Brussels The Dutch government is committed to tightening sanctions against Russia. “The Netherlands is open to excluding more banks from Swift,” said Dutch Finance Minister Sigrid Kaag in an interview with Handelsblatt and other European media. The EU recently uncoupled several Russian banks from the payment service provider Swift, but spared individual institutions such as Gazprombank in order to keep financial channels open for commodity transactions.
The minister, in office since January 10, also advocated “speeding up the imposition of sanctions on trust agencies and, where appropriate, on the providers of legal advice services that allow the oligarchs and clique around Putin to to set aside money”.
The war and its economic consequences are also giving impetus to the debate about reforming European debt rules. “We are open and constructive,” Kaag clarified. However, “compliance with and control of the rules must also be improved”. The debt pact, which stipulates a maximum budget deficit of three percent and total debt of no more than 60 percent of economic output, was suspended during the corona crisis.
The EU Commission is now considering further delaying the application of the debt rules. The Netherlands does not reject this in principle, but does not commit itself: “We must first wait for concrete proposals and also better understand the short- and medium-term effects of the crisis,” said Kaag, who is meeting with Federal Finance Minister Christian Lindner in Berlin on Monday.
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Read the full interview
Ms. Kaag, you recently said that you are in favor of tightening sanctions against Russia if Kremlin chief Vladimir Putin does not end the war. What are you thinking specifically?
We have agreed among EU finance ministers to speed up the imposition of sanctions on trust agencies and, where appropriate, on the providers of legal advice services that allow the oligarchs and the clique around Putin to siphon off their money and face the sanctions to dodge. We are waiting for the Commission’s proposal. The Netherlands are ready to further increase the pressure.
Putin describes the sanctions as a “declaration of war”. Does that scare you?
Putin is acting as if our response, which is legitimate and appropriate, is an escalation move. In fact, the escalation is a gross violation of Ukraine’s sovereignty and a threat to the security and stability of the European continent. Europe’s leaders communicate calmly and strategically so as not to further fuel the debate.
The current reporting of the Handelsblatt on the Ukraine war:
Should more Russian banks be decoupled from the Swift network and ultimately even energy imports from Russia stopped?
The Netherlands is open to banning more banks from Swift. But we respect the reluctance of other EU countries, which are much more dependent on importing Russian gas. I am very pleased about the unity in the EU. Therefore, it would not be advisable to publicly speculate about scenarios that would lead to a reduction or even a halt in gas imports. It is clear that we now have to make provisions for the coming winter. In the nightmare scenario we are experiencing, we were lucky that we had a relatively mild winter.
What do you think of plans to compensate member states or sectors that have been particularly hard hit by the aftermath of the war?
We hear that the EU Commission is preparing appropriate proposals. It is important that we avoid going it alone at national level and first discuss this at EU level.
Paris and Brussels are considering taking on joint debt again – this time for the rearmament of the EU.
We must first await concrete proposals and also better understand the short- and medium-term effects of the crisis. It is important for us that the Commission first uses the existing instruments and that money is used that has not yet been called up.
Europeans pay the highest gas prices in the world. Does the EU have to think about drastic steps, such as a price cap?
We are experiencing an ultimate crisis, an extreme shock that makes it clear to us that we are too geopolitically exposed and need to accelerate our energy transformation plans. Is there a cap on energy prices? Possibly. But when we intervene in the pricing mechanism, we need to be united and ensure that the potential benefits are balanced.
Debate about higher armaments spending
How will the war affect the planned reform of European debt rules?
Some debates seem almost anachronistic given the tremendous shock we are experiencing with Russia’s invasion. On the other hand, we see the EU rushing to make decisions that would have taken years or even been impossible before this crisis. The political will is there to deliver weapons, mobilize financial aid and take in refugees. It is extremely important that we also make progress with the reform of the debt pact.
What do you have in mind?
I have just sent a letter to the Dutch Parliament setting out our position. We are open and constructive, emphasizing the importance of reform. At the same time, we want compliance with and control of the rules to be improved.
The debt pact was suspended during the corona crisis. The Commission is now considering extending the suspension. Is that advisable?
Let’s wait for the exact proposal, it should come in April. We will then know more about the macroeconomic perspective of many EU countries and can better assess whether such a step would be justified. Germany’s decision to invest 100 billion euros in national defense is another factor in the debate. Some countries are proposing to exempt defense spending from debt rules. These discussions begin now. We are convinced that investments are important. But we currently see greater risks in too much flexibility.
That means: Do you reject the proposal for a “golden investment rule”, i.e. exceptions for certain desirable expenses?
We’re not saying no once and for all, but we do point out the risks: the softening of the rules and less clarity.
Her German colleague Christian Lindner takes a similar view. How do you understand each other?
We have a very warm, respectful relationship, even though we’ve only met a few times so far. I’ll be in Germany this Monday so we can go into more detail.
France’s finance minister Bruno Le Maire says the gulf between northern and southern Europeans on economic policy has been closed. Is that correct?
I think so, but I also understood the statement as a reminder not to get bogged down in artificial differences. We all represent our national governments, but we share a common goal of increasing prosperity and protecting our Union.
Hungary and Poland are threatened with EU rule of law proceedings. Does the war now change the calculation? Does EU unity come first?
Countries like Poland and Hungary are taking in refugees, and we appreciate that. In addition, the economic effects are stronger there, such as inflation. We must keep all of this in mind, without overlooking the fact that the rule of law is what unites us as a Union.
Ms. Kaag, thank you very much for the interview.
The conversation was conducted jointly with other EU correspondents.
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