US embassy cable - 05THEHAGUE829

UNCLAS SECTION 01 OF 02 THE HAGUE 000829 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, PINR, NL 
SUBJECT: RECONFIGURED DUTCH CABINET EXPECTED TO SURVIVE 
 
 
1. (SBU) Summary:  The Balkenende coalition government 
remains intact despite a cabinet crisis prompted by the 
March 23 resignation of Deputy PM De Graaf.  Although De 
Graaf's party (D66) moved quickly to replace him and to 
conclude an accord with the two other coalition parties to 
avoid a government collapse, D66 rank-and-file members must 
still approve this accord at an extraordinary party congress 
on Saturday, April 2.  As all three coalition parties hope 
to avoid early elections, observers expect that D66 will 
approve the accord.  This is not a foregone conclusion, 
however, particularly as the government reform issues, which 
prompted De Graaf's resignation, remain close to the heart 
of D66's founding generation.  End Summary. 
 
2. (U) On March 23, Deputy Prime Minister and Government 
Reform Minister Thom de Graaf resigned his position after 
his proposal for instituting the election of mayors was 
rejected by the upper house of the Dutch parliament.  (Note: 
The Netherlands is currently the only member of the EU in 
which mayors are appointed rather than elected.)  While his 
resignation could have prompted the withdrawal of his party 
(Democrats 66, or D66) from Prime Minister Balkenende's 
coalition cabinet, D66 party leadership instead moved 
quickly to replace De Graaf. Current D66 Economics Minister 
Brinkhorst will assume the Deputy Prime Minister position, 
and Party Chairman Alexander Pechtold will become Minister 
for Government reform and Kingdom Relations.  D66 
renegotiated the 2003 coalition accord on terms that would 
justify its remaining in the government by obtaining 
concessions on other party priorities.  The new accord, 
reached on March 26 after 11 hours of intense negotiations, 
must still be approved by D66's rank and file at a hastily 
called extraordinary party congress on April 2. 
 
3. (SBU) Recent polls suggest that all three members of the 
governing coalition -- Balkenende's Christian Democrats 
(CDA), the conservative Liberal Party (VVD), and D66 -- 
would suffer significant losses if new elections were to be 
held.  According to some polls, D66, which currently only 
holds 6 seats in the second chamber, could disappear 
entirely.  Most observers, therefore, believe that the D66 
rank and file will accept the new accord rather than commit 
electoral suicide by withdrawing from the government and 
forcing an election. 
 
4. (SBU) On the other hand, D66 was founded in 1966 for the 
primary purpose of promoting political reform, including the 
direct election of regional officials, and had made its 
participation in the coalition government conditional on 
receiving support on this issue. De Graaf was closely 
associated with the reform movement both politically and 
personally, and for many D66 members it remains a 
cornerstone of the party's existence.  One senior GONL 
official (and member of D66) told us recently that D66 is 
divided between an "old guard," for whom government reform 
is of primary importance, and "young Turks" who are more 
interested in issues such as education, innovation, and 
European integration.  The accord negotiated by D66 
parliamentary fraction leader Boris Dittrich (a "young 
Turk") attempted to bridge these differences by including 
references to renewed commitment to electoral reform as well 
as promises to boost spending on education and innovation. 
Whether or not this will satisfy the old guard, however, 
remains to be seen. 
 
5. (SBU) In public statements, PM Balkenende has tried to 
put a positive spin on the crisis as having a "cleansing 
effect" and has welcomed the new accord as "strengthening" 
his coalition government.  Behind the scenes, the Prime 
Minister's office is following developments within D66 
closely and is working hard to avoid a D66 walkout, even 
using its influence to convince some outspoken proponents of 
government reform to tone down their rhetoric until after 
the accord is finalized. 
 
COMMENT: 
------- 
 
6.  (SBU) D66 has long enjoyed the reputation of being the 
"most democratic" of Dutch political parties, so the outcome 
of the April 2 congress cannot be predicted with certainty. 
That said, the vast majority of politicians, staffers, 
commentators, and individuals with whom we have discussed 
this issue in the last several days find it highly unlikely 
that D66 would commit collective suicide over the issue of 
elected mayors.  One D66 source observed that as this was an 
issue of little interest to the younger members of the 
party, a negative vote would not only kill the current party 
but destroy its future as well.  Dittrich and Brinkhorst 
have staked their political future on keeping the coalition 
together and can be counted on to push hard for a positive 
decision.  If they fail, Dittrich will either be tasked to 
seek a further renegotiation of the accord -- a process 
which could stretch the crisis out for another week or more 
-- or to withdraw from the coalition government. The latter 
would signify the cabinet's fall and early elections. 
 
Sobel