COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of the Netherlands
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Netherlands, budget policy, economic policy, economic recovery, economic reform, employment policy, energy grid, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 619 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of the Netherlands {COM(2024) 619 final} - {SWD(2024) 600 final}  
 
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

The Dutch economy is adjusting to 
higher prices and interest rates 

The Dutch economy slowed down in 2023 
with  real  GDP  growing  by  0.1%. (1) 
Economic  activity  contracted  in  the  first three 
quarters  of  2023,  before  returning  to  modest 
growth  in  the  final  quarter.  This  slowdown 
follows a period of relative overperformance in 
the  Dutch  economy  compared  to  the  EU 
average  (Graph  1.1).  In  2023,  the  impact  of 
high inflation  rates  on  households’  disposable 
incomes  resulted  in  a  cumulative  decrease  in 
consumer  spending  of  more  than  2%  in  the 
first  three  quarters  of  the  year,  before 
recovering  in  the  fourth  quarter.  At  the  same 
time,  export  volumes  in  2023  decreased  due 
to a slowdown in the economic activity of the 
Netherlands’  main 
partners. 
Investment  proved  to  be  volatile:  while  the 
first half of the year still showed robust levels 
of  investment  spending,  businesses  cut  back 
on spending in the second half of the year.  

trading 

in  2024.  Growth 

A recovery in consumer spending is set to 
lead  to  a  return  to  modest  growth  in 
2024 and 2025. Wage growth has picked up 
considerably,  while  inflation  rates  have  come 
down. This is expected to lead to a recovery in 
households’  disposable  income  and  consumer 
spending 
is 
furthermore  expected  to  be  supported  by 
increased government consumption and public 
investments  in,  for  example,  defence  and  the 
green  transition.  Private  investment  is  set  to 
remain weak in 2024, due to persistent labour 
shortages and businesses continuing to adjust 
to  the  tightening  of  financial  conditions  in 
2023. Growth is projected to further pick up in 

in  2024 

2025,  on  the  back  of  a  continued  recovery  in 
consumer  spending  and  an  improved  outlook 
for  trade  and  investment.  Annual  growth  is 
forecast at 0.8% in 2024 and 1.5% in 2025. 

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

Source: Eurostat 

Inflation  in  the  Netherlands  came  down 
rapidly  in  2023.  The  price  cap  on  gas  and 
electricity, put in place in 2023, helped to bring 
down 
the 
inflation,  as  measured  by 
Harmonised  Index  of  Consumer  Prices  (HICP), 
from  more  than  13%  in  Q4-2022  to  around 
7.2%  in  Q1-2023.  Decreasing  energy  prices 
resulted in a further fall in inflation rates, with 
Q4-2023  recording  headline  inflation  of  only 
0.4% year-on-year. This was mostly due to the 
steep  fall  in  energy  prices  in  that  quarter 
compared  to  the  peak  in  energy  prices  the 
year  before.  At  the  beginning  of  2024, 
headline inflation bounced back to 3%, due to 
a less favourable year-on-year comparison for 
energy prices. Inflation is expected to continue 
easing  gradually  throughout  2024  and  2025, 
as the lower energy prices are passed through 
to other price categories.  

(1)  The cut-off date for the data used to prepare the 27 

Country Reports was 15 May 2024. 

sound  public 
The  Netherlands  has 
finances,  but  some  fiscal  challenges 

2 

90951001051101151201252015-Q12015-Q32016-Q12016-Q32017-Q12017-Q32018-Q12018-Q32019-Q12019-Q32020-Q12020-Q32021-Q12021-Q32022-Q12022-Q32023-Q12023-Q3European UnionNetherlandsTrend GDP Netherlands (2015-2019) 
 
 
  
could emerge in the medium to long term. 
Despite  the  outgoing  government’s  plans  for 
increased  investment,  the  government  deficit 
has reduced substantially since 2021, reaching 
0.3%  of  GDP  in  2023.  The  implementation  of 
government  investment  plans  has  been  slow 
due to labour shortages, among other factors, 
leading  to  a  lower  level  of  expenditure  than 
(Graph  1.2).  Additionally, 
initially  planned 
revenue has been higher than expected mainly 
due to windfalls in taxes on corporate profits. 
In 2024, the deficit is expected to increase to 
2.0%  due  to  rising  expenditure  on  social 
benefits,  higher  interest  rates  and  higher 
wages  in  the  public  sector.  In  the  medium  to 
the  ageing 
long 
linked 
term,  costs 
to  a 
lead 
population  are  expected 
significant increase in spending on health and 
long-term  care.  As  a  share  of  GDP,  spending 
on  long-term  care  in  the  Netherlands  is  the 
highest in the EU, and is expected to increase 
substantially  again  by  2070,  raising  potential 
concerns about fiscal sustainability in the long 
term (Annex 21).  

to 
to 

the  slowdown 

employment  growth 

The Dutch labour market remains strong, 
despite 
in  economic 
activity  in  2023.  The  unemployment  rate 
reached  its  lowest  level  in  decades  in  Q2-
2022, at 3.3%. It increased slightly since then, 
reaching 3.7% in Q1-2024, mostly as a result 
slowing  down. 
of 
Unemployment 
increase 
is  expected 
marginally in 2024, due to weaker job creation 
and  a  small  increase  in  bankruptcies,  but 
labour  shortages  are  expected  to  persist. 
Nominal  wage  growth  has  picked  up 
considerably, with growth in contractual wages 
increasing  from  around  2%  on  average  in 
2021 to 6.9% in the fourth quarter of 2023.  

to 

Graph 1.2: Underutilisation of public 
investment funds 

(1) Bars show total unspent funds earmarked for the 
respective investment funds in millions of euro 
Source: Annual Financial Reports 2019-2022, Ministry of 
Finance 

The  Netherlands  continues  to  experience 
vulnerabilities  related to  its  high  current 
account  surplus  and  its  high  levels  of 
private  debt (2).  The  high  current  account 
surplus  is  driven  by  the  presence  of  many 
foreign  multinationals  in  the  country,  the 
its  tax  and  pension 
specific  features  of 
incentivise  corporations  and 
systems  that 
households 
to  save,  and  by  continuing 
obstacles to domestic investment. The surplus 
is  expected  to  remain  rather  stable  in  the 
coming  years,  as  the  same  structural  drivers 
remain in place, but the risks associated with it 
appear more mitigated due to strong demand 
growth.  Moreover,  the  overvalued  housing 
market,  largely  fuelled  by  supply  shortages, 
and  tax  benefits  promoting  debt-financed 
home  ownership,  are  key  drivers  behind  the 
high  level  of  private  debt.  However,  stricter 
macroprudential policies have led to a gradual 
fall in private debt-to-GDP levels (from 268% 
in  2014  to  193%  in  2023).  Higher  interest 
rates  coupled  with  inflation  are  expected  to 
contribute to a continuation of this downward 
trend,  although  the  level  of  private  debt  is 

(2)  An in-depth review (IDR) was undertaken as part of the 
macroeconomic imbalance procedure (MIP) earlier this 
year, which found that the Dutch current account 
surplus is one of the highest in the EU (see SWD(2024) 
82 final). 

3 

-20002004006008001000120014002019202020212022Infrastructure/Mobility FundDeltafundDefence Material FundNational Growth FundTotal 
  
 
expected  to  remain  above  both  prudential 
thresholds and the EU average. 

among the highest in the EU. This means that 
there  is  only  limited  further  potential  to 
address shortages by merely increasing labour 
participation.  

Labour shortages and investment 
bottlenecks are hindering the twin 
transition and competitiveness 

limiting 

factors, 

The  Netherlands  is  a  highly  competitive 
economy,  but 
labour  shortages  are 
holding  back  progress  in  the  medium  to 
long  term.  The  country  is  an  EU  innovation 
leader  (Annex  11),  and  home  to  many  firms 
providing  cutting-edge  technologies  to  global 
markets. However, the economy is running into 
several 
potentially 
undermining its competitiveness in the future. 
the 
These 
government’s  ability  to  deliver  on  key  policy 
goals, including increasing the housing supply, 
achieving  the  digital  transition  and  fighting 
climate  change.  These  limiting  factors  include 
restrictions  stemming  from  shortages  of 
(skilled) workers, constraints in the capacity of 
the  electricity  grid  capacity  and  excessive 
limit  economic 
nitrogen  emissions,  which 
activity and investments.  

limiting 

issues 

also 

are 

related 

Labour  shortages  persist  across  many 
sectors.  There  continues  to  be  a  shortage  of 
workers  as  the  number  of  vacancies  has 
exceeded  the  number  of  unemployed  people 
since  Q4-2021 (3),  driven  by  a  strong  labour 
to 
demand.  Moreover,  challenges 
labour  market  segmentation  and  the  high 
prevalence  of  part-time  work,  in  particular  by 
women,  require  further  attention  in  terms  of 
the  Pillar  of  Social  Rights  (Annex  14).  Labour 
shortages  also  hold  back 
investments, 
including those related to the green and digital 
transitions.  In  the  medium  term,  demographic 
trends,  including  migration  and  the  ageing  of 
the  population,  are 
likely  to  add  further 
demand  for  workers  in  the  health  and  care 
sectors,  exacerbating  existing  shortages  of 
workers  (Annex  16).  Finally,  looking  at  labour 
supply,  it  should  be  noted  that  the  labour 
participation rate in the Netherlands is already 

(3)  CBS (2024) Spanning op de arbeidsmarkt. 

to 

invest 

flexible  workers, 

Labour productivity  growth  has been low 
over  the  past  two  decades.  The  high 
limiting 
prevalence  of 
in  skills 
incentives  for  firms 
training (4), together with a ‘net-shift effect’ of 
low-
employment  moving  from  high-  to 
sectors,  partly  explain 
productivity 
the 
labour 
growth 
low 
structurally 
productivity (5).  Additionally,  despite  a  recent 
increase, 
and 
innovation  as  a  share  of  GDP  remains  below 
peer  Member  States  (Annex  11).  The  level  of 
net public investment is also well below the EU 
average  (Annex  12).  In  the  longer  term,  the 
significant  deterioration  in  basic  skills  levels, 
as  demonstrated  by  a  steadily  declining 
performance  in  the  OECD’s  PISA  survey,  may 
further 
and 
skills 
undermine labour productivity (Annex 15). 

investment 

shortages 

research 

increase 

in 

in 

to 

related 

Bottlenecks 
the  green 
transition  are  causing  a  slowdown  in 
investments.  Restrictions  on  access  to  the 
electricity grid, due to capacity constraints, risk 
slowing  down  the  clean  energy  transition,  in 
particular the roll out of renewable energy. The 
restrictions  also  constrain  economic  activity 
(for example related to the expansion of firms 
and 
the  construction  of  new  dwellings), 
affecting  the  country’s  productivity  and,  as 
mentioned  above,  creating  macroeconomic 
imbalances. Even though major investments in 
the  expansion  of  the  grid  capacity  are  being 
planned  and 
implemented,  the  additional 
capacity  will  not  keep  up  with  the  growing 
demand  caused  by  the  shift  to  renewable 
energy. 
In  addition,  excessive  nitrogen 
emissions  represent  another  bottleneck  that 
constrains economic activity (Annex 6). 

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

Working Paper No. 2020/155. 

(5)  ESB (2024) Low productivity growth partly due to 

unfavourable economy structure - ESB. 

4 

 
 
 
Box 1: 

The Netherlands’ competitiveness in brief 

The  Netherlands  is  a  top  performer  in  terms  of  competitiveness,  but  challenges  lie 
ahead.  The  strong  industrial  sector,  which  is  leading  among  Member  States  in  productivity 
metrics,  contributes  to  the  diversification  and  resilience  of  the  Dutch  economy.  The  business 
environment has also traditionally been a key strength, scoring among the best performers in the 
EU  in  terms  of  access  to  finance,  with  the  exception,  however  of  SMEs’  access  to  loans.  Since 
greening and digitalising the economy fast enough will be key factors in maintaining productivity, 
they  have  received  a  strong  focus  in  the  Dutch  recovery  and  resilience  plan  and  EU  cohesion 
policy funding. 

