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CNBC Interview with Dutch Prime Minister, Mark Rutte, from the World Economic Forum 2019


Following are excerpts from a CNBC interview with Mark Rutte, Prime Minister of the Netherlands, and CNBC's Geoff Cutmore.

GC: I'm delighted to say, we have Mark Rutte with us, the Prime Minister of the Netherlands, good to see you, sir-,

MR: Good to-,

GC: Thank you so much-,

MR: Good to be back on the programme.

GC: For-, for coming to see us. I just want to pick up off the IMF downgrade, 0.2%, okay, it's not huge, but it does indicate a rate of change in the wrong direction, and the problem seems to be primarily with the advanced economies.

MR: Mm-hm.

GC: How concerned are you, in particular, with the performance of the Eurozone?

MR: Well, it's a-, the picture is quite different, from one country to another, the Netherlands is still growing at a healthy growth rate, we are still growing at about [inaudible] the rate of our surrounding, competing economies, like Germany, or Belgium, or France, so that is going well. We are also coming down a little bit, but in itself, that is good, we have now the third lowest unemployment rate in all of the European Union, and we have a budget surplus, so I'm-, I'm cautiously, um-, I'm worried, of course, about what is happening, and particularly, we have to watch, of course, the German car industry, and what impact that will have on the German economy.

GC: Are you worried about contagion of protesting spilling over from France? I mean, we've seen this yellow jacket protest. Growth is not a disaster, as you point out, for the Eurozone, and yet there are legacy issues-,

MR: Mm-hm.

GC: Related to the bailout, I think, and the way economies evolving here, that have made people very angry in Europe.

MR: Well, it's very difficult to find exactly what is behind the yellow coats, also there, we see many streams of people, from one side to the other. People can be angry about pensions, they can be angry about fiscal contraction in the past, they can be angry about the unemployment. And generally, of course, people-, now, when the economy is doing better, they want to experience themselves, in their personal life, by lowering the tax burden, if possible, by investing more money, in education, in defence, in, of course, safety on our streets, in healthcare, that people, also, themselves, experience that things are better. That is the main aim of my government, now that we are out of the crisis, that people really start to sense, in their personal lives, that things are a bit better, whilst, at the same time, trying to close the gap between those who already think that the politicians are there for them, and those who feel that the political class has left them to the side. We have to close that gap, that's the second main task we have as a government.

GC: Is there a political class in Europe that just doesn't seem to understand, that most people in the economy are not worried about the French/German project to Europeanise us all in the Eurozone, they're actually more concerned about their take-home pay, their household income, and whether they'll have a job, going forward, and that the institutions in Europe just don't seem to be prepared for that?

MR: Well, you need both. On the one side, we don't like a Eurozone which is trying to find new tasks for itself. What we have agreed, in December, at the European Council, was very good, we agreed that, in the Eurozone, we need to be more competitive, we need to create more jobs, and we need to put measures in place, which will assure us, not that countries who are not actually implementing what we agreed together, that we will help them, they have to help themselves, but that collectively, we will do more to get competitiveness in the Eurozone. That's crucial. And, at the same time, of course, all of us, in our day-to-day life, we can worry about our pension, about our job security, will our children have a job, when they have from school, is that schooling still relevant to, uh, our-, uh, to our labour market, and-, and the needs of the labour market of the future? These are the worries people have, and we, as politicians, are there to provide two things. One, safety, and secondly, make sure there is an economy which creates enough jobs.

GC: Are you concerned that we might see a dramatic swing to the right, in the May European elections? I know you've had your challenges, fighting the far right in the Netherlands, are you concerned that that may be the outcome of the results in May, if people don't feel that the European Commission, and the EU, is in touch with their lives?

MR: The problem with the European elections is that the turnout is low, so it will be difficult to use that as a measurement of the popularity of the extreme left or the extreme-, or-, or the extreme right, the populist, the wrong type of populist parties. It's difficult to use it, you can better measure that at a national level, and, luckily, in the Netherlands, and France, and Germany, we were able to beat that wrong type of, uh-, of populism. I think we will, across the board, see some gains being made, by the more populist parties, but I still think, and I have tremendous trust in-, in the judgement of the voters, and the people in Europe, that most people will still vote for parties who are really trying to explain that it is all about trade-offs, and that you cannot do everything, you cannot have lower prices and higher wages, you have to do everything at the same time, in a measured way.

