Rather its euro policy was one of benign neglect. When the euro started to tumble on foreign exchange markets, however, benign neglect took on the look of a weak euro policy to some. The Dutch have a tradition of a strong currency. Their argument that benign neglect be abandoned was instrumental in changing the currency policy. Today, thanks to their persuasive view, the ECB finally has adopted a strong euro policy, though it has no explicit exchange rate targets.
Several factors account for the ascendancy of Dutch influence in Frankfurt.
It undoubtedly helps, of course, that Wellink has had a long and close working relationship with ECB president Wim Duisenberg, who was Wellink s immediate predecessor at the Dutch central bank. Nurtured by such distinguished past central bank chiefs as Marius Holtrop, Jelle Zijlstra, and Duisenberg, the Dutch central bank has a long tradition of independence from outside political influences, a longer time horizon for policy, and a proclivity for strong anti-inflationary policies and a hard currency. This is exactly the kind of influence the fledgling European Central Bank needs, and exactly the type the old Bundesbank used to provide. What also helps give the Dutch a voice that counts in the Governing Council is the outstanding economic performance in Holland. In a recent interview, Wellink concurred that the success of the Dutch Model reduced social spending, flexible labor markets, and decentralized economic decision-making had not been irrelevant to Dutch influence in Frankfurt.