However, competitiveness challenges remain:  

• 

• 

• 

labour  and  skills  shortages  hinder  business  activity,  innovation,  and  the  green  and 
digital  transitions  and  together  with  the  segmentation  in  the  labour  market,  limit 
productivity growth; 

investment  bottlenecks,  including  due  to  congestion  in  the  electricity  grid  and 
excessive  nitrogen  emissions,  which  slow  down  the  roll-out  of  renewables,  limit  the 
expansion of business activity and the construction of new dwellings; and 

stagnant  public  investment  and  investment  in  research  and  innovation  are 
holding back labour productivity, innovation, and the green and digital transitions. 

Box 2: 

UN Sustainable Development Goals (SDGs) 

The Netherlands is making good progress and scores above the EU average in all SDGs 
related to competitiveness and productivity (SDGs 4, 8, 9). SDG 8on economic growth and 
employment  is  furthest  ahead  of  the  EU  average,  in  particular  thanks  to  the  high  rates  of 
employment and low long-term unemployment. In addition, the Netherlands has a high share of 
households with high-speed internet and a large number of patent applications per capita (SDG 
9 - Innovation, industry and infrastructure), and a high level of participation in adult learning and 
of post-secondary educational attainment (SDG 4 – Quality education) (Annex 1).  

In  addition,  the  Netherlands  performs  very  well  on  most  SDG  indicators  related  to 
fairness, which include good health and well-being (SDG 3), quality education (SDG 4), gender 
equality (SDG 5) and decent work and economic growth (SDG 8). 

Out of the 17 indicators, progress on 4 SDGs is below the EU average. These relate all to 
environmental sustainability (SDGs 7, 11, 13, 14). 

5 

 
 
 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility (RRF) and cohesion policy funding 
is  mutually  reinforcing  the  Netherlands’ 
efforts  to  boost  its  competitiveness  and 
foster  sustainable  growth.  In  addition  to 
the EUR 5.4 billion of RRF funding described in 
Annex  3,  cohesion  policy  funding  provides  the 
Netherlands  with  EUR  1.5  billion  between 
2021  and  2027.  Support  from  these  two 
instruments  combined 
represents  around 
0.68%  of  the  country’s  annual  GDP  in  2023, 
compared to the EU average of 5.38% of GDP 
(see Annex 4). 

its 

competitiveness. 

Under  its  recovery  and  resilience  plan 
launched 
(RRP),  the  Netherlands  has 
significant  policy  measures  that  aim  at 
improving 
In 
particular,  the  RRP  envisages  reforms  in  the 
areas  of  the  energy  transition,  the  labour 
market,  education  and  healthcare.  The  Dutch 
RRP  also  includes  substantial  investments  to 
address the housing shortage and support the 
development  of  quantum  and  artificial 
intelligence technologies.  

and 

resilience 

The  implementation  of  the  Netherlands’ 
is 
recovery 
significantly  delayed.  The  Netherlands  has 
submitted  one  payment  request  on  24  May 
2024,  corresponding  to  30  milestones  and 
targets 
(Annex  3).  The 
the  plan 
Commission’s assessment is ongoing.  

plan 

in 

Cohesion  policy  funding  helps  tackle  the 
Netherlands’ growth and competitiveness 
challenges  and  reduce  the  country’s 
territorial and social disparities. Under the 
2014-2020  cohesion  programming  period, 
support  focused  on  research  and  innovation, 
integrated 
the 
sustainable  urban  development,  and 
the 
labour  market.  For  the  current  2021-2027 
programming  period,  support  has  been 
extended  to  include  the  circular  economy,  the 

low-carbon 

economy, 

6 

industries,  and  network 
diversification  of 
infrastructure.  Furthermore,  cohesion  policy 
(as  well  as  the  RRP)  is  investing  in  life-long 
learning and upskilling and reskilling, including 
to  a  climate-neutral 
for 
economy,  as  well  as  in  actions  to  improve 
employment opportunities. 

transition 

the 

Investing in people, housing and 
healthcare for economic growth 
and social resilience 

(i) 

by: 

notably 

The  Netherlands  is  taking  action  through 
the  RRP  and  cohesion  policy  funding  to 
adapt  the  labour  market  and  pension 
system to current challenges and prepare 
for  future  ones,  and  to  help  students 
catch  up  on  learning  they  missed  due  to 
the COVID-19 pandemic. Measures included 
in the plan aim to reduce the differences in tax 
treatment  between  employees  and  the  self-
employed, 
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. 
Together  with  cohesion  policy  funding,  the 
Dutch RRP is also improving the employability 
of  Dutch  workers  via  upskilling  and  reskilling 
measures.  Unemployed  individuals  and  those 
at risk of unemployment receive career advice, 
skills  training  and  support  to  transition  into 
employment.  Furthermore,  under  the  RRP,  a 
law  entered  into  force  to  reform  the  pension 
system  and  make  it  more  transparent,  fair, 
resistant  to  shocks,  and  better  suited  to  a 
changing 
labour  market.  Finally,  several 
investments are being made under the RRP to 
support  disadvantaged  groups  of  students  by 
addressing  gaps  in  their  education  caused  by 
school 
the  COVID-19 
during 
pandemic.  

closures 

 
 
Box 3: 

Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  the  Dutch  RRP 
includes  reforms  that  support  investments  under  other  EU  instruments,  creating 
important synergies and complementarities between the various funds. For example, to 
incentivise  businesses  to  limit  their  energy  consumption  and  switch  to  renewable 
sources  of  energy,  a  CO2  levy  for  industry  is  being  rolled  out  as  part  of  the  RRP.  In 
parallel, cohesion policy funds support investments in renewable sources, such as green 
hydrogen,  targeting  SMEs,  local  green  hydrogen  infrastructure  and  research  on 
sustainable energy generation. 

reforms 

The  RRP  is  helping  to  speed  up  the 
construction  of  housing  and  make 
buildings  more  energy  efficient.  To 
investments  unlocking  new 
complement 
include 
constructions,  RRP 
the 
removal  of  bottlenecks 
in  planning  and 
permitting  procedures  and  the  agreement  on 
construction  targets  for  new  dwellings.  In 
addition,  the  Dutch  RRP  is  investing  in  energy 
efficiency  improvements  in  public  and  private 
buildings,  which  are 
complemented  by 
cohesion policy initiatives on energy efficiency 
in deprived neighbourhoods. 

Investments  are  being  made  under  the 
Dutch RRP to make the healthcare sector 
more  resilient  and  promote  equal  access 
to  care.  A  national  healthcare  reserve  has 
been  set  up  with  around  2 500  former 
healthcare professionals who can be deployed 
in times of crisis or during pandemics or other 
emergencies.  The  RRP  also  provides  support 
for  e-health  tools,  improved  intensive  care 
capacity  in  hospitals,  on-the-job  training  for 
intensive  care  workers  and  a  common 
infrastructure 
the  health 
for  access 
research data of university medical centres. 

to 

Unlocking investments for the 
green transition 

The  RRF  and  cohesion  policy  funding  are 
together  supporting  the  green  transition 
in  the  Netherlands.  Under  its  RRP,  the 
Netherlands is  implementing  significant  green 
policy reforms such as a CO2 levy for industry, 
an energy law, car taxes and an air travel tax. 
These  reforms  support  efforts  to  decarbonise 

7 

roll  out 

industry  and 
renewables  and 
sustainable  transport.  In  parallel,  the  RRP  is 
investing  in  hydrogen  in  aviation,  in  creating 
preconditions  for  the  roll-out  of  renewables, 
zero-emission  vessels  and  railway  signalling 
(ERTMS).  The  investment  in  the  closure  of  pig 
farms helps to reduce nitrogen emissions that 
act  as  a  barrier  to  the  roll-out  of  renewable 
energy  production  (for  example  by  delaying 
the permitting of grid expansion projects). The 
Just  Transition  Fund  will  invest  in  green 
technologies  for  the  chemical  industry  and 
steel  production,  the  production  of  renewable 
energy  and  hydrogen,  regional  networks  for 
renewable  hydrogen  and 
local  electricity 
networks  to  support  the  electrification  of 
industrial  processes.  The  Just  Transition  Fund 
will also invest in training 49 000 workers who 
currently  work  in  the  fossil  fuels  sector  to 
in 
equip  them  with  new  skills  to  work 
renewable and climate-neutral industries. 

Boosting digital skills and 
technologies for a successful 
digital transformation 

quantum 

The  RRF  is  providing  support  for  cutting-
edge  technologies,  while  also  helping  to 
address  major skills shortages in the  ICT 
sector,  and  to  boost  digital  skills  more 
broadly.  The  Dutch  RRP  includes  investments 
artificial 
computing 
in 
intelligence.  These  investments  will  contribute 
to  ensuring  that  the  Netherlands  remains  an 
sector 
attractive 
investment  in  technology  and  that  existing 
firms  continue 
the  business 
to  consider 
environment in the Netherlands as suitable for 

location 

private 

and 

for 

 
 
impulse 

education 

future  expansion.  The  availability  of  workers 
with digital skills is proving to be a bottleneck 
for Dutch businesses in the ICT sector, as well 
as  for  the  digitalisation  efforts  of  other 
sectors.  To  address  this,  the  RRP  includes  the 
digital 
investment 
programme, which will support digital learning 
throughout  the  education  system.  In  order  to 
attract ICT professionals, the Netherlands also 
launched  an 
ICT  human  capital  agenda. 
Cohesion  policy  funds  include  support  for 
digital  skills  through  the  broader  support  for 
upskilling  and  reskilling  initiatives.  Moreover, 
the  European  Regional  Development  Fund 
provides  support 
innovation 
financing  programmes  in  the  Netherlands, 
including for start-ups and scale-ups in digital 
technology. 

for  several 

8 

 
FURTHER PRIORITIES AHEAD 

care, 

faces 

long-term 

Netherlands 

The 
additional 
challenges related  to  tax  policy,  housing, 
the  labour  market,  the  public  allowances 
system, 
energy 
infrastructure  and 
renewables,  and 
excessive  nitrogen  emissions.  Tackling 
these  challenges  will  help 
the 
Netherlands’  long-term  competitiveness  and 
ensure  that  its  economy  remains  resilient.  It 
will also help the Netherlands to make further 
progress  in  achieving  the  UN  Sustainable 
Development Goals (SDGs). 

increase 

imbalance 

the 
The  policy  assessment  under 
macroeconomic 
procedure 
suggests  that  progress  on  the  relevant 
policies  in  the  Netherlands  has  been 
limited (6). To reduce the high current account 
surplus,  some  incentives  for  (multinational) 
corporations  to  retain  earnings  were  reduced, 
increase  domestic 
to 
but  policy  action 
investment  has  not  been  successful.  On 
household  debt,  the  statutory  loan-to-value 
ceiling  for  new  mortgages  and  mortgage 
interest  deductibility  remain  generous  and 
could be further reduced.  

It  is  important  that  the  challenges  identified 
are  addressed  both  at  the  national  and 
regional  level  to  reduce  regional  disparities 
and 
and 
investment capacity in a balanced way across 
the country.  

administrative 

improve 

the 

Reducing distortions in the tax 
system 

The  Netherlands  would  benefit  from 
taxing  income  from  various  forms  of 
wealth at more similar rates. Returns from 

income 

primary  residence  properties,  pension  wealth, 
from  closely  held 
and  capital 
companies  are  taxed  at  favourable  rates 
compared  to  income  from  investments  in 
shares  and  bonds.  Furthermore, 
these 
investments are not taxed on the basis of their 
actual  return  but  at  an  assumed  rate,  and, 
until  2023,  an  assumption  was  made  on  the 
composition of the portfolio (which is a unique 
practice in the EU). This leads to unfairness as 
it does not consider inequality between wealth 
incomes.  Taking  steps 
these 
shortcomings could provide the fiscal space to 
lighten  other  distortionary  taxes,  such  as 
taxation  on 
labour,  and  ensure  that  the 
allocation  of  capital  is  not  motivated  by  tax 
considerations.  This  could  help  improve  the 
business environment for companies willing to 
expand their operations in the Netherlands and 
thus  boost  the  competitiveness  of  the  Dutch 
economy. 

to  address 

The country's tax system incentivises the 
accumulation  of  illiquid  forms  of  wealth. 
A  person’s  primary  residence  as  well  as 
pension  savings  benefit  from  substantial  tax 
subsidies  compared  to  other  forms  of  wealth. 
The primary residence is subject to a relatively 
low  imputed  rent  tax  (Graph  3.1),  which, 
coupled  with  generous  mortgage 
interest 
deductibility,  leads  to  a  net  tax  subsidy  on 
housing  wealth  and 
thereby  stimulates 
housing demand. In addition, homeowners with 
no  or  little  mortgage  debt  are  largely  exempt 
from  the  imputed  rent  tax (7).  Total  property 
tax  revenue  in  the  Netherlands  was  also 
comparatively  lower  than  the  EU  average  in 
2022  (1.7%  vs  2.1%  of  GDP)  (Annex  19). 
Pension 
a 
comparably  high  annual  income  threshold  up 
to  which  they  are  deductible  from  taxable 
income. In addition, returns from accumulated 

contributions 

benefit 

from 

(6)  COM(2024). Institutional Paper 274. 

