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Netherlands (01/10)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

Geography
Area: 41,526 sq. km. (16,485 sq. mi.).
Cities: Capital--Amsterdam (pop. 761,262). Other cities--The Hague, seat of government (482,742); Rotterdam (582,949); Utrecht (299,484).
Terrain: Coastal lowland.
Climate: Northern maritime.

People
Population: 16.4 million.
Nationality: Noun--Dutchmen and Dutchwomen. Adjective--Dutch.
Ethnic groups: Predominantly Dutch; largest minority communities are Moroccans, Turks, Surinamese.
Religions: Roman Catholic, Protestant, Muslim, other.
Language: Dutch.
Education: Years compulsory--13. Attendance--nearly 100%. Literacy--99%.
Health: Infant mortality rate--4.1/1,000. Life expectancy--80.15 yrs.
Civilian employment (first quarter 2009, 7.9 million): industry--19.6%; manufacturing--13.2%; services--77.3%; agriculture--3.1%.

Government
Type: Parliamentary democracy under a constitutional monarch.
Constitution: 1814 and 1848.
Branches: Executive--monarch (chief of state), prime minister (head of government), cabinet. Legislative--bicameral parliament (First and Second Chambers). Judicial--Supreme Court.
Subdivisions: 12 provinces.
Political parties: Christian Democratic Appeal (CDA), Labor Party (PvdA), Socialist Party (SP), Liberal Party (VVD), other minor parties.
Suffrage: Universal at 18.

Economy*
GDP (2008): $827 billion.
GDP growth (2009 est.): - 4.75%.
GDP per capita (2008): $50,150.
Natural resources: Natural gas, petroleum, fertile soil.
Agriculture (2% of GDP): Products--dairy, poultry, meat, livestock, flower bulbs, cut flowers, vegetables and fruits, sugar beets, potatoes, wheat, barley.
Industry (24.4% of GDP): Types--agro-industries, steel and aluminum, metal and engineering products, electric machinery and equipment, bulk chemicals, natural gas, petroleum products, construction, transport equipment, microelectronics, fishing.
Services (73.6% of GDP): Types--trade, hotels, restaurants, transport, storage and communication, financial (banking and insurance) and business services, care and other.
Trade (2008): Exports--$537.5 billion f.o.b.: mineral fuels, chemicals, machinery and transport equipment, processed food and tobacco, agricultural products. Imports $485.3 billion f.o.b.: mineral fuels and crude petroleum, machinery, transportation equipment, consumer goods, foodstuffs. Major trading partners (exports/imports)--EU (76%/56%), Germany (24.2%/19.7%), Belgium (12.6%/10.5%), China (1%/7.6%), United Kingdom (9.2%/6.3%), and U.S. (4.5%/8.2%).

*Figures are based on a July 2009 exchange rate of 0.72 euro to the dollar.

HISTORY
The Dutch are primarily of Germanic stock with some Gallo-Celtic mixture. Their small homeland frequently has been threatened with destruction by the North Sea and has often been invaded by the great European powers.

Julius Caesar found the region which is now the Netherlands inhabited by Germanic tribes in the first century B.C. The western portion was inhabited by the Batavians and became part of a Roman province; the eastern portion was inhabited by the Frisians. Between the fourth and eighth centuries A.D., most of both portions were conquered by the Franks. The area later passed into the hands of the House of Burgundy and the Austrian Habsburgs. Falling under harsh Spanish rule in the 16th century, the Dutch revolted in 1558 under the leadership of Willem of Orange. By virtue of the Union of Utrecht in 1579, the seven northern Dutch provinces became the Republic of the United Netherlands.

During the 17th century, considered its "golden era," the Netherlands became a great sea and colonial power. Among other achievements, this period saw the emergence of some of painting's "Old Masters," including Rembrandt and Hals, whose works--along with those of later artists such as Mondriaan and Van Gogh--are today on display in museums throughout the Netherlands and the world.

The country's importance declined, however, with the gradual loss of Dutch technological superiority and after wars with Spain, France, and England in the 17th and 18th century. The Dutch United Provinces supported the Americans in the Revolutionary War. In 1795, French troops ousted Willem V of Orange, the Stadhouder under the Dutch Republic and head of the House of Orange.

Following Napoleon's defeat in 1815, the Netherlands and Belgium became the "Kingdom of the United Netherlands" under King Willem I, son of Willem V of Orange. The Belgians withdrew from the union in 1830 to form their own kingdom. King Willem II was largely responsible for the liberalizing revision of the constitution in 1848.

