After some years of political and socioeconomic confusion, a coalition of Christian democrats and liberals embark on a radical review of government finances and the social security system. In the Wassenaar Agreement, government and the social partners agree on pay restraint to strengthen the position of Dutch exports.
During the 1980s, the worldwide economic crisis drove up unemployment in the Netherlands to more than 600,000. It began to be clear that something had to be done to improve the performance of Dutch industry and government finance. In 1982, Ruud Lubbers became Prime Minister at the head of a centre-right coalition between the CDA and the People's Party for Freedom and Democracy (VVD). In the same year, two popular politicians left active political life: Dries van Agt of the CDA and Hans Wiegel of the VVD. Both became Queen's Commissioners: Van Agt in North Brabant and Wiegel in Friesland. The emergence of CDA politician Ruud Lubbers as Prime Minister ushered in a no-nonsense era. The policies of his government were directed at reducing government intervention in industry by way of decentralisation, deregulation and privatisation. For example, it stopped the payment of large subsidies to lame-duck enterprises. Measures were also taken to stimulate the economy, for example by passing the Investment Account Act (WIR), under which government reimburses a proportion of corporate investment. The Lubbers government also managed to reduce the government deficit from 11 per cent of national income in 1983 to 6.5 per cent in 1986.
In the 1970s and 1980s, the Dutch public was both vocal and highly critical. Mass demonstrations were held against nuclear weapons, nuclear power and the deployment of cruise missiles. On 21 November 1981, 400,000 people marched in Amsterdam in protest against nuclear weapons. Similar demonstrations were taking place throughout Europe, but nowhere else did they bring so many people out onto the streets. In 1983 a demonstration against the planned deployment of NATO cruise missiles in the Netherlands brought 550,000 people flocking to The Hague. The foreign media dubbed this sudden massive upsurge of anti-nuclear feeling 'Hollanditis', or the Dutch disease, and various groups immediately seized on the term as a badge of honour. In May 1984, a nation-wide week of protest was held against cruise missiles and 900,000 people participated in a 15-minute general strike. Their efforts were in vain: parliament gave consent for the deployment of the missiles and it would have gone ahead had not political changes in Eastern Europe and the Soviet Union removed the need for it.
The Lubbers government had another enemy in its sights. This was the high government deficit, which was then running at almost 12 per cent. In an attempt to reduce it, the government announced major spending cuts. To gain support for this, it asked the trade union movement and the employers to negotiate a formal agreement on pay restraint and the prevention of unemployment. It was agreed to put jobs above income and workers were given the option of trading pay increases for cuts in working hours. As a result, the working week in many sectors shrank from 40 hours to 38. The accord that was struck between the two sides of industry is known as the Wassenaar Agreement and has since become famous outside the Netherlands as 'the polder model'. Radical cuts were also made in the generous social security arrangements. Clearly, the time was ripe for such action, since the only person to protest was Joop den Uyl, by now getting on in years and the leader of the opposition Labour Party. He saw his old policy of ensuring wider access to knowledge, wealth and power being reversed. In 1986, however, Wim Kok - who had been chairman of the Netherlands Federation of Trade Unions (NVV) since 1973 - took Den Uyl's place as leader of the Labour Party.