2048. 

(7)  The tax exemption is being gradually phased out until 

9 

 
 
 
 
threshold (8).  Reducing 

pension  savings  are  tax-exempt,  even  when 
accumulated  through  contributions  above  the 
income 
tax 
benefits  that  incentivise  the  accumulation  of 
forms  of  wealth  would  make 
illiquid 
income 
households 
shocks (9)  and  help 
the 
overvaluation  of  the  housing  market  and  the 
high levels of household debt. 

to 
lower  both 

vulnerable 
to 

these 

less 

Graph 3.1: Impact of taxing imputed rent at 
the same level as returns from investments 
(Box 3) on disposable income 

from 

retaining 

in  such 
benefit  of  accumulating  wealth 
companies  is  twofold.  First,  dividend  income 
from these companies is taxed  at lower rates 
than  capital  income,  and  secondly,  company 
owners can choose to postpone  tax payments 
by 
their 
the  earnings 
investments in the corporation. Nonetheless, in 
order  to  have  these  means  at  their  personal 
disposal,  company  owners  can,  in  a  tax-
exempt  manner,  extend  loans  to  themselves 
on  behalf  of  the  company (11).  This  practice 
has  been  limited  by  recent  legislation  but 
remains  possible  in  many  cases (12).  Besides 
leading  to  tax-avoidance,  this  practice  might 
also  hamper  productive 
investments  by 
companies. 

Following  a  ruling  by  the  Dutch  Supreme 
Court  in  2021 (13),  the  Netherlands  is 
facing  its  biggest  tax  reform  in  two 
decades.  The  court  rejected  the  taxation  of 
capital  income  at  an  assumed  rate  of  return 
and  an  assumed  portfolio  of  savings  and 
investments.  In  response  to  the  ruling,  the 
actual portfolio composition will be used from 
2024  onwards  to  collect  capital  gains  tax. 
Another  reform  proposal  to  tax  actual  returns 
could enter into force in 2027. These reforms 
are  expected  to  contribute  to  a  more  stable 
economy  by  allowing  capital  income  taxation 
to  function  as  an  automatic  stabiliser (14). 
However,  the  other  existing  distortions  and 
loopholes  outlined  above  (notably  related  to 
housing, pensions and closely held companies) 
are not being addressed.  

(11)  Jacobs, B. (2019). Fundamentele hervorming van 
belastingen op kapitaalinkomen. S. Cnossen en B. 
Jacobs (red.), Ontwerp voor een beter belastingstelsel. 

(12)  Recent legislation has limited tax-exempt loans from 
the own company to below EUR 500 000 or loans for 
the purchase of a home. Loans of more than EUR 
500 000 receive the tax treatment of dividends.  

Source: Joint Research Centre, based on the EUROMOD 
model, I6.0+ 
Explanation: Imputed rent, currently assessed on average 
at 0.35% of the value of a house, is simulated to 
increase to 6.17%, resulting in the same assumed rate of 
return of investments taxed under ‘Box 3’. Observations 
are ranked into decile groups using household income in 
2023, equivalised using the modified OECD equivalence 
scale. The result shows the progressivity of the measure. 

To  reduce  tax  arbitrage,  a  loophole  that 
wealthy  individuals  use  to  postpone  and 
reduce  tax  payments  on  capital  income 
through  closely  held  companies  could  be 
closed.  Almost  20%  of  all  closely  held 
companies registered in the Netherlands have 
the sole purpose of harbouring investments or 
pension  wealth (10). 
number  has 
increased  significantly  in  the  last  decade.  The 

Their 

(8)  Pension income later in life is then taxed at the same 

rates as income from work.  

(9)  Ciurila, N. et al. Are the savings of Dutch households 

(13)  ECLI:NL:HR:2021:1963. 

optimal? CPB Notitie (2020). 

(10)  Deinum et. al. (2022). De economische activiteit van 

besloten vennootschappen. 

(14)  Gerritsen, A., & Zoutman, F. (2019). Naar een heffing op 
werkelijk rendement. S. Cnossen en B. Jacobs (red.), 
Ontwerp voor een beter belastingstelsel. 

10 

-5.0%-4.0%-3.0%-2.0%-1.0%0.0% 
  
 
 
Ensuring the availability and 
affordability of housing 

important  factor  in  a  household’s  decision  to 
relocate (15). 

in 

the  previous  section, 

House  prices  fell  for  the  first  time  in 
more  than  a  decade,  following  interest 
rate  rises.  The  overvaluation  of  the  housing 
market  has  been  driven  by  several  factors, 
including,  in  addition  to  the  tax  incentives 
discussed 
low 
mortgage  interest  rates  and  an  insufficient 
housing supply. The recent fall in house prices 
(down 3.8% between Q3-2022 and  Q3-2023) 
has  made  housing  more  affordable.  However, 
despite rising wages, this could not offset the 
increase  in  mortgage  interest  rates,  resulting 
in 
capacity  of 
households. The house-price-to-income ratio in 
2023  remained  around  31%  higher  than  the 
long-term average. By the end of 2023, house 
prices  started  picking  up  again  and  are 
projected to show an increase in 2024. 

reduced  borrowing 

the 

Housing  shortages  are  expected 
to 
persist  amid  a  relatively  poor  supply  of 
housing. Factors such as the lack of available 
and  affordable  locations,  the  high  cost  of 
building  materials,  shortages  of  workers, 
environmental 
to 
requirements 
nitrogen,  and  constraints  on  the  capacity  of 
the  energy  grid  are  driving  up  the  cost  and 
leading  to  delays  in  the  completion  of  new 
dwellings.  

related 

is 
The  Dutch  private  rental  sector 
relatively  small  and  expensive.  Despite 
increasing  in  size  by  30.5%  since  2013,  the 
private rental sector still made up only around 
14.4%  of  the  total  housing  market  in  2023, 
which  is  around  half  the  size  of  the  social 
housing  sector.  Subsidies  for  both  the  owner-
occupied  and  social  rental  sectors  make  the 
private rental sector relatively unattractive for 
households.  Recent  policy  measures  such  as 
buy-to-let  bans  and  the  expansion  of  rent 
controls  risk  additional  negative  effects  on 
supply in the rental sector. The lack of a well-
developed  private  rental  market  can  make  it 
difficult  for  people  to  move  for  work  and  for 
talent,  as 
to  attract  foreign 
companies 
available  and  affordable  rental  housing  is  an 

Improving productivity by 
addressing persistent shortages 
in a segmented labour market  

the 

and 

low-interest 

Labour  shortages  persist  on  the  Dutch 
labour market and are among the highest 
in  the  EU,  despite  a  high  participation 
rate  (83.5% in  Q3-2023).  Job  vacancies  at 
4.4% in Q4-2023 (vs the EU average of 2.5%) 
in  Q2  2022 
remain  high,  after  peaking 
(5%) (16)Public  support  during  the  COVID-19 
pandemic 
rate 
environment  have  increased  labour  hoarding, 
sometimes  in  firms  with  low  productivity  that 
might  otherwise  have  gone  bankrupt (17). 
However,  shortages  were  already  reported 
before  the  pandemic  in  sectors  such  as 
information  and  communication  technology, 
health,  education,  and 
fields, 
indicating  that  structural  factors  such  as  a 
segmented labour market, may  be at work. In 
addition, in 2023 just over half of all workers 
were employed  full  time, with almost  70% of 
women  working  part-time (18).  At  the  same 
time,  the  employment  rate  for  people  born 
outside  the  EU  is  over  20  percentage  points 
(pps)  lower  than  the  overall  participation  rate 
(Annex  14).  Tapping  into  the  labour  market 
potential of people from these groups can help 
to  alleviate  shortages,  which  may  otherwise 
hold back investment projects, including those 
related  to  the  green  and  digital  transitions 
(Annex 8).  

technical 

Skills  shortages  pose  a  risk  to  labour 
productivity and competitiveness. Firms in 
different  sectors  are  reporting  the  lack  of 

(15)  The 2024 In-Depth Review on the Netherlands contains 

a more detailed analysis of the affordability and 
availability of housing (COM(2024) Institutional Paper 
274). 

(16)  CBS (2024) Tension in the labour market. 

(17)  CPB (2024) Krappe arbeidsmarkt vraagt om keuzes. 

(18)  CBS (2024) More women and men in large part-time 

jobs | CBS. 

11 

 
 
skilled  workers  as  their  main  barrier  to 
production,  despite  adult  participation  in  life-
long  learning  and  participation  in  vocational 
education  and  training  being  significantly 
higher  than  the  EU  average.  Furthermore, 
despite  the  still  relatively  high,  although 
decreasing,  proportion  of 
top-performing 
students,  the  2022  results  of  the  Programme 
for  International  Student  Assessment  (PISA) 
show a sharp increase (including compared to 
other  Member  States)  in  the  number  of 
underachievers  in  mathematics,  science  and 
reading skills (Annex 15). This decline is one of 
the  biggest 
in  the  EU  and  undermines 
education  and  labour  market  outcomes,  as 
well as long-term productivity. The results also 
addressing 
show 
segregation in education, and tailoring support 
measures  to  the  needs  of  disadvantaged 
schools.  The  increasing  shortage  of  teachers 
can exacerbate challenges in the development 
of skills and quality of education. 

importance 

the 

of 

The  high  degree  of  segmentation  in  the 
Dutch  labour  market  holds  back  further 
improvements  in  skills  development  and 
productivity Changes to the institutional set-
up  and  enforcement  of  the  existing  rules  are 
needed to reduce the incentives for employers 
to overuse flexible and temporary contracts. A 
total of 23% of Dutch employees (down from 
28%  in  2022)  are  working  on  flexible  or 
temporary  contracts  (vs  12.1%  in  EU (19))  and 
12.3%  are  self-employed  workers  who  have 
no  other  employees  (vs  9.4%  in  EU)  (Annex 
14). Despite some benefits of a certain degree 
of  labour  market  flexibility,  the  excessive  use 
of  flexible  types  of  employment  can  have 
negative  effects.  Participation  in  learning  is  a 
challenge for those in flexible work, which also 
seems  to  be  correlated  with  weaker  trends  in 
productivity (20).  The Netherlands is facing low 
labour  productivity  growth  (0.4%  per  year  in 
2010-2019)  driven  by,  for  example,  strong 
employment growth in low-productivity sectors 

(19)  Statistics Netherlands (2024), Dashboard arbeidsmarkt. 

Flexwerk.  

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

Working Paper No. 2020/155. 

and sectors with a high prevalence of flexible 
work schemes (21). 

