(Apr. 17, 2009) Prime Minister Jan Peter Balkenende of the Netherlands outlined his government's plan to “invest heavily in the Netherlands' future” in a statement made to the Dutch House of Representatives on March 25, 2009. (Press Release, Government of the Netherlands, Balkenende Presents Measures to Tackle Crisis (Mar. 26, 2009), available at http://www.government.nl/News/Press_releases_and_news_items/2009/March/B
alkenende_presents_measures_to_tackle_crisis.) The government has proposed a new stimulus package of €6 billion (about US$7.9 billion) (equivalent to about 1% of gross domestic product) for 2009 and 2010, to be spent over six years, and drawn up measures to restore public finances and implement needed reforms. Dutch provinces and municipalities are to have an additional €1.5 billion to invest. The spending plan, the government contends, will boost consumption and the economy by €50 billion in the short term. In November 2008, the government had launched an €6 billion stimulus plan for companies and pumped €13.75 billion into the financial system, in addition to purchasing the Dutch operations of Fortis Bank for €16.8 billion. (Id.; Dutch PM Unveils Six-Bln-Euro Stimulus Plan, EUBUSINESS, Mar. 25, 2009, available at http://www.eubusiness.com/news-eu/1237995122.54/.)
Four key aspects of the plan are as follows.
- In the area of work and economic activity, the plan seeks to “ensure that as many people as possible keep their jobs,” Balkenende stated, with part-time unemployment benefits to help achieve this aim. Retraining programs will be made available to assist those whose job loss is unavoidable to find new employment quickly. Top priority will be given by the government to preventing youth unemployment.
- To achieve a “clean and innovative economy,” the stimulus plan includes investment in sustainability, energy security, renewable energy, and innovation. Among the proposals are schemes for scrapping old cars and for insulating homes.
- In the area of infrastructure and construction, the government will present spending plans for road and waterway maintenance and for improvement of school and hospital buildings or the construction of new ones. The Prime Minister stated that the government will also accelerate procedures to enable businesses and private individuals to undertake construction projects more quickly.
- The stimulus package also seeks to promote company liquidity. By abolishing the flight tax, for example, the government will seek to raise the liquidity of companies connected with Schiphol Airport. (Press Release, supra.)
Balkenende conceded that “all the measures for restoring the economy in the short term are very costly.” (Id.) The stimulus package is in addition to the €80 billion already spent to restore confidence in the country's banking sector since September 2008; even though leaving the 2009 and 2010 spending plans in place will cost the additional €50 billion, he stated, “[t]hese decisions are necessary and defensible given the economic situation.” (Press Release, supra; ROUNDUP: Dutch Announce Six-Billion-Euro Economic Stimulus Plan, SILVERSCORPIO, Mar. 25, 2009, available at http://silverscorpio.com/roundup-dutch-announce-6-billion-euro-economic-
stimulus-plan/.) To restore public finances, starting in 2011 the government plans to reduce the deficit by at least 0.5% of GDP a year, a commitment to be stipulated in an act of Parliament.
Finally, Balkenende addressed the need for reforms in the fields of health care, education, and pensions for the next four decades. The state pension age will be raised to 67 from 65, an effort will be made to control healthcare costs, and those who own a home worth €1 million (about US$1.3 million) or more will have to pay more tax on it. “The reforms are necessary and fair,” Balkenende stated, “[b]ut we realise that they will have far-reaching effects. That is why they will be introduced gradually, beginning in 2011.” (Press Release, supra; SILVERSCORPIO, supra.)
It has been pointed out in the press that there are no “substantial” reforms in the stimulus plan to regulate the financial sector, nor does the plan include any measures to improve supervisory functions of the central bank (De Nederlandsche Bank) or the Authority for the Financial Markets (Autoriteit Financiële Markten, the country's financial watchdog). The two institutions reportedly “have come under strong criticism in recent months from experts and the public alike for allegedly failing to prevent the problems in the financial sector.” (SILVERSCORPIO, supra.)