Tag Archives: Hypotheek

The Dutch NOS reported another go with banks in the view of business. Bernhard Wientjes has been voicing the opinion that some of the banks (ABN/AMRO and SNS Reaal) should be sold. It was brought in the air of ‘when you have no more money you start selling the silver cutlery’ would be the next step. As the Dutch government needs to cut 6 billion, the cutting spree could be a lot less. Well, in this matter I personally stand with Finance minister Jeroen Dijsselbloem who is not that eager to do that. There is logic for not doing this, as this relief would be for one year only and after that the cuttings would still need to be found next year. I am worried that certain business men are now in a state to strong hand certain political decisions. I leave it up to the reader whether those decisions are purely for the need of greed.

If business is linked to greed (often called ‘enterprising solutions’) then that would clearly fit in the views of Bernhard Wientjes. As chairman of the VNO-NCW it would be an enterprising solution that is right up his alley. The VNO-NCW is a fusion of the VNO (League of Dutch Commercial Enterprises) and the NCW (Dutch Christian Business Society). Their mission is to support and further the needs of Dutch corporations both on a National and international level. In this he is doing exactly what he is expected to do.

Yet, in this light, at a point where two banks would be sold far below value and at the expense of the tax-payers, one should clearly ask and look at the possible windfall for Bernhard Wientjes and his friends should this work out in that way.

There is a clear valid question whether the Dutch Silver cutlery is currently in a safe position. The reality of 6 billion of cutbacks will start to show a strangling result, yet, this was the danger all along when previous political alliances (2006-2010) were clearly pushing the outstanding invoice forward. Now that there are no more options, the consequences are likely to be dire, and as such in his position Bernhard Wientjes is clearly trying to look forward for Dutch corporations. I see this specific step as a dangerous one and until Dutch banks are clearly on a minimum set standard nothing should change. In addition, I am all in favour at present to keep these institutions nationalised to prevent their boards to just seek additional high risk gains at anyone’s expense to meet personal commission goals, whilst ignoring local needs (mortgages and such).

Even seeing these banks as possible training steps for younger jobseekers on the dole, to give them short term jobs whilst staying on the dole, would give them additional food for job experience. The answers that some view that this is not how it is supposed to be, I would counter, with ‘what solutions do you have?’. We need to change the way we think and operate. Instead of trying to balance which pocket the money is coming from, we should accept that the money is coming from the suit the government wears and see how far we can walk with this suit. Instead of staying on principle of keeping tabs what pocket it comes from, use the principle of it comes from us anyway and focus on instilling knowledge and experience. That will strengthen the young to get a good shot in getting something better with a decent chance. If you have any doubt, then consider that the Netherlands is only one of 3 countries where youth unemployment rates are below 10%. Many of the Southern European countries are way over 40%. If the future of youth employment is about experience, then make sure that the youth are getting a running start now is going to be important down the line. If their future could be a decent job in Germany, then giving them an edge as they compete with desperate youthful jobseekers from Spain, Italy or Greece is essential. Do not think that those kids are any less. Those who graduated from Universidad Complutense de Madrid are more than top Notch. 7 of their graduates ended up with a Nobel price and graduates from there ended up with 2 dozen of other internationally acclaimed awards. So, if we are looking at future events, getting the youth ready NOW will be an essential step.

Yet, this week has even more issues involving banks. A report that is due to be released tomorrow on advised banking changes. The ‘advice’ is to change the mortgage market. In the Netherlands it is currently possible to get a 105% mortgage so that the house and the notary costs and change of owner registration can all be covered. The commission chaired by Herman Wijfels is now advocating that the mortgage cannot be any higher than 80%. This is to prevent that the debt of selling a house at loss would end up hitting the banks. It seems that the banks are all over their need for ‘securing’ for the little man (read the average consumer). Taking into account that the average house in the Netherlands is around $350,000 the question, especially in this era of lack of funds is where on earth will a person get $70,000 in savings when the Dutch taxation system makes it almost impossible to get that kind of money saved up. They also mentioned that this should not be done until the housing market is stronger and prices are on the rise. Like that will help people to get the money. It is interesting that there is no mention of the much more reliable and fair Swedish system. Perhaps the report due out tomorrow will mention it, but I have not been privy to the full report. In the Swedish system a house often has a two tiered mortgage. You have the bottom part which envisions the gross off it (let’s say 80% for argument sake) at a low base percentage. The rest goes into the top part. Now that part (in my case) was almost 2.5% interest higher, but the mortgage was 105% covered. So instead of the unaffordable savings needs, we have a slightly higher mortgage. So, even if we have to accept a slightly cheaper house, we at least can get a house and not be looking at houses, never being able to afford any of it. The question becomes on what it was about. The fact that a report leaks is no news, but that the report leaks just around the same time Bernhard Wientjes is making a play to sell banks is a rather convenient coincidence.

These events are important to consider. This is because the same issues are playing in the UK. Consider that Lloyds is in need of an extension as they are selling 631 branches. This and the issues around the Royal Bank of Scotland do have links, as the UK government needs to cut cost by a lot more than 6 billion (having a Trillion in deficit makes that an awkward necessity). So will we see the same play as some are now seeing if they can sell banking interests at no more than tuppence on the pound? There is absolutely no known plans at present (in case you got scared or overly enthusiastic), but the issues remain, and the solution as such would be there in equal measure. To allow the young unemployed to become part of the bank on internships and training places, so that we can offer a solution where those seeking jobs will have actual work experience in their CV. These measures might seem small, yet the confidence boost that the younger jobseekers gain, could be the winning factor. In addition, extra hands, helping to boost the value of these banks would mean that when sold, they will go for a much better and more realistic value then they are currently set at. All this in a combined effort to strengthen commonwealth economy and their assets, for the simple reason that the European Economic outlook remains grim at best and relying on overly confident reports of economic prospects, that get downgraded quarter after quarter is not doing anyone any good.