The Netherlands prospered during the long reign of Willem III (1849-90). At the time of his death, his daughter Wilhelmina was 10 years old. Her mother, Queen Emma, reigned as regent until 1898, when Wilhelmina reached the age of 18 and became the monarch.

The Netherlands proclaimed neutrality at the start of both world wars. Although it escaped occupation in World War I, German troops overran the country in May 1940. Queen Wilhelmina fled to London and established a government-in-exile. During the war, the Nazis rounded up the Jewish population before deporting them to camps in the East. Over 75% of the Netherlands' 140,000 Jews died at the hands of the Nazis. Shortly after the Netherlands was liberated in May 1945, the Queen returned. Crown Princess Juliana acceded to the throne in 1948 upon her mother's abdication. In April 1980, Queen Juliana abdicated in favor of her daughter, now Queen Beatrix. Crown Prince Willem-Alexander was born in 1967.

Elements of the Netherlands' once far-flung empire were granted either full independence or nearly complete autonomy after World War II. Indonesia formally gained its independence in 1949, and Suriname became independent in 1975. The five islands of the Netherlands Antilles (Curacao, Bonaire, Saba, St. Eustatius, and a part of St. Maarten) and Aruba are integral parts of the Netherlands realm but enjoy a large degree of autonomy.

GOVERNMENT AND POLITICAL CONDITIONS
The present constitution--which dates from 1848 and has been amended several times, most recently in 1983--protects individual and political freedoms, including freedom of religion. Although church and state are separate, a few historical ties remain; the royal family belongs to the Dutch Reformed Church (Protestant). Freedom of speech also is protected.

Government Structure
The country's government is based on the principles of ministerial responsibility and parliamentary government. The national government comprises three main institutions: the Monarch, the Council of Ministers, and the States General. There also are local governments.

The Monarch. The monarch is the titular head of state. The Queen's function is largely ceremonial, but she does have some influence deriving from the traditional veneration of the House of Orange, from which Dutch monarchs for more than three centuries have descended. Her influence also derives from her personal qualities as Queen and her power to appoint the "formateur," who forms the Council of Ministers following elections.

Council of Ministers. The Council of Ministers plans and implements government policy. The Monarch and the Council of Ministers together are called the Crown. Most ministers also head government ministries, although ministers-without-portfolio exist. The ministers, collectively and individually, are responsible to the States General (parliament). Unlike the British system, Dutch ministers cannot simultaneously be members of parliament.

The Council of State is a constitutionally established advisory body to the government that consists of members of the royal family and Crown-appointed members generally having political, commercial, diplomatic, or military experience. The Council of State must be consulted by the cabinet on proposed legislation before a law is submitted to the parliament. The Council of State also serves as a channel of appeal for citizens against executive branch decisions.

States General (parliament). The Dutch parliament consists of two houses, the First Chamber and the Second Chamber. Historically, Dutch governments have been based on the support of a majority in both houses of parliament. The Second Chamber is by far the more important of the two houses. It alone has the right to initiate legislation and amend bills submitted by the Council of Ministers. It shares with the First Chamber the right to question ministers and state secretaries.

The Second Chamber consists of 150 members, elected directly for a 4-year term--unless the government falls prematurely--on the basis of a nationwide system of proportional representation. This system means that members represent the whole country--rather than individual districts as in the United States--and are normally elected on a party slate, not on a personal basis. There is no threshold for small-party representation. Campaigns are relatively short, lasting usually about a month, and the election budgets of each party tend to be less than $1 million. The electoral system makes a coalition government almost inevitable. The last election of the Second Chamber was in November 2006.

The First Chamber is composed of 75 members elected for 4-year terms by the 12 provincial legislatures. It cannot initiate or amend legislation, but its approval of bills passed by the Second Chamber is required before bills become law. The First Chamber generally meets only once a week, and its members usually have other full-time jobs. The current First Chamber was elected following provincial elections in May 2007.

Courts. The judiciary comprises 62 cantonal courts, 19 district courts, five courts of appeal, and a Supreme Court that has 24 justices. All judicial appointments are made by the Crown. Judges nominally are appointed for life but actually are retired at age 70.

Local Government. The first-level administrative divisions are the 12 provinces, each governed by a locally elected provincial council and a provincial executive appointed by members of the provincial council. The province is formally headed by a queen's commissioner appointed by the Crown.

