VZCZCXRO7862
RR RUEHAT
DE RUEHTC #0416/01 0551401
ZNR UUUUU ZZH
R 241401Z FEB 06
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC 4922
RUEHC/DEPT OF LABOR WASHDC
INFO RUEHAT/AMCONSUL AMSTERDAM 0418

UNCLAS SECTION 01 OF 02 THE HAGUE 000416 
 
SIPDIS 
 
DEPT FOR EUR/UBI, DRL/IL 
LABOR FOR BBRUMFIELD 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV SOCI NL
SUBJECT:  SCENESETTER FOR SOCIAL AFFAIRS AND EMPLOYMENT 
MINISTER DE GEUS VISIT TO LABOR SECRETARY CHAO 
 
 
Overview of De Geus Visit 
------------------------- 
 
¶1.  (U) Minister of Social Affairs and Employment Aart de 
Geus is in the United States to examine U.S. approaches to 
work place issues related to family and child care.  His 
visit is part of broader information-gathering effort to 
identify effective labor and social welfare policies, in 
preparation for development of policy proposals in these 
areas by the Dutch government.  De Geus is interested in 
comparing the United States' "private sector" approach to 
the welfare state approach of the Scandinavian countries. 
 
¶2. (U) In addition to his meeting with Labor Secretary Chao, 
De Geus will meet with academics, think tanks and state 
government officials.  He will be accompanied on the trip by 
his political advisor, Jeroen de Graaf; the Ministry's 
Secretary General, Maarten Ruijs; and the Director of the 
 
SIPDIS 
Labor and Care Section; Peter Stein.  In New York, he plans 
to visit the Family Work Institute, and the Rita Gold Early 
Childhood Center at Colombia University; in Maryland, he 
will meet with officials at the Maryland Departments of 
Education and Human Resources.  In Washington, he will visit 
the New America Foundation, the Urban Institute, the 
Heritage Foundation, and the AARP.  Among the issues he may 
want to explore are the role of the family in society and 
the government role in supporting families; parental choices 
on work and child-care; the role of public and private 
sector, including faith-based, organizations in providing 
child-care; maternity, parental and family leave policies; 
and family support payments. 
 
¶3.  (U) De Geus has served as Minister for Social Affairs 
and Employment since July 2002.  He is a member of the 
centrist Christian Democratic Party, the largest party in 
Prime Minister Jan Peter Balkenende's center-right coalition 
government.  De Geus is the government's coordinator for 
Emancipation (gender equality) and Family Matters.  His 
ministry has responsibility for policy in the areas of 
employment, social security, social assistance, industrial 
relations, gender equality and family issues.  De Geus 
worked for the Christian Trade Union Federation (CNV) for 
nearly two decades, initially in its Industrial Sector, and 
ultimately as vice chairman of the Federation.  In 1998 he 
became a partner in a consulting firm, where he specialized 
in issues related to the welfare state, working for both 
public and private sector clients.  He has a law degree from 
Erasmus University in Rotterdam. 
 
Political and Economic Background 
--------------------------------- 
 
¶4. (U) The Netherlands is a constitutional monarchy with a 
parliamentary form of government.  Queen Beatrix is the 
titular head of state.  The center-right Balkenende 
government is in the third year of its four-year term (2003- 
2007).  The government has proposed a wide range of measures 
and spending cuts intended to strengthen the economy, 
restore Dutch competitiveness, reduce bureaucracy, and 
enhance security.  It has focused on fiscal consolidation, 
restructuring the social welfare system, improving the 
business climate, strengthening work incentives, fostering 
greater market flexibility, including the labor market, and 
spurring innovation.  The government has made steady 
progress in its economic reform program, but its belt- 
tightening measures have not been popular, causing each of 
the three coalition partners to lose support in the polls. 
 
¶5.  (U) Municipal elections will be held in all Dutch cities 
on March 7.  The results will be closely analyzed for clues 
on the balance of power between the governing coalition and 
the opposition parties, and will help shape party strategies 
for the 2007 general elections.  Local elections, however, 
are only a rough barometer of party strength at the national 
level.  Among the reasons for this are that there are a 
variety of small local parties that attract votes away from 
the major parties, voter turn-out is generally significantly 
lower than in national elections, and foreigners who are 
permanent residents of the Netherlands, including Moroccan 
and Turkish immigrants who are not Dutch citizens, are 
permitted to vote in local, but not national, elections. 
 
¶6.  (U) At a CDA election rally on February 21, De Geus said 
he planned to investigate whether it would be legally 
possible to establish live-in centers where unemployed young 
people could acquire work experience and discipline.  He 
suggested that 30,000 to 35,000 jobless youth who are 
 
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neither enrolled in an education program or eligible for 
unemployment payments could be assigned to such centers. 
These individuals, "when left to their own devices, threaten 
to become problems for themselves and society," he said.  He 
declined to elaborate further until a report on the legal 
implications of such a scheme was completed. 
 
¶7.  (U) After performing exceptionally well in the 1990s, 
the Dutch economy has struggled since 2001, with growth 
averaging less than one percent per year.  Unemployment has 
risen from below three to above six percent.  Ethnic 
minorities have been hardest hit by the economic downturn. 
Unemployment among minorities is around 16 percent; among 
the Muslim population (primarily of Turkish and Moroccan 
decent) it has risen from 10 to over 20 percent.  The 
economy is beginning to show signs of recovery; growth 
estimates for 2006 range between 2 and 2.75 percent.  Over 
the last two years, the government has pushed through 
reforms in unemployment insurance, disability and health 
insurance, ended early retirement schemes.  Problems remain, 
however, including rigid labor markets, high wage rates and 
declining productivity. 
 
Labor and Collective Bargaining 
------------------------------- 
 
¶8. (U) Organized labor is well established in the 
Netherlands.  Historically, labor relations are based on the 
"Polder model" of intensive consultation and negotiation 
among stakeholders (including employers and workers 
organizations and the government), and consensus-based 
decision-making.  The Social and Economic Council (SER) and 
the Labor Foundation mediate negotiations between employers 
and labor. The SER is a tripartite body of representatives 
from employers' and labor organizations and independent 
members appointed by the government.  The Labor Foundation 
is a forum for labor and employer cooperation. 
 
¶9. (U) Agreements between employers and workers on labor 
conditions are generally established through a Collective 
Labor Agreement (CAO), that set wages and working hours, 
schedule periodic wage increases, and establish rules for a 
wide range of issues, including annual leave, training, 
social benefits and pension schemes.  Once employers and 
unions reach agreement on a CAO, they may request the Social 
and Employment Minister to declare the agreement universally 
binding, thus extending its terms to all employees in that 
industrial sector.  Some 1,200 CAOs cover more than 70 
percent of the Dutch workforce. 
 
¶10.  (U) Although trade union federations are not formally 
allied with political parties, there are historic bonds 
between the Federation of Dutch Trade Unions (FNV), the 
largest union federation, and the left leaning Labor Party, 
and between the Christian Trade Union Federation (CNV) and 
the Christian Democratic Party.  The third and smallest 
federation is the Trade Union Federation for Staff and 
Managerial Personnel (MHP). 
 
Blakeman