GC: A lot of people in Europe look at President Trump's attacks on the WTO-,

MR: Mm-hm.

GC: On the OECD, on the organisation of NATO, on the Commission, and they're angry about that-,

MR: Mm-hm.

GC: But as I read you on this-,

MR: [Laughs].

GC: You said, Dutch white wine-sipping elite, who have criticised US President Donald Trump, should recognise that there are actually some errors in the number of international organisations, and the way they-,

MR: Mm.

GC: Operate. That's quite a swipe, at a constituency in Europe that maybe doesn't agree with that perspective.

MR: We have-, we don't vote in US elections. The United States has voted, and Trump is the President, and maybe he will be re-elected, so that is the-, the given, so we have to work with him, and I think he is also an opportunity, an opportunity to make changes to some of those multilateral organisations, whom we hold dearly, like the WTO, but it's not functioning very well. Take the UN. Many issues to solve. Take the European Union. Many issues to solve. So, my point would be, instead of thinking, 'Oh, we would have liked Hillary Clinton to win,' or, 'If Obama was still there,' well, guys, Trump is President. Make use of his Presidency, and his critique of those international organisations is sometimes very valid. Make use of that, get him on your side, so that collectively, with Trump, we can change those organisations.

GC: Which ones, in particular, do you not think are working?

MR: Now, the crucial one is, of course, the WTO. The WTO is, at this moment, in a difficult spot. The whole conflict resolution mechanism, the way it is dealing with trade disputes, of course, the US, itself, has some responsibility for that, they have to appoint certain people in certain bodies, so there is a lot we need to do, and if we could get Donald Trump on board, in saying, 'Hey, we are not fighting you on multilateralism,' let's forget that debate, whether you are pro or anti multilateralism, I mean, it is a given, that we are interconnected in this world. Let's make sure that these organisations deliver for the people.

GC: I've got to wrap up with a final question on Brexit, and I expect you anticipated this-,

MR: [Laughs].

GC: I-, I've just done a panel with Governor Mark Carney, he says that the banking system in the UK, the financial architecture, is robust enough-,

MR: Mm-hm.

GC: To deal with a no Brexit outcome, but he did have some concerns about the logistics businesses, the-, the-, the companies that are currently having-,

MR: Right.

GC: To operate with supply chains across borders. Do you still share some concerns, about how business in your country, and in the UK, is going to manage that potential scenario?

MR: Yes, I do, you have to prepare for the worst and hope for the best, and preparing for the worst means we, as a government, we are putting in place many new people, to deal with customs, to deal with logistics, but also our companies have to prepare. Many are doing that, but not everyone, and I am also worried about the UK side, whether the government, and companies, are doing enough to prepare for a no deal scenario, and at the same time, I work very hard to prevent a no deal scenario, because it would be an awful outcome, even if we were able to deal with the logistics.

GC: In particular, I know I've seen numbers suggesting that there would be a hit to growth in the-, in the Netherlands, the number I saw was 4.25% knocked off Dutch GDP, that's a number from October 2017. Have you done your own work-,

MR: Yes, well-,

GC: On that, and does that number add up?

MR: It is not that dramatic, and it will take place over many years, but still, it will have a big effect, also on Belgium, on the west coast of France, on Poland, on Denmark, on Ireland, but particularly on the UK. I have said before, to BBC, I hate Brexit from every angle, because it is bad news for the United Kingdom, first of all, it will be a smaller, less relevant country, after Brexit than before, and, of course, their economy will get a huge hit, if there is talk of a no deal Brexit. If there is a negotiated Brexit, we might be able to contain the damage.

GC: Alright, Mark Rutte, it's been a real pleasure catching up with you-,

MR: Absolutely.

GC: Thanks so much-,

MR: Thank you.

GC: Coming to see us here.

MR: Good to be here.

GC: Mark Rutte, the Prime Minister of the Netherlands.