Current Government. General elections were held in November 2006. On February 22, 2007, a new center-left coalition government was sworn in, composed of the center-right Christian Democrats (CDA), Social Democrats (PvdA), and left-of-center orthodox Protestant Christian Union (CU) under CDA Prime Minister Jan Peter Balkenende. Given the consensus-based nature of Dutch politics, a change of government does not usually result in any drastic change in foreign or domestic policy. Descriptions of the four main parties follow.

The Christian Democratic Appeal (CDA) was formed from the merger of the Catholic People's Party and two Protestant parties, the Anti-Revolutionary Party and the Christian-Historical Union. The merger process, begun in the early 1970s to try to stem the tide of losses suffered by religiously based parties, was completed in 1980. The CDA supports free enterprise and holds to the principle that government activity should supplement but not supplant communal action by citizens. On the political spectrum, the CDA sees its philosophy as standing between the "individualism" of the Liberals and the "statism" of the Labor Party. CDA has 41 seats in the current Second Chamber, more than any other party.

The Labor Party (PvdA), a classic European social democratic party, is left of center. It currently has 33 seats in the Second Chamber. Labor's program is based on greater social, political, and economic equality for all citizens, although in recent years the party has begun to debate the role of central government in that process. Although called the Labor Party, it has no formal links to the trade unions.

The Liberal (VVD) Party is "liberal" in the European, rather than American, sense of the word. It thus attaches great importance to private enterprise and the freedom of the individual in political, social, and economic affairs. The VVD is generally seen as the most conservative of the major parties. It currently has 22 seats in the Second Chamber.

The Socialist Party (SP) was founded as a grass root Marxist-Leninist movement in 1972. This working-class leftist alternative to the Labor Party succeeded at being elected to parliament in 1994. At every subsequent election the party grew, and in November 2006 it obtained 25 seats, which made it the third-largest party. The party is fundamentally nationalistic and opposes globalization, the European Union, and Dutch participation in international peacekeeping. It also favors cutting defense spending by 40%.

Domestic Drug Policy
Despite the government’s long-term efforts to combat production of and trafficking in narcotic drugs, the Netherlands continues to be a significant transit point for drugs entering Europe (especially cocaine), and an important producer and exporter of synthetic drugs, particularly Ecstasy (MDMA), although MDMA production appears to have declined significantly in recent years. Dutch authorities received no reports of Ecstasy tablet seizures in the United States linked to the Netherlands in 2007, though this may be due to incomplete data. In July 2008, the Justice and Interior Ministers established a task force to combat the criminal organizations behind cannabis plantations. The “100% controls” at Schiphol airport in Amsterdam on inbound flights from the Caribbean and some South American countries have resulted in a sharp decline in the number of drug couriers from those countries.

The Dutch Opium Act punishes possession, commercial distribution, production, import, and export of all illicit drugs. Drug use, however, is not an offense. The act distinguishes between "hard" drugs that have "unacceptable" risks (e.g., heroin, cocaine, Ecstasy) and "soft" drugs (cannabis products). One of the main aims of this policy is to separate the markets for soft and hard drugs so that soft drug users are less likely to come into contact with hard drugs. Sales of small quantities (under five grams) of cannabis products are tolerated in "coffeeshops" operating under strict conditions and controls. The United States continues to disagree with this aspect of Dutch drug policy. Trafficking in “hard” drugs is prosecuted vigorously. Overall, the Health Ministry coordinates drug policy, while the Ministry of Justice is responsible for law enforcement. At the municipal level, policy is coordinated in tripartite consultations among the mayor, the chief public prosecutor, and the police.

The Netherlands has a wide variety of demand-reduction and harm-reduction programs reaching about 80% of the country's 24,000-46,000 opiate addicts. The number of opiate addicts has stabilized over the past few years, with the average age rising to 40, and the number of overdose deaths related to opiates stabilizing at between 30 and 50 per year.

Counterterrorism/Homeland Security
The Netherlands supports counterterrorism efforts with leadership, personnel, and material, including the deployment of troops to Afghanistan as part of the International Security Assistance Force (ISAF). The Netherlands is a party to all 12 UN counterterrorism conventions.

