As I write this the lower house of Dutch Parliament is debating what and where to cut in order to get their budget under the 3% hurdle as quickly as possible. It is now clear from a number of the details coming from the Dutch press that the Dutch will not make the 3% hurdle in 2012 and what they are trying to do now is get under the hurdle by 2013 instead. So just as with the Spanish and Italians before them, the Dutch are set to miss their targets. They have already been punished with credit watch negative by the ratings agency Fitch. The hope is that this deal is enough to see them through. Nationalist leader Geert Wilders used the parliamentary debate as an opportunity to say that his PVV party "will do everything we can to make the September elections a referendum over the Euro, the EU and Brussels".
I think this all speaks to the growing backlash against austerity in the EU. Perhaps we are witnessing a real change in the policy agenda. I don’t know. But I tend to think any changes will be at the margin and we will be in a for a long hard slog. Still doesn’t mean underweight for European shares but Europe will continue to underperform economically.