Outgoing RutteVier pays billions for large companies, which has made the investment climate very generous

Economics is a battle and at the end of the day, large corporations often win the day. The economic battle between companies is about the best products, tip-top services, the best employees and the most talented management. You can read the success or failure by the profit.

But behind the competitive struggle lies political struggle. A battle for fewer rules, lower taxes or, as has been the case recently: for the highest amounts of support from the central government. The most muscular lobby wins.

Industrial politics no longer suspect

Billions flew around us last week. The outgoing RutteVier cabinet is taking steps and making decisions that will determine the future of Dutch industry in the coming years, perhaps even decades. Industrial politics had long been suspect since the debacle of shipbuilder RSV in 1983, which only survived for years with government support. But the mood in politics has completely changed and the business community is responding to this in a sophisticated manner.

The government is putting 1.73 billion euros on the table to convince chip machine manufacturer ASML in Veldhoven that the rapidly growing factory and research complex will continue to expand in the Eindhoven region (Brainport). Co-chairman Peter Wennink of the ASML board had alluded at the end of January to the possibility of realizing the new construction abroad.

What is the common thread in the above examples of industrial policy?

There isn’t one. Industrial policy, like any policy, must have an argument, a motive, an urgent reason to spend public money. That was also the case in the past. Politicians wanted to save jobs, such as at RSV, and that was argument enough. Or they wanted to pick the winners of the future. Or they wanted to invest money in new technological combinations of companies to stimulate the earning capacity of the Netherlands. That is the goal of the National Growth Fund.

Hotchpotch of arguments

But what the outgoing cabinet is doing now is a hodgepodge. The ministers support a winner (ASML), a laggard (Tata Steel) and a climate project that still has to prove itself (Porthos). ASML benefits from its status (high-tech). Tata benefits from a new argument in favor of subsidy and support policies: strategic economic independence. And Porthos benefits from the political wish that the Netherlands should be a guiding country.

If you didn’t know any better, given the amounts, agreements and ambitions, you would say: this is a cabinet halfway through its term, which is converting big plans into concrete policy. But the ministers are outgoing. The parties they represent have a minority in the House of Representatives. They turn a long nose at the negotiators at the formation table and at the voter. The motto seems to be: you don’t participate, we are taking irreversible steps with our industrial policy.

Menno Tammingais an economic columnist for Wynia’s Week. He was previously editor and columnist of Het Financieele Dagblad and NRC Handelsblad. 

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