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Compromise Helps Dutch Stay Afloat In Crisis

The new Dutch coalition government that took office in November consists of two parties who had been bitter foes for a decade: the conservative VVD party under Rutte, together with the leftist Labor party. Their governing pact was designed to put the Netherlands on firmer financial footing by combining, for instance, the spending cuts on welfare desired by the conservatives with the tax increases on homeowners desired by Labor.

It's as if the Republicans and Democrats had sat down together in Washington, hashed out their differences, and adopted the bulk of recommendations for long-term budget reform in America.

Another source of Holland's compromise culture is its long history of international commerce stretching all the way back to the Dutch East India Company â¿¿ which dominated trade between Europe and Asia in the 17th and 18th centuries and was the first corporation to issue stock.

"Compromise is really in the nature of a nation that depends on international trade for its prosperity," said Randall Filer, economics professor at Hunter College in New York.

"The intangible benefit is that outsiders â¿¿ whether it be investors, or trade partners or political allies â¿¿ trust it's going to remain a stable country, with open markets and social stability."

A sign of the benefits such openness can bring: The Netherlands is the world's second-largest agricultural exporter, after the United States.

The origin of the Polder Model in its modern form was an economic crisis in 1982: Amid high unemployment and stagflation, government ministers sat down with unions and industry leaders, and brokered a deal in which unions agreed to wage restraints and ended strikes in exchange for employment guarantees.

The Dutch economy, the fifth largest among the 17 eurozone countries, has been among the best-performing among industrial nations since then. According to IMF figures, it grew more than 1 percent per year faster than Sweden, France or Germany from 1990-2007, and slightly faster than the U.S. â¿¿ but not quite as fast as Britain. Greece and Spain grew faster initially buoyed by the introduction of the euro, but their economies have since collapsed.

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