EU: A Dutch “No” to Ukraine Expansion

Published on April 4, 2016

Dutch citizens will head to the polls the day after tomorrow, April 6, to cast their vote in a non-binding referendum on the “Ukraine-European Union Association Agreement Approval Act,” the Dutch law that ratified the EU-Ukraine Association Agreement.

The vote comes at a particularly delicate time, with support for the EU in the Netherlands at an all-time low, the Ukrainian government going through a major political crisis of its own, and, last but not least, a Brexit vote on EU membership looming on June 23 in the UK.

*** We believe the outcome of the referendum is likely to be “No” to Dutch ratification of the EU-Ukraine Association Agreement, albeit by a relatively small margin – and margin will matter. If that is the case, the Dutch government is still likely to forge ahead with the EU-Ukraine Association Agreement and refrain from restarting the parliamentary approval process for the Treaty all over again. But Prime Minister Mark Rutte’s Liberal (VVD)-Labour (PvDA) coalition will commit to holding a parliamentary debate to discuss the referendum results, and will pledge to take the vote results into consideration in future trade negotiations. ***

*** In the less likely – but not impossible – event that a “No” prevails with a 10 or more point spread and the participation rate for the referendum is above 55% or so, we have been told the government may be forced to take further actions. That could include Rutte asking Commission President Jean-Claude Juncker and other member states to add language to the Association Agreement that would explicitly deny Kiev a path to EU membership in the near future. ***

The inclusion of such language would still largely just be symbolic, even while controversial, if not inflammatory. EU enlargement requires unanimity anyway, and the Dutch or any other member state could oppose expansion into Ukraine with or without such a provision.

But the hope is the inclusion of such language could help Rutte stave off a potential rebellion of his Liberal Party’s right wing and a political crisis as his party continues to lose ground in the polls to Geert Wilders’ extreme right PVV in the run up to the March 2017 elections. That will be a tall order.

Perhaps most to the point, barring a surprise “Yes” vote, almost any response from Rutte will provide fuel to the rising anti-EU forces across the continent and in the UK. These will be sure to latch onto the symbolism of yet another European government overriding the will of their national constituencies, especially when it comes to affairs of EU integration and expansion.

A Short, Tricky Campaign

The April 6 referendum is the first one that will be held under a new Dutch law that allows non-binding popular consultations on a wide range of legislative acts.

Once this kind of referendum is called, the law in question is required to be suspended until the day after the vote. So even though the Dutch Parliament last year overwhelmingly voted in favor of ratification of the EU-Ukraine Association Agreement, the Dutch government for now cannot use that as a legal basis to put its final signature on the deal.

That, in turn, has forced a temporary suspension of the final implementation of the agreement (70% of which, being strict EU competence, has already been in force since January 1, 2016) by the entire European Union, a clear embarrassment for the traditionally EU and trade-oriented Dutch government.

The small bit of good news for The Hague is in a recent judgement in which a Dutch court confirmed the purely consultative nature of the referendum, going so far as to explicitly state trade policy cannot be influenced by a non-binding vote.

But even if the Prime Minister can and will exercise full discretion even in the event of a “No” vote, his government has had to tread lightly in the run-up to the referendum.

While supporting a “Yes” vote, the Rutte government is well aware that the main drivers to the “No” vote are public fears that an Association Agreement has historically constituted the first step to a country’s achievement of full EU membership, and fears over potential visa-free traveling rights – and illegal overstaying – of Ukrainians within the EU.

So even as Prime Minister Rutte and his allies have been forced to commit the government’s support behind the “Yes” campaign, as the “No” side has started to take a solid lead that support has turned increasingly half-hearted, culminating in a public statement of opposition last week to any path for Ukraine to EU membership.

And the mess in Kiev has not helped Ukraine or Rutte’s case.

President Petro Poroshenko is facing a major political crisis, with Prime Minister Aresnyi Yatsenyuk refusing to step down until a new Prime Minister obtains Parliament’s confidence, even with public support for him languishing in the single digits. Corruption is still rampant, structural reforms are lagging, and implementation of the Minsk II agreement is at a standstill.

A “No” vote would still most probably not kill the Association Agreement. But even, or perhaps especially, if ignored, it would send a red warning sign to the March 2017 Dutch parliamentary elections – with Wilders’ PVV leading now in polls and projected to win as many seats as the entire current government coalition combined.

It would also without a doubt be gleefully seized on by the “Leave” campaign in the upcoming “Brexit” referendum on June 23.

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