COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - the Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of the Netherlands and delivering a Council opinion on the 2023 Stability Programme of the Netherlands
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Netherlands, economic policy, economic recovery, economic reform, energy policy, fiscal policy, investment, labour market, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  SWD(2023) 619 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report -  the Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of the Netherlands and delivering a Council opinion on the 2023 Stability Programme of the Netherlands {COM(2023) 619 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

A resilient economy facing new 
headwinds 

The  Dutch  economy  has  proven  to  be 
in  recent  years.  Despite  the 
resilient 
increased  uncertainty  and  high 
inflation 
caused  by  Russia’s  war  of  aggression  against 
Ukraine,  the  Dutch  economy  continued  to 
perform  well 
in  the  first  half  of  2022. 
Businesses have invested more, and consumer 
spending has continued to grow on the back of 
a  strong  labour  market  and  solid  growth  in 
exports.  Having  already  surpassed  pre-
pandemic levels in 2021, Dutch GDP regained 
its pre-pandemic growth-trendline in Q2-2022 
(see  Graph  1.1).  The  post-pandemic  recovery 
in  the  Netherlands  has  therefore  been  faster 
and  more  complete  than  in  most  other  EU 
countries.  

New  headwinds  and  challenges  are 
expected to lead to a modest slowdown in 
economic  growth.  Russia’s 
invasion  of 
Ukraine  has  caused  inflation  to  surge,  driven 
especially  by  higher  prices  for  energy  and 
raising 
commodities.  With  central  banks 
interest rates in response to the high inflation, 
borrowing  is  becoming  more  expensive.  The 
Dutch  economy  is  also  increasingly  affected 
by  a  shortage  of  workers.  Although  consumer 
spending  still  held  up  well  during  the  second 
half of 2022, investment activity slowed down 
as  businesses  adjusted  to  higher  input  prices, 
shortages  of  workers,  and  the  increasing  cost 
of  borrowing.  Looking  ahead  at  2023,  growth 
in  consumer  spending  is  projected  to  slow 
down,  with  employment  growth  expected  to 
slow  down  and  households  continuing  to 
adjust  their  spending  to  the  increased  prices. 
Business investment is also forecast to remain 
subdued  as  the  cost  of  borrowing  is expected 
to increase further while labour shortages are 

set to persist. Growth is projected to pick up in 
2024 on the back of easing inflation. 

Graph 1.1: Gross domestic product in constant 
prices (100 in Q1-2015) 

Source: Eurostat 

The  Netherlands  had  one  of  the  EU’s 
highest rates of inflation in 2022. Inflation 
as  measured  by  the  Harmonised  Indices  of 
Consumer  Prices peaked  at  17.1%  year-on-
year  in  September  2022,  with  surging  energy 
prices  being  the  main  driver.  Increases  in  the 
price  of  gas  and  oil  have  a  particularly  large 
impact  on  the  Dutch  economy  given  the 
significance  of  these  energy  sources  in  the 
country’s  energy  mix (1).  In  addition  to  high 
energy prices, Dutch core inflation also stands 
out as being higher than the EU and euro-area 
average. Since the inflation peak in September, 
energy prices have started to come down, and 
this trend is expected to continue in 2023, also 
bringing  down  headline  inflation.  In  addition, 
the  Dutch  authorities  put  in  place  a  price  cap 
for  gas  and  electricity  as  of  January  2023  to 

(1)  In addition, the Dutch inflation statistics only take into 
account energy prices in new contracts, which means 
that the official inflation statistic overstates the 
average price inflation experienced by consumers 
because it ignores the fact that some households have 
a fixed energy contract. 

2 

9095100105110115120European UnionNetherlandsTrend GDP Netherlands (2015-2019) 
 
  
                                                 
protect  consumers  from  further  energy-price 
spikes (see Box 1.1). The price cap is expected 
to  offset  the  regressive  effect  of  the  price 
shock to some degree (2). The government has 
also implemented other measures that aim to 
cushion  the  effects  of  the  increase  in  energy 
prices (see Graph 1.2). However, only  some of 
these  measures  (for  example  the  increase  in 
the  energy  allowance)  are  targeted  at  the 
most vulnerable households. 

in  government  spending, 

The  2023  budget  involves  a  substantial 
in 
increase 
particular  due  to  the  measures  taken  to 
cushion the impact of high energy prices. 
The  most  notable  of  these  measures  is  the 
aforementioned price cap on energy that came 
into  effect  on  1 January 2023  (see  Box  1.1). 
Given  the  cost  of  the  energy  package,  in 
combination  with  the  government’s  additional 
spending  plans  related  to  societal  challenges, 
such as the green transition, limiting excessive 
nitrogen  depositions,  education  and  housing 
supply,  the  deficit is  expected  to  rise to  2.1% 
of GDP in 2023 after it was balanced in 2022 
(as  high  gas  prices  led  to  a  revenue  windfall 
while spending came out lower than expected). 
The deficit is projected to drop slightly to 1.7% 
in 2024.  

The  Netherlands  is  experiencing  very  low 
unemployment,  but  a  two-tier  labour 
market and shortages of workers remain 
a challenge. There is a shortage of workers in 
the  Dutch  labour  market  as  the  number  of 
vacancies exceeds the number of unemployed 
people.  The  unemployment  rate  reached  its 
lowest level in April 2022 at 3.2% and stands 
only slightly higher at 3.4% in April 2023 due 
to a stronger increase in the supply of workers. 
Although  unemployment 
to 
increase in 2023 due to weaker job creation, it 
is  expected  that  there  will  continue  to  be  a 
shortage  of  workers.  Furthermore,  the  high 
level of more precarious ‘flexible’ employment 

is  expected 

(2)  Simulations show that the welfare loss for households 
in the lowest 10% of incomes is more than double that 
of households in the highest 10% of incomes. Assuming 
2022 prices, the price cap would significantly reduce 
the differences in welfare effects because higher-
income households on average still pay the market 
price on some of their energy consumption, while the 
energy used by lower-income households falls 
completely under the price cap. Source: JRC, EUROMOD. 

(i.e.,  workers  not  on  permanent  contracts) 
requires  further  attention  in  terms  of  the 
European  Pillar  of  Social  Rights,  in  particular 
for  equal  opportunities  in  the  labour  market, 
fair  working  conditions,  and  adequate  social 
protection for all (see also Annex 14).  

Graph 1.2: Estimated effects of measures 
aiming to restore purchasing power on 
disposable income by income decile 

Minimum-wage policies are simulated on the assumption 
that no worker earns less than the hourly minimum wage 
per hour worked. Simulation of the inflationary shock in 
2022 based on EU-SILC 2010 data, combined with EU-
HBS 2015 data, adjusted to be representative of the 
2022 population. Deciles are determined using 2021 
household income, equivalised using the modified OECD 
equivalence scale. The effects of other policy changes 
are simulated using EU-SILC 2020 data. 
Source: European Commission’s Joint Research Centre, 
calculations based on the EUROMOD model, version I5.0+ 
and its Indirect Tax Tool extension (ITTv4). 

The Netherlands has been selected for an 
in-depth review to assess macroeconomic 
vulnerabilities  related to  its  high  current 
account  surplus  and  its  high  levels  of 
private debt. (3) The current account surplus 
of  the  Netherlands  has  narrowed  under  the 
impact  of  high  energy  prices  and  a  widening 
primary  incomes  balance.  With  lower  energy 
prices  over  2023,  the  surplus  is  expected  to 
rebound.  Private  debt  has  been  gradually 
falling  over  the  last  decade  while  remaining 
above  both  prudential  levels  and  the  EU 
the 
interest 
average.  Higher 

rates  and 

(3) European Commission (2023), In-Depth Review for the 
Netherlands, Commission staff working document 
(COM(2023) 640 final). 

3 

-2.00%3.00%8.00%13.00%18.00%12345678910Compensating measuresOther measuresRental allowanceCare allowanceEnergy allowanceMinimum wage increaseInflationary shock in 2022 
                                                 
   
                                                 
Box 1.1:  Energy policy response in the Netherlands 

The Netherlands has adopted several support measures to cushion the impact of energy 
price inflation on households and businesses. The Commission’s 2023 Spring Economic 
Forecast  projects  the  country’s  gross  budgetary  costs  to  amount  to  1.1%  of  GDP (4). 
Most measures do not fully preserve the price signal and only some of these measures 
target  the  most  vulnerable.  Almost  all  energy  support  measures  are  expected  to  be 
phased out at the end of 2023.  

Notable  support  measures  include:  (i)  the  support  given  to  low-income  households 
through municipalities; (ii) a 21% decrease in excise duties on petrol fuel and diesel; (iii) 
the transfer of an energy allowance of EUR 1 300 to households earning up to 120% of 
the  statutory  minimum  wage;  and  (iv)  a  scheme  to  help  pay  for  some  of  the  energy 
costs  faced  by  energy-intensive  SMEs.  In  addition,  the  Netherlands  has  introduced  a 
price cap on electricity and gas that will apply from January to December 2023. These 
price  caps  apply  to  the  first  consumed  2 900  kWh  of  electricity  and  1 200  m3  gas, 
which  is  around  the  level  of  average,  annual  household  consumption  for  gas  and 
slightly  above  the  level  of  average,  annual  household  consumption  for  electricity.  In 
addition,  households  making  use  of  district  heating  will  pay  a  capped  price  of  EUR 
47.38/GJ  for  the  first  37  GJ  they  consume.  The  market  price  applies  to  energy 
consumption above these respective volume limits. 

The  Netherlands  applies  retroactively  for  2022  the  EU  solidarity  contribution  in 
application of Council Regulation (EU) 2022/1854 (5) at a rate of 33%.  

The filling of gas-storage facilities in 2022 was implemented through a tender scheme.  
In September 2022, the government approved subsidies for vulnerable households with 
poorly  insulated  homes  to  improve  insulation  in  their  homes.  The  government  also 
launched  an  energy-saving  campaign  in  March  2022  which  was  extended  in  autumn 
2022. 

increased  cost  of  borrowing  are  expected  to 
contribute to a continuation of this trend. 

Unlocking and expanding the 
potential of the Dutch economy 

to 

In  the  medium  and  longer  term,  the 
Netherlands 
have 
continues 
considerable potential to further improve 
prosperity and resilience, but bottlenecks 
are  holding  up  progress.  The  country  is  an 
EU  innovation  leader  (see  Annex  11),  a  top 
performer  in  the  digitalisation  of  its  economy 
(see  Annex  10),  and  home  to  many  firms 
providing  cutting-edge  technologies  to  global 
markets.  These  structural  characteristics  have 
supported  the  economy’s  swift  recovery  from 
the  pandemic.  At  the  same  time,  several 
challenges  may  prevent  the  economy  from 
achieving  its  potential  in  the  future.  For 

face 

businesses 

restrictions 
example, 
stemming from both a shortage of workers in 
key  sectors  (see  Section  3  of  this  report)  and 
environmental  legislation  to  curb  excessive 
nitrogen emissions, limiting their activities and 
investments.  Both  issues  are  also  limiting  the 
government’s  ability  to  deliver  on  key  policy 
goals, among others on housing and the fight 
against climate change.  

(4)  For 2022, the gross budgetary costs of the measures 
amounted to 0.6% of GDP. Some of the measures 
outlined in this box were already in place in 2022. 

(5)  I.e., the application of a mandatory temporary tax at a 

rate of at least 33% to the extraordinary and 
unexpected profits of businesses active in: (i) the 
extraction of crude petroleum, natural gas, and coal; 
and (ii) the refinery sector. It is calculated on taxable 
profits, as determined under national tax rules in the 
fiscal year starting in 2022 and/or in 2023, which are 
more than 20% greater than the average yearly taxable 
profits in 2018-2021.  

4 

 
                                                 
 
Graph 1.3: Labour productivity per hour 
worked 

constitute  obstacles  to  resource  re-allocation, 
an important driver of productivity.  

Given current demographic and migration 
trends,  the  ageing  of  Dutch  society  is 
putting  pressure  on  the  social-welfare 
system.  The  sustainability  of  the  long-term 
care  system 
is  coming  under  particular 
pressure. Ageing is likely to add to demand for 
workers 
in  the  health  and  care  sectors, 
exacerbating  existing  shortages  of  workers. 
This  could  weigh  on  the  sustainability  of 
government  finances  unless  there  are  cost-
effective investments in health and long-term 
care. This underscores the need to continue to 
strengthen 
and 
productivity outcomes in the Dutch economy. 

innovation 

capacity 

In the medium term, persistent fragilities 
in  global  value  chains  could  be  a  source 
of  concern  for  the  Dutch  economy. 
Smoothly  functioning  value  chains  have  long 
benefited the Dutch economy. The Netherlands 
has strong cross-country connections: in 2022, 
almost  half  of  Dutch  imports  were  used  for 
further  processing  by  domestic  firms  and 
around  30%  of  imports  are  used  to  produce 
exports (8).  Global  supply  chains  and  export 
markets  have  become  more  fragile  in  recent 
years.  The  experience  of  pandemic-related 
supply-chain  disruptions  shows  that  Dutch 
sectors  with  more  diversified  supply  chains 
have  absorbed  these  disruptions  better  than 
those  with  more 
supply 
chains (9).  This  pattern  could  point  to  a 
possible  adjustment  strategy  of  supply-chain 
diversification  for  the  Dutch  economy  if  the 
vulnerability  of  cross-border  value  chains 
establishes itself as a long-term trend. 

concentrated 

Uncertainty  about  future  energy-price 
developments  and  the  need  to  achieve 
climate  targets  put  further  pressure  on 
decarbonising  the  country’s  energy  mix. 
The share of energy produced from renewable 
sources  stood  at  13%  in  2021.  This  is  still 

(1) EU27 = 100 
Source: Eurostat 

of 

of 

the 

types 

levels 

decrease 

employment 

The  Netherlands  has  experienced  a  drop 
in  labour  productivity  over  the  past  two 
decades. Although the employment rate is at 
a  record-high,  many  of  the  jobs  added  in 
in 
recent  years  have  been  concentrated 
activities  with 
labour 
low 
productivity (6). Structural characteristics of the 
this 
labour  market  can  explain 
Dutch 
development  to  some  degree.  The  strong 
increase  in  the  share  of  workers  working  in 
has 
flexible 
labour 
accompanied 
productivity  compared  with  the  EU  average 
shown  in  Graph  1.3.  This  increase  in  flexible 
work may be one of the factors contributing to 
poor  productivity  growth.  Flexible  contracts 
limit incentives for businesses to invest in the 
skills  of 
the 
their  employees  and 
automation  of  tasks.  Additionally,  business 
dynamism  has  fallen  in  recent  years,  with 
productivity  growth  mainly  coming  from 
investment 
incumbent 
in 
research  and 
remains  below 
innovation 
national targets. Low ‘exit rates’ of incumbent 
firms  (i.e.  few  incumbent  firms  going  out  of 
business)  and  long-lasting  pandemic-support 
measures  provided  by  the  government  may 

firms (7),  while 

in 

in 

(6)  Ando, S. (2020), Productivity in the Netherlands, IMF 

(8)  Dutch Trade in Facts and Figures, 2022, Statistics 

Working Paper No. 2020/155. 

Netherlands. 

(7)  Freeman, D., L. Bettendorf, G.H. van Heuvelen and G. 
Meijerink (2021), ‘The contribution of business 
dynamics to productivity growth in the Netherlands’. 
CPB discussion paper (link). 

(9)  Böschemeier, J., Mau, K. (2022), Gediversifieerd netwerk 
van handelspartners helpt schokken op te vangen. 
Economisch Statistische Berichten, 107(4816), 542-
544. 

5 

115120125130135140145BelgiumDenmarkGermanyFranceNetherlands 
  
                                                 
                                                 
below  both  the  EU  average  and  national 
targets.  The  expansion  of  renewable  energy 
production  through  large,  new  offshore  wind-
parks  and  integrating  these  wind-parks  into 
the  grid  will  be  key  to  ensuring  the  resilience 
of  the  Dutch  economy  against  future  energy-
market shocks.  

(SDGs), 

although 

The  Netherlands  scores  very  well  on  the 
United  Nations  Sustainable  Development 
Goals 
significant 
challenges remain in a few areas, such as 
the environmental impacts of agricultural 
production  (SDG  2)  and  climate  action 
(SDG  13).  The  Netherlands  has  a  strong 
healthcare  system  and  has  made  progress 
towards  achieving  SDG  3  (good  health  and 
well-being).  However,  the  pandemic  has  also 
targeted 
highlighted 
country 
investment 
performs  very  well  on  SDG  8  (economic 
growth  and  employment),  but  there  are  still 
concerns  about  the  prevalence  of  temporary 
contracts.  On  SDG  4  (quality  education),  the 
Netherlands  has  one  of  the  highest  shares  of 
adult  participation  in  learning,  but  there  are 
still challenges in ensuring inclusive education. 
The  Netherlands’  performance  on  SDG  10 
(migration  and  social  inclusion)  could  improve 
by  ensuring  that  more  people  with  a  migrant 
background  are  in  paid  employment  and  in 
education. 

the  need  for  more 
The 
in  healthcare. 

6 

 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

Promoting the green transition 

of 

to: 

surplus 

hydrogen 

infrastructure; 

the  nitrogen 

change; 
in 

Promoting  the  green  transition  is  a  key 
priority  of  the  Dutch  RRP,  with  47.8%  of 
the  financial  contribution  allocated  to 
measures  combating  and  mitigating 
climate change. The plan includes significant 
(i)  deploying 
investments  dedicated 
renewable  energy  sources;  (ii)  developing  a 
functional 
(iii) 
adapting  residential  neighbourhoods  to  the 
(iv) 
climate 
consequences 
improving  energy  efficiency 
the  built 
environment;  and  (v)  rolling  out  climate-
friendly  mobility  solutions.  The  plan  seeks  to 
help  restore  biodiversity  in  natural  habitats 
and  shift  towards  sustainable  agriculture  by 
reducing 
through 
significant  investments  in  nature  restoration 
(the nature programme) and closing pig farms. 
The  plan  also  includes  a  package  of  fiscal 
reforms aiming to: (i) make sustainable energy 
sources  financially  more  attractive  relative  to 
fossil fuels; and (ii) incentivise individuals and 
businesses  to  limit  their  energy  consumption. 
Combined,  these  measures  are  expected  to 
contribute to the Netherlands’ decarbonisation 
and  energy  objectives  as  identified  in  the 
national  energy  and  climate  plan  2021-2030. 
These  measures  are  also  significant  steps 
towards achieving climate neutrality  by 2050. 
Two  other  reforms  are  also  part  of  the 
country’s  2023  tax  plan:  a  reform  introducing 
and increasing the CO2 levy for industry; and a 
reform  to  increase  the  rate  of  the  air-travel 
tax. In addition, the government has published 
its  Human  Capital  Agenda,  a  plan  to  increase 
the number of workers with skills in the green 
hydrogen sector. 

the 

tackling 

healthcare, 

The  Netherlands’  recovery  and  resilience  plan 
(RRP)  aims  to  address  key  challenges  related 
to: the green and digital transition, the housing 
market,  the  labour  jobs  market,  pensions, 
education, 
of 
aggressive tax planning, and the fight against 
money  laundering.  It  consists  of  21  reforms 
and 28 investments that are supported by EUR 
4.7  billion  in  grants  representing  0.58%  of 
GDP.  The  relatively  small  size  of  the  financial 
allocation  means  that  the  plan  can  only 
account  for  part  of  the  investment  needs 
identified in the Netherlands.  

implementation 

While  the  Netherlands’  recovery  and 
resilience plan was only adopted in 2022, 
is  now  underway. 
its 
Proceeding swiftly  with the negotiation of the 
operational  arrangements  will  help 
the 
implementation  of  the  plan  and  is  necessary 
for  the  submission  of  the  first  payment 
request which is expected by the end of 2023. 
Implementation  is  ongoing  and  at  this  stage, 
risks  of  non-absorption  appear  limited  given 
financial  allocation. 
the 
Preparations  of  a  REPowerEU  chapter  are 
ongoing. The Netherlands still needs to submit 
its  first  payment  request.  This  request  would 
cover  33  milestones  and  targets  that  track 
progress  across  all  components  of 
the 
recovery  and 
resilience  plan,  potentially 
leading  to  a  disbursement  of  up  to  EUR  1.4 
billion. 

relatively  small 

requested 

The  plan  is  expected  to  be  revised  in 
2023  with  the  addition  of  a  REPowerEU 
the 
chapter.  The  Netherlands 
transfer  of  additional  resources  available 
under  the  Brexit  Adjustment  Reserve,  leading 
to  a  total  financial  allocation  of  EUR  735 
million under REPowerEU. The following, more 
detailed 
being 
implemented under the RRP in no way implies 
formal  Commission  approval  or  rejection  of 
any payment requests. 

of  measures 

review 

7 

 
 
Accelerating the digital 
transformation 

to 

boost 

further 

The  Dutch  RRP  contains  a  number  of 
measures 
the 
digitalisation  of  the  Dutch  economy.  The 
measures included in the plan allocate 25.6% 
of  the  Netherlands’  financial  allocation  to 
digital  objectives.  In  addition  to  measures  in 
other  parts  of  the  RRP  contributing  to  the 
digital  transformation,  the  dedicated  digital 
component  of  the  RRP  contains  measures  to: 
(i)  promote  the  development  of  innovative 
technologies  and  digital  skills; 
(ii)  make 
mobility  future-proof;  and  (iii)  accelerate  the 
digitalisation  of  the  Dutch  government.  These 
measures  include  the  digitalisation  of  the 
criminal-justice  process,  and 
the  Open 
Government  Act  (which  entered  into  force  in 
2022  and  seeks 
the  public 
administration  more  transparent).  Several  of 
the  digital 
included 
the 
component  of  the  Dutch  RRP  have  already 
been  launched.  Support  has  been  granted 
under  the  plan  to:  (i)  promote  the  Quantum 
(ii)  stimulate 
Delta  NL 
quantum  computing;  and  (iii)  promote  the 
European  Rail  Traffic  Management  System, 
which  has  started  planning  studies  for  two 
new rail tracks in the Netherlands.  

innovation  hub; 

investments 

to  make 

in 

Improving the functioning of the 
housing market 

The  Dutch  RRP  aims  to  improve  the 
housing market and make buildings more 
energy efficient. The third component of the 
plan  includes  a  package  of  reforms  and 
investments  that  are  expected  to  address  the 
shortage  of  housing.  These  reforms  and 
investments  will  seek 
(i)  accelerate 
planning  and  permitting  procedures;  (ii)  set 
binding 
local 
authorities;  and  (iii)  give  financial  support  to 
municipalities  to  unlock  stalled  construction 
projects.  A  separate  set  of  reforms  in  this 
component  is  expected  to  improve  fairness  in 
the  housing  market  by:  (i)  removing  tax  rules 

construction 

targets 

for 

to: 

that  favour  some  types  of  home  ownership 
over  others;  and  (ii)  making  access  to  social 
rent  more 
income  dependent.  Lastly,  the 
component  includes  two  sizeable  investments 
to improve energy efficiency in both public and 
private  buildings.  Reforms  of  the  vacant 
possession 
the 
exemption  of  the  gift  tax  on  home  purchases 
income-dependence  of 
and  the 
social  rents  have  already  been  undertaken. 
The government and provinces have agreed on 
construction  targets  and  drawn  up  an  action 
plan  on  to  accelerate  planning  and  permitting 
procedures.  

the  phase-out  of 

increased 

ratio, 

Strengthening the labour market, 
pensions, and education 

in 

tax 

The 

also 

plan 

RRP 

reforms 
the 

and 
includes 
The 
investments 
labour 
to  prepare 
market  and  pension  system  for  current 
and  future  challenges  and  to  help 
students  catch  up  on  gaps 
in  their 
schooling  due  to  the  pandemic.  Measures 
in  the  plan  aim  to  reduce  the 
included 
differences 
treatment  between 
employees and the self-employed, notably by: 
(i)  introducing  mandatory  insurance  for  the 
self-employed;  and  (ii)  tackling  bogus  self-
employment  by  passing  a  law  to  amend  the 
definition  of  what  constitutes  an  employment 
relationship. 
includes 
investments  in  the  sustainable  employability 
of  Dutch  workers  via  upskilling  and  reskilling. 
Furthermore,  a  reform  aims  to  adapt  the 
second  pillar  of  the  pension  system  to  the 
changing  labour  market  while  also  improving 
intergenerational  fairness,  transparency,  and 
resilience  to  shocks.  Investments  are  already 
being made via the ‘NL continues to learn’ and 
‘Regional Mobility Teams’ initiatives to support 
upskilling  and  reskilling.  Actions  to  reduce 
bogus  self-employment  have  been  published 
and  the  difference  in  tax  treatment  between 
employed  and  self-employed  has  been 
reduced. Several investments have been made 
and  are  also  underway  that  aim  to  support 
vulnerable student groups (such as newcomers 
to  schools,  and  students  in  their  last  year  of 
in 
secondary  school)  by  addressing  gaps 

8 

 
Box 2.1:  Key deliverables expected under the recovery and resilience plan in 

2023/2024: 

 

 

 

Entry into force of a law adjusting energy-tax tariffs 

Finalisation of the aid scheme for the rehabilitation of pig farms 

Launch of a digital portal for communication on criminal proceedings between the public 
and official parties in the justice process 

  Beginning of construction on 16 000 dwellings under the measure ‘Unlocking new 

construction projects’ 

 

 

Finalisation of agreements between the government, provinces, and municipalities on the 
building of 900 000 new dwellings by 2030 

Entry into force of a law setting up the new pension system and reforming the second pillar 
of the Dutch pension system 

  Activation of the data portal for locating and accessing research health data 

 

Entry into force of a law on withholding tax on dividends paid to low-tax jurisdictions and in 
situations that constitute tax abuse under the Dutch anti-abuse regulations 

students’ education caused by school closures 
during the COVID-19 pandemic.  

Increasing the resilience of the 
healthcare sector 

The Dutch RRP has a separate component 
increasing  the  resilience  of  the 
on 
healthcare  sector.  The  plan  helps  former 
healthcare  professionals  and  others  to  assist 
healthcare  organisations  in  need  of  staff.  A 
national  healthcare  reserve  is  being  set  up 
with  around  2 500 
former  healthcare 
professionals who can be deployed in times of 
crisis,  pandemic  or  other  emergencies. 
Hospitals  will  also  be  able  to  benefit  from  a 
grant scheme under the RRP to cover the costs 
of scaling up their intensive-care capacity. The 
scheme  will  cover  both  the  costs  of  training 
staff and of adding new beds and equipment. 
The  plan  also  supports  e-health  applications 
that  make  remote  care  possible.  Examples  of 
these  remote  types  of  care  include  display 
care, diagnosis via an app, and the provision of 
medication via medication dispensers. The RRP 
promotes  innovation  in  the  life  sciences  and 
the healthcare sector by connecting data from: 
(i) 
healthcare 
organisations;  (ii)  knowledge  institutions  and 

hospitals 

Dutch 

and 

(v)  health  funds;  and 

(iv)  patient 
public  health  organisations; 
organisations; 
(vi) 
businesses. Measures have also been taken to 
increase the numbers of additional  temporary 
staff and scale up intensive-care capacity.  

Combating aggressive tax planning 
and money laundering 

The  Dutch  RRP  includes  several  reforms 
to  tackle  aggressive  tax  planning  and 
money  laundering  more  effectively.  The 
RRP helps to tackle tax avoidance by a variety 
imposing  a 
of  measures, 
including  by 
conditional  withholding 
interest, 
tax  on 
low-tax 
royalties,  and  dividends  paid  to 
jurisdictions  and  in  situations  that  constitute 
tax  abuse  under 
the  Dutch  anti-abuse 
regulations. The challenge of how best to fight 
money  laundering  is  addressed  by  a  strategy 
that: (i) aims to increase the staff capacity of 
the  country’s  Financial  Intelligence  Unit;  and 
(ii) introduces a limit on cash payments. In this 
way,  this  part  of  the  RRP  aims  to:  (i)  make  it 
more  difficult  for  criminals  to  launder money; 
and  (ii)  strengthen  the  country’s  investigation 
and  prosecution  capacity.  Several  legislative 
changes  related  to  aggressive  tax  planning 
have already been adopted.  