To tackle shortages of workers and skills, 
it  will  be  necessary  to  take  into  account 
sector-specific  needs  and  barriers.  Given 
the  existing  shortages  in  different  sectors, 
policy measures tackling this issue could focus 
on  promoting  high  value-added  sectors,  as 
well  as  sectors  such  as  education  and 
healthcare, which affect other priorities of the 
Dutch  economy (22).  The  Netherlands  could 
improve  upskilling  and  reskilling  opportunities 
to 
sectors, 
particularly to sectors with higher productivity. 
In response to the labour shortages, the Dutch 
labour  market  could  also  benefit  from  an 
increase in investments in R&D and to improve 
productivity 
Dutch 
competitiveness,  including  in  low-productivity 
sectors  (Annex  11).  Lastly,  the  Netherlands 
could  incentivise  people  to  increase  the  hours 
they  work  to  help  reduce  labour  and  skills 
shortages (23). 

increase  mobility 

strengthen 

between 

to 

Reforming an overly complex 
public allowance system to 
improve the public administration 

to 

costs 

The Netherlands has an extensive system 
of  allowances  supporting  households  to 
cover 
housing, 
related 
healthcare  and  childcare.  In  2022,  more 
than  two-thirds  of  Dutch  households  received 
allowances,  worth  EUR  15.7  billion  (1.6%  of 
GDP  in  2022).  The  system  allows  for  a  very 
targeted  approach  in  providing  extra  support 
to  disadvantaged  households,  but  this  comes 

(21)  ESB (2024) Low productivity growth partly due to 

unfavourable economy structure - ESB. 

(22)  CPB (2024) Krappe arbeidsmarkt vraagt om keuzes 

(23)  Some specific households (for example low-income 

single parents) with a strong dependency on allowances 
can face very high marginal tax rates, which could 
affect decisions by people in these groups about the 
hours they work. In addition, the Netherlands has 
relatively high non-tax compulsory payments (OECD 
2023), such as second-pillar pension premiums, which 
may affect labour market decisions. 

12 

 
 
 
at the cost of a high degree of complexity for 
both the bodies implementing the system and 
the people receiving allowances. 

A  lack  of  transparency  in  determining 
entitlements  creates  income  uncertainty 
and  hampers  the  take-up  of  benefits. 
Almost  a  quarter  of  low-  and  middle-income 
households  do  not  know  whether  they  are 
entitled  to  any  of  the  allowances (24).  Only 
48%  of  the  households  received  the  correct 
amount  in  allowances,  with  almost  a  quarter 
of  households  in  2022  facing  a  recovery  for 
overpayment.  Fear  of  such  recoveries  may 
lead  people  to  apply  for  allowances  only 
retroactively  or  not  at  all,  which  defeats  their 
original  purpose  of  topping  up  the  current 
income (25).  The  rate  of  people  with  flexible 
work  and  of  self-employed  people,  whose 
income is harder to estimate, who did not take 
up  allowances  reached  34% (26).  The  lack  of 
take-up  and  the  possibility  of  recovery  of 
allowances  may  exacerbate  financial  distress 
and contribute to poverty traps.  

The  complexity  of  the  system  also 
hinders  its  implementation.  The  need  for 
reform  has  become  more  evident  after  more 
than 20 000 families were wrongly accused of 
fraud  after  they  requested  childcare  benefits 
(Annex  13).  In  February  2024,  the  caretaker 
government sent a letter (27) and full report on 
the  future  of  the  allowance  system  to  the 
Senate  and  House  of  Representatives, 
presenting alternatives to the current set-up. 

Simplifying  the  allowance  system  could 
improve  the  take-up  rate  and  minimise 
recoveries. A reform of the allowance system 
to 
the 
implementing  bodies  and  recipients  could 

its  complexity 

for  both 

reduce 

(24)  National Institute for Budget Information (2023) Nibud: 
Kwart van huishoudens weet niet of ze recht hebben op 
toeslagen - Nibud. 

(25)  Ministry of Finance (2024) Appendix 1 Description and 
problem analysis of the benefits system | Report | 
Rijksoverheid.nl. 

(26)  Ministry of Finance (2024) Eindrapport toekomst 

toeslagenstelsel.  

(27)  Government of the Netherlands (2024) Letter to the 
House of Representatives on the Final Report on the 
Future of the Benefits System. 

13 

income  uncertainty,  especially  for 
reduce 
people  with  flexible  contracts  and  the  self-
employed.  To  tackle  the  complexity  of  the 
allowance  system,  it  will  be  necessary  to 
ensure  consistency  with  choices  in  taxation, 
social security and municipal schemes.  

Addressing challenges in the long-
term care system  

to 

are 

that 

Expenditure  on  long-term  care  in  the 
Netherlands  is  the  highest  in  the  EU  and 
costs 
increase 
expected 
substantially.  In  2022,  total  long-term  care 
expenditure  in  the  Netherlands  stood  at  3.8% 
of GDP, the highest value in the EU by a wide 
margin.  The  Commission’s  2024  Ageing 
Report (28)  projects 
figure  will 
increase  by  1.0  pps  by  2040  and  1.9  pps  by 
2070 (Annex 21). Only two Member States are 
in 
face  bigger 
projected 
expenditure. Under the risk scenario, long-term 
care expenditure increases by 1.5 pps by 2040 
and  3.8  pps  by 2070.  High  public  expenditure 
on  long-term  care  can  be  partially  explained 
by  the  near-universal  coverage  of  the  Dutch 
system,  which  reduces  the  need  for  informal 
care (29).  

increases 

this 

to 

costs 

Comparatively  high  unit 
for 
institutional  care (30)  suggest  that  there 
is  scope  for  improving  the  efficiency  of 
the  long-term  care  system.  Despite  a 
reform  of  the  system  in  2015,  significant 
incentives  remain  in  place  for  municipalities, 
which  provide  less  expensive  home  care,  to 
shift  responsibility  for  patients  to  the  more 
expensive  institutional  care.  This  seems  to  be 
particularly prevalent in municipalities that are 
experiencing  financial  distress (31).  In  addition, 

(28)  European Commission (2024). 2024 Ageing Report.  

(29)  Bakx, P., et al. (2023). Long-term care in the 

Netherlands. National Bureau of Economic Research. 

(30)  Unit costs for institutional care are measured as total 

expenditure on institutional care per patient.  

(31)  Alders, P., & Schut, F. T. (2022). Strategic cost-shifting in 
long-term care. Evidence from the Netherlands. Health 
Policy, 126(1), 43-48; Portrait, F et al. (2023). Passing 
on the hot potato. Health Policy, 137, 104914.  

 
 
 
insufficient  coordination  between  different 
care  providers  at  local  and  national  levels  is 
driving up  costs (32).  As a result, unit costs for 
the  provision  of  institutional  care  in  the 
Netherlands are among the highest in the EU, 
even  when  measured  as  a  share  of  GDP  per 
capita. 
aforementioned 
inefficiencies  could  help  limit  the  increasing 
costs of long-term care that the Netherlands is 
facing due to demographic changes. 

Addressing 

the 

Making agriculture more 
sustainable to advance the green 
transition 

the 

and 

deployment 
infrastructure. 

Agriculture is the main source of nitrogen 
in  the  Netherlands,  putting 
pollution 
significant  constraints  on  construction 
of 
activity 
renewable-energy 
The 
nitrogen surplus is four times higher than the 
EU  average,  affecting  biodiversity  and  water 
quality,  including  because  of  high  nitrate 
levels.  50%  of  the  nitrogen  deposits  in  the 
in 
Netherlands 
particular 
non-organic 
agriculture. As a result, construction activity is 
constrained by the permitting system to avoid 
an increase in nitrogen emissions. 

result 
livestock 

from  agriculture, 

and 

its 

competitiveness. 

reduce 
to 
Despite  some  measures 
nitrogen  deposits 
in  agriculture  (see 
Section  2),  more  efforts  are  needed  to 
sustainable  while 
make  agriculture 
preserving 
The 
Netherlands has earmarked EUR 24.3 billion to 
finance  a  package  of  measures  to  reduce 
nitrogen at the source, but the Senate has not 
yet voted on its release. This package includes 
different schemes that promote  the voluntary 
closure  of  livestock  production  capacity.  The 
Environmental  Planning  Agency  indicates  that 
further  efforts  will  be  needed (33).  The 

(32)  Alders, P., & Schut, F. T. (2019). The 2015 long-term 
care reform in the Netherlands: Getting the financial 
incentives right?. Health Policy, 123(3), 312-316. 

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

ontwikkelingen in nationale emissies van 
luchtverontreinigende stoffen 2022.  

14 

Netherlands  would  benefit  from  reducing 
livestock  numbers,  accelerating  the  transition 
to circular and organic agriculture, and cutting 
the  use  of  chemical  pesticides  and  inorganic 
the  position  of 
fertilisers.  Furthermore, 
farmers in the value chain could be improved, 
for example, through the further development 
of  EU  quality  signs,  greater  recognition  of 
producer  organisations,  further  digitalisation 
and 
the 
increased  availability  of  organic  products  for 
consumers. 

in  agriculture,  and 

innovation 

surface  water.  There 

Agriculture is also an important source of 
water  pollution.  Diffuse  pollution  from 
agriculture  puts  the  most  significant  pressure 
remains  an 
on 
opportunity  to  increase  funding  for  pollution 
prevention  and  control  (there  is  a  gap  of  EUR 
2.3  billion  per  year)  and  sustainable  water 
management (EUR 1.2 billion) (Annex 6). 

Tackling energy grid capacity 
constraints and accelerating 
renewables 

deployment 

The  Netherlands  has  made  major  efforts 
to  accelerate 
of 
the 
renewables.  The  generation  capacity  of 
renewable power is growing fast, following an 
increase  of  21%  in  2022,  with  solar  power 
capacity  growing  even 
faster,  by  32%. 
Consequently,  the  Netherlands  now  has  the 
highest  installed  solar  capacity  per  capita  of 
all Member States (more than 1 000 watt per 
inhabitant in  2022).  Wind remains  the  largest 
renewable  energy  source  in  the  Netherlands, 
mainly  from  offshore  wind  farms,  making  up 
around  16%  of 
the  country’s  electricity 
production.  Despite  this  strong  progress,  the 
share  of 
final  energy 
consumption  was  15.0% 
in  2022,  still 
significantly  below  the  EU  average  of  23.0%, 
which  shows  the  potential  for  a  further 
transition to renewables.  

renewables 

in 

Increasing  the  capacity  and  flexibility  of 
the grid is key to ensuring the security of 
electricity  supply  and  the  clean  energy 
the 
transition.  Capacity 

constraints 

in 

 
 
measures and regulation (e.g. tariff incentives, 
time-of-use).  

electricity  grid  are  worsening  and  reach  the 
whole  territory  of  the  country.  In  past  years, 
congestion  was  especially  prevalent  in  rural, 
sparsely  populated  areas,  where  energy 
demand  has  traditionally  been  low.  However, 
congestion  is  now  also  impacting  the  main 
urban  areas  (the  ‘Randstad’)  with  a  high 
concentration  of  population  and  economic 
activity.  Congestion  in  the  grid  is  thereby 
becoming a significant bottleneck for the roll-
out  of  renewable  energy  installations  and  for 
economic  activity.  The  Dutch  electricity  grid 
longer  accommodate  the  rapidly 
can  no 
growing  demand 
transmission  and 
for 
distribution capacity. On the transmission side, 
this  can  be  seen  in  the  regular  refusal  by 
network  operators  to  allow  new  producers  of 
electricity to connect to the grid. Congestion is 
also  preventing  the  deployment  of  renewable 
energy  installations,  including  solar  panels  by 
households,  as  these  rely  heavily  on  the 
transmission  capacity  of  the  electricity  grid 
during  peaks  of  wind  and  solar  power 
generation.  In  addition,  congestion  in  the  grid 
is  impacting  the  uptake  of  electric  transport 
and  slowing  down  connections  to  premises, 
thereby  limiting  the  expansion  of  business 
activity and the construction of new dwellings. 

To 

the 

transmission 

The  national  energy  system  plan (34), 
adopted  in  December  2023,  calls  for 
investments  of  EUR  8  billion  per  year 
from 2025 in additional grid and storage 
capacity. 
necessary 
facilitate 
investments  in  the  expansion  of  electricity 
infrastructure, faster permitting procedures for 
electricity 
distribution 
(multi-year  permits, 
networks  are  crucial 
centralised  decision-making 
involving  all 
stakeholders,  regulatory  incentives  -  some  of 
these  are  included  in  the  Dutch  RRP).  This 
would  also  speed  up  the  implementation  of 
renewable  energy 
onshore  and  offshore 
projects  (Annex  6).  Finally,  according  to  the 
Dutch energy regulator ACM (35), there is room 
technical 
to 

congestion 

through 

tackle 

and 

(34)  Ministry of economic affairs and climate (2023) 

Nationaal plan energiesysteem (NPE).  