In August 2004, the Act on Terrorist Crimes, implementing the 2002 European Union (EU) framework decision on combating terrorism, became effective. The act makes recruitment for the Jihad and conspiracy with the aim of committing a serious terrorist crime separate criminal offenses. In July 2009, the Dutch Government decided to initiate an external investigation into the legitimacy and effectiveness of Dutch counterterrorism laws and regulations. In January 2008, the appeals court in The Hague acquitted the seven members of the “Hofstad” terror group of participating in a criminal and terrorist organization, finding that “there was no question of a lasting and structured form of cooperation, nor of a commonly shared ideology.” The appeals court upheld the convictions of two “Hofstad” group members for having thrown a hand grenade at police officers in November 2004. In October 2008, the appeals court in The Hague upheld the guilty verdicts of four members of the “Piranha” terror group for participating in a terrorist organization. Defense attorneys appealed the verdict to the Supreme Court; the case is pending. In June 2009, the National Counterterrorism Coordinator's Office (NCTb) maintained the terror threat level at "substantial" (the Netherlands has four threat levels: minimum, limited, substantial, and critical). According to the NCTb, the Netherlands and its foreign interests may be among priority targets for international jihad networks, primarily due to the March 2008 release of the film “Fitna” by Geert Wilders, a member of parliament and leader of the political party PVV. The film was highly critical of Islam and was offensive to many Muslims.

The Dutch have taken a leading role in the European Union, the Financial Action Task Force (FATF), and other bodies to establish financial protocols to combat terrorism. They have assisted countries that lack the capacity to implement measures to combat terrorist financing. The Dutch Government takes steps to freeze the assets of individuals and entities included on the UN Security Council Resolution (UNSCR) 1267 Sanctions Committee's consolidated list. In August 2008, the Prevention of Money Laundering and Financing of Terrorism Act (WWFT) became effective. The act incorporated the EU’s third Money Laundering Directive into Dutch national law.

The Netherlands is an active participant in the Container Security Initiative at Rotterdam, one of Europe's busiest ports. The Dutch Government also permitted U.S. CBP Immigration Liaison Officers to return to Schiphol airport to assist with U.S.-bound passenger screening (the program is now known as the Immigration Advisory Program). In May 2008, the United States and the Netherlands signed a joint statement enabling the start of the International Expedited Traveler Initiative (IET) between Schiphol airport and certain U.S. airports. In July 2008, the Dutch parliament ratified the U.S.-EU extradition and mutual legal assistance treaties.

Principal Government Officials
Head of State--Queen Beatrix
Prime Minister--Jan Peter Balkenende
Deputy Prime Minister and Minister of Finance--Wouter Bos
Deputy Prime Minister and Minister for Youth and Family Affairs--Andre Rouvoet
Foreign Minister--Maxime Verhagen
Defense Minister--Eimert van Middelkoop
Ambassador to the United States--Renee Jones-Bos
Ambassador to the United Nations--Herman Schaper

The Netherlands' embassy in the U.S. is at 4200 Linnean Avenue, NW, Washington, DC 20008; tel: 877-388-2443; fax: 202-362-3430.

ECONOMY
After a strong performance in the 1990s, which brought unemployment to below 3%, the Dutch economy struggled through 2002 and 2003, plagued by relatively high costs and weak domestic demand. GDP growth recovered in 2006 and peaked at 3.5% in 2007. The global financial crisis has hit the Netherlands hard since fall 2008; the Dutch economy entered recession in the fourth quarter of 2008, but annual GDP growth that year was still 2.1%. In contrast, GDP was expected to shrink by 4.75% in 2009 and is expected to shrink by 0.5% in 2010 due to slowing international trade--exports were expected to drop by 16.25% in 2009--and decreasing private consumption. In 2010, the increasing budget deficit (expected to be 6.7% of GDP) and unemployment (expected to be 9.5%) are causes for serious concern.

The government has launched three economic stimulus packages since November 2008. The first package was worth about $8.3 billion, the second consisted mainly of government guarantees to stimulate lending and exports, and the third was worth $9 billion, bringing the total value of the stimulus measures to $17.3 billion, or approximately 2% of GDP. A key element of the packages is an agreement among stakeholders that the Dutch Government will not cut its stimulus spending before 2011, and then only “if the economy has recovered sufficiently.” The state finances have further deteriorated due to government interventions in the financial sector, including the nationalization of the Dutch activities of ABN Amro/Fortis Bank, and capital injections to ING and other financial institutions whose balance sheets were compromised by U.S. mortgage-backed securities and other toxic assets.

