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Currencies

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Categorized | Economy

Netherlands holds firm on EU-Ukraine deal


Posted on September 22, 2016

epa05541933 Dutch Prime Minister Mark Rutte arrives at Bratislava castle during the Bratislava EU summit, an informal meeting of the 27 heads of state or government, in Bratislava, Slovakia, 16 September 2016. European Union leaders meet to discuss a new strategy and future of the European Union after the recent Brexit referendum in Britain. EPA/FILIP SINGER©EPA

Dutch prime minister Mark Rutte has warned that the Netherlands is unlikely to sign off a treaty between the EU and Ukraine after Dutch voters slammed the deal in a non-binding referendum earlier this year.

    Despite months of diplomatic efforts to come up with a legal compromise between Brussels and the Netherlands, Mr Rutte told Dutch MPs on Thursday: “I think that ultimately we will not ratify [the agreement].”

    Dutch citizens voted against the deal by a margin of nearly two-to-one in a referendum in April, albeit on a low turnout, casting the long-term viability of the controversial trade and integration agreement with Ukraine into doubt.

    The association agreement — which harmonises Ukrainian law with EU standards and lowers trade barriers between Ukraine and the bloc — must be ratified by all of the EU’s 28 national governments before officially coming into force.

    In Ukraine, the deal was viewed as a seismic shift towards the EU, while in the Netherlands it was viewed by voters as an example of over-reach by Brussels.

    Mr Rutte expressed some hope that the deal could carry on without the Netherlands, involving the EU’s remaining 27 member states and Ukraine. But the significance of the deal means that the Dutch government will face intense pressure from Brussels and even Washington to try and overcome doubts from voters.

    MPs from rival parties in the Netherlands hounded the prime minister for stalling over his next step for nearly half-a-year. Although the referendum was not binding, most parties agreed to abide by its result, with MPs accusing Mr Rutte of ignoring the wishes of Dutch voters.

    A senior Ukrainian foreign ministry official on Thursday described the Dutch position as “very disappointing” but questioned whether it would legally torpedo the landmark EU-Ukraine association agreement.

    At the moment, the terms of the deal are in force on a temporary basis on the assumption that the Netherlands will eventually ratify the agreement.

    What was the Dutch referendum all about?

    Voters stand in polling booths as they cast their votes in the EU-Ukraine trade and association agreement referendum in the Leidschenveen neighborhood of The Hague, Netherlands, on Wednesday, April 6, 2016. Dutch voters head to the polls on Wednesday to weigh in on a treaty that eases relations between the European Union and Ukraine, as a growing sense of EU-skepticism threatens to influence the outcome. Photographer: Jasper Juinen/Bloomberg

    Result will send geopolitical tremors through Ukraine and holds lessons for Brexit campaigns

    Some observers in Brussels questioned whether Mr Rutte’s remarks to parliament would call into question its provisional application, but two senior figures with knowledge of the file said it was unlikely to be derailed.

    “I doubt whether this prejudices temporary application,” said the Ukrainian official.

    One European diplomat said the Netherlands gave the go-ahead for its provisional application by signing the agreement in the first place. This still stands, even though the country is increasingly unlikely to provide final legal ratification for the agreement in The Hague.

    The diplomat also said a declaration in June by European leaders that the EU leaders should “seek a solution” to the issues raised by the Dutch vote also remains in place.

    Still, a settlement remains elusive. The Dutch government has argued that three conditions must be met in any proposal to break the deadlock. Its position is that any solution must address the concerns of Dutch voters, be legally binding and be capable of securing the support of the Dutch government and parliament, as well as other EU member states and Ukraine’s government.

    While the EU has failed to provide any solutions to appease the Dutch, the Ukrainian government has been criticised for failing to carry out pledged reforms on its side of the deal.

    This has led to frustration in the EU and a warning from US vice-president Joe Biden on the sidelines of this week’s UN General Assembly. Mr Biden told Petro Poroshenko, Ukraine’s president, that a failure to reform was weakening the increasingly fragile EU alliance on Russian sanctions.

    A Ukrainian official dismissed these concerns: “We understand that the risk is high but I believe criticism of reforms is just an excuse. The sanctions were not imposed because of reforms.”