(35)  ACM (2024). Pakket aan maatregelen tegen 

netcongestie.  

15 

 
 
Box 4: 

The mid-term review of cohesion policy funds for the Netherlands 

The  mid-term  review  of  cohesion  policy  funds  is  an  opportunity  to  assess  cohesion  policy 
programmes  and  tackle  emerging  needs  and  challenges  in  Member  States  and  their  regions. 
Member  States  are  reviewing  each  programme  taking  into  account  among  other  things  the 
challenges  identified  in  the  European  Semester,  including  in  the  2024  country-specific 
recommendations.  This  review  forms  the  basis  for  a  proposal  by  the  Member  State  for  the 
definitive allocation of 15% of EU funding included in each programme.   

The  Netherlands  has  made  progress  in  implementing  cohesion  policy  programmes  and  the 
European  Pillar  of  Social  Rights,  but  challenges  remain  as  outlined  in  this  report,  including 
Annexes 14 and 17. In  particular, while regional differences in GDP per capita remained stable 
and all regions ranked well above the EU average in terms of competitiveness, the transition to a 
industries 
carbon-neutral  economy  affects  regions  with  clusters  of  emission-intensive 
differently. Against this background, it remains important to continue to implement the planned 
priorities, paying particular attention to: (i) innovation to assist the green and digital transition in 
all  regions  within  the  framework  of  regional  smart  specialisation  strategies;  (ii)  economic 
diversification, network infrastructure, upskilling and reskilling of workers and potential workers 
for  the  green  economy  in  the  regions  most  affected  by  the  climate  transition;  (iii)  support  for 
societal transitions in deprived urban areas in large cities; (iv) increasing investments in life-long 
learning, upskilling and reskilling, and in other measures to improve employment opportunities, in 
particular for   those at the margins of the labour market and for inactive people  to find a job, 
and by encouraging people to look for work or training; (v) addressing social and  labour market 
inequalities by investing in equal opportunities and by combating discrimination.  

The potential for testing and piloting solutions to reduce congestion in the power grid deserves 
specific consideration in the preparation for the mid-term review. The Netherlands could benefit 
from  the  opportunities  provided  by  the  Strategic  Technologies  for  Europe  Platform  (STEP) 
initiative (36)  to  support  the  transformation  of  industry  and  facilitate  investments  in  net-zero 
technology manufacturing, including in upskilling and reskilling. 

(36)  Regulation (EU) 2024/795.  

16 

 
 
 
 
KEY FINDINGS 

The  Netherlands’  recovery  and  resilience 
plan  (RRP)  includes  measures  to  address 
a  series  of  structural  challenges, 
in 
synergy  with  other  EU  funds,  including 
cohesion policy funds, by: 

•  Promoting the green transition through 
renewable  energy 
the  deployment  of 
the  grid, 
to 
sources  and  connection 
investing 
infrastructure, 
hydrogen 
in 
shifting to sustainable agriculture, boosting 
energy  efficiency  in  public  and  private 
incentivising 
buildings, 
renewable 
and 
energy 
sustainable transport; 

production 

reforms 

and 

•  Accelerating 

the 

digital 
transformation  by  developing  quantum 
skills,  and  digital 
technology,  digital 
solutions  to 
improve  safe,  smart  and 
sustainable transport; 

•  Developing  a  skilled  workforce  by 
helping  students  to  catch  up  on  gaps  in 
their  education  caused  by  the  COVID-19 
pandemic, and offering continuous learning 
opportunities and career advice; 

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

The  implementation  of  the  Netherlands’ 
recovery  and  resilience  plan  is  facing 
delays  which  require  decisive  actions  to 
ensure a successful implementation of all the 
measures of the Dutch recovery and resilience 
plan by August 2026. 

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

•  Aligning  the  taxation  of  different  types 
incomes  from  wealth,  and  thereby 
of 
reducing the accumulation of illiquid forms 
of wealth and tax arbitrage; 

(ii) 

segmentation; 

•  Further improving social resilience and 
inclusive  growth  by  (i)  addressing  labour 
market 
improving 
students’  basic  skills;  and  (iii)  tackling 
labour  and  skills  shortages, 
structural 
including  by  tapping  into  the  potential  of 
people at the margins of the labour market 
and  by  encouraging  mobility  from  low  to 
high  productivity  sectors  and  to  sectors 
related to societal challenges;  

•  Removing  obstacles  to  the  construction 
of  new  dwellings  and  ensuring 
the 
affordability  and  availability  of  housing  on 
the private rental market; 

•  Ensuring 

of 
healthcare sector in times of crisis; 

resilience 

the 

the 

•  Reducing  the  complexity  of  the  public 

allowance system; 

•  Improving  the  housing  market  by 
reforming 
permitting 
procedures,  setting  regional  construction 
targets,  and  providing  funds  to  unlock 
private construction projects; 

planning 

and 

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

the  self-employed  and  by 

17 

•  Ensuring  the  budgetary  sustainability 

of the long-term care system; 

•  Reducing  capacity  constraints  in  the 
electricity  grid through further investments 
and  reforms  to  accelerate  the  deployment 
of renewable energy; 

•  Making  agriculture  more  sustainable, 
thereby  reducing  nitrogen  emissions  and 
improving water quality. 

 
 
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 – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

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 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Dutch RRP 

21 

24 

24 

26 

29 

31 

34 

36 

36 

41 

47 

50 

50 

52 

55 

57 

60 

62 

62 

65 

68 

70 

73 

73 

76 

79 

80 

27 
29 

 
 
 
Support from EU instruments in the Netherlands 
Resilience indices across dimensions for the Netherlands and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key indicators for a fair transition in the Netherlands 
Circularity indicators 

A3.2.  Measures in the Netherlands' RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index 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 

LIST OF GRAPHS 

Progress towards the SDGs in the Netherlands 
The Netherland’s progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in the Netherlands 
Distribution of RRF funding by pillar in the Netherlands 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
Netherland´s energy retail prices for households and industry & service 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Netherland's installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in the Netherlands 
Job vacancy rate in transforming sectors and mining and quarrying 
ETS emissions by sector since 2013 
Trends in material use 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A9.3. 
A12.1.  Labour productivity (GDP per hour worked) in purchasing power standards and as percentage of the EU in 2023 vs growth 

rate 2000-2023 

A12.2.  Real labour productivity, hours worked, 2015=100 
A13.1.  Government effectiveness 
A13.2.  Share of employed by occupation and by sector 
A15.1.  Underachievement rates by field, PISA 2012, 2018 and 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  The Netherlands, NUTS2: GDP per capita (2012) and GDP growth (2013-2022) 
A17.2.  The Netherlands, NUTS2: Labour productivity (real GVA per worker), EU-27, 2000-2022 
A18.1.  Evolution of credit activity 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023, with and without non-tax compulsory 

payments (NTCPs) 

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

30 
33 
34 
40 
45 
47 
50 
53 
55 
58 
60 
61 
62 
65 
68 
70 
73 
75 
78 
81 
81 

24 
26 
29 
32 
32 
37 
38 
39 
41 
41 
43 
47 
48 
50 
50 
51 

57 
57 
60 
60 
65 
68 
68 
70 
70 
73 

77 
78 

22 

 
 
 
LIST OF MAPS 

A17.1.  The Netherlands, NUTS2: Regional Competitiveness Index (2022) 

71 

23 

 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses 
the  Netherlands’ 
progress  on  the  Sustainable  Development 
Goals  (SDGs)  along  the  four  dimensions  of 
competitive  sustainability.  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 
inequalities  and  tackle  climate 
poverty,  fight 
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. 

The  Netherlands  performs  well  on  several 
indicators  related  to  environmental 
SDG 
sustainability (SDGs 2, 6, 9, 12, 15). However, 
it  still  needs  to  catch  up  with  the  EU  average  on 
SDGs 7  and 13,  and  is  moving  away  from  the 
targets  for  SDGs  11  and 14.  On  SDG 13  (Climate 

action),  net  greenhouse  gas  emissions  have 
decreased over time (from 12.2 tonnes per capita 
in 2017 to 9.5 tonnes per capita in 2022) but are 
still above the EU average (7.3 tonnes per capita in 
2022).  As  regards  SDG 7  (Affordable  and  clean 
energy),  the  Netherlands  has  made  considerable 
progress  on  increasing  the  share  of  renewable 
energy in total energy consumption (from 6.5% in 
2017 to 15.0% in 2022) but remains below the EU 
average  (23.0%  in  2022).  The  Netherlands  also 
improved  on  indicators  such  as  primary  energy 
consumption  (3.2 tonnes  of  oil  equivalent  per 
capita  in  2022)  and  final  energy  consumption 
in  2022),  but  consumption  still 
(2.5 tonnes 
(2.8  and 
remains  above 
2.1 tonnes,  respectively,  in  2022).  Energy  import 
dependency  increased  further  (from  49.5%  in 
2017 to 80.2% in 2022) and is thus considerably 
above the  EU  average  (62.5%  in  2022).  However, 
under  SDG 12 
(Responsible  consumption  and 
production), it is notable that the Netherlands has 
the second lowest material footprint per inhabitant 
in  the  EU,  and  this  continues  to  decrease  (from 

the  EU  average 

Graph A1.1: Progress towards the SDGs in the Netherlands 

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). 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 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

24 

 
 
 
 
 
 
 
infrastructure), 

innovation  and 

In  addition,  participation 

average:  12.7%). 
in 
tertiary  education  increased  further  (from  47.6% 
in  2018  to  54.5%  in  2023)  and  is  substantially 
above  the  EU  average  of  43.1%.  On  SDG 9 
(Industry, 
the 
Netherlands  outperforms  the  EU  average.  The 
share  of  households  with  high-speed  internet  in 
2022  (97.8%)  was  well  above  the  EU  average 
(73.4%),  representing  significant  progress  on  this 
indicator  since  2017  (31.9%).  The  Netherlands 
also increased R&D investments as a share of GDP 
(from 2.2% in 2017 to 2.3% in 2022), and is thus 
just  above  the  EU  average  (2.2%  in  2022).  The 
share  of  R&D  personnel  among  the  active 
population  rose  from  1.7%  in  2017  to  2.0%  in 
2022 (EU average: 1.5% in 2022). The Dutch RRP 
includes  several  measures  to  further  improve 
digital skills and upskill and reskill the workforce. 

the 

strong 

institutions), 

The  Netherlands  performs  very  well  on  SDG 
indicators related to macroeconomic stability 
(SDGs 8, 16 and 17). On SDG 16 (Peace, justice 
and 
perceived 
independence of the justice system saw however a 
notable  drop  from  79%  in  2018  to  70%  in  2023 
(still  above  the  EU  average  of  53%  in  2023). 
Similarly, 
index 
decreased  from  82%  in  2018  to  79%  in  2023 
(also still above the EU average of 64% in 2023). 
The  Netherlands  performs  better  than  the  EU 
average  on  indicators  related  to  partnerships  for 
the goals (SDG 17) and decent work and economic 
growth (SDG 8). The Dutch RRP includes reforms to 
improve transparency of the public administration 
and several measures to tackle money laundering. 

corruption  perceptions 

the 

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

7.3 tonnes  in  2017  to  6.8 tonnes  in  2022).  Even 
though  the  Netherlands  scores  well  on  SDG 2 
(Zero hunger), when it comes to the environmental 
impacts  of  agricultural  production,  ammonia 
emissions  from  agriculture  (57.8 kg  in  2021)  are 
still  very  high  compared  to  the  EU  average 
(18.8 kg 
in  2021).  The  Dutch  recovery  and 
resilience plan (RRP) includes investments to boost 
the  deployment  of  renewable  energy  and  support 
the transition to sustainable agriculture. 