Private consumption in the Netherlands, which had grown by 2.1% in 2007, continued to increase by 1.8% in 2008. The unemployment rate, which had previously dropped from 4.5% in 2007 to 3.9% in 2008, was projected to increase to 5.5% in 2009 and is projected to increase to 9.5% in 2010 as a result of the global economic downturn. After a drop in the early 2000s, business investment (excluding the housing sector) staged a recovery in 2005-2006. This upward trend peaked in 2008 with an increase of 10.4% but is expected to reverse course in the following two years, with investment forecast to decline by 14.75% in 2009 and by 13.0% in 2010.

Before the onset of the financial crisis, many firms in the Netherlands cited a loss of competitiveness as a major impediment to growth as unit labor costs outpaced those of their major competitors, including within the euro area. Smaller wage increases codified in collective bargaining agreements before growth accelerated in 2006 helped Dutch firms stay competitive during this period. However, an increasing labor shortage resulted in higher wage demands in the second half of 2007 and into 2008, with the average wage increasing by 3.3%. The pace of job growth reached 10-year highs in 2007, but it fell sharply in late 2008 as fallout from the financial crisis constricted demand. Inflation ranged from 1.1% to 1.7% between 2004 and 2007, reaching its peak in 2008 at 2.5%. The projected inflation rate for 2009 was 1.0%.

The Netherlands was one of the first EU member states to qualify for the Economic and Monetary Union (EMU). Traditionally, Dutch fiscal policy sought to strike a balance between further reductions in public spending and lower tax and social security contributions. During the first half of the current decade, the government struggled to keep the budget deficit within the limit of 3% of GDP set by the EU’s Growth and Stability Pact. The government achieved a budget surplus of 0.6% in 2006 and 0.7% in 2007. Despite the financial crisis, it managed to create a budget surplus of 0.9% in 2008, but this was expected to change dramatically in 2009 as a result of increased government spending on stimulus packages, unemployment benefits, and financial sector bailouts. The government was expecting a budget deficit of 4.1% of GDP in 2009 and is expecting a budget deficit of 6.7% of GDP in 2010, thus exceeding the EU’s limit.

Government Role
Although the private sector is the cornerstone of the economy, the Netherlands has an important and vibrant public sector. The government plays a significant role through permit requirements and regulations pertaining to almost every aspect of economic activity; however, the current cabinet aims to reduce some of the administrative burden. For example, as part of the economic stimulus measures, some environmental regulations have been temporarily relaxed to speed up certain infrastructure projects. The government had gradually reduced its role in the economy since the 1980s, but it has been forced to become more active again as the recent economic downturn has necessitated its intervention. Unabated privatization came to a halt in December 2007, when the government approved a policy that "the State will not pursue selling its interest in approximately 30 companies of 'vital interest'."

Trade and Investment
The Netherlands, which derives more than two-thirds of GDP from merchandise and services trade, had a record trade surplus of approximately $56 billion in 2007. In 2008, this surplus decreased to approximately $50 billion. With no significant trade or investment barriers, the Netherlands remains a receptive market for U.S. exports and an important investment partner. The Netherlands is the eighth-largest destination for U.S. exports ($40.2 billion in 2008), as well as the fourth-largest direct investor in the United States. Dutch accumulated direct investment in the United States in 2007 was $209 billion. The United States is the second-largest investor in the Netherlands, with $370 billion direct investment as of 2007. There are more than 1,600 U.S. companies with subsidiaries or offices in the Netherlands. The Dutch are strong proponents of free trade and staunch allies of the U.S. in international fora such as the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD).

Sectors of the Economy
Services account for about three-quarters of the national income and are primarily in transportation, distribution, logistics, and financial areas such as banking and insurance. Industrial activity generates about a fourth of the national product and is dominated by the metalworking, oil refining, chemical, and food processing industries. The agriculture and fisheries sector account for some 2% of GDP.

Although Dutch crude oil production is small, the Netherlands is the third-largest producer and the second-largest net exporter of natural gas in Europe (after Norway). At year-end 2006, the country had 1.4 trillion cubic feet of natural gas reserves valued at over $166 billion. The port city of Rotterdam is one of the world's major centers for crude oil imports, trading, refining, and petrochemical production. Key import sources include Russia, Saudi Arabia, and Norway. Domestic gas resources are forecast to run out by 2030. To remain an energy player after its own resources are depleted, the Netherlands is cultivating energy relationships with potential long-term supplier countries such as Algeria, Kazakhstan, Libya, Qatar, and--most importantly--Russia. For example, Dutch gas pipeline company Gasunie, wholly owned by the Dutch Government, holds a 9% stake in Gazprom’s Nord Stream pipeline, which will transport gas from Russia to Germany under the Baltic Sea. The Netherlands’s goal is to become a gas “roundabout” for the Western Europe, meaning a hub that gathers natural gas from various sources (including the North Sea, Algerian and Qatari liquefied natural gas (LNG), and Russia), and then distributes it via pipeline to continental Europe.

