In the UK, thanks to the new Minister of Finance, relations are recovering, but it is not yet clear whether peace will return, according to Arnoud Boot, Professor of Entrepreneurial Finance and Financial Markets from the University of Amsterdam. This seems to be a stabilization week.

He did speak of a ‘normalisation week’, comparing Jeremy Hunt’s appointment as UK finance secretary to ‘bringing in some sort of Johan Remkes’. That’s what Volkskrant wrote. He will quietly do what needs to be done with economic policy. You have to show what your plans are, you have to show how you handle income and expenses and you have to show how you are doing today and tomorrow.’

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However, Boot had no idea that Hunt would reverse the entire financial action package of his predecessor Kwasi Kwarteng. It’s going to be more nuanced. “Because of some strange actions, everyone thinks that the package is complete nonsense, but there is also reasonable things in it,” said Boot. It has something to do with investment in infrastructure, for example. Hunt will make policy as you should as a politician, and hopefully we as the Netherlands can take an example from that.’

How come

According to Boot, the Netherlands can take an example from the UK in terms of what not to do. “We’ve seen that in the last few weeks. And from now on we can see how it should be done.’ He refers to the mutual struggle between government policy and the central bank: “That’s the side effect, the collateral damage. But it’s huge.”

Boot argues that a central bank is needed as a reasonably autonomous institution that depends on public support. “They’re institutions that should have a certain reputation that we can rely on, but they’re actually putting the brakes on.” To keep inflation under control. But if at the same time – as in England and the Netherlands – unimaginable amounts of money are being spent by governments without thinking about financing, then central bank policy will get in the way.’

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Boot continues: ‘Because politicians don’t want to admit it, they start throwing mud at the central bank. So in the end there are losers on both sides, where the state or the people actually bear the brunt.’