9 

 
 
FURTHER PRIORITIES AHEAD 

emissions 

Beyond  the  challenges  addressed  by  the 
RRP,  the  Netherlands  faces  additional 
challenges not sufficiently covered in the 
plan.  The  Dutch  housing  market  continues  to 
be characterised by distortions that contribute 
to  both  high  levels  of  private  debt  and  an 
underdeveloped  rental  market.  The 
labour 
market  is  characterised  by  segmentation  and 
there  are  labour  shortages  in  key  sectors. 
Nitrogen 
the 
environment  and  blocking  the  construction  of 
housing  and  renewable-energy  projects.  To 
the  economy, 
help 
investments are needed in the Dutch electricity 
grid.  Addressing  these  challenges  will  also 
enable  further  progress 
in  achieving  the 
Sustainable Development Goals (SDGs), where 
the  Netherlands  currently  shows  room  for 
further 
improvement,  namely  on  SDG  7 
(affordable  and  clean  energy)  and  SDG  13 
(climate action). 

further  decarbonise 

harming 

are 

Ensuring the affordability and 
availability of housing 

House  prices  increased  substantially  in 
the  past  decade  but  appear  to  have 
reached  a  turning  point.  Average  house 
prices  nearly  doubled  between  2013  and 
2022,  with  yearly  growth  reaching  15.1%  in 
2021. The rapid increase in housing valuations 
was caused by a range of factors, notably low 
rates  of  mortgage  interest,  insufficient  and 
inelastic  supply,  and 
that 
stimulate  demand.  With  tightening  financial 
conditions  in  2022,  house  price  growth  has 
come  to  a  halt.  Mortgage  rates  have  also 
picked up substantially, limiting the borrowing 
capacity  of  households  and  leading  to  a 
decrease in house prices of 5.1% between July 
2022 and March 2023.  

tax  benefits 

The surge in house prices in recent years 
less 
has  made  housing  considerably 
affordable.  The  house-price-to-income  ratio 
in  2022  was  33%  higher  than  the  long-term 
average, and substantially above the previous 
overvaluation  peak  in  2007.  In  2022,  the 
maximum  mortgage  that  the  median  single-
income  household  qualified  for  was  sufficient 
to  finance  only  5%  of  total  houses  for  sale, 
down  from  20%  in  2017 (10).  Looking  ahead, 
the  positive  affordability impact  of the  recent 
decrease  in  house  prices  is  expected  to  be 
more  than  offset  by  the  large  increase  in 
mortgage rates. 

to 

an 

improve 

attempt 

In 
the 
affordability  and  availability  of  housing, 
the  Dutch  authorities  are 
taking 
measures  to  increase  housing  supply. 
However,  high  inflation,  shortages  of  workers, 
and  environmental  requirements  related  to 
nitrogen (see below) are driving up the cost of 
new  construction  projects  and  could  lead  to 
delays in delivering new dwellings.  

Significant  incentives  for  debt-financed 
home  ownership  remain,  contributing  to 
housing overvaluation and the large debt 
burden carried by Dutch households. Dutch 
homeowners  can  deduct  their  mortgage-
interest  payment  from  their  taxable  income, 
which stimulates housing demand, contributes 
to higher housing prices, and incentivises debt-
financing.  The  partial  reduction  in  interest 
deductibility  introduced  in  recent  years  was 
coupled  with  a  reduction  in  the  ‘imputed  rent’ 
tax  that  is  levied  on  owner-occupied  houses, 
partly offsetting the effect of the deductibility 
reduction. In combination with generous limits 
on  the  maximum  amount  that  homebuyers 
can  borrow 
this  unequal 
from  banks, 
treatment  of  different  types  of  wealth  is  an 
important factor explaining the large levels of 

(10)  Hans L., Plegt M. (2022). Waar kunnen koopstarters nog 

slagen?, Rooilijn 55/6. 

10 

 
 
                                                 
in 

the  Netherlands, 

the 
household  debt 
relatively high levels  of illiquid assets held by 
households,  and  households’  low  levels  of 
liquid assets (11).  

the  private 

rental  sector 

The Dutch rental market is characterised 
by  a large,  subsidised, social-rent  sector, 
while 
is 
relatively  small.  In  2022,  the  private  rental 
sector made up only around 14% of the total 
Dutch  housing  market,  about  half  the  size  of 
the  social-rent  sector.  Subsidisation  of  both 
the  owner-occupied  and  social-rent  sectors 
make  the  private  rental  sector  relatively 
unattractive for households.  

sector 

attractive 

It  appears  that  the  government’s  recent 
policy  measures  will  make  the  private 
rental 
for 
less 
investors. The authorities have increased the 
transaction  tax  for  buy-to-let  investors  and 
have announced the expansion of rent controls 
in  the  private  sector  starting  in  2024.  The 
government  expects  about  90%  of  all  rental 
housing  to  be  covered  by  rent  controls  in  the 
medium-term (12). These policies risk adversely 
affecting  housing  supply  in  the  rental  sector 
and  may  further  increase  the  bias  towards 
owner-occupied  housing  and  social  housing 
(which is already characterised by long waiting 
lists).  The  lack  of  a  well-developed  private 
labour 
rental  market  could  also 
mobility  because  available  and  affordable 
rental  housing  is  an  important  factor  in 
households’  decision  to  relocate.  This  could  in 
turn  contribute  to  shortages  of  workers, 
especially in large cities. 

reduce 

Reducing inequalities in a two-tier 
labour market  

segmentation in  the  labour  market include:  (i) 
the  high  level  –  and  strong  growth  over  the 
past  decade  –  of  flexible  and  temporary 
contracts  (28%  of  Dutch  employees  are  on 
these  contracts  against  an  EU  average  of 
12.9% (13));  and  (ii)  the  high  numbers  of  self-
employed  people  who  have  no  other 
employees  over  the  last  decade (14).  In  2022, 
the  share  of  self-employed  people  increased 
further,  while  the  share  of  people  working 
under 
temporary  contracts 
remains  well  above  EU  averages.  People  in 
flexible  employment  often  have  a  more 
vulnerable position in the labour market (15).  

flexible  and 

A  two-tier  labour  market  can  amplify 
inequality  and  weigh  on  productivity.  A 
certain  degree  of  flexibility  in  the  labour 
market  contributes  to  the  adaptability  of  the 
economy  and  may  also  better  accommodate 
individual preferences. However, the excessive 
use of flexible types of employment can have 
negative  effects  for  workers  and  the  wider 
economy. For example, participation in learning 
is a challenge for those with a flexible contract 
because  of 
their  uncertain  employment 
arrangements,  and  this  in  turn  results  in  less 
investment  in  skills  by  employers.  It  may  be 
partly  for  this  reason  that  the  high  share  of 
flexible  work  appears  correlated  with  weaker 
productivity  developments  and  weaker  wage 
growth (16). 

The  use  of  flexible  types  of  employment 
is  not  necessarily  driven  by  job-specific 
needs  or  by  the  preferences  of  job 
holders.  For  example,  preliminary  evidence 
suggests  that  after  an 
in  the 
maximum  permitted  duration  of  temporary 
to 
contracts, 
permanent  contracts  have  become 
less 
frequent  while  transitions  between  different 

transitions 

increase 

flexible 

from 

The  Dutch  labour  market  performs  well 
but  is  characterised  by  a  high  share  of 
signs  of 
flexible  employment.  Some 

(11)  Ciurila, N., Van Heuvelen, H., Luginbuhl, R., & Smid, B. 
(2020). Are the savings of Dutch households optimal? 
CPB Notitie. 

(13)  Statistics Netherlands (2023), Meer flexcontracten met 

zekerheid, maar ook meer zzp’ers.  

(14)  In total, around 41% of the labour force is in flexible 

employment in Q4 2022. This figure includes both self-
employed workers without employees (12.8% of the 
labour force) and workers on flexible and temporary 
contracts (28.0% of the labour force). 

(15)  Commisie Regulering van Werk (2020), In wat voor land 

willen wij werken? 

(12)  Ministry of Interior Affairs and Kingdom Relations 
(2022), Kamerbrief over regulering middenhuur. 

(16)  Ando, S. (2020), Productivity in the Netherlands, IMF 

Working Paper No. 2020/155. 

11 

 
                                                 
                                                 
have 

contracts 

become  more 
flexible 
frequent (17).  It  also  appears  that  temporary 
agency  workers  stay 
longer  than  strictly 
needed  under  temporary  contracts  with  more 
limited  rights,  a  sign  that  flexibility  in  the 
system  is  possibly  being  abused  in  some 
cases (18).  Ideally  however,  the  institutional 
framework should ensure that the choice of a 
certain type  of  employment  contract  is  driven 
by job-specific needs or by the preferences of 
job holders. 

Changes  in  the  institutional  set-up  could 
improve the position of people in flexible 
employment  while  also  reducing  duality. 
These  changes  could  include  reducing  the 
incentives  for  employers  to  use  flexible  and 
temporary  contracts  in  a  comprehensive  and 
timely  manner.  For  example,  harmonisation 
and  better  enforcement  of  rules  for  the 
different  types  of  flexible  contracts  could 
increase  worker’s  knowledge  of  their  rights 
and support income security. Steps to improve 
social  protection  among  the  self-employed 
and  to  tackle  bogus  self-employment  have 
been  included  in  the  Dutch  RRP  (see  also 
Section 2 of this report). 

and 

flexible 

address 

differences 

In  close  cooperation  with  the  social 
partners,  the  Dutch  government  intends 
between 
to 
work 
permanent 
arrangements (19).  Implementation  of  the 
different  plans  has  been  progressing  slowly. 
Plans include the introduction of a certification 
system  for  agencies  that  hire  people  under 
flexible  contracts.  The  government  also 
intends  to:  (i)  abolish  zero-hours  contracts  (ii) 
replace ‘on-call’ contracts in their present form 
with  a  new  type  of  contract  providing  more 
income  security  for  workers;  and  (iii)  improve 
the 
temporary  agency 
workers (20).  

job  security  of 

(17)  Heyma, A., Luiten, W. (2022). Effecten ketenbepaling 

WAB. 

(18)  Tweede Kamer der Staten-Generaal (2022), 

Arbeidsmarktbeleid. 

(19)  Tweede Kamer der Staten-Generaal (2022), 

Arbeidsmarktbeleid. 

Tackling labour and skills 
shortages 

in 

In  2022, 

the  Netherlands 

The shortage of workers – and the lack of 
technically skilled workers in particular – 
risks  hampering  the  green,  energy,  and 
digital  transitions (21).  The  lack  of  skilled 
workers  is  not  only  a  problem  for  people 
seeking  to  employ  professionals  with  higher 
levels  of  education.  It  is  increasingly  also  a 
problem  for  those  seeking  to  employ  workers 
with  a  secondary-level  vocational  education 
labour  shortages  were 
(MBO). 
reported 
for  108 
occupations  that  required  specific  skills  or 
knowledge  for  the  green  transition,  including 
environmental-protection 
professionals, 
civil-engineering 
insulation  workers,  and 
technicians (22). These shortages will hold back 
investments in green projects. Shortages were 
already  a  feature  of  the Dutch  labour market 
before the COVID-19 pandemic, but they have 
become  more  widespread  across  different 
sectors  since 
job 
vacancies  has  exceeded 
the  number  of 
unemployed  people  since  Q4-2021 (23).  Firms 
reporting 
labour  shortages  as  their  main 
barrier  to  production  are  spread  across  a 
variety of sectors in industry and services, and 
worker  shortages  are  substantially  above  EU 
averages (see Graph 3.1).  

then.  The  number  of 

(21)  SEO, ROA (2022), Arbeidsmarkt krapte technici; 

Planbureau voor de Leefomgeving (2022), Inzicht in 
arbeidsmarktknelpunten voor de uitvoering van het 
klimaatbeleid; ABN AMRO (2022), Personeelstekort 
energietransitie rond recordniveau  

(22)  Based on European Labour Authority (2023), EURES 
Report on labour shortages and surpluses 2022, i.e. 
data submitted by the EURES National Coordination 
Offices. Skills and knowledge requirements are based 
on the ESCO (European Skills Competences and 
Occupations) taxonomy on skills for the green transition. 
Examples are analysed on the basis of the share of 
ESCO green skills in relevant sectors. Data are not 
comparable across countries and cover a wide variety 
of sectors. 

(20)  Tweede kamer der Staten-Generaal (2023), voortgang 

(23)  Statistics Netherlands (2023), Arbeidsmarkt in vierde 

uitwerking arbeidsmarktpakket. 

kwartaal iets krapper. 

12 

 
                                                 
                                                 
Graph 3.1: Percentage of Dutch sectors with 
shortages of workers in the top 25% of 
labour shortages in the EU (in %) 

(1) Calculations based on number of firms reporting staff 
shortages as greatest barrier to production 
Source: European Commission Business and Consumer 
Surveys 

Shortages  are  driven  by  cyclical  and 
structural  factors.  More  and  more  sectors 
have recently reported that they have unfilled 
vacancies.  This  growing  shortage  of  workers 
appears related to cyclical factors such as the 
reopening  of  contact-intensive  sectors  of  the 
economy  and  temporary  shifts  in  demand  for 
workers,  leading  to  many  unfilled  vacancies 
for  low-skilled  jobs (24).  Other  sectors  of  the 
and 
as 
economy 
communications technology; health; education; 
and  technical  fields)  already  reported  severe 
shortages before the pandemic, indicating that 
more  structural  factors  may  be  at  work. 
Labour  market 
that 
forecasts 
tightness  in  these  sectors  will  persist,  partly 
due to demographic developments (25). 

information 

suggest 

(such 

Despite  a  high  overall  participation  rate, 
the  Netherlands  still  has  a  pool  of 
untapped  and  underutilised  potential 
workers.  The  employment  rate  of  women  is 
increasing.  However,  most 
high  and  still 

in  a  part-time 

women work in part-time employment (60.6% 
in  2022).  Once 
job,  few 
employees  choose  to  increase  the  hours  that 
they  work.  This  can  be  partially  explained  by 
high marginal  tax  rates,  or  obligations  (or the 
anticipation  of  future  obligations)  related  to 
the  informal  care  of  children  or  other  family 
members,  the  quality  of  work  and  the  work-
life balance (26). The employment rate of other 
groups 
in  the  population  could  also  be 
increased.  In  2022,  the  gap  between  the 
employment  rates  of  non-EU  nationals  and 
people  born  in  the  Netherlands  was  18.5 
pps (27).  Incentivising  an  increase  in  hours 
worked and activating those at the margins of 
the  labour  market  and  inactive  people  could 
help to reduce labour and skills shortages.  

include: 

reducing 

(i)  further 

To tackle shortages of workers and skills, 
it  will  be  necessary  to  take  into  account 
sector-specific  needs  and  barriers.  A 
combination of policies could be considered to 
labour  and  skills  shortages.  These 
tackle 
the 
policies 
marginal  tax  rate  and/or  simplifying  eligibility 
criteria  in  the  benefit  system  to  increase 
transparency about the marginal tax rate that 
an individual faces (28); (ii) increasing wages in 
sectors with structural  shortages, in particular 
those with a concentration of public and semi-
public  employers;  (iii)  promoting  quality  of 
work  and  work-life  balance;  (iv)  improving 
career  guidance;  and  (v)  improving  access  to 
high-quality  and  affordable  childcare.  The 
Dutch  labour  market  could  also  benefit  from 
(e.g., 
productivity-enhancing 
further  investments  in  e-health).  In  2022,  the 
government  presented  a  general  approach  to 
labour  shortages  and  a  strategy  to  tackle 
teacher  shortages  specifically (29).  In  February 
2023,  the  government  updated  this  general 
action  plan,  and  presented  an  action  plan  on 
green  and  digital  jobs (30).  The  government 

investments 

(26)  Portegrijs, W. (2022). Once part-time, always part-time, 

Sociaal Cultureel Planbureau. 

(24)  Bakens, J., & Fouarge, D. (2022). Huidige vacatures zijn 

(27)  This value is higher than the EU average of 9.7pps. 

slechte raadgever voor studiekeuze. Economisch 
Statistische Berichten, 107(4809), 211-213. 

(25)  Bakens, J., Bijlsma, I., Dijksman, S., Fouarge, D., & 

Goedhart, R. (2021). De arbeidsmarkt naar opleiding en 
beroep tot 2026 (No. 005). Maastricht University, 
Research Centre for Education and the Labour Market 
(ROA). 

(28)  Van Dijk, J., Van de Ven, Y. (2023). Het einde van de 

toeslagen, Instituut voor publieke economie. 

(29)  Ministry of Education, Culture and Science (2022), 

Kamerbrief over Leraarenstrategie 

(30)  Ministry of Social Affairs and Employment (2023), 
Kamerbrief met actieplan groene en digitale banen 

13 

01020304050607080 
  
                                                 
                                                 
also aims to reform the childcare system and 
further 
independent-childcare 
allowance.  

increase  the 

and 

support 

continued 
Targeted 
investments 
in  basic,  technical,  and 
digital  skills  could  make  it  easier  for 
vulnerable groups to access work. Overall, 
adult  participation  in  lifelong  learning  and 
participation 
in  vocational  education  and 
training  remains  significantly  higher  than  the 
EU  average.  Nevertheless,  there  is  scope  to 
reskilling 
strengthen 
opportunities  to  reach  people  at  the  margins 
of  the  labour  market,  including  by  increasing 
cross-sector  mobility  (i.e.,  workers  with  a 
background  in  one  sector  moving  to  work  in 
another  sector).  This  would  also  help  the 
Netherlands  to  reach  its  national  target  of 
least  62%  of  adults 
ensuring 
participate in training every year by 2030.  

upskilling 

that  at 

and 

Making agriculture more 
sustainable to promote the green 
transition 

the 

and 

deployment 
infrastructure. 

Pollution by large deposits of nitrogen in 
nature areas is constraining construction 
of 
activity 
renewable-energy 
The 
Netherlands’  nitrogen  surplus  remains  at  a 
level  that  is  four  times  the  EU  average, 
affecting the quality of biodiversity and water, 
including  through  high  nitrate  levels.  In  2018, 
about  78%  of  the  hectares  of  nitrogen-
sensitive  nature  within  Dutch  Natura  2000 
sites  exceeded  critical  nitrogen-deposition 
values (31).  A  ruling  by  the  Dutch  Council  of 
State in 2022 (32) concluded that the ‘nitrogen 
the 
exemption’ 
government  following  the  Council  of  State’s 

introduced  by 

that  was 

(31)  The value above which there is a risk that the quality of 

habitats is significantly affected. 

(32)  The Council of State has ruled that construction 

activities should not be exempted from the analysis of 
nitrogen emissions in environmental impact 
assessments, concluding that the government’s 
programme nitrogen approach (PAS) did not provide 
sufficient guarantees for nature conservation. The PAS 
had been adopted afterto the first ruling of the Council 
of State in 2019, blocking building permits. 

14 

2019  ruling (33)  was  insufficient,  and  that 
many  construction  projects  would  need  to 
reapply for an individual environmental permit. 
The  ruling  may  delay  the  deployment  of 
critical  renewable-energy  infrastructure  and 
housing construction (34). 

The  intensive  agricultural  sector  is  the 
main  source  of  both  nitrogen  deposits  in 
nature and diffuse pollution of water. The 
Dutch agricultural  sector can be  characterised 
innovative,  and  export-
as  a  productive, 
intensive  agricultural 
oriented  sector  with 
production  mostly  based  on 
cost-price 
reduction  and  increasing  economies  of  scale. 
At the same time, 50% of nitrogen depositions 
in  the 
and  86%  of  ammonia  emissions 
Netherlands 
agriculture. 
originate 
Although the total number of farms has been 
decreasing  in  recent  years,  both  livestock 
density  and  the  number  of  very  large  farms 
has increased considerably (35). The area under 
organic 
is 
substantially below EU averages (36). Livestock 
is  responsible  for  70.5%  of  GHG  emissions 
(EU 
from  agriculture 
average:  57.9%).  Diffuse  pollution 
from 
agriculture is the most significant pressure on 
surface water. 

in  the  Netherlands 

the  Netherlands 

farming 

from 

in 

The Dutch government is taking action to 
reduce  nitrogen  deposits  (in  particular 
from  agriculture)  through  the  RRP  and 
integrated  area  programmes  at  the 
provincial  level,  but  further  efforts  will 
be  needed.  Following  the  judgment  of  the 
Council of State, the government is responding 
along 
restoration  and 
enhancement  of  nature;  and  (ii)  reduction  of 
nitrogen  emissions.  The  government  aims  to 
bring  74%  of  the  surface  area  of  nitrogen-
sensitive  Natura  2000  sites  below  the  critical 

tracks: 

two 

(i) 

(33)  see SWD(2022) 621 final. 

(34)  Reply by Minister Jetten to Parliamentary questions on 
the court case concerning the application of the partial 
exemption for nitrogen (construction exemption) in the 
case of the Porthos CO2 storage project. 

(35)  Livestock density, calculated as the total number of 

livestock units/total utilised agricultural area, increased 
from 3.32 in 2005 to 3.8 in 2016. 

(36)  3.2% in the Netherlands compared with the EU average 

of 8% in 2018. 

 
                                                 
                                                 
deposition  value  by  2030.  To  this  end,  the 
Netherlands has earmarked EUR 24.3 billion to 
finance a package of nitrogen-reducing source 
measures.  This  includes  different  schemes 
that promote the voluntary closure of livestock 
production  capacity.  One  of  these  schemes  – 
specifically targeting pig farms – is part of the 
Dutch  RRP  (see  Section  2  of  this  report). 
Integrated area programmes under the control 
of the provinces are now being drawn up and 
are expected to be an important step towards 
meeting  the  government’s  nitrogen  targets. 
However,  a  recent  report  by  the  Dutch 
Environmental  Assessment  Agency  (PBL) (37) 
concluded that the nitrogen targets cannot be 
reached without additional efforts. 

solutions 

(ii)  accelerating 

There  is  room  to  make  agriculture  more 
sustainable,  reduce  nitrogen  deposition, 
and  protect  biodiversity,  while  at  the 
improving 
further 
time 
same 
competitiveness.  Possible 
to 
reduce nitrogen emissions include: (i) reducing 
the 
livestock  numbers; 
transition  to  circular  and  organic  agriculture; 
and (iii) cutting the use of chemical pesticides 
and 
inorganic  fertilisers.  Furthermore,  the 
position of farmers in the value chain could be 
improved,  for  example  through:  (i)  the  further 
development  of  EU  quality  signs;  (ii)  greater 
recognition  of  producer  organisations;  (iii) 
in 
further  digitalisation  and 
agriculture; and (iv) the increased presence of 
organic products in shops.  

innovation 

Helping to decarbonise the energy 
mix 

Despite  successful  efforts  to  reduce 
dependency  on  Russian  gas  and  oil,  the 
Netherlands remains highly dependent on 
imported  fossil  fuels (38).  In  2021,  natural 
gas  and  oil  accounted  for  41%  and  38%  of 
the energy mix respectively, making the Dutch 

(37)  Planbureau voor de Leefomgeving (2023). Geraamde 

ontwikkelingen in nationale emissies von 
luchtverontreinigende stoffen 2022. 

(38)  These dependencies also drive the vulnerabilities in the 
'Raw material and energy supply' area of the resilience 
dashboards (see Annex 5). 

to 

gas 

global 

reduce 

demand. 

sensitive 

price 
economy 
developments.  While  energy  prices  have 
decreased, uncertainty remains regarding next 
winter,  which  requires  continued  efforts  to 
The 
structurally 
Netherlands  has  plans  in  place  to  phase  out 
natural gas, resulting in an expected decrease 
in  natural-gas  consumption  of  6-16  billion 
cubic metres (bcm) by 2030, while natural-gas 
production is expected to decrease by 14 bcm 
by  2030  due  to  the  expected  closure  of  the 
Groningen  gas  field  in  2023.  Reducing  the 
reliance on fossil fuels is also an essential part 
of  ensuring  security  of  supply.  Despite 
install  additional 
increased  ambitions 
renewable-energy  capacity, 
the  share  of 
renewables  in  final  energy  consumption  was 
only  13%  in  2021,  below  both  the  politically 
agreed  target  at  the  EU  level  and  the  EU 
average of 21.8% (see Annex 7 and 12).  

to 

in 

of 

rural, 

rollout 

prevalent 

Capacity  constraints  in  the  electricity 
grid  remain  a  significant  bottleneck  for 
renewable-energy 
the 
installations.  The  Dutch  electricity  grid  can 
no  longer  accommodate  the  rapidly  growing 
demand for transmission capacity. This can be 
in  the  regular  refusal  by  network 
seen 
operators to allow new producers of electricity 
to connect to the grid. Congestion of the grid is 
especially 
sparsely 
populated  areas,  where  energy  demand  has 
traditionally been low. At the same time, these 
areas  provide  favourable  conditions  for  the 
deployment  of  large-scale  renewable-energy 
installations. These installations rely heavily on 
the transmission capacity of the electricity grid 
during  peaks  of  wind  and  solar  power 
generation, but the rural areas they are in are 
least  able  to  accommodate  such  peaks. 
Capacity constraints are especially acute in the 
provinces  of  Groningen,  Flevoland,  Gelderland 
and  parts  of  North  Holland  and  Zeeland. 
Additional  investments  in  the  expansion  of 
electricity  infrastructure,  both  at  transmission 
and distribution levels, are therefore necessary 
to  speed  up  the  implementation  of  both 
onshore  and  offshore 
renewable-energy 
projects (see Annex 6).  

Energy-efficiency improvements remain a 
cost-effective way to  reduce  dependency 
on fossil fuels. The Netherlands has a long-

15 

 
                                                 
term strategy to renovate 1.5 million dwellings 
with energy-efficiency improvements by 2030. 
In  addition,  the  Netherlands  has  obliged 
businesses  to 
implement  energy-efficiency 
improvements  following  energy  audits,  and  is 
now  preparing 
it 
legislation 
mandatory for owners of buildings to switch to 
more  efficient  heat  pumps  hen  replacing  a 
stand-alone  fossil-fuel  boiler.  These  efforts 
will  help  to  improve  the  energy  efficiency  of 
the built environment (see Annex 6). 

to  make 

16 

 
KEY FINDINGS 

The  Netherlands’  recovery  and  resilience  plan 
includes  measures  to  address  a  series  of 
structural challenges through: 

  significant  investments  into,  among  other 
things:  (i)  the  deployment  of  renewable 
energy  sources;  (ii)  a  functional  hydrogen 
infrastructure;  (iii)  the  shift  to  sustainable 
agriculture; and (iv) the energy efficiency of 
public and private buildings; 

  fiscal 

reforms  aiming 

(i)  make 
renewable  energy  sources  more  financially 
attractive;  and  (ii)  incentivise  reduction  of 
energy consumption; 

to: 

  supporting  the  further  digitalisation  of  the 
Dutch  economy  through  investments  in 
innovative  technologies,  digital  skills,  and 
sustainable mobility; 

  removing features of the Dutch tax system 
that 
home 
ownership  and  making  access  to  social 
housing more income-dependent; 

debt-financed 

incentivise 

  reforming 

planning 

permitting 
procedures in the construction process and 
setting  regional  construction  targets  to 
boost housing supply; 

and 

  funding  necessary  investments  to  unlock 

private construction projects; 

  ensuring  a  level  playing  field  between 
employees  and 
the  self-employed  by 
introducing  mandatory  disability  insurance 
for 
taking 
measures to tackle bogus self-employment; 

the  self-employed  and  by 

  Reforming  of  the  second  pillar  of  the 
pension  system  to  improve  its  fairness, 
transparency, and shock resilience; 

  helping  students  (in  particular  vulnerable 
students)  to  catch  up  on  gaps  in  their 
education caused by the pandemic; 

17 

  ensuring  the  resilience  of  the  healthcare 

sector in times of crises; 

  tackling 

tax  avoidance  and  money 

laundering.  