The Netherlands performs very well on most 
SDG indicators related to fairness (SDGs 3, 4, 
5,  8),  but  is  moving  away  from  the  targets 
for  SDGs 1  and  10,  and  needs  to  catch  up 
with  the  EU  average  on  SDG  7.  The 
Netherlands  outperforms  the  EU  average  in  most 
indicators  related  to  health,  education,  gender 
equality,  and  decent  work  and  growth  (SDGs 3,  4, 
5  8).  Historically,  the  Netherlands  performs  very 
well on decent work and economic growth (SDG 8). 
The  employment  rate  increased  further  between 
2018  and  2023  (from  80.0%  to  83.5%),  which 
makes the Netherlands one of the best performers 
in the EU (EU average: 75.3% in 2023). In addition, 
the 
long-term  unemployment  rate  decreased 
(from 1.2% in 2018 to 0.5% in 2023) and is well 
below  the  EU  average  (2.1%  in  2023).  Some 
indicators  for  SDG 1  (No  poverty)  worsened  in 
recent  years.  The  housing  cost  overburden  rate 
impacts  10.0%  of  the  population  (in  contrast  to 
9.4% in 2017), and the number of people at risk of 
monetary  poverty  after  social  transfers  increased 
between 2017 and 2022 (from 13.2% to 14.5% of 
the  population).  On  migration  and  social  inclusion 
(SDG 10), the gap between non-EU citizens and EU 
nationals  in  terms  of  people  at  risk  of  monetary 
poverty 
increased 
substantially  between  2017  and  2022  (from 
19.7% to 28.9%) and is now above the EU average 
of  22.7%.  At  the  same  time,  the  gap  between 
those  two  categories  in  terms  of  employment 
rates  slightly  decreased  (from  23.6%  in  2018  to 
22.2% in 2023), remaining above the EU  average 
(13.2% in 2023). The  Dutch RRP includes reforms 
and  investments  aimed  at  fair  education  and  a 
resilient health system. 

transfers 

social 

after 

The  Netherlands  performs  very  well  on  SDG 
indicators related to  productivity (SDGs 4, 8, 
9).  When  it  comes  to  quality  education  (SDG 4), 
the  Netherlands  has  the  highest  share  of  people 
with at least basic digital skills (82.7% in 2023; EU 
average: 55.6%), and one of the highest shares of 
adult participation in learning (24.4% in 2023; EU 

25 

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

(SDGs) 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (37) 
addressed  to  the Netherlands as part  of the 
European  Semester.  These  recommendations 
concern  a  wide  range  of  policy  areas  that  are 
related to  13  of  the  17  Sustainable Development 
Goals 
(see  Annexes  1  and  3). The 
assessment  considers  the  policy  action  taken  by 
the Netherlands to date (38) and the commitments 
in its recovery and resilience plan (RRP) (39). At this 
stage,  63%  of  the  CSRs  focusing  on  structural 
issues  from  2019-2023  have  recorded  at  least 
‘some  progress’,  while  37%  recorded  ‘limited 
progress’ 
is 
implemented,  considerable  progress  in  addressing 
structural CSRs is expected in the coming years. 

(see  Graph  A2.1).  As  the  RRP 

Graph A2.1: The Netherland’s progress on the 
2019-2023 CSRs (2024 European Semester) 

Source: European Commission. 

(37)  2023 CSRs: EUR-Lex - 32023H0901(19) - EN - EUR-Lex 

(europa.eu). 

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) 

(38)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (published twice a year, reporting on progress in 
implementing milestones and targets on the basis of the 
payment requests assessment). 

(39)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. 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 have not yet been 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 Progress0%Limited Progress37%Some Progress37%Substantial Progress20%Full Implementation6% 
 
 
 
 
  
 
 
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

27 

NetherlandsAssessment in May 2024*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.Substantial 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 2022 and 2025SDG 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 2023 and 2025SDG 1,2,102020 CSR 3Some progressFront-load mature public investment projects (to foster the economic recovery)Limited 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 progressTakestepstofullyaddressfeaturesofthetaxsystemthatfacilitateaggressivetaxplanninginparticularonoutboundpayments,notablybyimplementingtheadoptedmeasuresandensuringitseffectiveness. 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 1Not relevant anymoreIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilience Facility, and preserve nationally financed investment.Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions and ensuring fiscal sustainability in the medium term.Not relevant anymoreNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthe coverage, adequacy and sustainability of health and social protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Some progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation.Substantial progressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Limited progressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions.Full implementationNot applicableSDG 8, 16Reducethedebtbiasforhouseholdsandthedistortionsinthehousingmarket,includingbysupportingthe development of the private rental sector and taking measures to increase housing supply.Limited progressRelevant RRP measures planned as of 2022, 2023 and 2024SDG 8Enact and implement the reform of the pension system agreed in 2019 and 2020.Substantial 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 2023 and 2025SDG 1, 2, 10tackle bogus self-employmentLimited progressRelevant RRP measures planned as of 2022 and 2025SDG 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, 2022, 2023, 2024 and 2026SDG 4Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
 
  
 
Table (continued) 

Note:. 
* See footnote (39). 
** 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, 13byacceleratingthedeploymentofrenewables,inparticularbyboostingcomplementaryinvestmentsinnetwork infrastructure and further streamlining permitting procedures,Some progressRelevant RRP measures planned as of 2021, 2023, 2024, 2025, 2026SDG 7, 9, 16 improving energy efficiency, in particular in buildings,Some progressRelevant RRP measures planned as of 2022, 2025, 2026SDG 7 and accelerating investments in sustainable transport Some progressRelevant RRP measures planned as of 2022, 2023, 2024, 2025, 2026SDG 11and sustainable agriculture.Limited progressRelevant RRP measures planned as of 2023SDG 11, 12, 13, 152023 CSR 1Some progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerable households and firms, fiscally affordable, and preserve incentives for energy savings.Substantial progressNot applicableSDG 1, 7, 8, 10, 12Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimary expenditure in 2024 to not more than 3.5%.Some progressNot applicableSDG 8PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandother EU funds, in particular to foster the green and digital transitions.Full implementationNot applicableSDG 8, 9, 13Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.Full implementationNot applicableSDG 8Reducethehouseholddebtbiasanddistortionsinthehousingmarket.Supporttheavailabilityandaffordability of housing on the private rental market.Limited progressRelevant RRP measures planned as of 2022, 2023 and 2024SDG 8Remove obstacles holding back investments, including in residential construction.Limited progressRelevant RRP measures planned as of 2022 and 20242023 CSR 2ProceedwiththesteadyimplementationofitsrecoveryandresilienceplanandswiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecovery and resilience plan.2023 CSR 3Limited progressReduce incentives to use flexible or temporary contracts.Limited progressSDG 8Takingintoaccountsector-specificneeds,addressstructurallabourandskillsshortages,includingbytapping into underutilised labour potentialSome progressRelevant RRP measures planned as of 2021, 2023, 2024 and 2025SDG 8andstrengtheningup-andreskillingopportunities,inparticularforthoseatthemarginsofthelabourmarket and the inactive.Some progressRelevant RRP measures planned as of 2020, 2022, 2023, 2024 and 2026SDG 4, 8, 102023 CSR 4Some progressReduce reliance on fossil fuelsLimited progressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, and 2026SDG 7, 13byacceleratingthedeploymentofrenewables,improvingframeworkconditionstoboostinvestmentinthe expansion of electricity transmission and distribution grids,Some progressRelevant RRP measures planned as of 2021, 2023, 2024, 2025 and 2026SDG 7, 9, 13extendingandacceleratingenergyefficiencymeasurestoreduceenergyconsumption,inparticularinthe built environment.Some progressRelevant RRP measures planned as of 2022, 2025 and 2026SDG 12Support the transition towards sustainable agriculture.Limited progressRelevant RRP measures planned as of 2023SDG 11, 12, 13, 15Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetencesneededforthegreen transition.Some progressRelevant RRP measures planned as of 2023SDG 4, 13RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

contribute  to  ensuring  the  supply  of  affordable, 
secure,  and  sustainable  energy,  by  tackling  grid 
congestion  and  accelerating  the  deployment  of 
renewable energy.   

Table A3.1:  Key facts of the Dutch RRP 

Source: RRF Scoreboard 

The  plan  has  a  strong  focus  on  the  green 
transition, dedicating 54.9% of the available 
funds  to  measures  that  support  climate 
objectives  and  25.6%  of  its  total  allocation 
to support the digital transition. It also retains 
a  strong  social  dimension  with  measures  related 
to  affordable  housing,  protection  of  the  self-
employed, and support for re-employment.    

Graph A3.1: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants, including pre-
financing, disbursed so far under the RRF. Grants are non-
repayable financial contributions. The total amount of grants 
given to each Member State is determined by an allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

This  Annex  provides  a  snapshot  of  the 
Netherlands’  implementation  of  its  recovery 
and  resilience  plan  (RRP),  past  the  mid-way 
point  of 
the  Recovery  and  Resilience 
Facility’s  (RRF)  lifetime.  The  RRF  has  proven 
central  to  the  EU’s  recovery  from  the  COVID-19 
pandemic,  helping  speed  up  the  twin  green  and 
digital  transition,  while  adapting  to  geopolitical 
and  economic  developments,  and  strengthening 
resilience  against  future  shocks.  The  RRF  is  also 
helping 
Sustainable 
Development  Goals  and  address  the  country-
specific recommendations (see Annex 2).    

implement 

the 

UN 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR  5.4  billion  in  grants  under  the  RRF  over 
the  2021-2026  period, representing  0.5% of 
the  Netherlands’  GDP (40).  As  of  15  May,  the 
Netherlands  still  had 
its  full  RRF  allocation 
available,  which  will  be  disbursed  after  the 
assessment  of  the  future  fulfilment  of  the  132 
milestones and targets (41)  included in the Council 
Implementing  Decision (42)  (CID),  ahead  of  the 
2026 deadline established for the RRF.  

The  Netherlands’  progress  in  implementing 
its  plan  is  recorded  in  the  Recovery  and 
Resilience Scoreboard (43). The scoreboard gives 
an overview of the progress made in implementing 
the RRF as a whole. Graph A3.1 shows the current 
state of play as reflected in the scoreboard.  

The Dutch RRP includes a REPowerEU chapter 
to phase out its dependency on Russian fossil 
fuels,  diversify 
its  energy  supplies,  and 
produce  more  clean  energy  in  the  coming 
years.  The  Netherlands  still  has  pre-financing 
available 
chapter’s 
kick-start 
includes  a  scaled-up 
implementation,  which 
investment  for  sustainable  energy  and  energy 
savings in housing and a relevant reform that will 

the 

to 

(40)  GDP information is based on 2023 

data. Source: https://ec.europa.eu/economy_finance/recovery-
and-resilience-scoreboard/index.html?lang=en  

(41)  A milestone or target is satisfactorily fulfilled once a Member 
State has provided evidence to the Commission that it has 
reached the milestone or target and the Commission has 
assessed it positively in an implementing decision. 

(42)  https://data.consilium.europa.eu/doc/document/ST-12275-

2022-ADD-1/en/pdf 

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

resilience-scoreboard/country_overview.html 

29 

Initial plan CID adoption date4 October 2021Scope Revised plan with REPowerEU chapterLast major revision17 October 2023Total allocation EUR 5.441 billion in grants (0.5% of 2023 GDP)Investments and reforms 28 investments and 22 reforms Total number of milestones and targets132Fulfilled milestones and targets0 (0% of total)EUR 0billion (0%)Total allocation: EUR 5.441billion 
 
 
 
   
 
   
 
 
 
With  a  significantly  delayed  implementation 
of  its  RRP,  the  Netherlands  submitted  its 
first payment request on 24 May 2024, which 
the  Commission  is  now  assessing.  Table  A3.2 
highlights  some  relevant  measures  that  will  be 
implemented  before  2026  to  keep  making  the 
Dutch  economy  greener,  more  digital,  inclusive, 
and resilient.   

