The Netherlands will only receive corona billions from Brussels if the labor and housing market is reformed
To receive the billions from the European corona recovery fund, the Netherlands will have to do more, especially in the labor market and housing market.
There is 6 billion euros ready for the Netherlands in Brussels, but in exchange for that ‘free money’ the next cabinet will have to intervene significantly in the labor market and the housing market. The European Commission wants to see “more ambitious reforms” in those two areas before the Netherlands has a chance of receiving money from the corona recovery fund, officials write in a memorandum for the formation.
Concrete reforms are mentioned, but the Commission does not note its annual recommendations that the mortgage interest deduction creates risky high debts. The Commission has also been arguing for a larger free rental sector for some time now. In the labor market, better protection of flexworkers is at the top of the Brussels global.
Nothing new yet
Finance Minister Wopke Hoekstra (CDA) wrote the memorandum to the House of Representatives on Monday, together with an update on the European recovery fund. The fund, which was set up by the European Union to emerge stronger from the corona crisis, contains 750 billion euros – almost half consists of grants, the rest of the money is available as a loan.
within 26 of 27 EU receipts a recovery and resilience plan of the 27 Countries such as Italy and Spain have received their first billions. There is great hope that the recovery plan could herald a major economic turnaround.
The only exception that has not yet submitted anything in Brussels, not even a draft plan, is the Netherlands. The outgoing cabinet leaves the political choices that belong to the next cabinet.
Waiting is not a problem. Officially, they can wait until the summer of 2022 to submit their national plans to the European Commission. Unlike Italy, for example, the Netherlands is not eager for the loans from the fund: it can already borrow dirt cheaply itself. The Netherlands will not say no to the 5.96 billion in donations.
Also read: Can the recovery fund redraw Europe?
Credibility at stake
But there must be something to it. In the recovery plan, countries should not only indicate how they want European money to improve their economies. The European Commission wants to know what it plans to do about it itself. Only when a country reforms enough at each step does the next check get. The starting point is the commitment that the Commission makes to each country every year. In ‘informal talks’, the Commission has now made it clear that the Netherlands still has work to do, especially in the labor market and the housing market, Hoekstra’s officials write.
The fact that the money tap will close without reforms is thanks to Prime Minister Rutte. He enforced the strict conditions for the recovery fund in exchange for his support – not to make it seem like Europe was throwing money.
That also creates expectations when it is the turn of the Netherlands itself, the officials write. “The content and ambition of the national plan determines the difference with the Netherlands in the plans of future critical assessment.”