The  Netherlands  should  proceed  with  the 
steady  implementation  of  its  recovery  and 
resilience  plan  and  swiftly 
the 
REPowerEU  chapter  with  a  view  to  rapidly 
starting its implementation. 

finalise 

Beyond  the  reforms  and  investments  in 
the  RRP,  the  Netherlands  would  benefit 
from: 

  Further reducing the incentives that favour 
debt-financed home ownership and lead to 
high  household  debt  and  supporting  the 
affordability  and  availability  of  housing  on 
the private rental market; 

  removing obstacles to investment, including 

in residential construction; 

  further 

improving  social  outcomes  and 
labour 

inclusive  growth  by  addressing 
market segmentation; 

  tackling 

structural 

labour  and 

including  by: 
labour 

skills 
(i)  activating 
shortages, 
untapped 
(ii) 
and 
improving  up-  and  reskilling  opportunities, 
including  for  those  at  the  margins  of  the 
labour market and the inactive; 

potential; 

  making  agriculture  more  sustainable  by 

reducing nitrogen emissions; 

  improving  energy  efficiency  and  removing 
capacity  constraints  in  the  electricity  grid 
through 
to 
accommodate  the  increasing  deployment 
of renewable energy. 

investments 

further 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

A22.  Macroeconomic imbalance procedure assessment matrix 

21 

24 

24 

26 

29 

31 

33 

34 

34 

39 

43 

46 

46 

49 

51 

53 

56 

58 

58 

60 

62 

64 

66 

66 

68 

70 

71 

74 

 
 
 
LIST OF TABLES 

A2.1. 
Summary table on 2019-2022 CSRs 
A3.1. 
Key elements of the Netherland’s RRP 
A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key energy indicators 
A8.1. 
Key indicators for a fair transition in the Netherlands 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for the Netherlands 
A14.2.  Situation of the Netherlands on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in the Netherlands 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - the Netherlands 
A21.2.  Heat map of fiscal sustainability risks - the Netherlands 
A22.1.  Assessment of macroeconomic imbalances matrix 

LIST OF GRAPHS 

Progress towards the SDGs in the Netherlands in the last 5 years 
The Netherland’s progress on the 2019-2022 CSRs (2023 European Semester) 
Share of RRF funds contribution to each policy pillar 
Cohesion policy funds 2021-2027 in the Netherlands: budget by fund 
Synergies between cohesion policy funds and the RRF with its six pillars in the Netherlands 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in the Netherlands 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
Energy mix (top) and Electricity mix (bottom), 2021 
Thematic – environmental investment needs and current investment, p.a. 2014-2020 
Underground storage levels in Netherlands 
Share of gas consumption per sector, 2021 
The Netherlands´ retail energy prices for industry (top) and households (bottom) 
Fair transition challenges in the Netherlands 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 
Trend in material use 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A4.1. 
A4.2. 
A4.3. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A12.1.  Productivity per sector 
A12.2.  Business environment and productivity drivers 
A13.1.  The Netherlands. Indicators of Regulatory Policy and Governance: regulatory impact assessment 
A13.2.  Accounting maturity by government sector. 2018 scores 
A15.1.  Trend in reading performance in PISA mean score, 2003-2018 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A17.1.  GDP per capita (2010) and GDP growth (2011-2020), Netherlands (NUTS 2 regions) 
A17.2.  Labour productivity (real GVA per worker), EU-27, Netherlands (NUTS 2 regions), 2000-2020 
A17.3.  Unemployment in Dutch regions, 2019-2021 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2022 
A19.2.  Flows of Dutch interest and royalty payments to non-EU countries, in EUR billion 

22 

27 
29 
33 
34 
39 
43 
46 
49 
51 
54 
56 
58 
59 
60 
62 
64 
66 
69 
70 
71 
73 
74 

25 
26 
30 
31 
31 
32 
34 
35 
36 
39 
40 
40 
43 
44 
46 
46 
54 
54 
56 
57 
60 
62 
62 
64 
64 
65 
68 
69 

 
 
 
 
23 

 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

of 

four 

dimensions 

This  Annex  assesses  the  progress  on  the 
Sustainable Development Goals (SDGs) along 
the 
competitive 
sustainability  of  the  Netherlands.  The  17 
SDGs  and  their  related  indicators provide  a  policy 
framework  under  the  UN’s  2030  Agenda  for 
Sustainable  Development.  The  aim  is  to  end  all 
forms  of  poverty,  fight  inequalities  and  tackle 
climate change and the environmental crisis, while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set developed to monitor progress on the SDGs in 
an EU context. 

SDG 

The  Netherlands  performs  very  well  on 
to 
several 
environmental  sustainability  (SDGs  2,  6,  9, 
11,  12,  15),  but  still  needs  to  catch  up  with 
the  EU  average  on  SDGs  7  and 13.  On 

indicators 

related 

indicators 

addressing  SDG 7  (Affordable  and  clean  energy), 
the  country  has  made  considerable  progress  on 
the  share  of  renewable  energy  in  total  energy 
consumption, which increased from 5.8% in 2016 
to 12.3% in 2021, but this is still far below the EU 
in  2021).  The  country  also 
average  (21.8% 
improved  on 
like  primary  energy 
consumption  (3.5  tonnes  of  oil  equivalent  per 
capita in 2021) and final energy consumption (2.7 
tonnes  in  2021),  but  consumption  still  remains 
above  the  EU  average  (2.9  and  2.2  tonnes, 
respectively  in  2021).  It  also  improved  on  energy 
productivity  (from  7.5  in  2016  to  8.4  in  2021), 
getting  closer  to  the  EU  average  (8.6  in  2021). 
However,  energy import  dependency  is  still  above 
the EU average (57.7% in 2020) and is increasing 
(from 49.1% in 2016 to 68.1% in 2020). However, 
there are still challenges in achieving a sustainable 
and  affordable  energy  system.  Regarding  the 
environmental  impacts  of  agricultural  production 
(SDG  2),  ammonia  emissions  from  agriculture 
(57.4 kg  in  2021)  are  still  very  high  compared  to 

Graph A1.1: Progress towards the SDGs in the Netherlands in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings - Sustainable development 
indicators - Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all the indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat,  latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

24 

 
 
 
 
 
 
in 2016 and 26.6% in 2021) (SDG 4). The share of 
households  with  high-speed  internet  in  2021 
(90.6%)  was  well  above  the  EU  average  (70.2%), 
representing  significant  progress  on  this  indicator 
since  2016  (31.2%  in  2016).  The  percentages  of 
young  people  neither  in  employment,  nor  in 
education and training (5.5% in 2021) is far below 
the  EU  average  (13.1%  in  2021).  However,  there 
are  still  concerns  over  some  aspects  of  work, 
temporary 
prevalence 
including 
employment  contracts.  The  Netherlands  has 
increased  R&D  investments  as  a  share  of  GDP 
from  2.1%  in  2016  to  2.2%  in  2021  and  meets 
the EU average (2.2% in 2021). The share of R&D 
personnel  among  the  active  population  rose  from 
1.6% in 2015 to 1.8% in 2021 (EU average: 1.5% 
in 2021)  (SDG 9). The Dutch RRP includes several 
measures  related  to  the  further  improvement  of 
digital  skills  as  well  as  up-  and  reskilling 
opportunities of the workforce. 

the 

of 

The  Netherlands  performs  very  well  on  SDG 
indicators related to macroeconomic stability 
(SDGs  8, 16, 17).  In  particular, the  indicators  on 
SDG  16  (Peace,  justice  and  strong  institutions)  
have  further  improved  and  the  country  scores 
highly  on  indicators  related  to  access  to  justice. 
The  Corruption  Perceptions  Index  is  far  above the 
EU  average  (82  as  compared  to  64  of  the  EU  in 
2021). The Netherlands also performs better than 
the  EU  average  on 
to 
employment  and  decent  work  (SDG  8).  Although 
the  percentage  of  the  population  reporting  crime, 
violence  or  vandalism  decreased  from  17.4%  in 
2014  to  15.7%  in  2020,  it  is  still  above  the  EU 
average  (SDG  16;  11%  in  2020.  The  Dutch  RRP 
includes  a  reform to  improve  transparency  of  the 
public  administration  and  several  measures  to 
tackle  money 
laundering  and  aggressive  tax 
planning. 

indicators 

related 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

the EU average (19.3 kg in 2019). Regarding SDG 
13 (Climate action)  net greenhouse gas emissions 
have  decreased  over  time  (from  12.3  tonnes  per 
capita in 2016 to 10.1 tonnes per capita in 2021), 
but they are still above the EU average (7.4 tonnes 
per  capita  in  2021).  Large  investments  in  the 
Dutch  RRP  aim  to  boost  the  deployment  of 
renewable  energy  and  support  the  transition  to 
sustainable agriculture.  

related 

to  1.5% 

indicators 

The Netherlands performs very well on most 
SDG  indicators  related  to  fairness  (SDGs    2, 
3,  4,  5,  8,  10)  but  is  moving away  from  SDG 
1.  The  country  outperforms  the  EU  average  in 
most 
to  poverty,  health, 
education  and  gender  equality  (SDGs  1,  3,  4,  5). 
However, the indicators related to housing in SDG 
1 are worsening in the recent years. Housing cost 
overburden  rate  impacts  12.5%  of  the  population 
(in  contrast  to  10.7%  in  2016)  and  the  ‘Severe 
housing  deprivation’  rate  also  rose  from  1%  in 
2015 
in  2020.  The  Netherlands 
historically performs very well on economic growth 
and  employment  (SDG  8).  The  employment  rate 
increased from 77.9% in 2016 to 81.7% in 2021, 
which  makes  the  Netherlands  one  of  the  best 
performers in the EU (EU average: 73.1% in 2021). 
In  addition,  the  long-term  unemployment  rate 
decreased  from  2.3%  in  2016  to  0.8%  in  2021 
and is well below the EU average (2.8% in 2021). 
On  migration  and  social  inclusion  (SDG  10),  the 
gap  between  non-EU  citizens  and  EU  nationals  in 
terms  of  employment  rates  widened  slightly 
between 2016 and 2021 (from 25.3% to 26.0% in 
2021)  and  remains  higher  than  the  EU  average 
(14.9%).  However,  the  gap  between  those  two 
categories  for  early  leavers  from  education  and 
training  is  narrowing  (4.4%  in  2021)  and  is  far 
below  the  EU  average  (17.6%  in  2021).  The 
Netherlands  has  a  high-quality  education  system, 
but  there  are  still  challenges  in  ensuring  that 
everyone  has  access  to  education  and  that  it  is 
inclusive. The COVID-19 pandemic has also had an 
impact,  with  an  increase  in  the  number  of  people 
relying  on  social  welfare.  The  Dutch  RRP  includes 
reforms  and  investments  aimed  at  fair  education 
and a resilient health system.  

The  Netherlands  performs  very  well  on  SDG 
indicators related to productivity (SDGs 4, 8, 
9).  The  country  has  the  highest  share  of  people 
with  at  least  basic  digital  skills  (79%  in  2021, 
compared to the EU average of 54%), and one of 
the  highest  shares  of  adult  participation 
in 
learning,  which  has  increased  since  2015  (18.8% 

25 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

the  policy  action 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (39) 
addressed  to  the Netherlands as part  of the 
European  Semester.  These  recommendations 
concern  a  wide  range  of  policy  areas  that  are 
related to  14  of  the  17  Sustainable Development 
Goals  (see  Annexes  1  and  3). The  assessment 
the 
considers 
Netherlands  to  date (40)  and  the  commitments  in 
its  recovery  and  resilience  plan  (RRP) (41).  At  this 
stage  of  RRP  implementation,  44%  of  the  CSRs 
focusing  on  structural  issues  from  2019-2022 
have recorded at least ‘some progress’, while 28% 
recorded  ‘limited  progress’  (see  Graph  A2.1).  As 
the  RRP  is  implemented  further,  considerable 
progress in addressing structural CSRs is expected 
in the years to come. 

taken  by 

Graph A2.1: The Netherland’s progress on the 
2019-2022 CSRs (2023 European Semester) 

Source: European Commission. 

(39)  2022 CSRs: EUR-Lex - 32022H0901(19) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(19) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(19) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(19) - EN - EUR-Lex 
(europa.eu) 

(40)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(41)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

26 

No Progress2%Limited Progress28%Some Progress44%Substantial Progress26% 
 
                                                 
 
   
 
 
 
 
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

27 

NetherlandsAssessment in May 2023*RRP coverage of CSRs until 2026**Relevant SDGs2019 CSR 1Some progressReduce the debt bias for households and the distortions in the housing market, including by supporting the development of the private rental sector.Limited progressRelevant RRP measures planned as of 2022, 2023 and 2024SDG 8Ensure that the second pillar of the pension system is more transparent, inter-generationally fairer and more resilient to shocks.Some progressRelevant RRP measures planned as of 2023SDG 8Implement policies to increase household disposable income, including by strengthening the conditions that support wage growth, while respecting the role of social partners.Substantial progressSDG 8Address features of the tax system that may facilitate aggressive tax planning, in particular by means of outbound payments, notably by implementing the announced measures.Substantial progressRelevant RRP measures planned as of 2021, 2022 and 2024SDG 8, 162019 CSR 2Limited progressReduce the incentives for the self-employed without employees, while promoting adequate social protection for the self-employed,Limited progressRelevant RRP measures planned as of 2023 and 2025SDG 1, 2, 8, 10and tackle bogus self-employment.Limited progressRelevant RRP measures planned as of 2022SDG 8 Strengthen comprehensive life-long learning and upgrade skills notably of those at the margins of the labour market and the inactive.Some progressRelevant RRP measures planned as of 2020 and 2021SDG 42019 CSR 3Some progressWhile respecting the medium-term budgetary objective, use fiscal and structural policies to support an upward trend in investment.Not relevant anymoreSDG 8, 16Focus investment-related economic policy on research and development in particular in the private sector,Some progressRelevant RRP measures planned as of 2021, 2023, 2024 and 2025SDG 9on renewable energy, energy efficiency and greenhouse gas emissions reduction strategiesSome progressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025 and 2026SDG 7, 9, 13and on addressing transport bottlenecks.Some progressRelevant measures planned as of 2022, 2023, 2024 and 2025SDG 112020 CSR 1Some progressIn line with the general escape clause, take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery. When economic conditions allow, pursue fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment.Not relevant anymoreSDG 8, 16Strengthentheresilienceofthehealthsystem,includingbytacklingtheexistingshortagesofhealthworkers and stepping up the deployment of relevant e‑Health tools.Some progressRelevant RRP measures planned as of 2021,2022 and 2023SDG 32020 CSR 2Some progressMitigate the employment and social impact of the crisis andSubstantial progressRelevant RRP measures planned as of 2020,2021 and 2023SDG 1, 2, 8, 10promote adequate social protection for the self-employed.Limited progressRelevant RRP measures planned as of 2025SDG 1,2,102020 CSR 3Some progressFront-load mature public investment projects (to foster the economic recovery)Some progressRelevant RRP measures planned as of 2023 and 2024SDG 8, 16and promote private investment to foster the economic recovery. Limited progressRelevant RRP measures planned as of 2021,2023,2024 and 2026SDG 8, 9Focus investment on the green and digital transition, in particular on digital skills development,Some progressRelevant RRP measures planned as of 2021,2024 and 2025SDG 4sustainable infrastructure and clean and efficient production and use of energy Some progressRelevant RRP measures planned as of 2021,2022, 2023, 2024, 2025 and 2026SDG 7, 9, 13as well as mission-oriented research and innovation.Substantial progressRelevant RRP measures planned as of 2021,2023,2024 and 2025SDG 92020 CSR 4Substantial progressTake steps to fully address features of the tax system that facilitate aggressive tax planning in particular on outbound payments, notably by implementing the adopted measures and ensuring its effectiveness. Substantial progressRelevant RRP measures planned as of 2021,2022 and 2024SDG 8, 16Ensure effective supervision and enforcement of the anti-money laundering framework.Substantial progressRelevant RRP measures  planned as of 2024SDG 8, 162021 CSR 1Substantial progressIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilience Facility, and preserve nationally financed investment.Substantial progressNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions and ensuring fiscal sustainability in the medium term.Substantial progressNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Some progressNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthe coverage, adequacy and sustainability of health and social protection systems for all.Substantial progressSDG 8, 162022 CSR 1Some progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation.No progressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Some progressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions.Substantial progressNot applicableSDG 8, 16Reducethedebtbiasforhouseholdsandthedistortionsinthehousingmarket,includingbysupportingthe development of the private rental sector and taking measures to increase housing supply.Some progressRelevant RRP measures planned as of 2022,2023 and 2024SDG 8Enact and implement the reform of the pension system agreed in 2019 and 2020.Some progressRelevant RRP measures planned as of 2023SDG 82022 CSR 2SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocuments with a view to starting their implementation.2022 CSR 3Limited progressPromote adequate social protection for the self-employed without employees,Limited progressRelevant RRP measures planned as of 2025SDG 1, 2, 10tackle bogus self-employmentLimited progressRelevant RRP measures planned as of 2022SDG 8and reduce the incentives to use flexible or temporary contracts.Limited progressSDG 8Addresslabourandskillsshortages,inparticularinhealthcare,education,digitalandtechnicaljobsandconstruction,includingbytappingunderutilisedlabourpotentialoriginatingfromthehighshareofpart-time employment and the lower employment rate of people with a migrant background.Some progressRelevant RRP measures planned as of 2021,2023,2024 and 2025SDG 8Strengthenup-andreskillingopportunities,inparticularforthoseatthemarginsofthelabourmarketand the inactive.Some progressRelevant RRP measures planned as of 2020 and 2021SDG 4Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
 
  
 
Table (continued) 

Note:. 
* See footnote (40). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented' 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.  
Source: European Commission. 

28 

2022 CSR 4Some progressReduce overall reliance on fossil fuelsLimited progressRelevant RRP measures planned as of 2021,2022, 2023, 2024, 2025 and 2026SDG 7, 9, 13byacceleratingthedeploymentofrenewables,inparticularbyboostingcomplementaryinvestmentsinnetwork infrastructure and further streamlining permitting procedures,Limited progressRelevant measures planned as of 2021,2023, 2024 and 2025SDG 7, 8, 9, 13improving energy efficiency, in particular in buildings,Some progressRelevant measures planned as of 2022 and 2026SDG 7and accelerating investments in sustainable transportSome progressRellevant measures planned as of 2022, 2023, 2024 and 2025SDG 11and sustainable agriculture.Limited progressRelevant measures planned as of 2023 and 2026SDG 6, 12, 15 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

The  Netherland’s  progress  in  implementing 
its  plan  is  published  in  the  Recovery  and 
Resilience  Scoreboard (42).  The  Scoreboard  also 
gives  an  overview  of  the  progress  made  in 
implementing the RRF as a whole, in a transparent 
manner. The graphs in this Annex show the current 
state of play.  

No disbursements have yet been made to the 
Netherlands.  Due  to  the  late  submission  of  the 
RRP,  the  Netherlands  was  not  eligible  for  pre-
financing.  Disbursement  of  the  allocation  for  the 
in 
Netherlands  will  depend  on  the  progress 
implementing the plan.  

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific Recommendations (see Annex 4). The 
Netherlands  submitted  its  current  recovery  and 
(RRP)  on  8  July  2022.  The 
resilience  plan 
Commission’s 
8 
assessment 
positive 
September  2022  and  Council’s  approval  on  4 
October  2022  paved  the  way  for  disbursing 
EUR 4.7  billion  in  grants  under  the  RRF  over  the 
2021-2026 period.  

on 

into  force  of  the  RRF 
Since  the  entry 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of  the  RRF,  the  maximum  financial  contributions 
for  all  Member  States  were  updated  on  30  June 
2022.  Given  that  the  Netherlands  submitted  their 
RRP after this revision, the updated amount of EUR 
4.7 billion in grants was already taken into account 
by  the  authorities.  No  revision  was  submitted  at 
the time of publication of this country report yet. 

Table A3.1: Key elements of the Netherland’s RRP 

Source: RRF Scoreboard 

(42)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

29 

Current RRPScope Initial RRPCID adoption date (date of submission)4 October 2022Total allocation EUR 4.7 billion in grants (0.55% of 2021 GDP) Investments and reforms 28 investments and 21 reforms Total number of milestones and targets127 
 
 
  
 
 
 
 
                                                 
 
Graph A3.1: Share of RRF funds contribution to each policy pillar 

Note: Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed 
on this chart amounts to 200% of the estimated cost of the RRP. The bottom part represents the amount of the primary pillar, the 
top part the amount of the secondary pillar. 
Source:  RRF Scoreboard 

30 

0%10%20%30%40%50%60%70%80%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
     
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives. 

Graph A4.1: Cohesion policy funds 2021-2027 in 
the Netherlands: budget by fund 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

in 

regional 

In  2021-2027,  in  the  Netherlands,  cohesion 
policy funds (43) will invest EUR 873 million in 
the  green  transition  and  EUR  54  million  in 
the  digital  transformation  as  part  of  the 
country’s  total  allocation  of  EUR  3.5  billion. 
In  particular,  the  European  Regional  Development 
Fund  (ERDF) (44)  will  support  innovation  in  SMEs 
and  cooperation  between  SMEs  and  research 
organisations 
smart 
line  with 
specialisation  strategies. Over  6 000  firms  will  be 
supported,  of  which  900  cooperate  with  research 
institutions,  raising  an  estimated  EUR  390  million 
in private investment. 30% of ERDF resources will 
be  invested  in  the  energy  and  circular  economy 
transition,  including  through  demonstration  and 
pilot  projects.  In  2021-2027,  particular  attention 
should  be  paid  to  the  country’s  main  societal 
transitions.  The  Just  Transition  Fund  supports  six 
regions  with  emission 
in 
coping  with  the  consequences  of  the  climate  and 
energy transition. Carbon-intensive industries, such 
as the chemical and steel industry, need to change 
to production methods based on renewable energy 
and bio-based raw materials. The fund will support 

industries 

intensive 

innovation and economic diversification and invest 
in the up- and reskilling of workers for the climate 
transition.  The  European  Social  Fund  Plus  (ESF+) 
allocates  EUR  414  million  to  support  people  in 
finding  or  maintaining  quality  employment,  to 
promote  social  inclusion  and  innovation,  and  to 
provide  material  and  food  aid  to  the  most 
deprived.  EUR  103  million 
to 
promoting  lifelong  learning,  up-  and  reskilling  the 
workforce,  and  facilitating  career  transitions  and 
professional mobility. 

is  allocated 

Of  the  investments  mentioned  above,  EUR 
304  million  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
214  million  dedicated  to  REPowerEU  under  the 
2014-2020  budget.  EUR  42  million  (2021-2027) 
and EUR 182 million (2014-2020) is for improving 
energy  efficiency;  EUR  133  million  (2021-2027) 
and EUR 33 million (2014-2020) is for renewable 
energy  and  low-carbon  R&I;  and  EUR  129  million 
(2021-2027) is for smart energy systems. 

Graph A4.2: Synergies between cohesion policy 
funds and the RRF with its six pillars in the 
Netherlands 

(1) million EUR in current prices (total amount, including EU 
and national co-financing)   
Source: European Commission  

1.6 

billion 

In  2014-2020  cohesion  policy  funds  made 
the 
EUR 
Netherlands (45)  with  absorption  of  61% (46). 
Including  national  financing,  the  total  investment 
amounts to EUR 3.2 billion  - around 0.1% of GDP 
for 2014-2020.  

available 

to 

(43)  European Regional Development Fund (ERDF), European 
Social Fund+ (ESF+), Just Transition Fund (JTF), Interreg 
programmes are excluded. Total amount includes national 
and EU contributions. Data source: Cohesion Open Data.  

(45)  Cohesion policy funds include the ERDF, ESF. ETC 

programmes are excluded here. According to the ‘N+3 rule’, 
the funds committed for 2014-2020 must be spent by 
2023. REACT-EU is included in all figures. The total amount 
includes EU and national co-financing. Data source: Cohesion 
Open Data. 

(44)  ERDF’s expected achievements from the 2021-2027 

(46)  2014-2020 Cohesion policy EU payments by MS is updated 

programmes. 

daily on Cohesion Open Data.   

31 

1,26136%98828%1,24636%ERDFESF+JTF311 9 1,436 1,249 3 873 54 1,002 1,317 166 102 02004006008001000120014001600Green transitionDigitaltransformationSmart, sustainableand inclusive growthSocial and territorialcohesionHealth, economic,social andinstitutionalresiliencePolicies for the nextgenerationEU CP 2014-2020 (million EUR)EU CP 2021-2027 (million EUR) 
 
  
                                                 
   
                                                 
 
 
to 

flexibility 

(REACT-EU) (47) 

The  Netherlands  continues  to  benefit  from 
support 
cohesion  policy 
economic  recovery,  step  up  convergence  and 
provide vital support to regions following the 
COVID-19  pandemic.  The  Recovery  Assistance 
for  Cohesion  and  the  Territories  of  Europe 
instrument 
under 
NextGenerationEU provides EUR 562 million on top 
of  the  2014-2020  cohesion  policy  allocation  for 
the  Netherlands.  REACT-EU  focuses  on  SMEs’ 
innovation  efforts  for  the  green  and  digital 
transition.  Around  1 800  firms  received  support, 
leveraging  almost  EUR  126  million  in  private 
investment.  In  addition,  EUR  886  million  was 
provisionally allocated to the Netherlands through 
the  Brexit  Adjustment  Reserve  (BAR).  With  SAFE 
(Supporting  Affordable  Energy),  the  2014-2020 
cohesion  policy  funds  may  also  be  mobilised  by 
the Netherlands to support vulnerable households, 
jobs  and  companies  particularly  affected  by  high 
energy prices. 

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in the 
Netherlands 

(1) 5 largest contributions to SDGs in million (EUR) current 
prices 
Source: European Commission  

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed  substantially 
the  Sustainable  Development  Goals 
to 
(SDGs).  These  funds  support  11  of  the  17  SDGs, 
notably SDG 8 ‘decent work and economic growth’ 
and 
and 
‘industry, 
SDG 
infrastructure’ (48). 

innovation 

9 

Fund 

two  CAP  Funds 

Other  EU  funds  make  significant  resources 
available  for  the  Netherlands.  The  common 
agricultural  policy  (CAP)  made  EUR  7.5  billion 
available  in  2014-2022  and  will  continue  to 
support  the  Netherlands  with  EUR  4.5  billion  in 
(European 
2023-2027.  The 
Agricultural  Guarantee  Fund  and  European 
Agricultural 
for  Rural  Development), 
contribute  to  the  European  Green  Deal  while 
ensuring  long-term  food  security.  They  promote 
social,  environmental  and  economic  sustainability 
and  innovation  in  agriculture  and  rural  areas,  in 
coordination  with  other  EU  funds.  The  European 
Maritime  and  Fisheries  Fund  made  EUR  102 
million  available  in  2014-2020  and  the  European 
Maritime,  Fisheries  and  Aquaculture  Fund  will 
make available EUR 98 million in 2021-2027.  

The Netherlands also benefits from other EU 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  78.42  million  to 
18  specific  projects  on  strategic 
transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated  more  than  EUR  1  billion  to  Dutch  R&I 
actors,  while  in  the  previous  programming  period, 
Horizon  2020  earmarked  EUR  5.4  billion.  The 
Public  Sector  Loan  Facility  established  under  the 
Just  Transition  Mechanism  makes  EUR  47  million 
of  grant  support  from  the  Commission  available 
for  projects  located  in  the  Netherlands  for  2021-
2027, which will be combined with loans from the 
EIB  to  support  investments  by  public  sector 
entities in just transition regions.  

Instrument 

(TSI) 
The  Technical  Support 
supports  the  Netherlands  in  designing  and 
implementing  growth-enhancing 
reforms, 
including  the  implementation  of  its  recovery 
and  resilience  plan  (RRP).  The  Netherlands  has 
received  support  since  2019.  Examples  include: 
preparing  policy  strategies  for  hydrogen  and 
sustainable  mobility,  which  includes  the  extension 
of  car  sharing  initiatives,  in  particular  of  electric 
cars.  With  the  Dutch  RRP  approved  in  2022,  the 
TSI  will 
cross-cutting 
implementation,  as  well  as  the  communication  of 
its impact to the general public (49).  

the  plan’s 

support 

(47)  REACT-EU allocation on Cohesion Open Data. 

(48)  Other EU funds contribute to the implementation of the 
SDGs. In 2014-2022, this includes both the European 
Agricultural Fund for Rural Development (EARDF) and the 
European Maritime and Fisheries Fund (EMFF). 

(49)  Country factsheets on reform support are available here. 

32 

603861321996111,2621,14131328514302004006008001,0001,2001,400SDG 8 Decent workand economicgrowthSDG 9 Industry,innovation,infrastructureSDG 7 Affordableand clean energySDG 1 No povertySDG 12ResponsibleconsumptionEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
   
                                                 
                                                 
capacities  in  all  dimensions.  The  Netherlands 
shows stronger capacities than the EU average in 
most areas, but has room for improving capacities 
compared  to  the  EU  in  the  area  ‘climate  change 
mitigation and adaptation’. 