Table A3.2:  Measures in the Netherlands' RRP 

Source: FENIX 

30 

Upcoming reforms and investments• Investment on increase capacity of wind power generation in the North Sea• Research and development of quantum technologies• Increase in the intensive care capacity of the healthcare system 
 
   
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

These  measures  supported  the  most  vulnerable 
groups  with  almost  one  out  of  two  people  having 
low-level qualifications and 37% having a migrant 
background. 

cooperate  with 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  the  Netherlands’  competitiveness, 
to  the  green  transition  and  to  social 
cohesion,  improving  the  living  and  working 
conditions  of  the  Netherlands’  people.  In 
2021-2027,  the  European  Regional  Development 
Fund is supporting innovation in SMEs and helping 
them cooperate with research organisations in line 
with regional smart specialisation strategies. Over 
6 000 businesses will be supported, of which 900 
research  organisations, 
will 
leveraging  an  estimated  EUR  390  million  of 
private  investment.  Innovative  renewable  energy 
projects  will  create  an  additional  production 
capacity  of  116 MW.  The  Just  Transition  Fund 
supports  six 
regions  with  emission-intensive 
industries. The fund will support 1 500 businesses 
of  which  380  will  cooperate  with  research 
organisations.  An  estimated  EUR  312  million  of 
private  investment  will  be  used.  About  49 000 
people  will  benefit  from  upskilling  and  reskilling.  
Almost  12 000  staff  members  from  SMEs  will 
complete training for skills for smart specialisation 
and industrial transition. The European Social Fund 
Plus  will  provide  EUR  366  million  to  help  develop 
human  capital  in  the  Netherlands.  This  will  help 
317 000  people  in  total,  and  involve  providing 
unemployed  people  with  access 
training, 
supporting  career  transitions  and  promoting  life-
long  learning.  With  this  work,  cohesion  policy 
substantially 
the 
Sustainable  Development  Goals  (SDGs)  in  the 
Netherlands, in particular SDG 8 (Decent work and 
economic  growth),  SDG  9  (Industry,  innovation, 
infrastructure)  and  SDG  7  (Affordable  and  clean 
energy). 

to  achieving 

contributes 

to 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member States.  In addition to the EUR 5.4 billion 
of  Recovery  and  Resilience  Facility  (RRF)  funding 
described in Annex 3, EU cohesion policy funds (44) 
provide EUR 1.5 billion to the Netherlands for the 
2021-2027  period (45).  Support  from  these  two 
instruments combined represents around 0.68% of 
the  country’s  2023  GDP,  compared  to  the  EU 
average  of  5.38%  of  GDP (46).  Cohesion  policy 
supports  regional  development,  economic,  social 
and  territorial  convergence  and  competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

in 

funds 

policy 

boosted 

During  the  2014-2020  programming  period, 
the 
cohesion 
Netherlands’  competitiveness,  with  tangible 
achievements  notably 
research  and 
innovation, and social inclusion. By the end of 
the  eligibility  period  in  December  2023,  2014-
2020 cohesion policy funds (47) had made EUR 1.6 
billion  available  to  the  Netherlands (48),  of  which 
EUR 816.2 million has been disbursed since March 
2020,  when  the  COVID-19  pandemic  began (49). 
The  achievements  of  cohesion  policy  funds  over 
the  programming  period  have  centred  around 
research  and  innovation  with  5 700  businesses 
receiving  support  so  far,  leveraging  EUR  303 
million  of  private-sector  investment.  Of  these 
businesses,  514  worked  together  with  research 
institutions. During the same period, over 600 000 
participants 
support  under  active 
inclusion and anti-poverty measures, supported by 
the European Social Fund (ESF) in the Netherlands. 

received 

(44)  In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. 

(45)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to EUR 3.5 
billion.  

(46)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(47)  In 2014-2020, cohesion policy funds included the European 
Regional Development Fund and the European Social Fund. 
REACT-EU allocations are included but ETC programmes are 
excluded. 

(48)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 3.1 billion.  

(49) Cut-off date: 14 May 2024. 

31 

 
 
 
 
 
Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in the Netherlands 

Graph A4.2: Distribution of RRF funding by pillar in 
the Netherlands 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
the Netherlands. 
Source: European Commission 

The  Netherlands  also  receives  funding  under 
several other EU instruments including those listed 
ones presented in Table A4.1. 

Source: European Commission 

in 

impact 

reinforcing 

funds  complement 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually 
the 
Netherlands.  For  instance,  the  RRP  invests  in 
research  and  development  of  green  hydrogen. 
this  by 
Cohesion  policy 
supporting  innovative  green  hydrogen  projects  in 
SMEs,  including  start-ups  and  scale-ups,  and  
boosting  investment  in  upskilling  and  reskilling  of 
workers  to  support  the  transition  to  a  climate-
neutral  economy.  The  RRP  is  also  expected  to 
boost  the  development  of  renewable  energy  by 
investing in offshore wind energy and reforms that 
enable  renewable  energy  to  be  connected  to  the 
electricity  grid.  Cohesion  policy  funds  are  being 
invested  in  research  and  innovation  projects  that 
renewable  energy 
bring  new  or 
technologies closer to the market. The contribution 
of  cohesion  policy  and  RRP  funding  by  policy 
objective is illustrated by Graphs A4.1 and A4.2. 

improved 

in 

invest 

The Technical Support Instrument (TSI) helps 
the  Netherlands 
its  public 
administration  and  create  a  better  enabling 
environment for EU and national investment. 
The TSI has funded projects in the Netherlands to 
design  and  implement  growth-enhancing  reforms 
since 2019. The support provided in 2023 included 
projects to help  the  authorities  supervise  artificial 
intelligence,  improve  the  permitting  process  for 
renewable energy projects and improve policies for 
attracting  and  retaining  highly  skilled  talent.  In 
addition, the TSI helps the Netherlands strengthen 
its capacity to implement the RRP and monitor its 
performance,  as  well  as  work  on  specific  reforms 
and  investments,  such  as  those  linked  with  the 
development of the renewable hydrogen sector.  

32 

PO1 Smarter EuropePO2 Greener EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable and inclusivegrowthSocial & territorial cohesionHealth & resilienceNext generation 
   
   
Table A4.1:  Support from EU instruments in the Netherlands 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023). 
Source: European Commission 

33 

Amount 2021-2027 (EUR million)Cohesion policy1 543.1RRF grants (1)5 441.4Public sector loan facility (grant component) (2)47.3Common agricultural policy (3)4 494.0EMFF/EMFAF (4)97.9Connecting Europe Facility (5) 233.2Horizon 2020 / Horizon Europe (6)2 905.2LIFE programme (7) 113.4Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)3 005.0InvestEU 2021-2027 (9) 500.87 500.0EU grantsAmount 2014-2020 (EUR million)1 582.1--1 062.6 183.0101.5 697.55 370.2131.2EU guaranteesEU Guarantee (EUR million) 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for the Netherlands and the EU-27 

(1)  The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

to 

(RDB) (50) 

This  Annex  uses  the  Commission’s  resilience 
the 
dashboards 
Netherlands’  relative  resilience  capacities 
and  vulnerabilities (51)  that  may  be  of 
relevance  for  societal,  economic,  digital  and 
green  transformations,  and  for  dealing  with 
future shocks and geopolitical challenges. (52) 

show 

According  to  the  RDB’s  set  of  resilience 
indicators,  the  Netherlands  has  maintained 
its  medium-low  overall  vulnerabilities  and 
high  overall  capacities  with  respect  to  the 
2023 RDB.  This is reflected  in the distribution of 
indicators  across  different  resilience  categories: 
almost 60% of vulnerability indicators fall into the 
low or medium-low category, while almost 70% of 
capacity  indicators  fall  into  the  high  or  medium-
high category. 

to 

social 

inequalities, 

The  Netherlands  has  low  vulnerabilities  and 
medium-high  capacities  in  the  social  and 
economic  dimension.  The  country  has 
low 
vulnerabilities  and  high  capacities  particularly  in 
relation 
healthcare, 
education  and  work.  It  also  has  the  highest 
employment  rate in the  EU,  a  high  level  of  active 
labour market policies per person, the lowest level 
of  skills  mismatch  rate,  and  the  lowest  rate  of 
in 
young  people  neither 
education  and  training.  The  gender  employment 
gap also continues to narrow. The Netherlands still 
has some of high vulnerabilities and low economic 
and  financial  sustainability  capacities.  The  non-
financial corporation debt to GDP is decreasing but 
still  above  the  EU  average,  while  on  the  capacity 
side,  government  investments  have  continued  to 
decrease  in  relation  to  GDP,  putting  them  below 
the EU average. 

in  employment  nor 

(50)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(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, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(52)  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. 

In  the  green  dimension,  the  Netherlands  has 
capacities,  but  has  not 
medium-high 
improved 
its  overall  vulnerabilities  that 
remain  medium.  It  has  high  or  medium-high 
vulnerabilities,  particularly  in  indicators  related  to 
ecosystems  and  biodiversity,  and  the  sustainable 
use  of  resources,  and  is  among  the  poorest-
performing  EU  countries 
in  terms  of  waste 
generation,  the  soil  sealing  index (53),  and  the 
farmland  bird  index.  In  terms  of  capacities,  the 
Netherlands has a high electric vehicle penetration, 

(53)  This indicator estimates the percentage of sealed soil 
surfaces with impervious materials due to urban 
development. Soil sealing is a major cause of biodiversity 
and habitat losses.  

34 

NLNLEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowCapacitiesGeopoliticalVulnerabilities0.500.480.41Capacities0.740.800.65DigitalVulnerabilities0.740.790.52Capacities0.850.910.65GreenVulnerabilities0.440.400.44Capacities0.760.730.70Social and economicVulnerabilities0.810.810.47Capacities0.810.770.67DimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.690.720.50Capacities0.800.810.67Vulnerabilities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(63 indicators) 
 
 
 
 
   
 
 
rate  and 

circular  material  use 
resource 
its 
productivity.  However, 
resilience  by  increasing  CO2  absorption  by  forests 
and 
reducing 
farming, 
vulnerabilities related to healthy ecosystems. 

it  could 

improve 

thereby 

organic 

does 

have 

incidents 

In the digital dimension, Dutch (medium-low) 
vulnerabilities  and  (high)  capacities  remain 
stable  with  respect  to  the  2023  RDB.  The 
significant 
Netherlands 
not 
vulnerabilities  besides  a  high  number 
ICT 
if 
security 
in  enterprises,  and  overall 
vulnerabilities  are  medium-low.  It  also  has  high 
digital capacities. The country performs among the 
best  in  relation  to  the digital  skills  of  both  adults 
and  young  people,  the  use  of  online  courses,  and 
cybersecurity  awareness.  It  also  has  the  highest 
proportion  of  employees  who  telework,  making  it 
more  resilient  to  shocks 
like  the  COVID-19 
pandemic.  

to 

and 

respect 

the  2023  RDB, 

has  medium 
high 

the 
With 
geopolitical 
Netherlands 
vulnerabilities 
geopolitical 
capacities.  It  has  low  vulnerabilities,  thanks  in 
particular  to 
in  financial 
its  strong  position 
globalisation.  Vulnerabilities  related  to  security 
and demographics remain quite high, in particular 
disinformation  from  abroad  and  the  employment 
gap  between EU and non-EU  nationals,  where the 
Netherlands  has  reduced  its  vulnerability,  but 
remains  above  the  EU  average.  Its  strong  trade 
position  gives  it  high  geopolitical  capacities.  The 
main  areas  it  should  focus  on  in  terms  of 
increasing  capacities  are  the  related  to  armed 
forces personnel and its per capita metal footprint. 

35 

 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

The  Netherlands  has  made  progress  in  the 
green transition, with more action needed on 
developing  and  implementing  ambitious  green 
measures,  including  to  meet  its  2030  climate 
target,  on  biodiversity  and  ecosystem  protection, 
and other areas. This Annex provides a snapshot of 
climate, energy, and environmental aspects of the 
transition in the Netherlands (54). 

In  its  draft  updated  national  energy  and 
climate  plan  (NECP),  information  on  the 
Netherlands’  investment  needs  and  funding 
sources  to  achieve  its  2030  climate  and 
energy  targets  is  incomplete.  The  plan  lacks 
information both on total investment needs and on 
public  and  private  investment  needs.  It  provides 
only 
the 
additional  public  financing  needed  to  close  the 
investment gap (55). The plan mentions the Climate 
Fund as the main source of funding for measures 
aimed  at  contributing  to  the  new  target  of  a  55-
60%  reduction  in  the  emission  of  greenhouse 
gases  compared  to  1990  levels.  Other  sources 
include  the  Heat  Fund,  the  National  Growth  Fund, 
and national subsidy schemes (56).  

limited  qualitative 

information  on 

Without  updated  projections  in  the  Dutch 
final  updated  NECP,  it  remains  unclear  how 
current  and  planned  policies  will  deliver  on 
its 2030 effort sharing target (57). In 2022, the 
Netherlands’  greenhouse  gas  emissions  from  its 

(54)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(55)  For example, an increase in the CO2 charging rate as of 

2025, a ban on the use of fossil fuels for heating processes 
during expansion, new construction and replacement of 
industrial production installations, and adjustments to the 
energy taxes to make sustainable alternatives more 
attractive. 

