NETHERLANDS - The current crisis between the Dutch trade unions and the Dutch government will lead to a “very hot summer” according to trade union chiefs.

FNV chairman Lodewijk de Waal made the remark when asked to comment on the failure of the so-called Spring Meeting between the social partners and the government which focused on the pre-pension issue.

According to the trade union chairman, the lack of will shown by the government, Minister of Social Affairs Aart-Jan de Geus, will result in the total breakdown of the Autumn Agreement, in which all parties involved signed an agreement not to raise salaries for the coming years.

After five and half hours of negotiations last week, the trade unions left the meeting stating they could not agree upon the new proposals of the government.

Officials of the ministry indicated to IPE that the only way de Geus will be taken is the introduction of a new pre-pension system, which will make it increasingly financially unattractive to stop working before the age of 65.

The real stumbling block has been the proposal by the government to give employees the opportunity to opt out of the collective pre-pension agreements.

If this is implemented, this will mean the end to early retirement for most people involved. The trade unions were surprised by the 180-degree turnaround of the Dutch small and medium business association, the MKB, which suddenly agreed with the new proposal. It had previously agreed with the unions.

MKB officials declined to give more information on the reasons for the turn-around. In a reaction of FNV officials, it was stated that the union sees no reason for this unexpected and rather negative view of the MKB, which is now opting for a total liberalisation of the pension system in the Netherlands.

Louk Hermans, MKB chairman and a former Liberal Party MP for the Liberal Party, stated that he saw no other solution. “If you would vote against it, no pre-pension schemes would exist at all anymore,” he said.

Still, there is some room for negotiations left, as the Dutch politics and labour relations are known for their consensual approach.

However, if it all comes to nothing, there will be a very hot summer. Threats by the unions, that they will end their willingness to stop salary increases, will have a detrimental effect on pension fund performance the coming years.

Pension funds contacted by IPE said they were “not a party to the current conflict”.