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

(1) Data are for 2021, and EU-27 refers to the value for the 
EU as a whole.  Data underlying EU-27 vulnerabilities in the 
area ‘value chains and trade’ are not available as they 
comprise partner concentration measures that are not 
comparable with Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

ANNEX 5: RESILIENCE 

the 

four 

using 

progress 

geopolitical. 

vulnerabilities  of 

This  Annex  illustrates  the  relative  resilience 
the 
capacities  and 
Netherlands, 
Commission’s 
resilience  dashboards  (RDB) (50).  Comprising  a 
set of 124 quantitative indicators, the RDB provide 
broad  indications  of  Member  States’  ability  to 
make 
interrelated 
across 
dimensions:  social  and  economic,  green,  digital, 
show 
The 
and 
vulnerabilities (51)  and  capacities (52)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
illustrate  the  overall 
resilience 
relative  situation  for  each  of  the  four  dimensions 
and their underlying areas for Belgium and the EU-
27 (53). 

indices,  which 

indicators 

in 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  the  Netherlands  generally 
displays  lower  vulnerabilities  than  the  EU 
average.  The  Netherlands 
shows  medium 
vulnerabilities 
the  green  and  geopolitical 
dimensions  of  the  RDB  and  medium-low  to  low 
vulnerabilities  in  the  digital  and  the  social  and 
economic 
higher 
vulnerabilities  than  the  EU  average  in  the  area 
'sustainable  use  of  resources’.  The  Netherlands 
shows  relatively  low vulnerabilities  in  all  areas  of 
the  digital  dimension,  in  ‘inequalities  and  social 
impact  of  transitions’  and  ‘health,  education  and 
work’. 

dimensions. 

faces 

It 

to 

the 

Compared 
the 
Netherlands shows an overall higher level of 
capacities  across  all  RDB  indicators.  The 
Netherlands  has  overall  medium-high  and  high 

average, 

EU 

(50)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(51)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(52)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(53)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

33 

NLEU-27NLEU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
 
 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

The  green  transition  in  the  Netherlands 
requires actions on several aspects including 
renewable  energy,  energy  efficiency,  and 
Implementation  of  the 
climate  adaptation. 
European  Green  Deal 
the 
Netherlands; this Annex provides a snapshot of the 
key areas involved (54). 

is  underway 

in 

The  Netherlands  has  not  yet  defined  all  the 
climate policy measures it needs to reach its 
2030  climate  target  for  the  effort  sharing 
sectors (55).  Data  for  2021  on  greenhouse  gas 
emissions  generated  by  the  Netherlands’  effort 
sharing  sectors  are  expected  to  show  the  country 
its  annual  emission 
generated 
allocations (56). Current policies in the Netherlands 
are  projected  to  reduce  these  emissions  by  31% 
by  2030  compared  to  2005  levels,  not  sufficient 
to meet the effort  sharing target even before the 
target was raised to meet the EU’s 55% objective, 
let alone the Netherlands’ new target, 48% (57) (58). 

than 

less 

(54)  The overview in this Annex is complemented by the 

information provided in Annex 7 on energy security and 
affordability, Annex 8 on the fair transition to climate 
neutrality and environmental sustainability, Annex 9 on 
resource productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(55)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(56)  The annual emission allocations of the Netherlands for 2021 
were some 98.2 Mt CO2eq, and its approximated 2021 
emissions were 92.7 Mt (see European Commission, 
Accelerating the transition to climate neutrality for Europe’s 
security and prosperity: EU Climate Action Progress Report 
2022, SWD(2022)343). 

(57)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2021. 

(58)  More recent estimates by the Netherlands Environmental 
Assessment Agency indicate that, based on policies put in 
place by 1 May 2022, the country will meet its current but 
not its new effort sharing target. See the 2022 Climate and 
Energy Outlook, Klimaat- en Energieverkenning 2022 (pbl.nl). 

In its recovery and resilience plan, the Netherlands 
will allocate 47,8 % of its Recovery and Resilience 
Facility  grants  to  key  reforms  and  investments  to 
attain climate objectives (59). The Netherlands aims 
to 
gas 
emissions to at least 55 % by 2030, striving for -
60%, compared to 1990 (60). 

economy-wide 

greenhouse 

reduce 

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

in 

increased 

recent  years 

The  Netherlands  is  not yet on  track  towards 
meeting its 2030 net carbon removals target 
for  its  land  use  sector.  Net  emissions  in  2021 
have 
instead  of 
decreasing.  Its  land  use,  land  use  change  and 
forestry  (LULUCF)  sector  is  a  net  source  of 
greenhouse gas emissions; agricultural land is the 
main  source  of  these  emissions,  with  forests 
achieving  minor  carbon  removals.  (see  Table 
A6.1) (61).  

In 2021, fossil fuels still played a significant 
role  in  the  Netherlands’  energy  mix.  Gas 
provided  the  highest  share  of  the  energy  mix  at 
41%,  followed  by  oil  at  38%.  Renewables  came 
third  at  12%.  Netherlands’s  target  of  27%  of 
share  of  energy  from  renewable  sources  in  gross 
final energy consumption by 2030 included in the 

(59)  For example, measures supporting the deployment of 
renewable energy, the development of hydrogen 
infrastructure, the adaptation of residential neighbourhoods 
to climate change, improvements of energy efficiency in 
buildings, the rollout of climate-friendly mobility solutions, 
the restoration of biodiversity in natural habitats, and a shift 
to sustainable agriculture.  

(60)  See: 

https://www.rijksoverheid.nl/onderwerpen/klimaatverandering/
klimaatbeleid 

(61)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

34 

02040608010012014020052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
     
                                                 
 
 
NECP  was  considered  sufficiently  ambitious. 
Netherlands  will  need  to  increase  its  renewable 
energy  target  in  the  updated  NECP  to  reflect  the 
more  ambitious  EU  climate  and  energy  targets  in 
the Fit for 55 Package and in the REPowerEU Plan. 

Graph A6.2: Energy mix (top) and Electricity mix 
(bottom), 2021 

government continued the SDE++ support scheme, 
increasing the budget to EUR 13 billion. 

Energy  efficiency  improvements  are  a  cost-
effective  way  to  cut  dependency  on  fossil 
fuels.  The  Netherlands’  NECP  targets  for  primary 
and final energy consumption (FEC and PEC) were 
considered  of  modest  and  sufficient  ambition 
respectively in the 2020 Commission assessment. 
Based  on  the  energy  consumption  trajectory  for 
2018-2021, the Netherlands is expected to be on 
track to meet its 2030 target for PEC and FEC, as 
these  were  notified  in  its  NECP (62).  Its  recovery 
and resilience plan supports the attainment of this 
target through the subsidy scheme for sustainable 
public-sector  buildings  (EUR 225  million),  which 
promotes  renovations  and  focuses  on  improving 
the  energy  efficiency  of  public-sector  buildings. 
There 
for 
sustainable  energy  and  energy  savings  (ISDE) 
(EUR 624  million),  which  awards  grants  for 
investments  in  small-scale  heat  pumps,  solar 
boilers, insulation and heat connections to improve 
energy  efficiency.  The  Netherlands  has  a  long-
term  renovation  strategy for  energy  rehabilitation 
in  buildings,  which  aims  to  renovate  1.5  million 
dwellings  by  2030.  It  is  also  preparing  legislation 
that will make it mandatory for all building owners 
to switch to a more efficient heat generator when 
replacing a stand-alone fossil fuel boiler. 

investment  subsidy 

is  also 

the 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste.  
Source: Eurosta 
Source:  

The  Netherlands  continued  to  roll  out 
renewable energy in 2021, with the share of 
in 
renewable  electricity  consumed 
the 
increase  from 
Netherlands  expected  to 
26.4% in 2020 to 30.4% in 2021. However, the 
total  share  of  renewable  energy  remains  low 
(13.0%  in  2021  and  14%  in  2020).  Biomass 
remains the largest source of renewable energy in 
the  Netherlands.  In  2021,  the  Dutch  government 
committed  over  EUR 4  billion  under 
the 
Stimulation  of  Sustainable  Energy  Production  and 
Climate  Transition  (SDE++)  subsidy  scheme,  of 
which  it  allocates  around  75%  to  renewable 
electricity  generation, 
renewable  gases  and 
renewable  heating  and  cooling.  In  2022,  the 

the  need 

Despite  progress  with  sustainable  mobility, 
air  pollution 
remains  a  concern.  The 
Netherlands has seen a dynamic take-up of zero-
emission  vehicles,  prompting 
for 
infrastructure  investment.  It  also  has  a  highly 
electrified  railway  network.  In  recent  years,  the 
Netherlands  has  not  reported  any  exceedance  of 
the  current  EU  air  quality  limit  values  (Directive 
2008/50/EC) at their monitoring sites. According to 
the  latest  projections  prepared  by  PBL (63),  the 
Netherlands  will  also  meet  the  national  emission 
reduction  targets  of 
the  National  Reduction 
Commitments Directive (2016/2284), both for the 
period up to 2029 and from 2030 onwards. These 
projections  still  need  however  to  be  reviewed  by 

(62)  After the conclusion of the negotiations for a recast EED, the 
ambition of both the EU and national targets as well as of 
the national measures for energy efficiency to meet these 
targets is expected to increase. 

(63)  PBL (Netherlands Environmental Assessment Agency) in 
samenwerking met RIVM en TNO en WUR: Geraamde 
ontwikkelingen in nationale emissies van 
luchtverontreinigende stoffen 2023, Rapportage bij de 
Klimaat- en Energieverkenning 2022, 28-02-2023 

35 

8%41%38%1%12%Solid fossil fuels, peatand oil shaleGasOilNuclearRenewables14%47%1%35%3%Solid fossil fuelsNatural gasOilRenewablesNuclear 
   
                                                 
confirming 

Commission 

the 
this 
before 
assessment. Nevertheless, air pollution remains of 
concern (64),  because  of  the  uncertainty  whether 
and  when  the  Netherlands  can  meet  the  updated 
and  stricter  air  quality  guidelines  of  the  WHO (65). 
According to projections, the Netherlands will miss 
its  2020  to  2029  emission  reduction  targets  for 
pollutants  and  exceed  the  specific  WHO  guideline 
levels.  

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a. 2014-2020 

Source: European Commission. 

The  Netherlands  would  benefit 
from 
investing  more  in  environmental  protection, 
in  particular  on  the  circular  economy,  waste 
management,  and  pollution  prevention  and 
control.  Between  2014  and  2020, 
the 
needs (66)  were 
environmental 
estimated  to  be  at  least  EUR 10  billion  while 
investment  was  about  EUR 7.7  billion,  leaving  a 
gap of at least EUR 2.3 billion per year (see Graph 
A6.3) (67).  Including  both  Natura  2000  and  other 
nationally  designated  protected  areas, 
the 
Netherlands legally protects 26.6% of its land and 

investment 

(64)  See the data on the years of life lost per 100 000 

inhabitants due to air pollution from PM2.5 and NO2. 

(65)  WHO global air quality guidelines: particulate matter (PM2.5 
and PM10), ozone, nitrogen dioxide, sulfur dioxide and carbon 
monoxide, 22 September 2011. 

(66)  Environmental objectives include pollution prevention and 

control, water management and industries, circular economy 
and waste, biodiversity and ecosystems (European 
Commission, 2022, Environmental Implementation Review, 
country report Netherlands). 

(67)  When also accounting for needs estimated at EU level only 

(e.g. water protection, higher circularity, biodiversity strategy). 

36 

25.6% of its marine areas (68). Sufficient resources 
are  yet  to  be  allocated  to  the  protection  and 
management  of  these  areas  and  some  marine 
designations  are  still  needed.  Ammonia emissions 
from agriculture remain a challenge, also given the 
high level of pollution from nitrogen emissions and 
the need to improve nature protection. 

The Netherlands is vulnerable to the impacts 
of climate change, in particular sea level rise 
and  a  higher  intensity  and  frequency  of 
rainfall,  heatwaves,  and  droughts.  Economic 
damage  caused  by  weather  and  climate-related 
extreme  events  was  almost  EUR 9.3  billion 
between  1980  and  2020 (69).  The  Netherlands’ 
vulnerabilities  to  climate  change  are  set  to 
grow (70). In response, the country has put in place 
a climate change adaptation framework (71). While 
it provides a good basis for adaptation to climate 
change, there is still scope to further mainstream 
adaptation measures across governmental policies 
and  long-term plans.  Specifically,  the Netherlands 
could  prioritise  sustainable  water  management 
measures to achieve good water quality in current 
and  future  climatic  conditions  and  increase  its 
resilience  to  deal  with  changing  water  levels  by 
restoring land, marine, and freshwater ecosystems 
(including  wetlands).  Despite  recent  progress, 
in  soil  and  wetland 
challenges  also  remain 
(especially peatland) management (see Annex 9). 

The  Netherlands  provides  fossil  fuel  and 
other environmentally harmful subsidies that 
could  be  considered  for  reform,  while 
ensuring  food  and  energy  security  and 
mitigating  social  effects.  Fossil  fuel  subsidies 
in  the  Netherlands  amounted  to  EUR  1  billion  in 
2021,  a  61%  increase  since  2015,  adding  to  a 

(68)  In 2021, Netherlands had 26.5% terrestrial protected areas 
(Natura 2000 and nationally designated areas), against the 
EU average of 26.4% (European Environment Agency, 2023, 
Natura 2000 Barometer). 

(69)  See European Environmental Agency, Economic losses from 

climate-related extremes in Europe, published on 
03/02/2022. 

(70)  For estimates of the effects of climate change on the 

Netherlands, see Klimaatschadeschatter. 

(71)  The framework includes a national adaptation strategy 

(2016) and a national programme (2010) called ‘Delta’. It 
aims to provide protection from coastal, fluvial, and pluvial 
flooding, ensure the supply of fresh water, and contribute to 
making the country resilient to climate change impacts by 
2050. The Netherlands could strengthen the framework by 
programmes for other climate threats, such as changes in 
wind regimes, lightning, wildfires and tropical diseases. 

3653,3442,2201,4083541,8903,7623,4524054430.0500.01000.01500.02000.02500.03000.03500.04000.0Pollutionprevention andcontrolWater (industries,excl. protection)Circular economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
      
                                                 
                                                 
number of fiscal measures that support the fossil 
low  carbon 
fuel  energy  sector,  which  put 
alternatives  at  a  disadvantage.  Environmentally 
harmful  subsidies  have  been  identified,  via  an 
initial  assessment,  in the agriculture,  forestry  and 
fishing, electricity, gas, steam and air conditioning, 
transportation and storage, manufacturing, mining 
and  quarrying  and  services  sectors.  Examples  of 
such  subsidies  include  the  flat  rate  taxation  of 
privately  used  company  cars,  the  reimbursement 
of excise duty on diesel  used in freight and other 
categories  of  passenger  transport,  the  excise  tax 
exemption  and  tax  relief  for  natural  gas  for 
industrial  consumers  or  the  refund  scheme  for 
energy-intensive  industry  under  conditions (72).  A 
mapping  of  all  environmentally  harmful  subsidies 
the  Netherlands  would  help  prioritise 
by 
candidates for reform. 

to 

reduce 

The  Netherlands  has  scope  to  apply  tax 
environmental 
instruments 
pollution.  It  already  applies  environmental  taxes 
such as a carbon tax and a deposit refund system 
on  small  plastic  bottles.  But  it  could  further 
leverage  environmental  taxation  in  line  with  the 
polluter  pays  principle,  specifically  to  target  the 
adverse  effects  of  intensive  agriculture,  and  to 
reduce the taxation of labour (see also Annex 19). 
Examples  of  potential  measures  include  a  tax  on 
NOx 
in  energy  production,  that  would  have 
potential  for  improving  air  quality  and  reducing 
emissions (73),  or  additional  tax 
incentives  to 
encourage  the  transition  towards  sustainable 
agricultural practices (74). 

(72)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on the 
following datasets: OECD Agriculture Policy Monitoring and 
Evaluations; OECD Policy Instruments for the Environment 
(PINE) Database; OECD Statistical Database for Fossil Fuels 
Support; IMF country-level energy subsidy estimates. Annex 4 
of the toolbox contains detailed examples of subsidies on 
the candidates for reform. 

(73)  Centraal Planbureau (2019): Belasting op luchtvervuiling in 

de industrie. 

(74)  Examples include taxes on intensive agriculture practices. 

The Netherlands has the highest greenhouse gas emissions 
(CH4 and N2O) per hectare of agricultural land, more than 
four times the EU average due to high intensity agriculture. 
Agriculture has a negative impact on the status of waters in 
the Netherlands, including through high nitrate levels. The 
nitrogen surplus in the Netherlands is four times above the 
EU average, at 200 kg N per hectare per year. On the tax, 
see Centraal Planbureau (2019), European Commission, 
2021, Green taxation and other economic instruments – 

Internalising environmental costs to make the polluter pay, 
and European Commission, 2022, Toolbox for reforming 
environmentally harmful subsidies in Europe. 

37 

 
                                                 
                                                                              
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

38 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq; %; pp127.8-20%-22%-24%-29%--48.0%-17-17Net carbon removals from LULUCF (2)kt CO2eq5,7604,0934,1824,1764,1424,3134523.0n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%2%7%7%9%14%13%27%Energy efficiency: primary energy consumption (3)Mtoe70.165.064.463.658.560.746.6Energy efficiency: final energy consumption (3)Mtoe54.150.050.449.445.046.943.9201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP3.43.33.33.43.23.12.42.22.2Environmental taxes (% of total taxation) (4)% of taxation 8.78.68.68.68.07.85.95.65.5Government expenditure on environmental protection% of total exp.3.23.23.33.33.13.01.71.61.6Investment in environmental protection (5) % of GDP0.40.40.40.4--0.40.40.4Fossil fuel subsidies (6)EUR2021bn0.60.90.90.90.91.053.050.0-Climate protection gap (7) score 1-41.92.01.5Net greenhouse gas emissions1990 = 10088.090.087.086.076.077.076.069.072.0Greenhouse gas emission intensity of the economykg/EUR'100.320.300.290.270.26-0.310.300.26Energy intensity of the economykgoe/EUR'100.110.110.110.100.10-0.110.11-Final energy consumption (FEC)2015=100102.2102.9103.8101.892.796.5102.994.6-FEC in residential building sector2015=100102.9100.5100.297.895.6106.4101.3101.3106.8FEC in services building sector2015=100101.0103.1102.699.593.997.8100.194.4100.7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'100.70.70.70.60.6-0.90.9-Years of life lost due to air pollution by PM2.5per 100.000 inh.545.0578.0638.0551.0--581.6544.5-Years of life lost due to air pollution by NO2per 100.000 inh.87.095.0101.062.0--309.6218.8-Nitrate in ground watermg NO3/litre------21.020.8-Land protected areas% of total15.215.4-26.226.126.526.226.426.4Marine protected areas% of total25.6--25.6-26.110.7-12.1Organic farming% of total utilised agricultural area3.03.33.53.84.04.28.59.1-201720182019202020212022202020212022Share of zero-emission vehicles (9)% in new registrations1.95.413.920.519.920.75.48.910.7Number of AC/DC recharging points (AFIR categorisation)---6518185168101585188626330028432518Share of electrified railways%75.670.775.675.675.675.656.6n/a56.6Hours of congestion per commuting driver per year31.932.432.832.9n/an/a28.7n/an/a'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetNetherlandsEUMobilityFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
     
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

rights on the basis of the Dutch authorities’ ‘use it 
or lose it’ principle), one of Europe’s largest, in the 
winter of 2023/2024. 

Graph A7.1: Underground storage levels in 
Netherlands 

The  Netherlands  is  highly  dependent  on 
imported  fossil  fuels.  Before  Russia  invaded 
Ukraine,  the  Netherlands  had  exposure  to 
Russian  gas  (30%)  and  oil  (26%),  close  to 
the  EU  average (75).  The  Netherlands  still 
imports  LNG  from  Russia  (2  bcm  in  2022). 
This Annex (76)  sets out actions carried out  by the 
Netherlands to achieve the REPowerEU objectives, 
its 
including  through  the 
recovery  and  resilience  plan,  in  order  to  improve 
energy 
affordability  while 
accelerating  the  clean  energy  transition,  and 
contributing to enhancing the EU’s competitiveness 
in the clean energy sector (77).   

implementation  of 

security 

and 

The Netherlands has achieved a high level of 
gas supply security in the face of challenging 
circumstances.  It  has  the  third  largest  storage 
capacity (78)  in  the  EU  in  absolute  numbers  after 
Germany  and  Italy,  with  13.1  billion  cubic  metres 
(bcm), which can cover 30% of annual demand. It 
fulfilled  its  gas  storage  obligations  last  winter, 
reaching 88.05 % by 1 November 2022 (above the 
EU  legal  obligation  of  80%),  and  ended  the 
heating  season  with  a  filling  gas  storage  of 
59.07%  by  15  April  2023 (79).  The  Dutch 
government  expects  to  spend  up  to  EUR  520.5 
million to fill the gas storage unit at Bergermeer to 
a sufficient level (where Gazprom has some usage 

(75)  As of 28.09.2022, the Netherlands and 12 other Member 
States (LT, BG, PL, DE, FI, DK, IT, FR, AT, CZ, SI and LV) are 
partially or fully cut off from Russian gas.  

(76)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty and protect the 
most vulnerable ones, and by Annex 9 as the transition to a 
circular economy will unlock significant energy and resource 
savings, further strengthening energy security and 
affordability and by Annex 12 on industry and single market 
complementing ongoing efforts under the European Green 
Deal and REPowerEU. 

(77)  In line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final 

(78)  The Netherlands operates 6 underground storage facilities 
managed by 5 operators: UGS EnergyStock (managed by 
UGS EnergyStock), UGS Nüttermoor H-1 (managed by UGS 
Nüttermoor H-1), CUGS Grijpskerk and UGS Norg (Langelo) 
(managed by NAM), UGS Alkmaar (managed by TAQA Pek 
Gas), UGS Bergermeer (managed by TAQA Gas Storage). 

(79)  Regulation of the European Parliament and of the Council 
amending Regulations (EU) 2017/1938 and (EC) No 
715/2009 with regard to gas storage and Implementing 
Regulation (EU) 2022/2301 of 23 November 2022 setting 
the filling trajectory with intermediary targets for 2023 for 
each Member State with underground gas storage facilities 
on its territory and directly interconnected to its market area. 

Source: JRC calculation based on AGSI+ Transparency 
Platform, 2022 (Last update 2 May 2023) 

Gas  production  is  expected  to  continue  to 
decline  until  Groningen’s  expected  closure  in 
2023.  The  Netherlands  has  far-reaching  plans  to 
phase  out  natural  gas.  Part  of 
its  gas 
infrastructure will be used to transport hydrogen. It 
plans  to  become  a  European  pivot 
in  gas 
exchanges  by  developing  its  liquefied  natural  gas 
import 
infrastructure,  gas  pipelines  and  gas 
storage  facilities.  Between  2020  and  2030,  total 
natural  gas  consumption  is  expected  to  decrease 
by  6-16  bcm.  Production  is  expected  to  decrease 
by 14 bcm. 

savings 

To  fulfil  its  legal  obligations  set  out  in  the 
Council Regulation gas demand reduction (80), 
the  Netherlands  has  adopted  a  number  of 
measures  at  national  level.  These  include  an 
information  campaign  on  energy  saving  for 
households  and  businesses,  as  well  as  measures 
to reduce heating temperatures in public buildings. 
The  ‘Flip  the  Switch’  campaign  to  incentivise 
energy 
is  aimed  at  households, 
consumers,  businesses  and  the  public  sector. 
Initially  the  campaign  focused  on  short-term 
actions, but it has been extended to actions aimed 
at  preparing  society  for  the  winter  and  more 
structural actions. The obligation for businesses to 
implement  energy  efficiency  measures,  which  is 
the result of an energy audit with a payback time 
under 5 years, has also been extended to include a 
wider  range  of  measures  and  a  broader  range  of 
businesses. Implementation of such measures led 

(80)  Council Regulation on coordinated demand-reduction 

measures for gas. 

39 

 
 
                                                 
 
                                                 
 
 
to a gas demand reduction of 29% over the period 
August 2022- March 2023 when compared to the 
previous 5-years average (81). 

electricity 
and 

infrastructure, 
distribution 

Current  congestion  and  the  need  to  expand 
the electricity grid is a cause for concern. The 
Netherlands could benefit from large investments 
at 
in 
its 
The 
transmission 
transmission  system  operator  Tennet  regularly 
refuses requests for access to the network due to 
capacity  shortages.  The  Netherlands  has  a 
interconnection  with 
sufficient 
neighbouring  countries  and  Norway,  although  this 
is decreasing somewhat.  

levels. 

level 

both 

of 

Graph A7.2: Share of gas consumption per sector, 
2021 

Source: Eurostat 

Despite  the  mechanisms  introduced  by  the 
Netherlands  to  mitigate  soaring  energy 
prices,  households,  in  particular  low-income 
ones (82),  and  industries  are  being  severely 
hit.  Electricity  prices  have  also  soared,  so 
households that use electricity to heat their homes 
are  facing  similar  challenges,  unless  they  have 
solar  panels  installed.  There  are long  waiting  lists 
for  the  installation  of  solar  panels  and  heat 
pumps, due to the lack of supplies and of a skilled 
workforce. The surge in energy prices has also had 
a  considerable  impact  on  Dutch  industry,  which 
accounts  for  over  30%  of  gas  consumption. 
Industries  such  as  the  metallurgical,  chemical, 

(81)  EU countries agreed to reduce their gas demand by 15% 

compared to their average consumption in the past 5 years, 
between 1 August 2022 and 31 March 2023, with measures 
of their own choice. 

(82)  Annex 8 looks at the impact soaring energy prices have on 

the most vulnerable households. 

wood  and  paper  industries,  highly  exposed  to 
energy  shocks,  are  experiencing  growing  pressure 
to raise their prices in order to safeguard margins 
or  reduce  production  in  order  to  reduce  the 
industries’  energy  consumption.  Smaller  energy-
intensive  businesses  such  as  bakeries,  wellness 
centres,  etc.  are  also  suffering  from  the  high 
prices,  with  many  of  them  closing  down  or 
reducing their operations.   

Graph A7.3: The Netherlands´ retail energy prices 
for industry (top) and households (bottom) 

(1) On electricity, the band consumption is DC for households 
and ID for industry 
(2) On gas, the band consumption is D2 for households and I4 
for industry 
Source: Eurostat 

The current share of renewable energy in the 
final  energy  consumption  stood  at  13  %  in 
2021. It is below the agreed targets (as set in the 
Renewable  Energy  Directive  and  the  Energy 
Governance Regulation) and represents a decrease 
from  2020,  likely  due  to  the  economic  recovery 
from the pandemic in 2021, as well as inadequate 
production  of  renewables.  The  deployment  of 
renewable  energy  continued  in  2022  reaching  32 
839  MW  of  total  capacity (83).  In  2021,  the 
renewable  energy  share  in  electricity  was  30.3%, 
up  from  26.4%  in  2020.  Biomass  remains  the 
energy. 
predominant 

source  of 

renewable 

(83)  IRENA, Renewable capacity statistics 2023. 

40 

34.4%25.0%0.3%9.1%24.3%7.0%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery050100150200250€/MWhGas NetherlandsGas EUElectricity NetherlandsElectricity EU050100150200250300€/MWhGas NetherlandsGas EUElectricity NetherlandsElectricity EU 
     
                                                 
   
                                                 
 
However, the Netherlands has difficulties reaching 
the  current  targets  for  renewable  energy  sources. 
In  2021,  the  government  committed  over  EUR  4 
billion under the Stimulation of Sustainable Energy 
Production  and  Climate  Transition 
(SDE++) 
scheme,  of  which  around  75%  went  to  the 
production  of  renewable  electricity,  renewable 
gases and renewable heating and cooling. In 2022, 
the government continued with its SDE++ support 
scheme,  with  a  total  budget  of  EUR  13  billion.  It 
also increased its ambitions for the deployment of 
offshore wind energy from 11.5 GW in 2022 to 21 
GW  in  2030.  A  new  offshore  wind  roadmap  was 
published  in  December  2022,  showing  2.3  GW 
under  construction,  1.5  GW  under  development, 
and  15  GW  planned.  However,  no  new  offshore 
wind  installations  came  online  in  2021.  The 
government  also  approved  seven  projects  to 
produce  renewable  hydrogen  in  December  2022 
for  a  total  of  EUR  783.5  million.  These  projects 
were part of the two rounds of Important Projects 
of  Common  European 
Interest  on  hydrogen, 
approved in 2022 by the European Commission.  

On  buildings,  the  Netherlands  is  preparing 
legislation  to  make  it  mandatory  for  all 
building owners to switch to a more efficient 
heat generator when replacing a stand-alone 
fossil  fuel  boiler.  Exceptions  will  be  made  for 
buildings where replacement with a more efficient 
heat  generator  is  technically,  economically  or 
functionally  not  feasible  or  when  a  building  is 
situated in an area that will switch to a collective 
alternative  for  natural  gas  (such  as  district 
heating) in the near future. In order to ensure the 
transformation  of  the  building  stock,  a  trained 
workforce 
integrated 
in  the  construction  and 
renovation  services  is  key,  including  installers  of 
heating appliances in sufficient numbers and with 
the  relevant  skill  sets.  The  Netherlands’  recovery 
and  resilience  plan  includes  energy  efficiency 
measures  through  the  subsidy  scheme  for  the 
sustainability  of  public  sector  real  estate,  which 
promotes  renovations  and  focuses  on  improving 
the  energy  efficiency  of  public  sector  buildings, 
and the investment subsidy for sustainable energy 
and  energy  savings,  which  awards  grants  for 
investments  in  small-scale  heat  pumps,  solar 
boilers, insulation and heat connections to improve 
energy  efficiency.  Regarding  market  surveillance 
activities,  the  Netherlands  are  carrying  out  a 
relatively  low  number  of  checks  on  products 
covered  by  ecodesign  and  energy  labelling.  This 
may imply concerns as to the compliance levels of 

the  concerned  products,  and  therefore  missed 
energy and CO2 savings (84). 

