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After a rocky post-2008 recovery marked by years of austerity, the Netherlands has a spring in its step once again and has been declared the sixth-happiest country in the world for the second year running.

Last year’s election did not, as many feared, lead to success for populist Geert Wilders, although his Freedom party remains the second-largest in the country. Two new parties won seats: another right-wing eurosceptic party Forum for Democracy, and its mirror-image, the migrant-led Denk (Think). GroenLinks celebrated rising star Jesse Klaver’s success.

The resulting political landscape is more fractious than ever but some things remain the same. No-nonsense prime minister Mark Rutte was elected for a third consecutive term and although negotiations to form the current four-party government took 225 days – the longest ever for the country – the result appears stable so far.

Tensions over immigration, race and integration remain unaddressed, as evidenced by a handful of attacks on Muslim institutions and the rise of identity politics. Security-wise, organised crime is a concern, with a Dutch police union report earlier this year warning of a parallel economy emerging and the country increasingly fulfilling many characteristics of a “narco-state”.

In the capital, Amsterdam, residents continue to both benefit from and bristle at the growing numbers of tourists and new arrivals. An ever-lengthening list of rules – no staring at the sex workers, no more touristy shops in the centre – aims to temper the effect of weekend-trippers.

At the same time, a growing number of foreigners – many employed by booming brands withEuropean HQs in the country, such as Netflix, Nike and Booking.com – are putting down roots. The downside is the overheating property market, with 80 per cent of houses sold at or above the asking price last year. The upside is that this village-esque city is becoming a proper metropolis, with a food scene and gdp to match.


Soft-power credentials

The Hague: Home to several major bodies, including the International Criminal Court and the Organisation for the Prohibition of Chemical Weapons, as well as numerous smaller conflict tribunals, the Dutch coastal city has become synonymous with international justice.
Water knowledge: The Netherlands boasts the largest port in Europe, Rotterdam, and a specially appointed water diplomat who promotes and exports Dutch expertise on everything from flood defence to land-water management all over the world. About 15 per cent of the Netherlands has been drained and reclaimed from the sea via polders.
Design: From Piet Hein’s collaboration with Ikea to architecture firms such as mvrdv and UNStudio bringing their special touch to major global projects, the Dutch design scene is on fire.


Things that need fixing

Corporate tax laws: The Netherlands is one of the biggest conduits to offshore tax havens in the world, providing a home to about 9,000 shell or “letterbox” companies. Recently proposed changes to tackle the problem must not become just a superficial fix.

Sustainable energy: Only 6 per cent of the country’s energy is from renewable sources, one of the lowest figures in the EU. The government has admitted that the Netherlands will miss 2020 Kyoto targets for renewable-energy production and greenhouse-gas emissions.

Zwarte Piet’s blackface tradition: The annual debate over whether the folkloric helpers of Sinterklaas (Santa Claus) should still have their faces smeared with black as in days of yore is a waste of time. This outdated practice simply stokes social divisions. End it.


Foreign policy
Despite its diminutive size, the Netherlands has always played an active role on the world stage, from being one of the founding members of the EU to hosting a number of major international organisations; it also contributes troops to several military and UN peacekeeping missions. It is not on good terms with Russia – which will be the subject of an upcoming Dutch trial over the downed mh17 flight – nor Turkey, with whom diplomatic relations are on ice. It maintains tight-knit friendships with its neighbours and has started combining its languishing armed forces with those of Germany. Recently, foreign minister Halbe Zijlstra was forced to resign after lying about a meeting with Russian president Vladimir Putin.


Leader’s performance
Rutte has proven himself to be the archetypal Dutch politician. Just right of the centre, along with much of the country, he is an adroit negotiator and a savvy election campaigner, as shown by his divisive Freedom party vote-stealing letter last year telling immigrants to “act normal or get out”. He stands for stability and steadfastness and is credited with pulling the Netherlands through a difficult post-2008 economic crisis. Known for cycling to work without (visible) bodyguards and being a regular at an Indonesian restaurant in The Hague, the former Unilever employee and long-time bachelor has managed to portray himself as down-to-earth and hard-working, and as a result is generally popular.


Tackling the plastic problem
A Dutch supermarket recently became the first to have a plastic-free aisle, featuring 700 products from meat to sauces. On the canals of Amsterdam, Plastic Whale has been busy fishing out recyclable rubbish for years.The Ocean Cleanup is also developing ways to remove plastic from the world’s water.


Referendums
The Netherlands has held only one referendum but it was a bruising experience. A significant “no” vote in 2016 on bolstering Ukraine’s ties with the EU handed Geert Wilders a major victory and cast the Netherlands in the unfamiliar role of Europe’s troublemaker. The government is abolishing them altogether – without a public vote.


The economy
An enormously international economy, the Netherlands was hit hard by the 2008 crash and ensuing austerity measures. Yet things are looking up again: growth last year was the strongest since 2007 at 3.1 per cent and it is the eurozone’s fifth-largest economy. Brexit is a blow – the UK is one of the country’s most important trading partners – but has also thrown up opportunities, such as Unilever’s decision to concentrate its HQ in Rotterdam rather than London.


Expert opinion

“European policy on the issues of the transfer union and migration remain unclear. Left unaddressed, the impression is reinforced here that the ‘ever closer union’ is unstoppable, that costs always go up and that the EU cannot stop migration. This is leading to ever-growing euroscepticism in the Netherlands, aggravated by right-wing parties such as pvv and Forum for Democracy.”
Adriaan Schout
Europe co-ordinator, Clingendael Institute

“The most interesting thing about our new government is how little we have seen from it over the past five months. You would expect that after over seven months of formation talks they would have started implementing their plans [with] guns blazing.”
Emilie van Outeren
Political reporter, NRC

“The financial sector is still too big to fail and the Dutch economy still too reliant on its woes. We still have massive banks compared to the economy and, in my view, they are not well-enough capitalised. Banks, mortgages and the pension system are the things that really need to be fixed.”
Bas Jacobs
Economics professor, Erasmus University


Monocle view
A strong economy, booming creative sector and a popular leader mean the Netherlands has much to celebrate. But far-right parties have been gaining traction – and festering social tensions will likely throw a spanner in the works if left unchecked.
Grade: B-

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