Minister of Finance Wopke Hoekstra may well take his briefcase to the Lower House for the last time this week. In his bill of millions, the national debt is rising enormously. What was bad for years is now suddenly called “prudent”. But it must, says the CDA. “We have to get from one bank to the other.”
Wopke Hoekstra had long wanted to be a married man. Yet the Minister of Finance sits with folded hands without a ring in his office. Not because she said “no.” Not even because the rings were not yet in the house. In fact, the flowers had been ordered and his package was already in the cupboard. Still, Wopke and his “long-time fiancé” Liselot decided to call off their wedding in August – three days before the day. “That seemed more logical,” he says when asked.
The first attempt at marriage ended a few years ago when their youngest son developed liver cancer. Attempt two would have been in July. “A big party with all the bells and whistles. But we already threw that plan overboard in March and April. ” Attempt three would be in very small circles. His party member Ferd Grapperhaus did get married, one day after the day on which Hoekstra would actually give his word – the whole country was able to see the photos. It almost cost him his political career. Asked about the choice of his CDA colleague, Hoekstra responds measuredly: “I don’t want to place one opposite the other.”
Was this your last briefcase?
“That chance is considerable. In 2017, there was no new cabinet for Prinsjesdag. I think it will be good for the country if the next formation is completed faster. ”
Is there no chance that you will surface again for this position?
“The voter determines which parties participate in a cabinet. I’m not going over it on my own. And we have to discuss it internally in the CDA. Elections are always surrounded by so much uncertainty that it is difficult to say anything about it. On the one hand, this is the best job I’ve ever had. But when a cabinet post comes up, I want to judge it at that point. On intuition. These kinds of roles in politics are not a right, but a privilege. ”
As Minister of Finance, Hoekstra will let the national debt rise to more than 500 billion euros in the coming year. A “phenomenally large amount,” he admits. Still, according to him, the Netherlands can take it.
What has gotten into you? Not so long ago we were always told from the Ministry of Finance how big the debt per Dutch person was. And it was said that we will pass on the bill to subsequent generations. You have four children. Will they pay for it later?
“When I was my children’s age, in the early 1980s, public debt was a much bigger problem than it is now. Interest was significantly higher. If Onno Ruding, at that time the Minister of Finance, borrowed a guilder, he had to pay 8 to 10 cents in interest on it. That meant that he immediately had a problem the next year and had to choose between spending cuts or increasing the national debt even further. That is not a blame for previous generations, but I do not have that dilemma. Now interest rates are so low and sometimes even negative – it’s almost incomprehensible. You borrow three billion and as “reward” you get a few more million in the bargain. ”
Guilt was always bad. Suddenly not anymore?
“The concept of debt means something different to the government than to households. You have to compare the national debt against our gross domestic product, or the amount that we earn together in the Netherlands. Under normal economic conditions, this national income increases a little each year. Now it is more than 800 billion euros. At the beginning of this calendar year, we had a national debt of around 400 billion. So we were at 49 percent. That percentage will grow to around 60 percent next year. That is high, but these are numbers that we can still use internationally. ”
In the past, when national debt rose, taxes went up and cutbacks were made. You don’t do either.
“That’s right. If we were to cut back now, it would be like pruning a tree in the wrong season: it will cause damage. There are circumstances in which cutbacks are not only conceivable, but also sensible. I am firmly convinced not at this stage. We now have to get from one bank to the other. That is why we now choose to stimulate the economy. As the economy grows and therefore tax revenues increase, the debt as a percentage of everything we earn decreases step by step. That is also important, because then that debt will become less of a problem. Also due to the low interest rate. When I came to the Senate in 2011, we still paid 6.5 billion in interest on the national debt. At the moment, while the national debt has increased in absolute terms, we are only paying 3.7 billion euros. ”
“There is something to be said for allowing some to consist of longer-term loans. Precisely because you then have the certainty that you will not pay anything for a while. We are now looking for a mix: not just short-term loans and not only very long-term loans. No one knows what the future looks like, but low interest rates are a long-term, global trend that is expected to continue for the next 20 years. This policy is now prudent. ”
“He is a bit looser in this than many other economists. If the economy is in dire straits at 80 percent, you go to 100 percent. I think that is way too high – and I have always understood that Teulings thinks it too. ”
History shows that there is a crisis about every seven years, so should we start paying off quickly?
“I think it would take about ten or fifteen years to reduce part of the debt. I still agree that in the long term you have to put the public finances in order. The thought that we will get good weather for twenty, thirty years after this is an absolute illusion. One thing you know for sure in life is that the next crisis is always around the corner. Then it is important to have a buffer again to be able to absorb it. Since 2000 we had the dot-com crisis, the attacks in the US, the banking crisis, the credit crisis and now the corona crisis. But this crisis requires a different recipe from the previous one. After all, that was an economic crisis, this is a health crisis that we have to overcome. If we can put the corona virus behind us, the economy will recover. ”
You do take a risk by relying on growth. With a second wave we get an even harder blow. You say yourself: we steer in the fog. We usually slow down then.
“There is just a lot of uncertainty. The situation can get much better, for example because there is a vaccine, the economy is recovering and we can leave corona behind us. But there may also be a new lockdown. Then the Central Planning Bureau predicts an economic contraction of 3 percent, against an expectation of 3 percent growth now. That is a gap of 6 percent. That sounds small, but it is bí-zar big. That is many hundreds of thousands of unemployed people. ”
The uncertainty also seeps through into his private life. When Hoekstra will now get married? Nobody knows. Hoekstra himself wanted to plan attempt four “as soon as possible after the infection rate improves”. “Only that is so difficult to judge. So then I thought: then we’ll do it somewhere before Christmas. ” His fiancé, general practitioner Liselot Hoornweg, has her doubts. “She said: how sure are we that it is possible?”