Environmental Policy
The Netherlands is a small and densely populated country. Its economy depends on industry (particularly chemicals and metal processing), intensive agriculture and horticulture, and its infrastructure, which takes advantage of the country's geographical position at the heart of Europe's transportation network. These factors have led to major pressure on the environment. The government works closely with industry and nongovernmental organizations to reach environmental targets. The Dutch welcomed the EU's 2008 directive to cut greenhouse gas (GHG) emissions 20% from 1990 levels and increase power derived from renewable sources to 20% by 2020. In its national “Clean and Efficient” climate plan published in September 2007, the government unilaterally promised to go even further by 2020: reducing GHG emissions by 30% and cutting its overall energy use by 2% per year. The Environment Ministry recently unveiled its plan requiring the entire Dutch Government to procure only sustainable, “green” goods and services as of 2010. The government acknowledges it will need to rely heavily on fledgling clean energy technologies in order to reach its GHG reduction goals. For example, Prime Minister Balkenende wants the Netherlands to become a global leader in the development of carbon capture and sequestration (CCS). Many independent energy experts, however, consider the government’s aggressive climate change targets to be overly optimistic.

FOREIGN RELATIONS
The Netherlands abandoned a longstanding policy of neutrality after World War II. The Dutch are engaged participants in international affairs. Dutch foreign policy is geared to promoting a wide variety of goals: the rule of law, human rights, and democracy. Priority is given to enhancing European integration, ensuring European security and stability (mainly through the mechanism of NATO and by emphasizing the important role the United States plays in the security of Europe), and participating in conflict management and peacekeeping missions.

The Netherlands generally pursues its foreign policy interests within the framework of multilateral organizations. The Netherlands is an active and responsible participant in the United Nations as well as other multilateral organizations such as NATO, the EU, the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe (CoE), the Organization for Economic Cooperation and Development (OECD), the WTO, and the International Monetary Fund. A centuries-old tradition of legal scholarship has made the Netherlands the home of the International Court of Justice; the Permanent Court of Arbitration; the Yugoslavia War Crimes Tribunal; the Special Tribunal for Lebanon; the European judicial and police organizations Eurojust and Europol; the Organization for the Prohibition of Chemical Weapons (OPCW); and the International Criminal Court. Dutch security policy is based primarily on membership in NATO, which the Netherlands joined as a charter member in 1949.

The Dutch have traditionally been strong advocates of European integration, and most aspects of their foreign, economic, and trade policies are coordinated through the European Union. However, Dutch voters rejected the EU constitutional treaty in June 2005. Parliament approved the Lisbon Treaty in September 2008.

The Netherlands' post-war customs union with Belgium and Luxembourg (the Benelux group) paved the way for the formation of the European Community (precursor to the EU). Likewise, the Benelux abolition of internal border controls was a model for the wider Schengen accord, which today has 15 European signatories, including the Netherlands, pledged to common visa policies and free movement of people and goods across common borders.

The Dutch were key proponents of the 1992 Maastricht Treaty and were the architects of the 1998 Treaty of Amsterdam. They have embraced the introduction of new member states and the common currency (euro). In recent years, however, the Dutch have become increasingly skeptical of the way the EU is run and of any further enlargements.

Foreign Aid
The Netherlands has traditionally been one of the world's most generous aid donors. The Dutch provide a fixed 0.8% of GDP--approximately $7 billion--in overseas development assistance (ODA) annually. This makes the Dutch the world’s fourth-largest aid donor as a percentage of GDP and the sixth-largest in absolute terms. However, because GDP was expected to shrink by 4.75% in 2009 as a result of the global economic downturn, the development budget, which is tied to GDP, was to shrink accordingly. The Ministry of Foreign Affairs (which administers all ODA programs) was likely to cut about $555 million from the ODA budget in 2009. Funding levels are expected to return to normal as GDP begins to recover in 2010.

