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1. (SBU) SUMMARY: The Dutch Labor Party's (PvdA) September
25 decision to drop its demand for a referendum on the EU
Reform Treaty avoids a messy -- and potentially disastrous --
repeat of the Dutch 2005 popular rejection of the previous
Constitutional Treaty. Parliament is now expected to ratify
the treaty. At the same time, the PvdA's reversal comes at a
cost both to the PvdA leadership -- now widely accused of
"cowardice" for abandoning a major election promise -- and to
its Coalition Partner, the Christian Democrats (CDA) -- which
will now be expected to show more flexibility on another
major issue, such as the national "dismissal laws" or the
Dutch deployment to Afghanistan. END SUMMARY.

2. (U) The Dutch appear to have avoided a political crisis
over a possible referendum over the proposed EU "reform"
treaty. On September 25, the Parliamentary Group of the Dutch
Labor Party (PvdA) announced that it would not support a
referendum on the treaty, effectively reversing its campaign
pledge to submit the treaty to a public vote. The PvdA
decision followed a September 21 Cabinet decision that a
referendum was "not desirable" and "not necessary" in light
of a Council of State study concluding that the "new" treaty
did not "have a constitutional nature." Supporters of the
treaty -- even many of those who believed a referendum was
necessary -- worried that the Dutch public, if given the
chance, would have repeated their 2005 rejection of the draft
EU Constitutional Treaty, embarrassing the Balkenende
government and strengthening anti-EU sentiments on the left
and right.

3. (U) As a member of the governing coalition government, the
PvdA ministers (including the Minister for European Affairs,
Frans Timmermans) officially supported the September 21
Cabinet decision. Although the Cabinet members are expected
to make every effort to convince their Parliamentary faction
to support government decisions, the PvdA ministers faced the
real prospect that their MPs would undercut their position by
pushing a pro-referendum motion in Parliament. Jacques
Tichelaar, PvdA floor leader, had repeatedly indicated his
support for a referendum in keeping with the party's election
manifesto. Former development minister Jan Pronk -- who
narrowly lost a bid to become Party Chairman on September 24
-- had also publicly called for party members to challenge
the coalition government's stance. In the end, however,
under Tichelaar's guidance, the parliamentary faction agreed
to adopt the government's anti-referendum position without
putting the issue to a vote.

4. (U) Following the decision, Tichelaar asserted that most
rank-and-file PvdA members were much more concerned about
domestic issues -- such as an upcoming debate on loosening
hiring and firing regulations -- than EU matters. In several
press interviews following the September 25 decision,
Tichelaar rejected accusations that he had "turned 180
degrees" on the referendum issues, arguing that his previous
positions were more nuanced. Political commentators
suggested that Tichelaar's mention of the dismissal laws in
the same breath as the EU treaty probably means the PvdA
expects to cut a deal in Cabinet linking the two issues.

5, (U) Opponents of the treaty on the left and right
immediately attacked Tichelaar and the PvdA leadership in
general for reversing the party's pre-election stance in
favor of a referendum. According to Socialist Party (SP)
spokesman Harry van Bommel, the PvdA's decision was a
"pistol" the SP and others would use to weaken the already
beleaguered party. Maverick nationalist politician Geert
Wilders (PVV) openly accused the PvdA leaders of "cowardice"
for not trusting the Dutch electorate to make up its own mind
on the issue. The pro-referendum camp in Parliament -- SP,
Green-Left, D-66, and PVV -- have made clear it intends to
push forward with their motion for a referendum, but without
PvdA support, it will have no majority in either Chamber of

6. (SBU) COMMENT: The parliamentary faction's decision will
be discussed at an upcoming PvdA conference on October 6.
There is a slight chance that PvdA rank and file members will
take the opportunity of the conference to reopen the debate
and call for a new decision. Such an action, however, would
essentially constitute a vote of "no confidence" in the PvdA
leadership -- possibly leading to a collapse of the current
government -- and would be seen as virtually suicidal for a
party already widely viewed as weak and internally divided.

7. (SBU) COMMENT, CONTINUED: The purported link between the
coalition decisions on the EU treaty and the dismissal laws
could also indirectly have an impact on the current debate
over the Netherlands' troop deployment to Afghanistan. Since
joining the Balkenende IV cabinet, three main issues have

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divided the PvdA from its senior Coalition Partner, the
Christian Democrats (CDA): the EU treaty referendum,
revising national labor laws regarding hiring and firing (the
"dismissal laws"), and renewing the Dutch deployment to
Afghanistan. Absent a victory in at least one prominent
area, the current PvdA leadership, and Finance
Minister/Deputy Prime Minister Wouter Bos in particular, will
face ever growing resentment from party members. Having
"lost" on the EU referendum, if the PvdA doesn't "win" on the
dismissal laws, it may toughen its stance against a renewed
Afghanistan deployment or seek other areas in which to prove
the party's relevance in Cabinet. END COMMENT.