The Netherlands has been performing well in 
developing  clean  technologies. 
It  provided 
about 0.032% of public spending (expressed as a 
percentage of GDP) on research and innovation in 
2020  and  0.11%  (expressed  as  a  percentage  of 
GDP) of private spending in 2019. It   is among the 
Innovation  Leaders  according  to  the  European 
the 
Innovation 
EU. 
Entrepreneurial 
government 
procurement are above the EU average as drivers 
of  research  and  innovation.  The  Netherlands’ 
performance  is  below  average  on  the  climate 
change-related  indicators  of  the  circular  material 
use rate and environmental innovation. In venture 
capital,  it  attracted  about  EUR  555  million  in 
climate technology start-ups in 2021.  

Scoreboard (85) 
training 

in 
and 

(84)  The internet-supported information and communication 
system for the pan-European market surveillance 

(85)  htthttps://research-and-

innovation.ec.europa.eu/statistics/performance-
indicators/european-innovation-
scoreboard_entps://research-and-
innovation.ec.europa.eu/statistics/performance-
indicators/european-innovation-scoreboard_en 

41 

 
                                                 
 
Table A7.1: Key energy indicators 

(1) The ranking of the main supliers is based on the latest available figures (for 2021) 
(2) FSRU included 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm). 

Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

42 

EU20182019202020212018201920202021Import Dependency [%] 59%64%68%58%58%61%57%56%of Solid fossil fuels 100%102%92%100%44%44%36%37%of Oil and petroleum products 94%101%100%86%95%97%97%92%of Natural Gas 15%26%45%34%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal39%41%54%38%40%44%49%47%of Crude Oil40%24%27%32%30%27%26%25%of Natural Gas 47%44%30%35%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)110,211115,158117,192114,264121,355123,287122,132-Combustible Fuels95,97599,99699,41195,83099,91794,79588,194-Nuclear4,0783,9603,4023,5153,9104,0873,828-Hydro931006172744688-Wind7,5508,17010,56910,54911,50815,27818,005-Solar 1,1091,6022,2043,7085,3998,56811,495-Geothermal 0000000-Other Sources1,4071,3291,544591547512522-Net Imports of Electricity (GWh)8,7484,9143,5067,970855-2,660253-   As a % of electricity available for final consumption 8%4%3%7%1%-2%0% -Electricity Interconnection (%)--18.10%18.61%22.9%25.9%16.3%13.7%20152016201720182019202020212022Gas Consumption (in bcm)40.139.543.343.044.944.142.336.6Gas Imports - by type (in bcm)43.147.625.234.545.345.140.0-Gas imports - pipeline40.745.924.231.335.936.531.1-Gas imports - LNG2.41.71.03.39.48.68.9-Gas Imports - by main source supplier (in bcm) (1)Russia8.012.68.516.218.718.714.3-Norway23.021.19.913.313.411.510.5-United States0.00.00.10.64.25.27.5-Belgium0.00.00.10.82.01.81.6-Others12.013.86.73.66.98.06.1-2019202020212022LNG TerminalsNumber of LNG Terminals (2)1112LNG Storage capacity (m3 LNG)540000540000540000720000Underground StorageNumber of storage facilities6666Operational Storage Capacity (bcm)14.514.914.914.22019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)61.2129.9555.8n.a.as a % of total VC investments in Netherlands3.6%7.8%8.0%n.a.Research & Innovation spending in Energy Union R&i priorites Public R&I (EUR mln)289.0265.4360.9n.a.Public R&I (% GDP)0.036%0.033%0.042%n.a.Private R&I (EUR mln)903.3n.a.n.a.n.a.Private R&I (% GDP)0.11%n.a.n.a.n.a.NETHERLANDSENERGY DEPENDENCEDIVERSIFICATION OF GAS SUPPLIESCLEAN ENERGYELECTRICITY 
 
   
 
 
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

climate 

neutrality 

the  Netherlands’ 
This  Annex  monitors 
in  ensuring  a  fair  transition 
progress 
towards 
and 
environmental  sustainability,  notably  for 
in  vulnerable 
workers  and  households 
situations.  The  number  of  jobs  and  vacancies 
(reflecting a very tight labour market) in the Dutch 
green  economy  has  risen  quickly.  In  line  with 
Council 
objectives 
Recommendation (86),  the  Netherlands  invests  in 
the  skills  needed  for  a  fair  and  green  transition 
and  the  implementation  of  REPowerEU,  most 
notably  through  the  Just  Transition  Fund  (JTF)  as 
well  as  with  actions  supported  by  the  European 
Social Fund Plus (ESF+).  

included 

the 

in 

in 

active 

support. 

additional 

While the green economy is expanding in the 
Netherlands, employment in the sectors most 
affected by the green transition continues to 
decline,  and  workers  in  declining  activities 
need 
The 
greenhouse  gas  (GHG)  emissions  intensity  of  the 
Dutch workforce fell from 20.6 to 15.6 tonnes per 
worker  between  2015  and  2021,  above  the  EU 
average  of  13.7  tonnes  (see  Graph A8.1  and 
Table A8.1).  Employment 
the  Netherlands’ 
energy-intensive  industries  (EII)  represented  a 
stable share of 1.3% of total employment in 2021 
(in  2020:  1.3%  vs  3.0%  in  the  EU).  However,  a 
large  part  of  the  jobs  with  a  high  share  of  CO2 
emissions will be phased out in the coming years. 
These jobs are mainly related to the fossil and raw 
materials  industries,  and  their  phase-out  results 
from  the  cessation  of  gas  extraction,  the  closure 
of  coal-fired  power  stations  and  petroleum 
processing, and the phasing-out of fossil industrial 
production  processes  in  the  industrial  clusters 
(steel  and  chemicals).  Employment  in  mining  and 
quarrying  has  fallen  significantly  by  36.4%  since 
2015.  Total  jobs  in  the  environmental  goods  and 
services sector grew by 18.4% in 2015-2020 (EU: 
+8.3%),  reaching  1.5%  of  total  employment  (EU 
average:  2.2%)  (see  Annex  9  for  circular  jobs 
specifically).  The  job  vacancy  rate  in  construction, 
which is a key sector for the green transition, was 
7% in 2022, vs 4% in the EU (87). 

Graph A8.1: Fair transition challenges in the 
Netherlands 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1).   

In 

sectors. 

Investments  in  upskilling  and  reskilling  in 
declining  and  transforming  sectors  are 
ongoing,  but  labour  and  skills  shortages 
remain  a  challenge.  Skills  are  key  for  smooth 
labour  market  transitions  and  preserving  jobs  in 
transforming 
energy-intensive 
industries,  workers’  participation  in  education  and 
training  increased  from  22.3%  in  2015  to  25.3% 
in 2022, well above the EU average (10.4%). In the 
Netherlands,  37%  of  citizens  believe  they  do  not 
have the necessary skills to contribute to the green 
transition  (EU:  38%) (88).  The  Dutch  recovery  and 
resilience  plan  envisages  inter  alia  a  human 
capital agenda with actions to increase the supply 
of  skills  in  green  hydrogen  and  to  facilitate 
exchanges  between  businesses  and  education  or 
research  institutions.  Specific  investments  under 
the  JTF  provide  training  to  help  reskill  workers  in 
regions  affected  by  the  transition.  Additionally, 
actions supported by ESF+ aim to provide broader 
training  for  vulnerable  workers  and  jobseekers  to 
help  them  keep  or  find  sustainable  employment, 
including  in  sectors  relevant  for  the  green  and 
digital 
transitions  such  as  engineering  and 
construction.  

(86)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(87)  Eurostat (JVS_A_RATE_R2) 

(88)  Special Eurobarometer 527, Fairness perceptions of the 

green transition (May – June 2022). 

43 

00.511.522.5GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestNL Latest (vs EU Latest)NL 2015 (vs EU Latest) 
 
                                                 
  
                                                 
   
 
Table A8.1: Key indicators for a fair transition in the Netherlands 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021),  
EMPL-JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

the 

energy  poverty 

While 
indicators  had 
improved in recent years, the spike in energy 
prices  aggravated  the  situation.  However, 
the increase in energy poverty is expected to 
be  mitigated  to  a  considerable  extent  by 
national  measures,  including  a  temporary  price 
cap  for  electricity  and  gas  introduced  as  of  1 
January  2023 (89).  The  share  of 
total 
population unable to keep their homes adequately 
warm  decreased  from  2.9%  in  2015  to  2.4%  in 
2021 (EU average: 6.9% in 2021) (90). In particular, 
7.6%  of  the  population  at  risk  of  poverty  (AROP) 
were  affected  in  2021  (EU:  16.4%  in  2021),  as 
were 1.8% of lower middle-income households (in 
deciles  4-5)  in  2021  (EU:  8.2%  in  2021).  Before 
the  energy  price  hikes,  an  estimated  8.2%  of  the 
total  population  and  30.9%  of  the  (expenditure- 
based)  at-risk-of-poverty  AROP  population  had 
residential 
on 
electricity,  gas,  and  other  fuels (91)  above  10%  of 
their  household  budget  (still  below  the  estimated 
EU average of 26.9% and 48.2%, respectively) (92).  

expenditure 

budget 

shares 

(89)  https://www.cpb.nl/en/projections-august-2022; see also 
Rapport TNO Energiearmoede in Nederland 2022.  

(90)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 
The Netherlands uses a different definition for energy 
poverty. For their research and the policy advice that flows 
from it, the Netherlands Organisation for applied scientific 
research TNO defines households as energy poor when 
facing a low household income combined with either a high 
expenditure on energy, or housing with poor quality 
insulation. 

(91)  Products defined according to the European Classification of 
Individual Consumption according to Purpose (ECOICOP): 
CP045. 

(92)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

technical brief. 

44 

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) 

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior), excl. policy support and behavioural responses. 
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452. 

The  increased  energy  prices  in  2021-2023 
negatively  affected  households’  budgets,  in 
particular  for  low-income  groups.  As  a  result 
of  energy  price  changes  from  during  the  August 
2021  to  January  2023  period  relative  to  the  18 
months prior (cf. Annex 7), in the absence of policy 
support and behavioural responses, the fraction of 
individuals  living  in  households  spending  more 
than  10%  of  their  budget  on  energy  would  have 
increased  by  48.2  percentage  points (pps)  for  the 
whole  population  and  by  61.2 pps  among  the 
(expenditure-based)  AROP population, significantly 
more  than  the  EU-level  increase  (16.4 pps  and 
19.1 pps, respectively) (93).  The expenditure shares 
of  low  and  lower-middle  income  groups  would 
have  increased  the  most  pronounced  for  gas,  as 
shown  in  Graph A8.2.  Among  the  (expenditure- 
based)  AROP  population,  the  share  of  individuals 
living in households with budget shares for private 
fuels (94)  above  6%  would  have 
transport 

(93)  Estimates based on EMPL-JRC GD-AMEDI and AMEDI+ 

projects. 

(94)  ECOICOP: CP0722. 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%10.0%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10NL GasNL ElectricityEU GasEU ElectricityIndicatorDescriptionNL 2015NL LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes20.615.6 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %1.31.3 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %22.325.3 (2022)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %2.92.4 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %30.238.9 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters4.34 (2020)5 (2020) 
                                                 
   
                                                 
 
   
 
increased  by  8.7 pps,  more  than  the  EU  average 
(5.3 pps), reaching 38.9% in January 2023 due to 
the  increase  in  transport  fuel  prices.  Research 
suggests that concerns about the energy transition 
relate mostly to the distribution of the costs of the 
proposed climate policy measures (95). 

Access to public transport displays an urban-
rural  divide.  In  2022,  citizens  perceived  public 
transport to be relatively available (66% vs 55% in 
the EU), fairly affordable (47% vs 54% in the EU) 
and of good quality (75% vs 60% in the EU). Rural 
areas  in  the  Netherlands  perceive  transport  to  be 
worse than urban areas but perceptions are better 
compared to rural areas in the EU overall (96). The 
average  carbon  footprint  of  the  top  10%  of 
emitters among the population in the Netherlands 
is about 4.0 times higher than that of the bottom 
50%  (EU  average:  5.0  times  higher).  In  the 
Netherlands,  the  average levels  of  air pollution  in 
2020  stood  below  the  EU  average  (9.2  vs  11.2 
µg/m  PM2.5),  with  7%  of  the  population  living  in 
regions  exposed 
levels  of  air 
pollution (97).  This  has  led  to  significant  health 
impacts, in particular on vulnerable groups, and 4 
970 premature deaths annually (98).  

critical 

to 

(95)  Report “De sociale aspecten van de energietransitie - Een 
onderzoek naar zorgen en oplossinge” by TNO (a NL 
Organisation for Applied Scientific Research), 2022. 

(96)  EU (rural): 46%, 48%, 56% respectively. Special 

Eurobarometer 527. 

(97)  Double the recommendations in the WHO Air Quality 

Guidelines. (annual exposure of 5µg/m3) 

(98)  EEA- Air Quality Health Risk Assessment 

45 

 
 
 
                                                 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

Graph A9.1: Trend in material use 

Source: Eurostat 

Graph A9.2: Treatment of municipal waste 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements  (Annex  6), as  they  rank  among  the 
most resource-intensive systems. 

The Netherlands’ circular economy transition 
is on track to meet the EU’s circular economy 
goals.  The  EU’s  2020  circular  economy  action 
plan (CEAP) aims at doubling circular material use 
by 2030 vs 2020. The Netherlands’ use of circular 
materials increased from 28.5% in 2016 to 33.8% 
in 2021. This performance makes the Netherlands 
the  first  country  in  the  EU  for  circular  materials 
used,  well  above  the  EU  2020  average  of  11.7%. 
The  CEAP  also  aims  to  significantly  decrease  the 
EU’s  material  footprint.  The  Netherlands’  material 
footprint  in  2020  was  far  below  the  EU  average 
and  the  country  has  achieved  a  25%  reduction 
since 2010. The goal is for the Dutch economy to 
be  completely  circular  by  2050 (99).  The  labour 
market  benefits  of  the  circular  transition  remain 
limited,  with  minor  growth  in  direct  circular  jobs 
since 2016.  

agendas 

in  2018 (100). 

The  Netherlands  adopted  a circular  economy 
strategy 
in  2016  and  commitment  and 
priorities to support the achievement of five 
The 
transition 
programme’s  ambition  is  to  achieve  an  interim 
objective of a 50% reduction in the use of primary 
raw  materials  (minerals,  fossil-based  materials 
and  metals)  by  2030.  In  2019,  the  government 
adopted  a  circular  economy 
iImplementation 
programme 2019-2023. The country committed to 
updating  the  programme  every  5  years.  A  new 
programme for 2023 and beyond is in preparation. 
The  Netherlands  puts  extra  effort  into  policies 
the 
regarding  biomass  and 
manufacturing 
and 
industry, 
consumer goods as priority sectors or value chains. 

food,  plastics, 
construction 

(99)  The 2050 aim has so far been endorsed in the Raw Materials 
Agreement by more than 400 companies, NGOs, financial 
institutions, public authorities and other organisations. 

(100) On biomass and food, plastics, the manufacturing industry, 
construction, and consumer goods as priority sections. 

46 

Source: Eurostat 

The  Netherlands  is  one  of  the  EU’s  top 
performers  in  waste  management,  with  a 
municipal waste recycling rate of 57.8 % in 2021, 
well  above  the  EU  average  of  48.5%.  It  is 
assessed to be on track to meet the EU’s recycling 
targets  for  2025  for  municipal  and  packaging 
waste.  However,  there  is  scope  to  shift  further 
reusable  and 
from 
incineration to maximise the transition to a circular 
economy.  The  second  amendment  to  the  2017-
2029  national  waste  management  plan  was 

recyclable  waste  away 

0.0100.0200.0300.0400.0500.0600.00.02.04.06.08.010.012.014.016.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint Netherlands (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials Netherlands (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)5205135115085335150100200300400500600201620172018201920202021Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
                                                 
          
 
        
 
Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use; (3) the 
recovery rate of construction and demolition waste includes waste which is prepared for reuse, recycled or subject to material 
recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 2015 data; (5) food waste includes 
primary production, processing and manufacturing, retail and distribution, restaurants and food services, and households. 
Source: Eurostat, European Environment Agency 

adopted  in  2021.  It  covers  household,  hazardous, 
industrial and bulky waste. 

industry, 

The industrial system is increasingly circular. 
is  more 
The  economy,  particularly 
efficient at using materials to produce wealth than 
the EU average, with a resource productivity of 5.7 
purchasing power standard per kilogramme vs 2.3 
for  the  EU,  further  increasing  the  Netherlands’ 
resilience (see Annex 5). Resource productivity has 
increased  since  2016, 
indicating  significant 
potential  to  boost  repair,  reuse  and  the  use  of 
secondary raw materials. Manufacturers are facing 
supply  risks  because  of  their  dependence  on 
cobalt,  indium,  rare-earth  metals,  tantalum,  tin 
and tungsten. These critical  metals are crucial  for 
the energy transition (101). 

The  built  environment  system  continues  to 
resources 
the  depletion  of 
exacerbate 
despite  recent  improvements.  The  recovery 
rate  of  construction  and  demolition  waste  has 
been complete since 2016 and remains above the 
(100%  vs  89%).  Soil  sealing 
EU  average 
progressed  between  2015  and  2018  at  a  lower 
rate  than  the  EU  average.  There  is  scope  for 
renovating  existing  buildings  and  improving  their 
instead  of  building  new  ones,  and  for 
use 

(101) NETHERLANDS INTEGRAL CIRCULAR ECONOMY REPORT 

2021 (pbl.nl) 

increasing  the  share  of  secondary  raw  materials 
used in construction. The Dutch Soil Quality Decree 
imposes  conditions  on  the  use  of  soil,  dredging 
spoil and building materials on or in the ground or 
in  surface  water.  The  Netherlands  Enterprise 
Agency  (RVO)  supports  the  building  sector  in 
providing  information  on  building  materials,  soil 
and dredging spoil for entrepreneurs. 

in 

issue 

remains  a  major 

The  agri-food  system  has  yet  to  become 
circular  and  to  efficiently  manage  water 
resources. Nitrate pollution in groundwater due to 
the 
agriculture 
Netherlands  (see  Annex  6).  Circular  agriculture 
provided  for  in  the  Dutch  action  plan  since  2019 
entails a paradigm shift from growth in production 
towards 
volumes  and  cost-price 
optimisation  of  resource  use  and  food  production 
in harmony with nature. In a more closed nutrient 
cycle,  residual  products  of  the  food  production 
chain  are  a  resource  for  feed.  Synthetic  fertiliser 
use can be reduced through more efficiency in the 
food chain and precision fertilising with processed 
composting  and 
manure.  The  Netherlands’ 
anaerobic digestion per head remained well above 
the EU average in 2021, in line with best practice.  

reductions 

There remains a financing gap in the circular 
economy, 
including  waste  management.  
Additional investments will be required to address 
growing  needs.  The  financing  gap  was  estimated 

47 

AREA201620172018201920202021EU-27 Latest year EU-27Overall state of the circular economyMaterial footprint (tonnes/capita)7.97.37.47.77.7-13.72020YoY growth in persons employed in the circular economy (%)10.90.8-0.8 0.0--2.92019Water exploitation index plus (WEI+) (%)3.84.54.84.8--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)3.74.14.24.54.65.72.32021Circular material use rate (%)228.529.728.930.030.033.811.72021Recycling rate (% of municipal waste)53.554.655.956.956.957.849.62021Built environmentRecovery rate from construction and demolition waste (%)3100.0-100.0-100.0-89.02020Soil sealing index (base year = 2006)4103.7-107.8---108.32018Agri-foodFood waste (kg per capita)5----161.0-131.02020Composting and digestion (kg per capita)144.0144.0147.0148.0156.0154.0100.02021 
                                                 
 
     
 
at  EUR  1.2  billion  per  year  between  2014  and 
2020 (Annex 6). 

48 

 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes the Netherland’s  performance on digital 
skills,  digital  infrastructure/connectivity  and  the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  The  Netherlands  allocates  26%  of  its  total 
RRP budget to digital (EUR 1.2 billion) (102). 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (103).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (104). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (105). 

While  the  Netherlands  generally  performs 
well as a digitally advanced country, the low 
share  of  ICT  graduates  is  a  concern  as  this 
impair  the  Netherlands’  ability  to 
may 

(102) The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(103) The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(104) See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(105) The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

49 

in 

(6.7%  compared 

manage  its  digital  transition.  The  Netherlands 
has  the  highest  share  of  individuals  with  at  least 
basic  digital  skills 
the  European  Union. 
Moreover, the share of ICT graduates is well above 
the  EU  average 
to  4.5% 
according  to  the  latest  available  data).  Yet  the 
share of enterprises with hard-to-fill ICT vacancies 
remains high (71.3% compared an EU  average of 
55.4%  in  2020).  This  lack  of  ICT  personnel  is 
reported as a major factor limiting the progress in 
the  Dutch  digital  transition.  The  share  of  female 
ICT  specialists  is  on  the  other  hand  below  the  EU 
the 
average 
Netherlands scores well above the EU average on 
other metrics related to gender equality. The Dutch 
RRP  includes  measures  to  further  promote  digital 
skills, but they are expected to have only a limited 
impact  on  the  structural  shortages  in  the  ICT 
sector. 

(18%  vs.  19%),  even 

though 

The  Netherlands  performs  well  on  digital 
infrastructure/connectivity  with  a  high  level 
of 5G and very high capacity network (VHCN) 
coverage.  The  country  continues  to  score  well 
above  the  EU  average  on  these  connectivity 
indicators  Nevertheless,  uptake  of  speeds  of  at 
least  100  Mbps  remains  below  its  potential, 
despite the available coverage, as households stick 
to  lower  speeds  and  broadband  prices  remain 
higher  than  the  EU  average.  Mobile  broadband 
uptake,  however,  appears  not  to  be  affected  and 
reached  94%  in  2021.  Despite  the  high  5G 
coverage, 
for 
improvement in the quality, reliability, and capacity 
of  the  Dutch  5G  network.  The  expansion  of 
spectrum  options  beyond  the  current  system  of 
dynamic  spectrum  sharing  –  in  particular,  the 
launch of the 3.6 GHz band auction, expected later 
this year – is crucial in this regard. 

significant 

room 

there 

is 

are 

businesses 

Dutch 
successfully 
integrating  new  digital  technologies,  scoring 
above  average  in  all  key  metrics.  However, 
more  work  is  needed  to  reach  the  highest 
levels  of  performance  in  the  EU  for  all 
advanced technologies. The share of enterprises 
using  cloud  computing  is  well  above  the  EU 
average.  The  share  of  SMEs  with  at  least  a  basic 
level  of  digital  intensity,  and  the  use  of  artificial 
intelligence  (AI)  and  big  data  by  businesses  are 
also above the EU average. However, the use of AI 
by businesses lags behind the use of cloud and big 
data. In order to address the risk of falling behind 
in the use of AI, the Dutch RRP includes investment 
such  as  AI  Learning  Communities,  where 

 
 
                                                 
 
Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

2021,  the  Netherlands  had  16.5  million  active 
DigiD’s.  On  access  to  e-health  records,  the 
Netherlands scores 69, which is slightly below the 
EU  average.  Most  health  care  providers  make  e-
health records available through their own portals. 
However, the spectrum of accessible and updated 
health data remains limited and fragmented. 

Source: Digital Economy and Society Index 

cooperation  between  business  and  academia  is 
envisaged  to  help  SMEs  in  applying  AI  in  their 
businesses, as well as AI research laboratories.   

The  Netherlands  performs  well  in  providing 
digital public services. The country scores above 
the  EU  average  for  delivering  digital  public 
services  to  both  citizens  and  businesses.  People 
to  electronic 
and  companies  have  access 
identification (eID) solutions – DigiD for individuals 
and  eHerkenning  for  companies  –  that  have  been 
notified  under  the  eIDAS  scheme.  At  the  end  of 

50 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA79%79%54%80%% individuals2021202120212030ICT specialists (1)5.9%6.7%6.7%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage90%91%98%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)36%52%63%56%-% households20202021202220222030Overall 5G coverage80%97%100%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA0%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA80%69%90%% SMEs202220222030Big data (3)27%27%27%14%75%% enterprises20202020202020202030Cloud (3)NA60%60%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA13%13%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA858577100Score (0 to 100)2021202220222030Digital public services for businessesNA888984100Score (0 to 100)2021202220222030Access to e-health recordsNANA6971100Score (0 to 100)202320232030Netherlands 
 
 
  
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance of the Dutch research and innovation 
(R&I)  system,  which is  essential  for  delivering  the 
twin green and digital transition. 

to 

the  European 

Innovation 
According 
Scoreboard (106),  the  Netherlands  re-joined 
the  group  of  ‘innovation  leaders’  in  2022. 
Thanks  to  continuous  improvements  since  2015, 
the  country’s  performance  lead  over  the  EU  has 
remained  stable,  with  exception  of  a  small 
decrease  in  2021,  when  the  Netherlands  was  in 
the group of ‘strong innovators’. 

While  R&D  intensity (107)  slightly  increased 
from  2019,  it  is  still  below  the  national 
target  of  2.5%.  It  reached  2.25%  in  2021 
(compared  with  2.14%  in  2018),  nearly  on  par 
with  the  EU  average.  However,  this  is  still  below 
the spending of other Member States with similar 
levels of economic development. The increase has 
been achieved mainly thanks to the growth in the 
business  R&D  intensity,  which  reached  in  2021 
1.52%, slightly above the EU average, while public 
R&D  intensity,  at  0.73%,  remains  slightly  below 
the EU average. 

plans 

investment 

ensure 
Multiannual 
sustained  public  support  for  R&I  in  the 
coming  years.  The  Dutch  authorities  recognise 
the  importance  of  further  investment  in  R&I,  to 
ensure sustainable growth: R&I is one of the pillars 
the  EUR 20 billion  National  Growth  Fund 
of 
(NGF) (108) 
(2021-2025).  Starting  from  2022, 
additional  public 
the  higher 
investment 
education  and  research  system  will  be  financed 
from the Research and Science Fund (EUR 5 billion 
up  to  2031)  and  from  the  structural  budget 
(EUR 700 million a year on a structural basis) (109). 

in 

(106) 2022 European Innovation Scoreboard, Country profile: the 

Netherlands 
https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-country-
profile-nl.pdfThe EIS provides a comparative analysis of 
innovation performance in EU countries, including the relative 
strengths and weaknesses of their national innovation 
systems (also compared to the EU average). 

(107) Defined as gross domestic expenditure on R&D as a 

percentage of GDP. 

(108) National Growth Fund: 

https://www.nationaalgroeifonds.nl/english. 

(109) Letter to Parliament about higher education and science 
policy: https://www.government.nl/ministries/ministry-of-
education-culture-and-science/documents/parliamentary-
documents/2022/06/17/letter-to-parliament-about-higher-
education-and-science-policy. 

There  is  potential  for  strengthening  the 
societal  impact  of  the  Dutch  R&I  system,  in 
relation  to  environmental  sustainability.  The 
Netherlands  has  an  excellent  public  science  base, 
notably in green research: it ranks among the top 
performers  in  the  EU  for  the  share  of  scientific 
publications that are highly cited, both on average 
across all scientific fields and specifically in green 
research.  However,  the  share  of  environment-
related  patents  in  total  Dutch  patent  applications 
is  lower  than  the  EU  average.  Stepping  up  R&I-
related  public  and  private  commitments  for 
sustainability  is  important  for  strengthening  the 
societal  impact  of  the  Dutch  R&I  system.  The 
Mission-driven  Top  Sector  and  Innovation  Policy 
and  Invest-NL  provide  relevant  frameworks  for 
this.  Moreover,  mobilising  R&I  for  the  green  and 
digital  transitions  is  a  key  priority  for  the  funds 
allocated  to  R&I  in  the  Dutch  recovery  and 
resilience  plan 
two 
transitions account for almost 100% of the overall 
R&I  investment  in  the  plan:  digital-related  R&I 
areas account for 69% of total R&I expenditure in 
the RRP, and green-related for 31%. 

(RRP) (110).  Together 

the 

to 

reach  11.2  per 

Shortages  of  skilled  human  resources  are 
hindering the green and digital transitions in 
the  Dutch  economy.  The  number  of  new 
graduates in science and engineering aged 25-34 
has  increased  slightly  over  the  last  decade  in  the 
Netherlands, 
thousand 
inhabitants in 2020 but this is still well below the 
EU  average  of  16.  Similarly,  the  number  of 
graduates  in  information  and  communications 
technology (ICT) is also below the EU average and 
is  not  catching  up  with  the  pressing  demand  for 
ICT  professionals.  Moreover,  only  18%  of  all  ICT 
specialists  in  the  Netherlands  are  women,  slightly 
below  the  EU  average  of  19%.  This  gender 
imbalance  highlights  the  missed  opportunities  in 
relation  to  female  talent.  Shortages  of  qualified 
ICT  staff  pose  a  significant  challenge  to  the 
Netherlands’  ambition  of  speeding  up  the  digital 
and green transitions. 

(110) Estimated amount of Recovery and Resilience Facility 

allocation to R&I: EUR 472 million (i.e. about 10% of the 
RRP). 