Despite the difficult economic situation, Development Minister Koenders is working to sustain Dutch leadership in international development. Koenders released a new foreign assistance strategy in October 2007 based on the Millennium Development Goals (MDGs). The strategy identifies safety and development, human rights, opportunities for women and girls, and sustainable energy as the priority areas for Dutch ODA. These thematic issues receive the largest share of the ODA budget--about $4.2 billion in 2009. The government consistently contributes large amounts of aid through multilateral channels, especially the UN Development Program, international financial institutions such as the World Bank, and EU programs. Dutch ODA through these multilateral channels totaled almost $1 billion in 2009.

The Netherlands also provides direct bilateral ODA to select partner countries. In 2008, this ODA totaled about $1.8 billion for 33 partner countries, with the largest share going to Indonesia, Sudan, Mozambique, and Tanzania. Another highlight is Afghanistan, where the Netherlands donated almost $116 million in 2008 through bilateral and multilateral channels; this is part of the Dutch commitment to provide a total of $311 million to Afghanistan from 2006-2008.

International Drug-Trafficking Control
The Dutch work closely with the United States and other countries on international programs against drug trafficking and organized crime. There is close Dutch-U.S. cooperation on joint counternarcotics operations in the Caribbean. The Netherlands actively participates in the Drug Enforcement Administration's (DEA) El Paso Intelligence Center (EPIC). In May 2007, the Netherlands became a full member of DEA’s International Drug Enforcement Conference (IDEC). The 10-year Forward Operation Locations agreement between the U.S. and the Netherlands for the establishment of forward operating locations on Aruba and Curacao became effective in October 2001. The Netherlands is a signatory to international counternarcotics agreements, a member of the UN Office on Drugs and Crime (UNODC), the UN Commission on Narcotic Drugs, and the 1990 Strasbourg Convention on Money Laundering and Confiscation, and is a major contributor to international counternarcotics projects.

U.S. RELATIONS
The U.S. partnership with the Netherlands is one of its oldest continuous relationships and dates back to the American Revolution. The excellent bilateral relations are based on close historical and cultural ties as well as a common dedication to individual freedom and human rights. The Netherlands shares with the United States a liberal economic outlook and is firmly committed to free trade. The United States attaches great value to its strong economic and commercial ties with the Dutch. In 2007, the Netherlands was the fourth-largest direct foreign investor in the United States, and the United States was the second-largest direct foreign investor in the Netherlands.

The United States and the Netherlands often have similar positions on issues and work together both bilaterally and multilaterally in such institutions as the United Nations and NATO. The Dutch have worked with the United States at the WTO and in the OECD, as well as within the EU to advance the shared goal of a more open, market-led global economy. The Dutch, like the United States, supported the accession of 10 new members to the EU in 2004, and accession negotiations for Turkey in 2005.

The United States and the Netherlands joined NATO as charter members in 1949. The Dutch fought alongside the United States in the Korean War and the first Gulf War and have been active in global peacekeeping efforts in the former Yugoslavia, Afghanistan, and Iraq. The Netherlands played a leading role in the 1999 Kosovo air campaign. They currently are contributing to EU peacekeeping forces in Bosnia. In the initial phase of the recent Iraq conflict, the Dutch deployed Patriot missiles to protect NATO ally Turkey, and sent a battalion of troops to Iraq to participate in stabilization operations. The Dutch also support and participate in NATO and EU training efforts in Iraq. They are active participants in the International Security Assistance Force in Afghanistan.

Principal U.S. Embassy Officials
Ambassador--Fay Hartog Levin
Deputy Chief of Mission--Edwin R. Nolan
Political-Economic Counselor--Andrew C. Mann
Global Affairs Officer--David E. Jaberg
Legal Counselor--John J. Kim
Public Affairs Counselor--James K. Foster
Management Counselor--Gregory S. Slotta
Regional Security Officer--John L. Bush
Defense Attache--Captain Daniel Braswell
Office of Defense Cooperation--Colonel Charles C. Mau
Commercial Counselor--Maria J. Andrews
Agriculture Counselor--Stephen M. Huete
Consul General, Amsterdam--Julie A. Ruterbories

The U.S. Embassy is located at Lange Voorhout 102, 2514 EJ The Hague; tel: 31-70-310-2209; fax: 31-70-310-2307. The Consulate General is at Museumplein 19, 1071 DJ Amsterdam; tel: 31-20-575-5309; fax: 31-20-679-0321.



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