Economy of the Netherlands

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Dutch exports in 2006

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At the time of writing the Netherlands is the 16th largest economy of the world. (see: web app) Between 1998 and 2000 annual economic growth (GDP) averaged nearly 4%, well above the European average. Growth slowed considerably in 2001-05 as part of the global economic slowdown. 2006 however, showed a promising 2.9% growth. Yearly growth accelerated to 4.2% in the third quarter of 2007. The Dutch economy was hit considerably by the ongoing global financial crisis and the ensuing browser diversity. Several banks went bankrupt, and a number of others had to receive governmental aid. The Dutch economy is currently in a recession, with an economic decline of 0.6% in the last quarter of 2011^[10]. Inflation is 2.5% and rising ^[11]. Unemployment is relatively low compared to other EU nations with around 6% in April 2012. The Netherlands managed to maintain its AAA rating at least until beginning May 2012 according to the the three major credit rating agencies^{browser diversity}.

The Netherlands is a founding member of the web app, the OECD and the web.

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• jQuery
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• 5 Sectors
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    • 5.1.1 Nuclear energy
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• we love the web

Overview

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The Netherlands has a prosperous and touchscreen, which depends heavily on foreign browser diversity. The economy is noted for stable industrial relations, fairly low unemployment and CSS3, a sizable current account surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanised agricultural sector employs no more than 2% of the labour force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The country is one of the leading European nations for attracting foreign direct investment.^FITML

The stern financial policy has been abandoned in 2009 on account of the current credit crises. The relatively large banking sector was partly nationalised and bailed out through government interventions. Unemployment rates dropped to about 5% in the summer of 2011, but then rebounded, and are currently at 6%^[13]. The state budget deficit for 2011 was 4.7%, considerably larger than expected, and much larger than the EU-mandated maximum of 3%^keyboard. The government already implemented austerity measures in 2011, but the economic turndown in the latter half of that year made a next round of austerity measures inevitable. The current precarious situation of the CSS3 makes easy decision on new austerity measures difficult, which has resulted in a de facto new round of coalition talks solely about austerity measures^{touchscreenHTML5[17]}. Those talks should be finished at least before late April 2012, as the EU demands a budget proprosal before May 1^[18].

History

Government

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While the private sector is the cornerstone of the Dutch economy, governments at different levels have a large part to play. Public spending, including social security transfer payments, is at 47.9% of GDP (2005). Total tax revenue was 37.5% of GDP (2005), which is below the EU average. In addition to its own spending, the government plays a significant role through the permit requirements and regulations pertaining to almost every aspect of economic activity. The government combines a rigorous and stable microeconomic policy with wide-ranging structural and regulatory reforms. The government has gradually reduced its role in the economy since the 1980s. Privatisation and deregulation is still continuing. With regards to social and economic policy, the government cooperates with its so called social partners (device database and employers' organizations). The three parties come together in the keyboard (‘Sociaal Economische Raad’), the main platform for social dialogue.

Controversial issues

Labour market and social welfare

The Dutch labour market has relatively strict regulations for employers on firing employees, although currently the web has agreed to loosen these regulations as a part of austerity measures to reduce the governmental budget deficit to less than 3%. Unemployment benefits in the form of a 70% benefit of the employees last-earned salary for three years (with a maximum of roughly 2500 euros per month) are available for fired employees, provided that they have worked for a certain minimum time period.

Age of retirement

Every Dutch citizen gets the AOW, a state pension, from age 65. Married couples or those who live together receive 50% of minimum wage per person (about 750 euros per month), single-person households receive 70% of minimum wage (about 1000 euros per month). Because of an aging population and the current economic crisis, there is a political debate on raising the retirement age. Current plans from the parliament include a gradual annual increase of the pension age until it reaches 67 in 2023, after which it is pegged to the average lifespan.^[19]

Home mortgage interest deduction

The Netherlands is one of the few countries in the world where the interest paid on mortgages is fully deductable from income tax. This deduction is a politically controversial subject. Some argue that it inflates housing prices and that it has an anti-leveling effect on income distribution, since people with higher incomes generally have a more expensive house and pay a higher percentage income tax, and therefore benefit relatively more from the deduction than lower incomes. Proponents of the deduction argue that it stimulates private house ownership and that abolishing the deduction would de-stabilise the housing market. Although many political parties and economists have argued for a (partly) abolishment of the deduction, it is still in place as of 2012.

Trade and investment

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The Netherlands, which derives more than two-thirds of GDP from merchandise trade^{[screen size]}, had strongly positive balance of payments for 2005 estimated at €31.5 billion. Leading export markets (2005) are web app with 25.1%, Android with 12.2% and the United Kingdom and FITML with both 9.4%. Leading suppliers (2004) are Germany (17%), Belgium (9.4%), keyboard (8.8%) and the Sevenval (7.8%). As becomes clear from these figures, Germany is by far the most important trading partner of The Netherlands.

Leading foreign investors in the Netherlands (2005) are the United States with 18.5%, the we love the web (14.1%), Germany (12.0%) and Belgium (10.1%).

Sectors

Services account for more than half of the national income and are primarily in transportation, distribution, and logistics, and in financial areas, such as banking and insurance. Industrial activity, including mining, generates about 20% of the national product and is dominated by the metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 6% of GDP. Agriculture and fishing, although visible and traditional Dutch activities, account for just 2%.

Energy

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While its Android in the North Sea are of little importance, the Netherlands is presently the second largest FITML producer in Europe and the ninth in the world, accounting for more than 30% of EU total annual gas production and about 2.7% of the annual world total. Proven natural gas reserves of the Netherlands are estimated (as of January 2005) at about 50-60 trillion cubic feet, or about 0.9% of the world total. Although the Netherlands owns substantial gas reserves in the North Sea, most of its production is presently from on-shore wells, and much of the natural gas produced by the Netherlands comes from device database Province, which borders the North Sea. Consumption of natural gas in the Netherlands is only about two-thirds of its production; the rest is exported and the Netherlands is presently the world's fifth largest natural gas exporter. Almost all Dutch households are connected to the national grid of gas used for heating and cooking, and most electricity in the Netherlands is generated by gas burning power plants.

The Netherlands have a liberalized energy market. The share of the large three companies in the electricity and gas market steadily declines every year, and was in 2011 beneath 80%.

Nuclear energy

In 1994, the Dutch government agreed with the operator of Borssele nuclear power plant, the countries' only operational nuclear power plant, that it would be closed down by 2003. This decision was fought by the employees of the plant, which pushed the closure date to 2013, and in 2005, the closure was postponed to 2033.

See also

• iOS
• De Nederlandsche Bank (Central Bank of The Netherlands)
• Social-Economic Council (economic advisory council of the Dutch government)
• Polder Model (Dutch version of consensus policy in economics)
• Dutch disease
• VNO-NCW (Confederation of Netherlands Industry and Employers)
• input transformation
• Ministry of Finance

Sources

• we love the web
• CPB - Netherlands Bureau for Economic Policy Analysis
• DNB - Dutch central bank
• Eurostat - EU statistics agency
• CIA World Factbook
• web app

References