51 

 
 
                                                 
                                                 
 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year or the year with the highest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest EU 

52 

EUaverage (1)R&D intensity (GERD as % of GDP):2.152.182.312.252.26Public expenditure on R&D as % of GDP:0.770.720.770.730.76Business enterprise expenditure on R&D (BERD) as % of GDP:1.351.461.541.521.49Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 16.115.414.9::9.8Patent Cooperation Treaty patent applications per billion GDP (in PPS)5.26.14.9::3.3Public-private scientific co-publications as % of total publications1010.711.410.9117.1Public expenditure on R&D financed by business enterprise (national) as % of GDP:0.060.061::0.054New graduates in science & engineering per thousand pop. aged 25-349.2:11.311.2:16Graduates in the field of computing per thousand population aged 25-342.4:2.32.5:3Total public sector support for BERD as % of GDP:0.2440.254::0.194R&D tax incentives: foregone revenues as % of GDP0.1350.1350.145::0.1Share of environment-related patents in total patent applications filed under Patent Cooperation Treaty  (%)11.91010.1 ::13.3Venture capital (market statistics) as % of GDP0.040.030.060.0770.1320.074Employment in fast-growing enterprises in 50% most innovative sectors5.24.86.66.95.5Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 20212020The Netherlands201020152019 
 
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

is 

in 

very 

high 

level 

The  productivity  growth  of  the  Dutch 
economy  is  one  of  the  lowest  in  the  EU.  The 
productivity 
the 
Netherlands (111).  Between  1980  and  2007,  the 
Netherlands was as productive as the US and one 
of  the  most  productive  EU  countries.  However, 
after  the  financial  crisis  productivity  growth 
weakened  compared  to  both  the  euro  area  and 
peer  economies (112).  Real  GDP  per  person 
employed  has  been  consistently  below  the  euro 
area average, starting with 2009. 2023 should be 
the  first  year  with  a  Dutch  productivity  growth 
above the euro area average. GDP per hour worked 
was stagnant in 2021 compared to 2015, making 
the  country  the  third  weakest  performer  in  the 
EU (113)https://data.oecd.org/lprdty/gdp-per-hour-
labour 
worked.htm 
productivity  in  industry  (see  table  A12.1)  tells  a 
similar story, being below the EU average. 

indicator-chart.  Real 

- 

Low  investment  in  the  Netherlands  is  a 
contributing  factor  to  its  poor  productivity 
growth performance. The capital intensity of the 
Dutch  economy  (net  capital  stock  per  person 
employed) increased between 2010 and 2021 but 
is  below  that  of  the  euro  area (114).  Capital 
intensity in the EU outgrew Dutch capital intensity 
by  5  percentage  points.  The  level  of  net  public 
investment is below the EU  average, including for 
2021 and 2022, as shown in table A12.1. 

Greening  the  economy  fast  enough  is  a  key 
factor  going  forward  for  preserving  the 
quality  of  the  business  environment.  The 
business environment has traditionally been a key 
strength  of  the  Dutch  economy.  But  delivering  on 
greening  commitments  may  be  a  key  issue  for 
economic  performance  in  the  coming  years,  as 
courts have started ruling on environmental cases, 
targets 
making  the  achievement  of  climate 
mandatory for the public sector and some private 
companies.  The  nitrogen-reduction  measures 
taken  by  the  government  have  provoked  violent 
demonstrations  from  farmers.  The  new  nitrogen 
ruling by the Council of State (November 2022) is 
expected to negatively affect construction projects 

(111) Eurostat, December 2022 

(112) Commission Spring Forecast 2023, Table 

28.https://data.oecd.org/lprdty/gdp-per-hour-
worked.htm - indicator-chart 

(113) OECD, https://data.oecd.org/lprdty/gdp-per-hour-

worked.htm#indicator-chart 

in  Rotterdam).  All 

(housing;  renewable  energy,  e.g.  the  Porthos 
these 
hydrogen  project 
developments  may  play  a  part  in  companies’ 
decisions  to  stay  in  or  relocate  out  of  the 
Netherlands, as will other important developments 
at  EU  and  international  level  (e.g.,  the  OECD 
agreement  on  profit 
taxation,  anti-money 
laundering  measures,  US  technology  sanctions 
against  China).  Several  big  firms  have  relocated 
their main headquarters out of the Netherlands in 
the last two years (Unilever, Shell, DSM). 

Decarbonising  industry  remains  a  challenge. 
Netherlands is one the heaviest polluters in the EU 
(6th  place  in  2020  in  terms  of  greenhouse 
emissions  per  capita  according  to  Eurostat).  The 
government  has  allocated  substantial  resources 
for greening (a €35bn climate fund to be built up 
over  10  years;  a  €25bn  fund  to  help  reduce  the 
country‘s  nitrogen  emissions).  The  money  will 
support  the  construction  of  heat,  hydrogen,  and 
electricity networks. Nuclear is part of the solution, 
as  two  new  nuclear  power  plants  will  be  built. 
However,  progress  in  implementation  is  slow.  The 
Dutch  Environment  Agency  (PBL)  warned  that  the 
2030 climate target of 55 % would be missed (115). 
On  current  plans,  the  reduction  achieved  will  be 
between  39 %  and 50 %. The  installed  renewable 
electricity capacity share in electricity production is 
clearly below the EU average (35 % vs 51 %). 

Industry  is  a  factor  of  resilience  for  the 
Dutch economy. It represents 12 % of Dutch GDP 
(18 %  if  construction  is  included)  and  directly 
employs 800,000 people. The government targets 
industry  share  of  10-15 %  of  GDP (116), 
an 
reflecting  its  desire  to  keep  a  strong  industrial 
base  in  the  Netherlands  as  a  foundation  of  its 
prosperity  and resilience, via the diversification of 
the economic structure. Industry contributes 50 % 
of R & D expenditure by Dutch businesses (2019). 
Manufacturing  was  one  of  the  two  sectors 
showing  increased  productivity in  2020  (Statistics 
Netherlands)  and  has  remained  a  top  performer 
over  the  years  in  terms  of  productivity,  as  shown 
in graph A12.1. 

(115) Netherlands Environmental Assessment Agency (PBL), 
Climate and Energy Outlook of the Netherlands, 15 
December 2022 

(116) Ministry of Economy and Climate, ‘New Strategic and Green 

(114) National Productivity Board (CPB), 2021 Annual Report. 

Industrial policy’, July 2022. 

53 

 
 
                                                 
                                                 
 
 
Graph A12.1: Productivity per sector 

Source: AMECO. 

Rising  energy  prices  have  hit  parts  of  Dutch 
industry. Gas consumption was 25 % lower in the 
Netherlands  in  2022  compared  to  2021.  Energy 
industries  have  reacted  particularly 
intensive 
strongly,  with  a  reduction  in  demand  close  to 
30 % (117).  Government  support  measures  have 
focused on households and some energy-intensive 
SMEs.  Several  energy-intensive  companies  have 
closed down (ALDEL, Nyrstar). 

Companies  are  affected  by 
labour  and 
materials  shortages.  Labour  and  materials 
shortages  are  acute  in  the  Netherlands:  in  the 
2022  EIB  Investment  Survey,  37 %  of  companies 
in  hiring  the  right  staff 
reported  problems 
compared  to  an  EU  average  of  23 %;  39 %  are 
experiencing  difficulties  finding 
the  material 
factors  of  production,  which  is  below  the  EU 
average  (48 %)  but  is  a  significant  step  up 
compared  to  previous  years  (8 %  2020,  24 % 
2021).  Finding  labour  and  materials  are  reported 
by  businesses  as  the  top  two  concerns  for  2023 
polled  and  16 % 
(36.4 %  of 
respectively)  in  the  Dutch  business  confidence 
survey  (COEN,  Q4  2022).  Availability  of  skilled 
staff  came  out  as  the  main  barrier  for  long-term 
investment  reported  by  Dutch  companies  in  the 
EIB Investment Survey 2022. It is also the only one 
for  which  Dutch  firms  are  more  concerned  than 
their counterparts in the EU (87 % vs 85 %). 

companies 

Netherlands is well integrated into the Single 
Market, but it could improve its performance 
in  the  Single  Market  Scoreboard  (SMS).  The 
country‘s trade integration in the single market for 

(117) Statistics Netherlands (CBS), ‘Natural gas consumption in 
2022 at lowest level in 50 years’, 13 February 2023. 

54 

goods and services (44 % of GDP) is above the EU 
average  (42 %).  The  OECD  restrictiveness  index 
shows  that  the  Netherlands  has  the 
lowest 
barriers  for  trading  in  services  among  all  EU 
countries. 
that 
performance  has  deteriorated,  especially  as 
regards  infringements  (average  case  duration – 
51.7 months vs 42.8 EU – and the time needed for 
complying  with  a  Court  of  Justice  ruling –  61.5 
months vs 46.8 EU). 

The  2022  SMS 

indicates 

Graph A12.2: Business environment and 
productivity drivers 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

especially  during 

SMEs face multiple challenges; better access 
to  finance  and  public  procurement  can  help. 
The  top  concerns  for  SMEs  are  related  to  staff 
shortages  and  energy  prices.  SMEs  could  take 
better  advantage, 
these 
challenging times, of the huge public procurement 
market in the Netherlands, including if competition 
is  opened  in  sectors  such  as  social  housing. 
Splitting  calls  may  help  SMEs  (16 %  split  calls  in 
the  Netherlands  vs  30 %  in  EU  in  2022).  The  EIF 
composite index on access to finance signals that 
SMEs  in  the  Netherlands  face  more  difficulties  in 
accessing 
is 
confirmed by the 2022 EIBIS, where the number of 
Dutch  companies  reporting  using  bank 
loans 
(around 60 %, the second lowest share in the EU) 
is  well  below  the  EU  average  (82 %).  The  same 

loans  than  EU  companies.  This 

6080100120140160030507091113151719212003=100Market services (G_N)Manufacturing (C)Construction (F)Tradable (A_E, G_J)Non tradable (F, K_U)1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionNetherlands 
   
                                                 
   
Table A12.1: Industry and the Single Market 

(*) Last available year 
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. 

study  shows  that  Dutch  companies  have  the 
lowest share of external finance in total financing 
(11 %) and the highest share of internal financing, 
which  suggests  that  their  dependence  on  bank 
loans is limited. 

55 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)3.64.53.74.14.23.7Net public investment, level of public capital stock, net of depreciation, % GDP (1)0.40.40.50.30.30.4Real labour productivity per person in industry (% yoy)(2)0.3-2.5-2.35.80.61.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)1.35.25.8-3.44.42.9Material shortage (industry), firms facing constraints, % (3)10108243947Labour shortage using survey data (industry), firms facing constraints, % (3)212315233728Vacancy rate (business economy)(4)3.33.62.64.25.43.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.180.180.190.190.180.18Installed renewables electricity capacity, % of total electricity produced (6)17.519.529.635.1n.a.50.9Single Market integrationEU trade integration, % (7)42.741.940.444.150.045.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.030.030.030.030.030.05Public procurement Single bids, % of total contractors (9)141513131929Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)12.211.09.89.010.529.6Bankruptcies, Index (2015=100)(11)60.663.453.230.235.686.8Business registrations, Index (2015=100) (11)111.8126.1121.2137.9142.2121.2Payment gap - corporates B2B, difference in days between offered and actual payment (12)119-2111313Payment gap - public sector, difference in days between offered and actual payment (12)912-3111315Share of SMEs experiencing late payments in past 6 months, % (13)n.a.33.12522.724.643EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.210.230.210.26n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.380.170.330.28n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

the 

reforms.  While 

This  Annex  outlines  the  performance  of  the 
Netherlands’  public  administration,  which  is 
essential for providing services and carrying 
out 
Netherlands’ 
administrative  effectiveness  score  still  places  it 
among  the  most  effective  Member  States,  it  has 
reached its lowest level since 2009 (118). This could 
be a result of the length of time it took to form a 
government  after  the  March  2021  parliamentary 
elections.  This  delayed  several  initiatives  such  as 
the  Open  Government  Act 
the 
submission of the recovery and resilience plan. The 
Netherlands  systematically  scores  well  above  the 
EU  average  on  most  public  administration 
indicators, but could improve in several areas, such 
as greater use of regulatory impact assessments. 

(Woo)  and 

The  Netherlands  is  one  of  the  countries 
where  the  ageing  of  public  administration 
employees represents a risk. The ratio of staff 
who are between 25 and 49 years of age to those 
aged  50  or  above  is  lower  than  the  EU  average 
(Table A13.1). While the public administration is a 
popular  employer  among  young  people,  the  low 
retention  rate  could  threaten  the  delivery  of 
services.  The  share  of  public  administration 
employees with higher education is slightly above 
the  EU  average,  and  their  participation  in  adult 
learning is among the highest in the EU. The share 
of women in senior positions has increased slowly 
but remains below the EU average. Parity has still 
not  been  achieved  at  the  senior  level,  despite 
being achieved at the general level (119).  

The  Netherlands  is  one  of  the  EU’s  best 
performers  on  digital  public  administration. 
The  level  of  e-government  maturity  is  high  (the 
Netherlands: 85%,  EU: 73%)  with  a  wide  range  of 
services  offered  digitally  (the  Netherlands: 85%, 
EU: 68%).  The  share  of  e-government  users 
continues  to  rise,  reaching  92%  of  the  population 
(EU: 65%).  The  Netherlands  outperforms  the  EU 
average  in  the  provision  of  digital  services  for  all 
life-events  apart  from  ‘starting  a  small  claims 
procedure’  (in  the  justice  domain)  for  which  it 
scores below average on two policy priorities (120). 

The  quality  of  policymaking 
the 
Netherlands is high. Stakeholder engagement in 

in 

new  regulations  and  on  ex  post  evaluation  has 
increased and the Netherlands remains among the 
best-performing Member States. This ensures that 
legislation is inclusive and remains up-to-date and 
fit 
for  purpose.  However,  performance  on 
regulatory  impact  assessment  remains  below  the 
EU average, which is mostly due to a consistently 
low  score  on  the  transparency  dimension  (Graph 
A13.1) (121). There are three ongoing parliamentary 
inquiries,  the  results  of  which  could  have  a  big 
impact  on  future  public  administration  reforms 
related to policymaking and legislation (122). 

Graph A13.1: The Netherlands. Indicators of 
Regulatory Policy and Governance: regulatory 
impact assessment 

Source: European Commission based on Indicators of 
Regulatory Policy and Governance Surveys 2017 and 2021, 
http://oe.cd/ireg 

The  justice  system  is  highly  efficient  in 
particular in civil and commercial litigious cases at 
first instance (which took an average of 127 days 
in 2020). Efficiency has improved for first-instance 
administrative  cases  (taking  an  average  of  265 
days in 2021 compared to 304 days in 2020). The 
overall  quality  of  the  justice  system  is  good. 
Additional  funds  are  being  allocated  to  the  legal 
aid  system,  and  the  government  has  announced 
that court fees will be reduced for individuals and 
SMEs.  The  level  of  digitalisation  is  advanced,  in 
particular,  regarding  the  availability  of  electronic 
communication tools in courts. Efforts continue to 
publish more judgments online and improve digital 

(118) Worldwide Governance Indicators, 2022. In 2021, the 

Netherlands scored 1.767 on a scale between -2.5 and +2.5. 

(121) OECD, iREG indicators, 2022. 

(119) European Institute for Gender Equality, 2022. 

(120) E-government benchmark report, 2022. 

(122) These inquiries are related to (i) gas extraction in Groningen, 
(ii) the childcare allowance affair and (iii) the government’s 
handling of the COVID-19 pandemic. 

56 

0.000.501.001.502.002.503.0000.511.522.53NL2017NL2021NL2017NL2021Primary lawsSecondary lawsRegulatory impact assessmentMethodologyOversightSystematic adoptionTransparencyEU-27 
 
                                                 
     
                                                 
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability.  
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10). 

tools that enable people and businesses to initiate 
and  follow  proceedings  online.  As  regards  judicial 
independence, no systemic deficiencies have been 
reported (123). 

Graph A13.2: Accounting maturity by government 
sector. 2018 scores 

is 
accrual 

less  advanced 
accounting 

in 
The  Netherlands 
implementing 
for 
government  relative  to  the  EU  average,  in 
particular  within  the  central  government 
(Graph  A13.2).  Accrual  accounting  as  a  public 
accounting  standard  provides  a  comprehensive 
and  transparent  overview  of  a  public  body’s 
financial  position  and  performance  and  can 
support sustainability and intergenerational equity.   

Source: Table 3 at  Updated accounting maturities of EU 
governments and EPSAS implementation cost  

(123) For a more detailed analysis of the performance of the 

justice system in the Netherlands, see the 2023 EU Justice 
Scoreboard (forthcoming) and the country chapter for the 
Netherlands in the 2023 Rule of Law Report (forthcoming). 

57 

00.10.20.30.40.50.60.70.80.9CentralgovernmentLocalgovernmentSocial securityFundsGeneralgovernmentSubcomponentsTotalNLEU-27NL201720182019202020212022EU-27(2)182.385.684.290.791.7n/a64.82n/an/an/a82.085.185.372.93n/a0.70.80.90.90.80.8453.253.956.1 (b)58.657.6 (b)59.352.0525.325.324.623.636.0 (b)33.716.9632.831.225.423.420.217.211.071.41.41.41.51.4 (b)1.51.580.90.90.90.90.9n/a0.792.42.42.42.42.4n/a1.5101.89n/an/an/a2.07n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
                                                 
      
 
 
   
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  the 
progress  of  the  Netherlands  in  implementing  the 
Pillars’ 20 principles and EU headline and national 
targets  for  2030  on  employment,  skills  and 
poverty reduction. 

Despite  rising  economic  uncertainty,  the 
Dutch  labour  market  is  performing  well 
overall,  but  significant  challenges  remain  in 
terms  of  labour  market  segmentation  and 
the  unfavourable  employment  and  social 
situation  of  certain  groups.  The  employment 
rate  in  the  Netherlands  was  82.9%  in  2022,  well 
above the EU average (74.7%). However, both the 
high  level  and  strong  growth  of  flexible  and 
temporary  contracts  (28%  of  employees  in  Q4-
2022 vs. 12.9% in the EU) and the number of self-
employed without employees over the last decade 
(about  1.2  million  in  Q4-2022)  require  further 
attention  to  ensure  equal  opportunities  and  fair 
working  conditions  for  all,  as  well  as  adequate 
social  protection,  in  particular  for  self-employed 
without  employees.  The  COVID-19  pandemic 
exacerbated the inherent risks in an already highly 
segmented  labour  market.  People  with  flexible 
contracts (in particular young people, lower-skilled 
adults,  people  with  a  migrant  background  and 
persons  with  disabilities)  were  among  the  groups 
hit  the  hardest,  together  with  the  self-employed 
without  employees.  The  total  labour  participation 
of women and their number of hours worked have 
increased,  and  the  gender  employment  gap  is 
below the EU average (7.9 percentage points (pps) 
compared to the EU average of 10.6 pps in 2022). 
Yet, further progress is needed on the gender pay 
gap, which was still slightly above the EU average 
in 2021 (13.5% vs 12.7%). Furthermore, part-time 
employment  remains  widespread.  As  a  share  of 
total  employment,  it  is  the  highest  in  the  EU 
(38.4% compared to 17.0% in the EU in 2022), in 
particular  among  women  (60.6%  compared  to 
27.9% in the EU in 2022). As a result, the gender 
gap  in  part-time  employment  (42.3  pps  against 
the EU average of 20.4 pps in 2022) is one of the 
highest  in  the  EU,  as  well  as  the  gender  pension 
gap (41.5% vs 25.9% in the EU in 2021). 

Table A14.1: Social Scoreboard for the Netherlands 

Update of 27 April 2023. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels and changes of the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2023. Due to changes in the 
definition of the individuals’ level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 
Source: Eurostat 

Increasing  labour  and  skills  shortages  and 
inequalities  in  access  to  adult  learning  and 
reskilling  opportunities  pose 
up-  and 
challenges,  which  may  affect  the  green  and 
digital transitions. The number of job vacancies 
has  exceeded  the  number  of  unemployed  people 
continuously  since  Q4-2021.  In  Q4-2022,  the 
highest  number  of  vacancies  were  in  the  trade, 
business  services  (zakelijke  dienstverlening)  and 
health sectors, while the vacancy rate was among 
the highest in construction and the ICT sector (124). 
Improving  the  labour  market  outcomes  of  groups 
in an unfavourable employment and/or vulnerable 
social situation would help tackle labour shortages 
labour  and  skills 
and  activate  the  untapped 

(124) https://www.cbs.nl/nl-nl/nieuws/2023/07/arbeidsmarkt-in-

vierde-kwartaal-iets-krapper 

58 

5.678.94.27.93.8882.93.50.7110.116.614.936.5625.812.574.20.2Critical situationTo watchWeak but improvingGood but to monitorOn averagePolicy areaHeadline indicatorEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021)Dynamic labour markets and fair working conditionsEmployment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Social protection and inclusionAt risk of poverty or social exclusion rate                                            (% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Disability employment gap(percentage points, 2021)Housing cost overburden(% of total population, 2021)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Better than averageBest performers 
 
 
 
   
 
                                                 
 
In 

particular, 

than  double 

the  EU  average 

potential. Participation in vocational education and 
training  and  adult  learning  remains  significantly 
higher  in  the  Netherlands  than  the  EU  average. 
Reflecting the impact of the COVID-19 crisis, adult 
participation  in  learning  over  the  past  4  weeks 
decreased from 2019 to 2020, after several years 
of weak growth, by 0.7 pps to 18.8%; this was still 
more 
(9.2%). 
Following a break in time series, adult participation 
in  learning  stood  at  26.6%  in  2021  (EU:  10.8%). 
However,  effective  outreach  to  those 
in  an 
unfavourable  labour  market  situation  (and  whose 
labour  potential  is  highly  needed)  remains  a 
challenge. 
decentralised 
implementation may not always guarantee that all 
vulnerable  groups  are  equally  or  adequately 
in  improving 
supported.  Continued 
basic, technical and digital skills, increasing cross-
sector  mobility  and  sustainable  employability,  as 
well as strengthening the quality and inclusiveness 
of  education  and  training  for  all  is  key  for  the 
Netherlands to reach its national target of at least 
62%  of  adults  participating  in  training  every year 
by  2030.  Under  the  European  Social  Fund  Plus 
(ESF+),  the  Netherlands  will  continue  to  invest  in 
the  active  inclusion  of  vulnerable  groups.  ESF+ 
resources  will  predominantly  be  used  to  provide 
up-  and  reskilling  opportunities  to  workers  at  the 
margins  of  the  labour  market  and  prevent  job 
losses. 

investment 

the 

in 

or 

social 

exclusion 

Although  the  share  of  people  at  risk  of 
the 
poverty 
Netherlands  is  stable and  well  below the  EU 
average,  there  are  still  challenges  for 
specific  groups,  such  as  people  with  a 
migrant  background  and  persons  with 
disabilities.  In  2022,  35.1%  of  non-EU-born 
people  living  in  the  Netherlands  were  at  risk  of 
poverty  or  social  exclusion,  20.6  pps  higher  than 
the  share  of  the  native-born  (in  2021,  the 
difference  was  21.6  pps).  For  people  with  a  non-
EU  migrant  background,  the  gap  is  driven  by  a 
more  prevalent  risk  of  poverty  (32.0%  vs  12.4% 
for  the  native-born  in  2022),  including  in-work 
poverty  (12.6%  versus  4.0%  in  2022).  This  is 
linked partly to a more unfavourable employment 
situation  and  a  higher  rate  of  severe  material 
deprivation (8.9% vs 1.1% in 2020). Moreover, the 
risks  of  in-work  poverty  and  material  and  social 
deprivation  are  higher  for  people  on  flexible  and 
temporary  contracts  as  well  as  for  the  self-
employed  without  employees.  Three  out  of  10 
children  with  foreign-born  parents  were  at  risk  of 
poverty in 2022, which was over four times higher 

than  for  children  with  native-born  parents  (6.9%). 
In addition, 25.9% of persons with disabilities were 
at  risk  of  poverty  or  social  exclusion  in  2022 
(0.6 pps  below  the  2021  value  but  still  1.4 pps 
more  than  in  2020).  Significant  challenges  in 
terms  of  access  to  adequate  social  protection 
remain  for  the  self-employed  without  employees. 
There  is  therefore  scope  for  greater  social  policy 
action,  so  the  Netherlands  can  contribute  to 
reaching  its  national  target  to  decrease  the 
number  of  people  at  risk  of  poverty  or  social 
exclusion by 163 000 by 2030. 

Table A14.2: Situation of the Netherlands on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months; (2) Number of persons at risk of poverty or social 
exclusion (AROPE), reference year 2019 
Source: Eurostat, DG EMPL 

To  tackle  the  impact  of  high  inflation  and 
rising energy costs on households, the Dutch 
government has taken a number of measures 
impact  on  the 
to  cushion  the  negative 
purchasing  power  of  households.  These 
measures  are  mostly  temporary,  of  a  generic 
nature  and  are  expected  to  soften  the  impact  of 
in  2023  (see  Chapter  1). 
the  energy  crisis 
Nevertheless,  inflation  and  energy  prices  are 
expected 
disposable 
household  incomes,  in  particular  of  those  in  the 
most  vulnerable  and  lower  income  groups.  This 
risks  further  aggravating  the  risks  of  poverty, 
including  energy  poverty,  and  material  and  social 
deprivation. 

negatively 

affect 

to 

59 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203082.9(2022)57.1(2016)+54(2022)Poverty reduction2 (thousands)-163-15,000Employment (%)8378Adult learning1 (%)6260 
 
   
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for  the 
Netherlands' education and training system in light 
of  the  EU-level  targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor. 

in  primary  education 

The  Netherlands  faces  growing  teacher 
shortages  in  all  sectors.  In  2021/22,  9.5%  of 
teaching and 13.6% of director positions were not 
filled 
(OCW,  2022a). 
Shortages  are  highest  in  the  big  urban  areas,  in 
particular  in  special  education,  in  schools  with  a 
disadvantaged  student  population  and  in  schools 
that  were  assessed  as  very  weak  by  the 
Inspectorate  of  Education.  Although  the  financing 
system  should  allow  schools  with  more  at-risk 
populations to hire more staff, it is unclear to what 
degree this possibility has been used and to what 
effect.  The  Education  Agreement  of  April  2022, 
between  the  Ministry  of  Education,  Culture  and 
Sciences  and 
sectoral 
organisations,  involves  closing  the  salary  gap 
between  primary  and  secondary  schoolteachers; 
for  this, the  government  is  setting  aside  EUR 919 
million  each  year  (OCW,  2022b).  The  agreement 
also contains commitments for additional  funding 
to  reduce  the  workload  in  secondary  education 
(EUR 300 million) and more funding for continuous 
professional  development  (EUR 128  million).  A 
specific  strategy  to  tackle  teacher  shortages  was 
launched in July 2022. 

trade  unions  and 

Participation  in  early  childhood  education 
and  care  (ECEC)  from  age  3  is  below  the  EU 
average.  From  age  3,  91.7%  of  children  in  the 
Netherlands  participate  in  ECEC,  below  the  EU 
average (93.0%) and the EU-level target (96%) set 
for  2030.  According  to  the  2020  sectoral  report 
for  ECEC  (Kinderopvang,  2021),  staff  shortages 
are currently the biggest concern, both in terms of 
teaching staff and other positions. 

Basic  skills  and  key  competencies  have 
deteriorated  since  the  outbreak  of  the 
pandemic.  At  the  end  of  2020/21,  pupils  in 
primary  education  performed  less  well  in  reading 
comprehension,  mathematics  and  spelling  than 
before  the  pandemic  (Inspectorate,  2022).  There 
was  also  a  decline  in  all  forms  of  secondary 
education. A decline in basic skills, as measured in 
the  OECD  Programme  for  International  Student 
Assessment 
in  2006. 
(PISA),  already  started 
According  to  the  latest  survey  in  2018,  the 
proportion  of  low  achievers  is  especially  high 

(56%)  among  pupils  born  abroad.  Native-born 
pupils  with  a  migrant  background  only  partially 
catch  up.  Differences  between  schools  have  the 
greatest  impact  on  pupils’  performance  of  all  EU 
countries, reflecting ability-based tracking from an 
early  age.  In  the  2022  Coalition  Agreement,  the 
cabinet committed itself to investing EUR 1 billion 
each  year 
(Government, 
in  education  quality 
2022a).  In  May  2022,  it  launched  a  ‘basic  skills 
master  plan’  for  early  childhood  education,  and 
primary, secondary and vocational education. 

