Is the economic crisis in the Netherlands nearly over?

02 June 2014, by
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Currently, one third of Dutch people think the financial crisis that began in 2008 is over, while for around one fifth of the population, it is even going well.

The people who think this way, however, are mostly educated men with above-average incomes.

This comes from statistics published by the National Institute for Family Finance Information (Nibud). According to them, the rest of the Netherlands does not think the crisis is over, with one fifth finding it even worse.

While increasing confidence is apparent, the continuing caution is expressed in consumer spending: in 2013, 70 per cent of Dutch people economised on their expenditure, and nearly that same amount say they will continue to do so in the coming year.

It’s also seen in the latest numbers on social security recipients: the numbers have been growing in the Netherlands for several years and have now reached the same levels as the late 1990s, with 426.000 people receiving social security in the first quarter of 2014.

Dutch economy improving, but…

Nonetheless, the Dutch economy has shown signs of recovery recently, according to figures from CBS and others. House prices are rising, consumer confidence has improved (to nearly 0, which means it is no longer negative), the private sector is investing more and entrepreneurs are not planning further staff cuts.

Further, the number of people on unemployment benefits is decreasing, while the number of job vacancies in the Netherlands has increased. There has also been an increase in the number of hours worked in temporary jobs over the last year, which usually provides a first indication of recovery on the labour market.

According to CBS, however, this last increase is not corroborated by the unemployment rate, which increased in April and remains high at 8,7 per cent. The agency's latest status report says that the economic situation is still fragile, with the recovery coming to a virtual standstill in the last few months as improvements and deteriorations almost cancelled each other out.

Unemployment and social security

Since 2009, the number of social security recipients too young to claim old age pensions has risen strongly. The rate accelerated in early 2013, as the situation on the Dutch labour market deteriorated and the number of people on unemployment benefits grew. A minority of these also became dependent on social security.

economic crisis netherlands nearly over

The lack of improvement in the social security numbers is because most people living on social security have been unemployed for a relatively long period of time and, on average, their chances on the labour market are more limited.

Another element is that the most substantial increase in recipients this year was among people under 27.

That number has increased from last year, although it tends to go up and down due to the relatively large number of short-term employment contracts among young people that leave them unable to build up an entitlement to unemployment benefits.

This means they claim social security more quickly once they are unemployed. On the other hand, they are more successful when it comes to finding a new job.

Government help for jobs

The Dutch government is taking action on unemployment, however, spending 230 million euros for employment schemes. That is enough to get 185.000 people employed, according to the Minister for Social Affairs and Employment Lodewijk Asscher.

The government has set aside 600 million altogether on employment schemes, dependent on that amount being matched by unions and employers.

Most of the money is going towards support for getting redundant workers into other jobs, additional traineeships for young people and employing people with few job opportunities, as well as education. How successful these schemes prove may not be seen until they are evaluated in 2016.

Until real ecomonic improvement is apparent, it seems most Dutch people will remain cautious spenders.

Sources: CBS, Volkskrant, Parool

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Alexandra Gowling

Alexandra is an Australian citizen and an experienced expat, having spent (quite a bit of) time in A...

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