Graph A15.1: Trend in reading performance in PISA 
mean score, 2003-2018 

Source: OECD (2019), PISA 2018 Database 

levels 

institutions  during 

Substantial  investments  are  being  made  to 
mitigate learning loss and to promote digital 
education.  In  February  2021,  the  Netherlands 
launched  an  exceptional  investment  of  EUR 8.5 
billion  at  all  education 
to  address 
educational  losses  caused  by  the  closures  of 
education 
the  COVID-19 
pandemic. Funding is offered to support secondary 
school  pupils in their final year, the integration of 
newly  arrived  migrants  in  education,  and  the 
provision  of 
IT  equipment  to  disadvantaged 
learners.  In  addition,  EUR  180  million  will  be 
invested from the Recovery and Resilience Facility 
in  several  projects.  One  of  these  projects  is  the 
establishment  of  a  National  Education  Laboratory 
for artificial intelligence.  

The  share  of  early  school  leavers  is  well 
below  the  EU-level  target  but  increased  in 
2022. With a 5.6% rate in 2022, the Netherlands 
had already reached the EU-level target (less than 
9%)  but  showed  a  0.5  percentage  point  increase 
from the previous year (125). National data point in 

(125) The EU indicator is based on data available on population 
aged 18-24 whose highest level of education or training 
attained is at most lower secondary education and who 

60 

513507508511503485475485495505515525535545200320062009201220152018NLEU-27 
 
  
                                                 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data is not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. 

the  same  direction:    in  2020/21,  the  absolute 
number of dropouts  - young people up  to age 23 
who  left  education  without  obtaining  an  upper 
secondary  qualification  of 
level  - 
increased  by  more  than  1 600  from  the  previous 
year to 24 385. 

ISCED  3 

attainment 

educational 

Tertiary 
and 
graduate  employment  rates  are  well  above 
the  EU  average.  56.4%  of  the  population  aged 
25-34 holds a tertiary degree (EU: 42.0%). Overall 
participation  in  vocational  education  and  training 
and  in  lifelong  learning  activities  is  high  (see 
Annex 14). 

received no education or training in the four weeks preceding 
the survey. 

61 

96%92.8%91.9%91.7%202093.0%2020Reading< 15%18.1% 20.0%24.1%201822.5%2018Mathematics< 15%16.7% 22.3%15.8%201822.9%2018Science< 15%18.5% 21.1%20.0%201822.3%2018< 9 %8.2%11.0%5.6% 9.6%Men9.9%12.5%6.8%11.1%Women6.4%9.4%4.3%8.0%Cities7.6%9.6%5.2%8.6%Rural areas9.2%12.2%7.4%10.0%Native8.0%10.0%5.4%8.3%EU-born:u20.7%10.7%20.3%Non EU-born11.2%23.4%6.3%22.1%6Equity indicator (percentage points)::14.5201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :95.1%60.1%45%45.1%36.5%56.4%42.0%Men40.6%31.2%52.3%36.5%Women49.6%41.8%60.6%47.6%Cities51.9%46.2%62.3%52.2%Rural areas35.0%26.9%41.3%30.2%Native46.6%37.7%57.4%43.0%EU-born44.7%32.7%58.8%39.5%Non EU-born32.4%27.0%48.2%35.7%41.2% 38.3%36.7%202039.2%2020Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over1Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birth.20152022IndicatorTargetNetherlandsEU27NetherlandsEU27 
                                                                              
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population  health  and  the  health  system  in  the 
Netherlands.  

Life expectancy is above the EU average, but 
declined  due  to  the  COVID-19  pandemic.  
Although  COVID-19  mortality  decreased 
in 
2021 (126),  life  expectancy  did  not  rebound.  In 
general,  the Netherlands fares comparatively  well 
treatable  causes. 
from 
in  avoiding  deaths 
However,  cancer  mortality 
is  above  the  EU 
average,  with  one  of  the  main  mortality  causes 
being  lung  cancer.  This  corresponds  with  the  fact 
leading 
the 
that 
behavioural  risk  factor  for  mortality 
in  the 
Netherlands. 
In  2020,  cancer  mortality  was 
followed by cardiovascular diseases and COVID-19 
as main causes of deaths. 

consumption 

tobacco 

is 

this increase  was  primarily  driven  by  spending  on 
control  and 
disease  detection,  surveillance, 
response programmes as part of the public health 
response  to  COVID-19.  In  2020,  spending  on 
preventive  care  in  the  Netherlands  amounted  to 
4.6% of total spending on healthcare (compared to 
3.4%  for  the  EU  overall).  This  is  comparatively 
high, with four other Member States also reporting 
a level above 4%. 

The  country  has  a  strong  primary  care 
system.  This  is  combined  with  a  comparably  low 
number of hospital beds per population, in tandem 
with  low  hospital  admission  rates  compared  to 
other  EU  countries.  This  corresponds  with  a 
relatively high spending on outpatient care on the 
one  hand,  and  low  spending  on  inpatient  care  on 
the  other  hand 
(as  shares  of  total  health 
spending).  

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

AWG reference scenario 
Source: European Commission / EPC (2021)  

Health  spending  relative  to  GDP  in  the 
Netherlands  was  slightly  above  the  EU 
average  in  2020.  It  increased  by  1 percentage 
point  compared  to  2019  (as  well  as  in  nominal 
terms). This is in line with the upward trend in all 
Member  States  in  2020.  Public  sources  cover  a 
high share of health expenditure, resulting in a low 
share  of  out-of-pocket  payments.  There  is  also  a 
large  voluntary  health  insurance  sector,  covering 
services outside the benefit package. The projected 
increase in public expenditure on health as a share 
of GDP by 2070 is slightly below the EU average. 

Spending  on  preventive  care  in  nominal 
terms increased by 49% from 2019 to 2020. 
A  similar  increase  was  observed  in  other  EU 
countries (of 26% on EU average). Across the EU, 

(126) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023) 

62 

81.781.881.982.281.481.480.980.981.081.380.480.1201620172018201920202021NetherlandsEU6.65.70.90.802468EUNetherlands% of GDP20192070increase 
 
 
           
                                                 
 
        
 
 
Table A16.1: Key health indicators 

Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only). 
Source: Eurostat; except: ** ECDC 

Ministry  of  Health  published  a  programme  to 
future-proof  the  healthcare  labour  market,  that 
will look at new ways of organising care processes, 
retention  of  staff  and  space  for  learning  and 
development (129). 

Through  its  recovery  and  resilience  plan 
(RRP),  the  Netherlands  plans  to  invest  EUR 
172 million (3.6% of the RRP’s total value) in 
healthcare.  Health-related 
investments  are 
planned  in  surge  capacity  of  additional  human 
resources for crisis times (including by setting up a 
architectural 
national 
adjustments  and  staff  training  in  intensive  care, 
e-health,  and  health  research  infrastructure.  The 
plan  includes  specific  measures  to  temporarily 
alleviate  the  shortage  of  healthcare  workers  in 
times  of  an  acute  crisis,  but  does  not  sufficiently 
address  structural  labour  shortages  in  the  health 
sector.  

healthcare 

reserve), 

in 

Structural  shortages  of  certain  health 
workers are an ongoing challenge. The number 
of  doctors  per  population is  slightly  below  the  EU 
average,  while 
the  number  of  nurses  per 
population is above the EU average. Nurses in the 
task-shifting  and 
Netherlands  participate 
advanced  practices,  creating  a  comparatively 
attractive  job  profile.  In  addition,  the  number  of 
nursing graduates has been on the rise in the last 
few years. However, nursing staff is overburdened 
in  certain  settings,  for  instance  in  hospitals,  and 
not  all  trained  nurses  work  (full-time)  in  the 
profession.  There  is  also  an  increasing  trend  of 
health  workers  being  self-employed  instead  of 
being  salaried.  Public  campaigns  aim  to  increase 
the  number  of  staff.  ‘Ik  Zorg’,  for  instance, brings 
together  people  who  want  to  work  in  healthcare 
and organisations looking for employees. In 2022, 
there  was  an  estimated  shortage  of  125 000 
healthcare workers (127).  

Recently  announced  plans  to  improve  the 
Dutch  health  system  underline  that  the 
demand  for  care  increases  faster  than  the 
(health)  workforce  to 
capacity  for  the 
expand.  In  the  Netherlands,  one  out  of  every  six 
employees is working in care (including long-term 
care). This share is projected to increase to one in 
three  by  2060  if  there  is  no  policy  change. 
Consequently,  staff  use 
is 
presented  as  one  of  the  guiding  assessment 
criteria  to  inform  decisions  on  the  basket  of 
benefits offered by the healthcare system (next to 
criteria  such  as  effectiveness,  cost-effectiveness 
and  necessity) (128).  In  autumn  2022,  the  Dutch 

(personeelsinzet) 

(127) Source: https://www.zorgaanzet.org/campagne-ik-zorg. 

(129) Source: 

(128) Source: 

https://www.rijksoverheid.nl/documenten/kamerstukken/2022

https://www.rijksoverheid.nl/documenten/publicaties/2022/09
/30/programmatoekomstbestendigearbeidsmarktzorgwelzijn. 

/12/02/kamerbrief-over-verbeteren-en-verbreden-van-de-
toets-op-het-basispakket. 

63 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)65.064.661.359.0NA91.7 (2020)Cancer mortality per 100 000 population276.7269.7266.6261.3NA242.2 (2020)Current expenditure on health, % GDP 10.110.010.111.1NA10.9 (2020)Public share of health expenditure, % of current health expenditure81.782.182.784.9NA81.2 (2020)Spending on prevention, % of current health expenditure 3.33.23.34.6NA3.4 (2020)Acute care beds per 100 000 population278274262247NA387.4 (2019)Doctors per 1 000 population *3.63.73.83.8NA3.9 (2020)Nurses per 1 000 population *10.911.210.811.1NA8.3 (2020)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption in CY and CZ) **8.98.98.77.87.614.5 (2021) 
                                                 
 
                                                                              
 
     
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

This  Annex  showcases  the  economic  and 
social  regional  dynamics  in  the  Netherlands, 
providing  an  update  on  economic,  social  and 
territorial  cohesion  in  and  among  the  Dutch 
regions compared with the rest of the EU and the 
main regional economic recovery challenges. 

Regional  disparities  have  been  stable  over 
the last decade. The Noord-Holland region, which 
includes  the  capital  Amsterdam,  had  the  highest 
GDP  per  capita  (PPS)  (168%  of  the  EU  average, 
2021)  and  one  of  the  highest  annual  GDP  per 
capita  growth  rates  among  the  Dutch  regions 
(0.9%) 
in  2011-2020  (Graph  A17.1).  Noord-
Brabant  and  Limburg  had  a  similar  growth  rate. 
The  three  regions  with  the  lowest  GDP  per  capita 
(Drenthe,  Friesland  and  Flevoland)  had  a  GDP  per 
capita  just  below  the  EU  average  and  fairly  low 
growth rates (-0.2%, 0.3% and 0.1% respectively). 
Groningen's  GDP  per  capita  shrank  by  -1.7%  – 
primarily  due  to  the  reduction  in  gas  extraction 
that is set to end in 2024 at the latest. 

Graph A17.1: GDP per capita (2010) and GDP 
growth (2011-2020), Netherlands (NUTS 2 
regions) 

Source: Eurostat 

showed 

productivity 

Labour 
regional 
variation  in  line  with  differences  in  GDP  per 
capita  (see  Graph  A17.2).  Noord-Holland  and 
Utrecht  were  the  most  productive  (129%  and 
123%  of  the  EU  average  respectively),  while 
Friesland  and  Drenthe  were  the  least  productive 
(both  88%  of  the  EU  average)  in  2020.  Average 
real  productivity  growth  in  2011-2020  ranged 
from  –2.3%  in  Groningen  to  0.7%  in  Noord-
Brabant.  

The regional differences in productivity were 
linked to  several phenomena.  The  Netherlands 
its  GDP  on  research  and 
spends  2.2%  of 
development,  which  is  slightly  above  the  EU 
average  of  2.0%.  However,  at  the  regional  level, 

64 

the  spending  rate  ranges  from  1.6%  in  Noord-
Nederland (NUTS1) to 3.1% in Zuid-Nederland. 

Dutch  regions  tend  to  have  relatively  highly 
educated  population.  The  share  of  the  Dutch 
population with a high level of education aged 30-
34  was  high  at  53%  (2021)  and  reached  66%  in 
Utrecht  and  60%  in  Noord-Holland.  Only  Drenthe 
(39%)  and 
(35%),  Zeeland 
Friesland  (39%)  had  a  rate  just  below  the  EU 
average  of  42%.  In  all  regions  except  Flevoland 
(10.0%)  the  percentage  of  early  school  leavers 
was below the EU average of 9.7% in 2021. 

(39%),  Flevoland 

Graph A17.2: Labour productivity (real GVA per 
worker), EU-27, Netherlands (NUTS 2 regions), 
2000-2020 

Source: Eurostat 

Innovation  performance  is  high  with  some 
regional  variation.  The  Netherlands  was  one  of 
the  five  innovation  leaders  in  the  EU  in  2022 
according  to  the  European  innovation  scoreboard. 
Most  regions  are  strong  innovators  or  innovation 
leaders,  but  Drenthe,  Friesland  and  Zeeland  are 
classified as moderate innovators. These last three 
provinces scored slightly below the EU  average in 
the 
(2021).  The 
innovation  leaders  Noord-Holland,  Utrecht  and 
Noord-Brabant  had  a  regional  innovation  index 
between  4.1%  and  5.7%  above  the  national 
average  –  which  indicates  that  there  are  some 
moderate regional differences.  

innovation 

regional 

index 

in 

terms 

regions 

did  well 

All 
of 
competitiveness,  but  differences  exist.  Four 
regions  were  in  the  EU  top  5  of  the  regional 
competitiveness index (2022). Utrecht scored 151 
compared  to  the  EU  average  of  100  followed  by 
Zuid-Holland 
(141)  and 
(142),  Noord-Brabant 
Amsterdam  with  its  commuting  zone  (141).  The 
least  performing  regions  were  Friesland  (117), 
Zeeland  (119)  and  Drenthe  (119),  which  is  in  line 
with their innovation performance. The average for 
the Netherlands stood at 137.  

-2.0-1.5-1.0-0.50.00.51.01.580100120140160180Annual real GDP per head growth 2010-2020GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU274550556065707580859095000102030405060708091011121314151617181920thousands of EUR per  personCapital regionOther NUTS2 regionsEU27National average 
 
  
  
 
Table A17.1: Selected indicators at regional level in the Netherlands 

Source: EUROSTAT 

All  regions  had  a  high  level  of  employment 
and  a  low  unemployment  rate.  Employment 
rates  ranged  from  78%  in  Groningen  to  84%  in 
Noord-Brabant  and  Utrecht  in  2021,  while  the  EU 
average stood at 73%. The unemployment rate in 
Groningen  was  the  highest  at  5.3%,  but  this  was 
still  below  the  EU  average  (7%).  Noord-Brabant 
had the lowest rate (3.2%). 

Labour  market  shortages  increased  further 
in  2022 (130).  All  provinces  had  a  record  high 
number of vacancies. Labour market tightness was 
highest in Utrecht and Noord-Brabant, followed at 
some  distance  by  Zeeland  and  Noord-Holland. 
Labour  market  shortages 
in 
Groningen.  

increased  most 

The share of population at risk of poverty or 
social  exclusion  (the  AROPE  rate)  showed 
regional differences. The Netherlands had a low 
AROPE rate at 16.6% in 2021 compared to the EU 
average of 21.7%. However, Groningen had a rate 
of  20.4%.  The  lowest  rates  could  be  noted  in 
Utrecht (14.2%) and Noord-Brabant (14.7%). 

economic  activities,  and  re-skilling  and  upskilling 
workers.  

All  regions  were  affected  by  the  COVID-19 
pandemic. Average excess mortality in 2020 and 
2021 was between 9.5% and 27% higher than in 
2015-2019. Zuid-Holland (27%), Zeeland (24.5%), 
Noord-Brabant (26.8%) and Limburg (24.4%) were 
most affected.  

Graph A17.3: Unemployment in Dutch regions, 
2019-2021 

Source: Eurostat 

The  transition  to  a  carbon-neutral  economy 
affects  regions  differently.  Regions  with 
clusters  of  emission-intensive 
industries  face 
particular  challenges  in  reducing  greenhouse  gas 
emissions, 
their 
industries,  developing  alternative  sustainable 

transforming 

sustainably 

(130) CBS (Statistics Netherlands), 2022 

65 

consequences 

social-economic 

The 
of 
COVID-19 seem to have been more severe in 
some regions. The employment rate fell in 2020 
in most regions but then recovered in line with the 
pre-COVID-19  upward  trend.  The  unemployment 
rate,  which  was  already  up  in  2020,  increased 
further in 2021 in almost all regions (ranging from 
-0.3  pps  in  Noord-Brabant  to  1.0  pps  in  Zeeland 
(see Graph A17.3).  

0123456GroningenFriesland (NL)DrentheOverijsselGelderlandFlevolandUtrechtNoord-HollandZuid-HollandZeelandNoord-BrabantLimburg (NL)Unemployment (%)201920202021NUTS 2 regionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP per head growthEmployment rate, ages 20-64Unemployment rateAt-risk-of-poverty or social exclusionPopulation  with high educational attainmentInnovation performanceIndex, EU27 = 100, 2021Index, EU27 = 100, 2020Average % change on the preceding year, 2011-2020Average % change on the preceding year, 2011-2020% of population aged 20-64, 2021% of active population, 2021% of population, 2021% of population aged 30-34, 2021RIS regional performance groupEuropean Union100.0100.00.20.673.17.021.741.6Nederland130.0110.80.10.581.74.216.653.4Groningen116.0102.8-2.3-1.778.35.320.446.1Strong innovatorFriesland (NL)92.087.70.00.381.44.518.339.1Moderate innovator +Drenthe88.087.5-0.3-0.280.63.517.434.8Moderate innovator +Overijssel109.094.90.30.882.03.815.351.3Strong innovatorGelderland109.098.90.40.681.73.91550.3Strong innovator +Flevoland95.0104.40.40.180.84.619.138.8Strong innovatorUtrecht162.0123.10.10.684.04.014.266.0Innovation leader -Noord-Holland168.0129.20.30.981.64.518.359.6Innovation leader -Zuid-Holland127.0114.2-0.2-0.280.55.117.655.1Strong innovator +Zeeland109.098.00.30.683.43.615.838.7Moderate innovator +Noord-Brabant133.0109.40.71.084.13.214.751.9Innovation leader -Limburg (NL)117.0100.70.51.179.23.816.756.5Strong innovator + 
                                                 
  
 
  
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

than 

The  Netherlands  has  a  well-developed, 
adequately 
capitalised  and  moderately 
profitable  banking  sector.  Banks’  assets 
in  nominal  terms  and  as  a 
increased  both 
percentage of GDP in Q3-2022 compared to 2021. 
In Q3-2022, they  were 309.7% of GDP compared 
to  308.8%  in  2021.  The  Dutch  banking  sector  is 
the  EU  average  and  mostly 
larger 
domestically owned (share of 93% of all banking-
sector assets), with the five largest banks holding 
84%  of  assets.  Bank  profitability  has  recovered 
from  the  COVID-19  pandemic,  with  return  on 
equity reaching 7.7% in Q3-2022, in line with the 
levels  recorded  before  the  COVID-19  crisis.  In  the 
future,  higher  interest  rates  could  support  banks’ 
earnings  provided  that  funding  costs  do  not 
increase  faster  than  interest  income  and  lending 
activity remains steady. The capital adequacy ratio 
was  21.1%  in  Q2-2022,  lower  than  the  year 
before, but above the EU average of 18.8%. Credit 
quality  is  strong,  with  a  historically  low  non-
performing 
in 
(NPLs) 
September  2022.  However,  depressed  economic 
growth,  higher  interest  rates  and  high  inflation 
may  result  in  increased  credit  losses  and  NPL 
provisioning. 
non-financial 
Furthermore, 
corporations’  indebtedness  is  still  elevated,  and 
more  than  43%  of  corporate  debt  is  due  to  be 
refinanced or has an interest-rate reset (131) in the 
next  12  months.  In  addition,  the  number  of 
bankruptcies  is  picking  up  slightly,  although  from 
very  low  levels (132).  These  factors  render  small 
and  medium-sized 
increasingly 
vulnerable due to their reliance on bank lending.  

ratio  of  1.3% 

enterprises 

loans 

Both commercial real estate and the housing 
market  are  showing  increased  risks.  With 
almost  52% (133)  of  commercial  real-estate  loans 
to  be  refinanced 
in  the  next  3  years,  the 
refinancing  risk  is  increasing,  while  higher  costs 
and  interest  rates  make  projects  more  expensive 
and  reduce  the  borrowing  capacity  of  real-estate 
investors.  On  the  housing  market,  several  key 
identified  by  the 
vulnerabilities  were  already 
European  Systemic  Risk  Board,  which 
issued 
recommendations  in  2019 (134).  The  Netherlands 
partially 
was 

subsequently 

assessed 

as 

increasingly  prefer  shorter 

compliant (135).  Since  2015,  prices  of  existing 
houses  have  continuously 
increased,  almost 
doubling by July 2022 (89.2% increase compared 
with  2015) (136).  However,  by  December  2022, 
house  prices  had  decreased  by  4.5%  since  their 
peak in July, and they have continued to fall since. 
This  poses  a  risk  of  negative  equity  for  some 
homeowners.  Although  nominal  mortgage  debt 
outstanding  has  increased  by  20%  since  2012, 
reaching  EUR  784  bn  in  2022,  relative  to  GDP  it 
decreased  from  100%  to  87%  over  the  same 
period.  Three  quarters  of  mortgages  have  an 
interest  rate  fixed  for  more  than  5  years,  but 
borrowers 
fixed 
periods (137). High debt-to-income ratios, high rates 
of inflation, and rising interest rates are increasing 
pressure  on households,  and  this  could  affect  the 
quality of mortgage portfolios. Because of the risk 
of  a  housing-market  correction,  the  DNB,  the 
Dutch central bank, introduced a floor for the risk-
weighting  of  mortgage  loans  (Article 458  of  the 
Capital 
of 
the  countercyclical 
January 2022,  and  raised 
buffer  to  1%  as  of  May  2023.  These  two 
measures  should  improve  banks’  resilience  to 
shocks, although they are insufficient on their own, 
as  other  contributing  factors,  beyond  the  DNB’s 
power  to  control,  may  have  a  greater  impact  on 
the likelihood of a house-price correction. 

Requirements 

Regulation) 

as 

The  insurance  sector  appears  robust  and 
solvent  as  a  whole,  but  higher  inflation  and 
rising  interest  rates  pose  certain  risks  for 
insurers. The total assets of insurance companies 
decreased in both nominal and relative terms over 
the last year, reaching 49.4% of GDP in Q2-2022, 
with  85%  of  these  assets  owned  by  life  insurers. 
At 200% in Q2-2022, the solvency ratio of Dutch 
insurance  groups 
robust.  The  high 
remains 
inflation  rate  poses  a  risk,  as  it  could  lead  to 
significant losses and a decrease in insurers’ own 
funds,  with  non-life  insurers  being  more  sensitive 
to  inflation  than  life  insurers.  Losses  could  be 
caused  by  several  factors, 
(i)  a 
significant  increase  in  underestimated  technical 
provisions  on  past  claims,  especially  for  long-tail 
business; (ii) a significant increase in the loss ratio 

including: 

(131) DNB, Financial Stability Report 2022. 

(132) Statistics Netherlands (CBS). 

(133) DNB, Financial Stability Report 2022. 

(135) ESRB Compliance report 2022 

(136) See also Housing Market  Developments - Thematic Note to 
Support In-Depth Reviews, April 2023 (ISSN 2443-8014) 

(134) ESRB Recommendations 2019 (ESRB/2019/7) 

(137) DNB Statistics - Bank mortgage lending rates 

66 

 
 
 
                                                 
                                                 
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3 2022. 
(2) Data is annualized. 
Source: ECB, Eurostat, S&P Global Capital IQ Pro. 

of  future  claims  if  insurers  find  it  difficult  to 
correctly price future inflation in their premiums in 
a  timely  manner;  and  (iii)  lower  underwriting  as 
inflation  might 
reduce  saving  capacity  and 
purchasing  power  among  policyholders.  Higher 
interest  rates  can  reduce  the  value  of  both 
liabilities  and  certain  investments,  such  as  bonds, 
which  represent  a  significant  share  of  Dutch 
insurers’  assets  (36%),  while  the  share  of  loans 
and  mortgages  they  hold  (29%)  could  constitute 
an additional risk. 

on 

generate 

Dutch  pension  funds’  funding  ratios  have 
improved,  but  a  financial-market  correction 
can 
investment 
losses 
portfolios. With the discounted value of liabilities 
showing  a  steeper  decline  in  the  past  year  than 
the  value  of  assets,  the  average  funding  ratio 
increased to 124.6% in Q3-2022. High inflation is 
eroding  the  real  value  of  the  accrued  assets, 
despite  the  positive  effect  of  rising  interest  rates. 
While a gradual increase in interest rates does not 
pose risks to liquidity, a rapid rise in interest rates 
may  trigger  liquidity  risk  through  an  increase  in 
margin  calls  from 
interest-rate  hedging,  as 
happened  in  the  first  half  of  2022.  A  lack  of 
liquidity in  the  market  can  further  exacerbate  the 
risk.  Still,  Dutch  pension-fund  investments  are 
diversified, and not exposed to exchange-rate risk 
in the euro area. These investments also have the 
advantage  of  the  deep  euro-area  government 
bond  market.  Therefore,  the  probability  of  selling 
of  securities  at  a  price  that  is  well  below  market 
value.  is  relatively  low  and,  if  it  occurs,  the  risk 
that  it  would  create  a  downward  spiral  of  bond 
prices  is  contained.  At  the  same  time,  the  DNB  is 

closely  supervising  pension  funds,  all  of  which 
must file quarterly reports to show they meet the 
required liquidity criteria.  

and 

diversified 

relatively  deep, 
The  Netherlands  has 
competitive 
financial 
markets.  The  asset  value  of  Dutch  investment 
funds  peaked 
in  Q2-2021,  but  decreased 
subsequently,  driven  by  falls  in  the  value  of 
equities and bonds. It is noteworthy that the value 
of  investments  held  by  households  increased  by 
more  than  200%  between  2018  and  end-2021. 
Although  banks  are  still  the  preferred  source  of 
financing,  NFCs  are  increasingly  seeking  funding 
via  capital  markets,  including  by  issuing  green 
bonds.  The  total  value  of  green  bonds  issued  in 
Q3-2022  was  EUR  91.5  bn,  a  quarter  of  which 
were issued by NFCs, particularly utility companies. 
The  Netherlands  is  also  a  fast-growing  hub  for 
finance  innovation,  putting  digital  finance  at  the 
top of supervisors’ agendas. At the same time, as 
the  financial  system  is  becoming  more  digitalised 
and  interconnected,  cyber  risk  has  become  a 
significant source of risk, driving both the DNB and 
the  AFM  (the Dutch  financial  market  regulator)  to 
issue various warnings and recommendations. The 
number  of  cyber-related  incidents  reported  by 
Dutch  banks  has  surged  in  recent  years,  while 
pension  funds  and  insurers  have  also  seen  an 
increase in cyber-attacks. For this reason, the most 
critical 
insurers  and  pension  providers  were 
included  in  the  EU's  Threat  Intelligence-Based 
Ethical Red Teaming programme. 

67 

201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)322.0299.9297.0319.0308.8309.7276.8207.9Share (total assets) of the five largest banks (%)83.884.784.784.384.1--68.7Share (total assets) of domestic credit institutions (%)192.693.393.794.293.692.9-60.2NFC credit growth (year-on-year % change)-0.7-0.3-1.01.67.32.4-9.1HH credit growth (year-on-year % change)0.00.20.2-1.01.21.6-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)2.11.91.81.91.41.21.81.8- capital adequacy ratio (%)22.122.422.923.222.721.118.619.8- return on equity (%)28.88.17.73.18.37.76.16.6Cost-to-income ratio (%)157.359.858.158.056.954.160.651.8Loan-to-deposit ratio (%)1117.7117.5119.4104.3101.696.288.678.0Central bank liquidity as % of liabilities1.51.41.46.87.82.8-2.9Private sector debt (% of GDP)247.6241.3229.9233.1229.3--120.7Long-term interest rate spread versus Bund (basis points)20.417.918.313.34.423.5-93.3Market funding ratio (%)52.150.350.044.950.1-50.840.0Green bonds issued to all bonds (%)0.81.32.63.44.75.93.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
 
   
 
ANNEX 19: TAXATION  

This  Annex  provides  an 
indicator-based 
overview  of  the  Dutch  tax  system.  It  includes 
information  on  the  tax  structure  (i.e.  the  types  of 
tax  that  the  Netherlands  derives  most  of  its 
revenue from, the tax burden for workers, and the 
progressivity  and  redistributive  effect  of  the  tax 
system).  It  also  provides  information  on  tax 
collection  and  compliance,  and  on  the  risks  of 
aggressive tax planning activity.  

In  the  Netherlands  tax  revenues  as  a 
percentage  of  GDP  are  similar  to  the  EU 
aggregate.  In  2021  total  Dutch  tax  revenues 
were  39.7%.  of its GDP, which  was  slightly  below 
the  EU  aggregate  of  40.6%  (Table  A19.1).  The 
main sources of tax revenues in the Netherlands in 
2021  were  labour  taxes  (19.4%  of  GDP)  and 
consumption  taxes (11.9%  of  GDP),  for  which the 
values  were  close  to  the  EU  aggregate.  Revenues 
from environmental taxes as a percentage of GDP 
were among the highest in the EU; and the Dutch 
RRP furthermore includes a reform of car taxation. 
Revenues from property taxes (expressed as % of 
GDP)  were  slightly  below  the  EU  aggregate,  as 
were  revenues  from  recurrent  property  taxes, 
which  are  particularly  conducive 
to  growth. 
Increased  use  of  recurrent  property  taxes  could 
also  be  beneficial  given  the  housing  market 
imbalances in the Netherlands and given that the 
existing  mortgage  interest  tax  relief  encourages 
the accumulation of household debt. 

The  tax-benefit  system  helps  reduce  income 
equality,  but  non-tax  compulsory  payments, 
such  as  pension  contributions,  drive  up  the 
compulsory  payment  wedge  on  labour.  In 
2022,  the  tax  wedge  in  the  Netherlands  was 
considerably lower than the EU average at various 
wage  levels  (Graph  A19.1).  However,  the  tax 
wedge  does  not  include  compulsory  contributions 
under  collective  labour  agreements  that  are  paid 
to  privately-
by  employees  and  employers 
managed  pension 
case  non-tax 
funds. 
compulsory payments are included the compulsory 
payment  wedge  for  a  single  earner  amounts  in 
2022 to 42.6%, 49.7% and 54.2% with a wage of 
67%,  100%  and  167%  of  the  average  wage, 
respectively (138).  These  levels  are  well-above  the 
EU average. The Netherlands is taking measures to 
reduce  the  difference  in  tax  treatment  between 

In 

(138) OECD (2023), Non-tax compulsory payments as an 
additional burden on labour income in 2022, OECD 
publishing, Paris. https://www.oecd.org/tax/tax-policy/tax-
database/non-tax-compulsory-payments.pdf.  

employed  and  self-employed.  Labour  taxation  is 
more  progressive  in  the  Netherlands  than  on 
average  in  the  EU.  This  contributes  to  the  higher 
ability  of  tax-benefit  system  to  reduce  income 
inequality,  as  measured  by  the  GINI  coefficient, 
than the EU average in 2021. 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2022 

Second earner tax wedge assumes first earner at 100% of 
the average wage and no children. 
Source: European Commission 

Data suggest that the Dutch tax system has 
been  historically  used  for  aggressive  tax 
in  the 
planning  purposes,  but  reforms 
context  of  the  RRP  have  recently  been 
introduced. To counter the use of special purpose 
entities  for  aggressive  tax  planning  purposes,  the 
Netherlands has introduced a new withholding tax 
on  royalties  and  interest  payments  that  either  go 
to  low  tax  jurisdictions  or  constitute  tax  abuse 
under  the  Dutch  anti-abuse  regulations.  The  new 
withholding tax entered into force in January 2021 
together  with  other  anti-abuse  rules  correcting 
undue  exemptions  and  limiting  the  deduction  of 
losses from company liquidations.  

The  flows  of  interest  and  royalty  payments 
made  from 
the  Netherlands  decreased 
significantly, albeit  from  very  high levels.  As 
Graph  A19.2  shows,  royalty  payments  to  non-EU 
countries decreased from EUR 46.8 billion in 2017 
(and an estimated EUR 56 bn in 2019)  to around 
EUR  14.2 billion in  2021, while  interest  payments 
decreased from EUR 21 bn in 2019 to EUR 10.8 bn 
in 2021.  Recently implemented reforms are likely 
to have contributed to this decrease. In 2022, the 
Netherlands continued to reform its corporate tax 
system to make it more resilient to aggressive tax 
planning  practices  by  introducing  measures  such 

68 

22.427.935.540.828.320253035404550100150Tax wedge, % of total labour costsEarnings in % of the average wageSingle earner - NLSingle earner - EU averageSecond earner -  NLSecond earner -  EU average 
 
                                                 
     
 
Table A19.1: Taxation indicators 

(1) Forward-looking effective tax rate (OECD) 
(2) A higher value indicates stronger redistributive impact of taxation 
(*) EU-27 simple average 
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office, 2021, https://data.europa.eu/doi/10.2778/843047 and the ‘Data on Taxation’ webpage (data 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en). For more details on the VAT gap, 
see European Commission, Directorate-General for Taxation and Customs Union, ‘VAT gap in the EU: report 2022’, Publications 
Office, 2022, https://data.europa.eu/doi/10.2778/109823  
Source: European Commission, OECD 

as  further  limits  to  loss  relief  and  an  anti-abuse 
provision concerning the arm’s length principle. 

Graph A19.2: Flows of Dutch interest and royalty 
payments to non-EU countries, in EUR billion 

(1) Data on extra EU-27 flows for royalties are confidential 
for 2018 and 2019. The figures shown for these dates have 
been estimated using linear regression. 
Source: European Commission 

doing  well 

on 
is 
The  Netherlands 
digitalisation  of  the  tax  administration, 
which  can  help  reduce  compliance  costs.  The 
Annual  report  on  taxation  2021  shows  that  the 
Netherlands  scores  highly  on  filing  tax  with  96% 
of  tax  returns  being  submitted  electronically.  The 
VAT  gap  (the  gap  between  revenues  actually 
collected  and  the  theoretical  tax  liability)  in  the 
Netherlands decreased substantially from 6.9% in 
2019 to 2.8% in 2020, which is well below the EU-
wide  gap  of  9.1%.  These  positive  changes  in 
compliance  during  the  recession  might  have been 
partially caused by the 8.9% increase in the value 
of  electronic  payments  despite  the  drop  in  the 
overall value of transactions, and the frequency of 
bankruptcies 
(reduced  by  11.8%).  For  these 
reasons  the  VAT  gap  is  expected  to  have  further 
decreased in 2021 (139). 

(139) VAT gap in the EU, Report 2022, 

https://data.europa.eu/doi/10.2778/109823 

69 

010203040506020152016201720182019202020212022RoyaltiesInterest2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)35.539.339.939.737.939.940.040.6Labour taxes (as % of GDP)19.519.520.519.420.020.721.320.9Consumption taxes (as % of GDP)11.011.811.911.910.811.110.711.2Capital taxes (as % of GDP)5.07.97.58.37.18.18.08.5Total property taxes (as % of GDP)1.31.61.91.91.92.22.22.2Recurrent taxes on immovable property (as % of GDP)0.60.80.90.91.11.21.21.1Environmental taxes as % of GDP3.53.43.23.12.42.42.22.2Tax wedge at 50% of average wage (Single person) (*)28.323.923.321.522.433.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)38.136.936.134.935.541.040.139.939.739.7Corporate income tax - effective average tax rates (1) (*)23.723.723.719.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.010.19.39.78.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6.011.731.640.7VAT Gap (% of VAT total tax liability, VTTL)6.92.811.09.1NetherlandsEU-27Tax structureProgressivity & fairnessTax administration & compliance 
                                                 
   
 
 
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.  
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

70 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)2.80.01.8-3.94.94.51.81.2Potential growth (y-o-y)1.80.91.21.51.72.21.91.9Private consumption (y-o-y)0.8-0.41.1-6.43.66.52.11.2Public consumption (y-o-y)3.01.41.01.65.21.52.31.4Gross fixed capital formation (y-o-y)6.2-4.14.0-2.63.22.51.71.1Exports of goods and services (y-o-y)6.62.04.1-4.35.24.73.81.8Imports of goods and services (y-o-y) 6.81.14.5-4.84.04.14.12.0Contribution to GDP growth:Domestic demand (y-o-y)2.4-0.71.5-2.93.63.71.81.1Inventories (y-o-y)0.00.00.1-0.8-0.10.0-0.10.0Net exports (y-o-y)0.40.80.1-0.11.40.90.00.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.40.20.70.91.01.31.11.0Capital accumulation (y-o-y)0.70.50.40.50.60.60.60.6Total factor productivity (y-o-y)0.70.30.00.10.20.20.20.3Output gap-0.5-1.2-0.7-4.0-1.01.21.10.4Unemployment rate6.05.86.74.94.23.53.83.9GDP deflator (y-o-y)2.01.01.41.92.45.36.12.6Harmonised index of consumer prices (HICP, y-o-y)1.51.91.21.12.811.64.93.3HICP excluding energy and unprocessed food (y-o-y)1.01.71.32.11.65.57.43.4Nominal compensation per employee (y-o-y)2.12.21.54.82.23.95.54.8Labour productivity (real, hours worked, y-o-y)1.60.20.3-1.11.50.40.40.1Unit labour costs (ULC, whole economy, y-o-y)0.42.30.98.5-0.63.34.74.3Real unit labour costs (y-o-y)-1.51.3-0.46.4-3.0-1.9-1.31.6Real effective exchange rate (ULC, y-o-y)-0.50.3-0.24.5-1.1-0.3-1.00.7Real effective exchange rate (HICP, y-o-y)-0.2-0.50.51.40.21.9..Net savings rate of households (net saving as percentage of net disposable income)3.06.910.318.817.5...Private credit flow, consolidated (% of GDP)11.97.63.7-0.711.7...Private sector debt, consolidated (% of GDP)228.8243.3251.5233.1229.5...of which household debt, consolidated (% of GDP)107.9116.6108.4103.8100.5...of which non-financial corporate debt, consolidated (% of GDP)120.9126.7143.1129.3129.1...Gross non-performing debt (% of total debt instruments and total loans and advances) (1).2.42.21.71.3...Corporations, net lending (+) or net borrowing (-) (% of GDP)8.06.94.62.04.03.86.25.9Corporations, gross operating surplus (% of GDP)27.327.727.025.326.027.028.627.2Households, net lending (+) or net borrowing (-) (% of GDP)-2.41.43.36.85.70.71.92.0Deflated house price index (y-o-y)2.4-3.72.46.211.25.6..Residential investment (% of GDP)6.04.84.05.45.55.4..Current account balance (% of GDP), balance of payments7.77.28.05.17.34.45.96.1Trade balance (% of GDP), balance of payments8.58.410.010.110.39.4..Terms of trade of goods and services (y-o-y)-0.1-0.50.30.7-1.7-2.91.50.0Capital account balance (% of GDP)-0.4-0.3-0.10.00.110.6..Net international investment position (% of GDP)-5.510.359.3113.093.275.1..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-64.3-73.2-33.712.926.122.9..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)326.3387.0392.8365.1336.9346.9..Export performance vs. advanced countries (% change over 5 years)6.90.4-3.27.45.7...Export market share, goods and services (y-o-y)-1.5-2.70.25.0-5.00.71.1-2.0Net FDI flows (% of GDP)4.65.85.0-10.19.98.5..General government balance (% of GDP)-0.6-3.8-0.3-3.7-2.40.0-2.1-1.7Structural budget balance (% of GDP)..-0.1-1.3-1.6-0.7-2.7-1.9General government gross debt (% of GDP)47.159.760.054.752.551.049.348.8forecast 
 
 
 
      
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  Annex  assesses  fiscal  sustainability 
risks  for  the  Netherlands  over  the  short, 
medium  and  long  term.  It  follows  the  same 
multi-dimensional  approach  as  the  European 
Commission’s  2022  Debt  Sustainability  Monitor, 
updated  based  on  the  Commission  2023  spring 
forecast. 

1  -  Short-term  risks  to  fiscal  sustainability 
are 
low  overall.  The  Commission’s  early-
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (Table  A21.2). (140)  Gross 
financing needs are expected to stabilize at around 
10%  of  GDP  in  the  short  term  (i.e.  over  2023-
2024),  although  declining  compared  with  the 
recent  peak  in  2020  (Table  A21.1,  Table  1). 
Financial  markets’  perceptions  of  sovereign  risk 
are  investment  grade,  as  confirmed  by  the  main 
rating agencies. 

2 - Medium-term risks to fiscal sustainability 
are medium overall.  

The  DSA  for  the  Netherlands  shows  that, 
under the baseline, government debt ratio, is 
projected  to  increase  above  60%  over  the 
medium term (at 61.6% of the GDP in 2033). 
(Graph 1) (141), (142) The assumed structural primary 
balance  (a  deficit  of  1.2%  of  GDP)  contributes  to 
these developments. It appears low compared with 
the 
past  fiscal  performance, 

indicating 

that 

(140) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(141) The assumptions underlying the Commission’s ‘no-fiscal 
policy change’ baseline notably comprise: (i) a structural 
primary deficit, before ageing costs, of 1.2% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 0.9%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

country  has  ample  room  for  corrective  action.  At 
the  same  time,  the  baseline  projections  up  to 
2033  benefit  from  a  still  favourable  (although 
diminishing) snowball effect, notably thanks to the 
impact  of  Next  Generation  EU,  with  real  GDP 
growth  at  around  0.9%  over  2025-2033. 
Government gross financing needs are expected to 
slowly increase over the projection period, reaching 
around  15%  of  GDP  in  2033,  above  the  level 
forecast for 2024. 

its 

The  baseline  projections  are  stress  tested 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph 1).  For  the  Netherlands,  reverting  to 
historical  fiscal  trajectories  under  the  ‘historical 
structural  primary  balance  (SPB)’  scenario  would 
lead to an improved government debt ratio. If the 
SPB gradually converged to a balanced budget (its 
historical 15-year average), the projected debt-to-
GDP ratio in 2033 would be close to 8 pps. of GDP 
in  the  baseline  scenario.  A 
below 
level 
the  macro-financial 
permanent  worsening  of 
conditions,  as 
‘adverse 
reflected  under 
interest-growth rate differential’ scenario (i.e. 1 pp. 
higher  than  the  baseline)  would  result  in  a 
persistently  higher  government  debt-to-GDP  ratio, 
by 4.5 pps. of GDP by 2033, as compared with the 
baseline.  A  temporary  worsening  of  financial 
conditions,  as  reflected  in  the  ‘financial  stress 
‘scenario (i.e. temporarily increase of interest rates 
by  1  pp.),  would  lead  to  a  similar  public  debt-to-
GDP  ratio  by  2033  compared  with  the  baseline. 
The 
(SPB)’ 
‘lower  structural  primary  balance 
scenario  (i.e.  SPB  level  permanently  reduced  by 
half  of  the  cumulative  forecast  change),  would 
also  lead  to  a  higher  government  debt-to-GDP 
ratio  by  2033 (around  +3  pps.  of  GDP)  compared 
with the baseline.  

the 

low 

risk 

(Graph 2). (143) 

Additionally,  stochastic  debt  projections 
indicate 
These 
stochastic simulations point to 47% probability of 
the debt ratio in 2027 being greater than in 2022, 
entailing low risk given the initial low debt level. In 
addition, such shocks point to low uncertainty (i.e. 
the  difference  between  the  10th  and  90th  debt 
the 
distribution 
government debt baseline projections. 

surrounding 

percentiles) 

(142) Table 1 shows the baseline debt projections and its 

(143) These projections show the impact on debt of 2000 different 

breakdown into the primary balance, the snowball effect (the 
combined impact of interest payments and nominal GDP 
growth on the debt dynamics) and the stock-flow 
adjustment.  

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events 

71 

 
 
                                                 
                                                 
 
 
factors include the lengthening of debt maturity in 
recent  years,  relatively  stable  financing  sources 
(with  a  diversified  and  large  investor  base),  and 
the currency denomination of debt. 

3  -  Long-term  risks  to  fiscal  sustainability 
are medium overall. (144)  

the 

long-term  and 

The  S2  sustainability  gap  indicator  (at  5.4 
pps.  of  GDP)  points  to  medium  risk, 
suggesting  that  the  Netherlands  would  need 
to  significantly 
its  structural 
improve 
primary  balance  to  ensure  debt  stabilisation 
over the long term. This result is underpinned by 
the projected increase of ageing costs (3.7 pps. of 
GDP)  over 
initial 
unfavourable budgetary position (1.7 pps. of GDP). 
In  particular,  health  care  and  long-term  care 
expenditure (joint contribution of 2.7 pps. of GDP) 
are  projected  to  significantly  increase,  together 
with pensions spending (+1.1 pp. of GDP) (Table 2). 
investments  and 
Hence,  while  a  number  of 
reforms  in  the  RRP  contributes  to  supporting  the 
efficiency  of  the  Dutch  health  system,  additional 
measures  may  be  required  to  further  improve  its 
efficiency and its fiscal sustainability.  

the 

Combined  with  debt  vulnerabilities,  as 
highlighted by the S1 indicator, overall long-
term  risks  are  assessed  as  medium.  Indeed, 
the  S1  sustainability  gap  indicator  signals  that  a 
significant consolidation effort of  3.8 pps. of GDP 
would be needed to bring debt to 60% of GDP by 
2070. This result is mainly driven by the projected 
increase in ageing costs (contribution of 2.9 pps. of 
GDP), and, to a lower extent, by the unfavourable 
initial  budgetary  position  (contribution  by  1.2  pps. 
of GDP) (Table 2).  

Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one hand, risk-increasing factors are related to the 
recent increase in interest rates, the relatively high 
share  of  short-term  government  debt  (in  total 
debt), and contingent liabilities stemming from the 
private  sector.  On  the  other-hand,  risk-mitigating 

(144) The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2024 that would be required 
to stabilise public debt over the long term. It is 
complemented by a revised S1 indicator, which measures the 
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in 
the long-term. For both S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

72 

 
                                                 
Table A21.1: Debt sustainability analysis - the Netherlands 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - the Netherlands 

Source: Commission services 

73 

Table 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)54.752.551.049.348.848.949.450.351.552.954.756.759.161.6Changes in the ratio6.1-2.2-1.5-1.7-0.40.10.50.91.11.41.72.12.32.5of whichPrimary deficit3.01.8-0.61.41.01.21.41.71.92.12.32.62.83.0Snowball effect1.7-3.2-4.2-3.1-1.1-1.1-0.9-0.8-0.7-0.7-0.6-0.5-0.5-0.5Stock-flow adjustments1.4-0.83.30.0-0.30.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)14.111.412.010.710.110.611.011.512.012.513.113.814.615.3S1S2Overall index  (pps. of GDP)3.85.4of which Initial budgetary position1.21.7Debt requirement-0.2Ageing costs2.93.7of which    Pensions0.91.1     Health care0.50.6     Long-term care1.62.1Others-0.1-0.1Table 2. Breakdown of the S1 and S2 sustainability gap indicators30354045505560657020202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p90304050607020202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallMEDIUMLOWMEDIUMMEDIUMMEDIUMLOWDebt level (2033), % GDP61.653.764.966.162.0Debt peak year20332033203320332033Fiscal consolidation space94%85%96%94%94%Probability of debt ratio exceeding in 2027 its 2022 level47%Difference between 90th and 10th percentiles (pps. GDP)24.8(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidtationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWMEDIUMMEDIUMMEDIUMMEDIUM 
 
 
 
 
 
 
 
 
 
   
 
 
   
 
ANNEX 22: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX  

housing  market  continues  to  exhibit  substantial 
in  favour  of  debt-financed  home 
distortions 
ownership,  the  main  structural  driver  of  high 
household  debt.  With  households’  borrowing 
capacity  shrinking  as  a  result  of  the  higher 
mortgage  rates,  house  prices  have  decreased  by 
around  5.1%  between  the  peak  in  prices  in  July 
2022  and  March  2023.  Due  to  high  growth  in 
to  be 
recent  years,  house  prices  continue 
recent 
the 
considerably  overvalued  despite 
decrease. 

Policy  progress  has  been  limited.  The  impact 
of  recent  policy  steps  on  the  structural  drivers  of 
the  savings  surplus  is  likely  to  remain  small. 
Tighter  capital-based  macroprudential  measures 
introduced  in  2021  have  been  extended  in  2022. 
These  measures  set  a  floor  for  risk-weights  on 
mortgages for banks and are expected to continue 
to discourage mortgage lending by banks to some 
degree but their effect on household debt levels is 
also  expected  to  remain  limited.  Other  policy 
measures on the housing market are also unlikely 
to  structurally  address  high  household  debt.  The 
authorities have focused their policy efforts on the 
supply  side  of  the  housing  market,  while  steps  to 
reduce  the  debt-bias  remain  insufficient.  New 
policies announced by  the authorities furthermore 
risk  undermining  the  development  of  the  private 
rental  market  further.  Notably,  the  expansion  of 
rent  controls  in  the  private  sector  could  decrease 
the  attractiveness  of  the  sector  for  investors  and 
lead  to  lower  supply  in  this  segment  of  the 
housing  market.  This  risks  increasing  the  bias 
toward  debt-financed  homeownership  further. 
Good  progress  has  been  made  on  reducing  the 
incentives  for  firms  to  accumulate  debt  and  to 
limit  the  possibilities  for  firms  to  use  the 
Netherlands as a conduit country for tax purposes, 
contributing  to  moderately  decreasing  corporate 
debt levels. 

Based  on  this  assessment,  the  Commission 
considered  in  its  communication  European 
Semester – 2023 Spring Package (COM(2023) 
600 final) that the Netherlands  continues to 
experience imbalances. 

for 

review 

undertaken 

in-depth  review 

The  Macroeconomic 
Imbalance  Procedure 
matrix presents the main elements of the in-
depth 
the 
Netherlands (145).  The  Netherlands  was  selected 
the  2023  Alert 
for  an 
Mechanism  Report.  This  in-depth  review  on  the 
prevention  and  correction  of  macroeconomic 
imbalances  presents  the  main  findings  on  the 
gravity  and  evolution  of  the  challenges  identified, 
as  well  as  policy  responses  and  potential  policy 
needs.  Findings  cover  all  areas  of  vulnerability 
assessed in the in-depth review.  

in 

levels 

The Netherlands is still facing vulnerabilities 
relating  to  a  high  current  account  surplus 
and  high  private  debt.  The  persistent  current 
account  surplus  is  one  of  the  highest  in  the  euro 
area  and  well  above 
justified  by 
fundamentals.  Data  revisions  have  shifted  the 
recent  years’  surplus  downwards  by  between  1.2 
and  2  percentage  points  without  significantly 
affecting  its  dynamics.  After  peaking  at  7.3%  of 
GDP  in  2021,  the  surplus  decreased  to  4.4%  in 
2022  mainly  due  to  worsening  terms  of  trade 
resulting  from  high  energy  prices,  and  to  a 
deteriorating  primary  income  balance.  However,  a 
substantial surplus in trade of goods and services 
remains  the  main  driver  of  the  surplus.  Private 
debt  levels  remain  high  despite  continuing  their 
downward  trend,  standing  at  215%  of  GDP  in 
2022,  due  to  both  high  NFC  debt  and  high 
especially 
household  debt. 
problematic as it makes households vulnerable to 
economic shocks, given that house prices seem to 
be  overvalued  and  strong  house  price  increases 
over  the  past  years  have  been  associated  with 
rising nominal mortgage debt. 

latter 

The 

is 

The current account surplus and private debt 
levels  are  expected  to  remain  high.  Largely 
dependent on the evolution of terms of trade, the 
Dutch  current  account  surplus  is  expected  to 
rebound  to  around  6.1%  of  GDP  by  2024. 
Structural  drivers  underpinning  high  households 
and corporate savings are expected to continue to 
contribute 
the  current  account  surplus. 
Regarding  private  debt,  the  moderate  downward 
trend is expected to continue with levels remaining 
well  above  benchmarks  and  EU  averages.  The 

to 

(145)  European Commission (2023), In-Depth Review for the 
Netherlands, Commission staff working document 
(COM(2023) 640 final), in accordance with Article 5 of 
Regulation (EU) No 1176/2011 on the prevention and 
correction of macroeconomic imbalances.  

74 

 
 
                                                 
 
 
 
 
 
Table A22.1: Assessment of macroeconomic imbalances matrix 

Source: European Commission 

75 

Gravity of the challengeEvolution and prospectsPolicy responseUnsustainable trends, vulnerabilities and associated risksCurrent account balanceThe Netherlands is running persistent current account surpluses, that are among the highest in the euro area and well above levels justified by fundamentals. A high surplus in trade in goods and services is the main contributor. The slight downward trend in the goods surplus over the past years has been compensated by upward trending surpluses in services trade. From a sectoral perspective, non-financial corporations and household savings are the main drivers. This pattern is linked to the strong presence of multinationals in the Netherlands and high levels of intra-group debt as well as high mandatory pension savings for households accompanied by deleveraging pressures after the global financial crisis. The current account surplus, after a rebound to 7.3% of GDP in 2021, decreased to 4.4% in 2022. Worsening terms of trade as a result of high energy prices and lower primary income balance have led to the decrease in the Dutch current account surplus in 2022. Data revisions due to a corrected recording of R&D expenses and a more accurate recording of foreign enterprise ownership have shifted the surplus for the recent years down by between 1.2 and 2 percentage points. The current account surplus is forecast to rebound to 5.9% in 2023 and 6.1% in 2024. Structural drivers underpinning high household and corporate savings are expected to continue to contribute to the current account surplus.The impact of recent policy steps on the structural drivers of the savings surplus is likely to remain limited. High mandatory savings imposed by the second-pillar pension system remain unaffected by the pension reform to be fully implemented by 2027. With regard to the corporate sector, a tax reform by which debt owned by controlling shareholders to their companies is partially taxed has been in force since January 2023. However, in practice the reform may only lead to a statistical effect, shifting part of small companies’ savings surplus to the household sector. Policy needs remain regarding the stimulation of domestic investments.Private debtPrivate debt in the Netherlands stood at 215% of GDP in 2022. Both corporate and household debt have been exceeding prudential and fundamental benchmarks by wide margins and are exceptionally high compared to the rest of the EU. Household debt is largely composed of mortgage debt, to a substantial degree driven by distortions on the housing market that favour debt-financed home ownership. NFC indebtedness is largely driven by intra-group cross-border debt of multinationals and hence represents a lower risk than the headline number would suggest. After an uptick in 2020, private debt in the Netherlands is continuing on its downward path. Total private debt decreased from an average of 252% of GDP over 2013-2019 to 215% in 2022.  Household debt is decreasing due to deleveraging pressures after the financial crisis. Decreasing NFC debt is driven by tax measures taken by the government that limit incentives for corporations to accumulate debt as well as the attractiveness of the country as a seat for their headquarters. Despite positive growth of credit flows to the private sector in 2021 and 2022, the private debt-to-GDP ratio has decreased on the back of real GDP growth and high inflation. Private debt as a percentage of GDP is expected to continue decreasing moderately while remaining exceptionally high compared to the rest of the EU. Mortgage growth is expected to moderate due to falling property transactions and prices.Some policy progress has been made in response to the identified private debt vulnerabilities. Macroprudential measures and slight reductions of incentives for debt-financed home ownership implemented after the financial crisis have contributed to the downward trend in private debt, but substantial distortions remain and would need to be addressed to significantly lower household debt.Tighter capital-based macroprudential measures introduced in 2021 have been extended in 2022. These measures set a floor for risk-weights on mortgages for banks and are expected to continue to discourage mortgage lending by banks to some degree. A tightening of borrower-based macroprudential measures is not expected. Good progress has been made on reducing the incentives for firms to accumulate debt and to limit the possibilities for firms to use the Netherlands as a conduit country for tax purposes.Housing MarketHouse prices nearly doubled in the past ten years and the housing market in 2022 was overvalued by 24%. The housing market is characterisd by significant incentives for debt-financed homeownership, in particular this concerns the deductability of mortgage interest payments from taxeable income. The private rental market, squeezed between a subsidized owner-occupied market and a large and not sufficiently means-tested social rent sector, is relatively small and underdeveloped. The favourable tax treatment of owner-occupied houses drives up house prices and contributes to the large mortgage debt position of Dutch households.  House price growth was substantial in 2021 and 2022, reaching 15% and 13.4% respectively. Factors underpinning this strong growth include notably the low mortgage interest rates, the favourable tax treatment of homeownership, and insufficient and inelastic housing supply. With financial conditions tightening and mortgage intrest rates increasing singificantly, the housing market appears to have reached a turning point. House prices have decreased by around 5.1% between the peak in July 2022 and March 2023 and further moderate decreases are expected in 2023 and 2024. Housing affordabilty is however not expected to improve as the effect of the increase in mortgage rates more than offsets the decrease in house prices. The authorities have focussed their policy efforts on the supply side of the housing market, while steps to reduce the debt-bias in the housing market remain insufficient. On the supply side, the authorities are taking measures to build  900 000 new dwellings by 2030. While these plans are ambitious, high inflation, labour shortages and environmental requirements related to nitrogen could in practice lead to delays in delivering new dwellings. On the demand side, mortgage interest deductibility has gradually been reduced but remains generous. The intention of the authorities to regulate rent in the private rental market and thereby improve affordability risks decreasing the attractiveness of the sector for investors and could undermine supply.