(56)  See the Commission’s (2023) assessment of the draft 
national energy and climate plan of the Netherlands.. 

(57)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned with the objective to reach the EU-level economy 
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

effort  sharing  sectors  are  expected  to  be  33.3% 
below  2005  levels.  Current  policies  are  projected 
to  reduce  its  effort  sharing  emissions  by  38% 
from 2005 levels by 2030.  The additional  policies 
included  in  the  Netherlands’  draft  updated  NECP 
are  projected  to  add  0.7  percentage  points,  thus 
reducing  these  emissions  by  38.7%  from  2005 
levels (58).  This  leaves  a  gap  of  9.3  percentage 
points below the Netherlands’ effort sharing target 
to  achieve  a  48%  reduction.  Official  national 
projections  released  in  September  2023  suggest 
that  measures  included  in  the  Netherlands’  2022 
climate  policy  programme  and  2023  spring 
decision-making  exercise  may  be  enough  to  get 
the country on track to achieve this 48% reduction, 
provided  that  they  are  implemented  rigorously. 
However, 
highly 
projections 
ambitious and uncertain. 

appear 

these 

The  gaps  in  the  Netherlands’  climate  policy 
framework  indicate  scope  for  improvement. 
In  2023,  the  Netherlands  enshrined  the  objective 
to  reach  climate  neutrality  by  2050  into  national 
law. Its draft updated NECP sets an economy-wide 
target  to  reduce  greenhouse  gas  emissions  by  at 
least  55%  compared  to  1990  levels  by  2030. 
Unlike  other  sectors,  key  measures  to  reduce 
agricultural sector emissions are not yet concrete, 
putting the achievement of climate targets at risk. 
As 
the  Dutch  Council  of 
State (59),  the  Netherlands  could  benefit  from 
developing  a  methodology  for  defining  and 
classifying all climate taxes and expenditures.  

recommended  by 

(58)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. 
Projections on the impact of current policies (‘with existing 
measures’, WEM) and additional policies (‘with additional 
measures’, WAM) as per the Netherlands’ draft updated 
NECP. 

(59)  See Onzeker of klimaatdoelstellingen van kabinet op tijd 

worden gehaald - Raad van State. 

36 

 
 
 
 
 
 
 
 
Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environmental Agency 

There is scope for increasing The Netherlands 
target  for  renewable  energy  in  its  final 
updated  NECP (60).  The  Netherlands’  renewable 
energy contribution set in its draft updated NECP, 
27%  by  2030,  is  below  the  required  contribution 
of  38.8%.  Its  energy  efficiency  contributions  of 
46.21  Mtoe  in  primary  energy  consumption  and 
38.41 Mtoe in final energy consumption for 2030 
set  in  the  draft  updated  NECP  match  those 
required  by  the  Energy  Efficiency  Directive.  See 
Annex  7  for  more  information  on  the  country’s 
energy transition. 

The  Netherlands  is  an  EU  frontrunner  in 
sustainable  transport,  but  still  has  room  to 
improve (61).  Standing  at  5% 
in  2023,  the 
Netherlands has one of the EU’s highest shares of 
battery electric vehicles in its passenger car fleet. 
In  2023,  its  144 100  publicly  accessible  charging 
points provided a charging point for every four e-
vehicles,  above  the  EU  average  of  1:10.  Car  trips 
account for 87% of distances travelled. For freight, 
road  transport  plays  a  lesser  role,  accounting  for  
49%  of  tonnes  transported,  while  40%  of  freight 
is carried on inland waterways, far higher that the 
EU average. Railways account for 8% of passenger 
transport,  slightly  above  the  EU  average  (6%),  as 

well  as  6%  of  freight  transport.  74%  of  the  rail 
network  is  electrified  (EU  average:  56%).  The 
Dutch  railway  network  is  the  most  heavily  used 
network  in  Europe.  The  European  Railway  Traffic 
Management  System  is  being  rolled  out  on  the 
Dutch  railway  network  to  support  the  increase  in 
rail traffic.  

land  use, 

The  Netherlands  still  has  scope  to  increase 
its  efforts  to  remove  carbon  from  the 
atmosphere  through 
land  use 
change  and  forestry  (LULUCF).  The  country 
increased  its  net  greenhouse  gas  emissions  from 
land  use  in  2021,  reversing  the  earlier  trend  of 
declining  emissions.  The  main  source  of  these 
emissions  is  agricultural  land.  To  reach  its  2030 
LULUCF  target,  additional  carbon  removals  of 
435 kt CO2eq are  needed (62).  According  to  the 
latest  projections,  the  Netherlands  is  expected  to 
reach this figure (63). 

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  prolonged  droughts.  Economic 
damage  caused  by  weather  and  climate-related 
extreme  events  stood  at  almost  EUR  10 billion  in 
1980-2020 (64).  The  Netherlands  has  a  high 
climate protection gap (65) for coastal floods and a 
medium-high  gap 
climate 
for 
adaptation  framework (66)  provides  a  good  basis 
for climate resilience, but it could be strengthened 
by  a 
legal  basis  for  adaptation  and  new 
programmes  for  specific  climate  threats  such  as 
changes  in  wind  regimes,  lightning,  wildfires  and 

floods. 

Its 

(62)  National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

(63)  See: Klimaat- en Energieverkenning 2023 (pbl.nl) 

(64)  See European Environment Agency, Economic losses from 
climate-related extremes in Europe, February 2022. For 
estimates on the effects of climate change on the 
Netherlands, see Klimaatschadeschatter. 

(65)  On the climate protection gap, see the annotations to Table 

(60)  The EU target set out in the revised Renewable Energy 

A6.1. 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Netherlands at 46.2 Mtoe for primary energy consumption 
and 38.4 Mtoe for final energy consumption. See the 
Commission Recommendation of 18.12.2023 to the 
Netherlands. 

(61)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

(66)  The framework includes a national adaptation strategy 

(2016) and the ‘Delta’ programme (2010) aimed at making 
the country climate resilient by 2050 by protecting against 
coastal, fluvial and pluvial flooding, ensuring freshwater 
supply, and enhancing urban and rural areas’ resilience to 
flood, prolonged drought and heat impacts. The government 
announced in late 2022 that it would consider the impacts 
on the soil and the water system in spatial planning. The 
Netherlands has also set up a knowledge programme, ‘Sea 
level rise’, with an interim report published in November 
2023. 

37 

02040608010012014020052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
     
 
 
the  spread  of 
invasive  species  and  tropical 
further 
diseases.  There 
mainstream  adaptation  across  governmental 
policies and long-term plans (67). 

is  also  scope 

to 

in  2022 

The management of water resources remains 
unsustainable.  The  water  exploitation  index  plus 
(WEI+)  stood  at  4.8%  in  2019,  with  the  worst 
seasonal value being 6.3% in Q3-2019. While 3% 
of the country’s area was impacted by droughts in 
it  was  already  14.8%. 
2000-2020, 
Croplands  are  generally 
impacted 
ecosystem.  The  Dutch  economy  is  lagging  behind 
the EU average on water productivity, with EUR 98 
generated per cubic metre of water abstracted. All 
surface water bodies have failed to reach a good 
ecological status, and 52% have failed to reach a 
good chemical status. Marine waters are not yet in 
a  good  environmental  status,  as  tracked  by  the 
descriptors used in the Marine Strategy Framework 
Directive.  

the  most 

Biodiversity  and  nature  protection  and 
restoration  are  a  key  challenge  for  the 
Netherlands. At the end of 2021, the Netherlands 
was protecting 26.6% of its land and 26.1% of its 
marine  area.  According  to  the  latest  reporting 
data,  in  2013-2018  only  11.5%  of  protected 
habitats  and  26.3%  of  species  reached  good 
conservation  status.  The 
intensive  nature  of 
agriculture  in  the  Netherlands  negatively  affects 
biodiversity.  The  common farmland  bird  index  fell 
between  2011  and  2018,  before  slightly 
increasing in 2019. 

Intensive  agriculture  has  a  major  adverse 
effect on air quality. The Netherlands is among 
the  slowest  to  adopt  organic  farming  practices. 
The  share  of 
total  utilised 
the  country’s 
agricultural  area  (UAA)  under  organic  farming 
reached  4.2%  in  2021  against  the  EU  average  of 
9.1%  and  the  EU  goal  of  at  least  25%  by  2030. 
The  Netherlands’  livestock  density  index  (3.45%) 
remains the highest in the EU. The total number of 
livestock  units 
regions: 
three 
Groningen,  Flevoland  and  Zeeland. 
Intensive 
rearing  of  poultry  and  pigs  is  the  country's  the 
main  source  of  ammonia  emissions  into  the  air. 
The  agricultural  sector  was 
responsible  for 
generating  85.8%  of  all  ammonia  emissions, 

increased 

in 

against  the  EU-27  average  of  90.7%  in  2021.  In 
the Netherlands, 11.2% of the UAA is composed of 
irrigated 
land  and  the  water  abstracted  for 
agricultural  purposes  accounts  for  2.9%  of  total 
abstraction in 2019. 

Graph A6.2: Changes in livestock density and 
organic farming 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

The Netherlands would benefit from adopting 
farming  practices  aimed  at  cutting  nutrient 
and  pesticide  pollution  and  improving  soil 
health.  The  latest  figures  for  the  gross  nitrogen 
balance  on  agricultural  land  in  the  Netherlands 
show  a  consistent  nitrogen  surplus,  with  an 
average  of  168.8 kg  of  nitrogen  per  hectare  per 
year  in  2019.  14%  of  groundwater  monitoring 
stations showed levels above the maximum 50 mg 
nitrate/l.  Furthermore,  the  phosphorous  surplus 
stood  at  4 kg/ha  in  2019.  The  Netherlands  is  one 
of  the  EU  countries  most  affected  by  pesticide 
pollution  in  its  surface  water  bodies.  In  2021, 
21.4%  of  monitoring  sites  were  reported  to  have 
pesticide  levels  exceeding  the  thresholds  set  by 
the  Water  Framework  Directive. Based  on  the 
impact  assessment  for 
the  Soil  Monitoring 
Law (68),  83%  of  the  Netherlands’  soil  could  be 
considered  as  unhealthy (69),  mainly  due 
to 
nutrients  surplus.  Nitrogen  excess  affects  87%  of 

(68)  SWD 417 final of 5.7.2023 - impact assessment for the 

Directive of the European Parliament and of the Council on 
Soil Monitoring and Resilience (Soil Monitoring Law), (cfr. pg. 
10, pg. 189-190, pg. 835-845). 

(67)  See the Commission’s 2023 assessment and 

recommendation on the Netherlands’ progress on climate 
adaptation. 

(69)  However, not all soil degradation processes could be 

quantified for all land uses. This number simply indicates an 
order of magnitude.  

38 

01234024681020162020% LSU per hectare% of total utilised agricultural areaLivestock density index Netherlands (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Netherlands (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area) 
 
       
 
agricultural land, while phosphorous excess affects 
90%.  The  total  estimated  organic  carbon  content 
in  arable  land  is  equal  to  129  megatons,  with  an 
average  of  33%,  above  the  EU  average  of  24%. 
However,  conservation  tillage  practices,  which 
increase  soil  organic  carbon,  covered  15%  of  the 
Netherlands’ 
in  2016. Drained 
peatlands  accounted  for  15%  of  agricultural  land 
in  2019.  Extensive  farming  practices  would  help 
reduce  the  number  of  animals  and  inputs  per 
hectare,  decreasing  pollution  and  improving  soil 
health. 

tillable  area 

Graph A6.3: Environmental investment gap, annual 
average 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

from 
The  Netherlands  would  benefit 
investing  more  in  pollution  prevention  and 
control,  circular  economy  and  waste  as  well 
as  sustainable  water  management.  Over  the 
2014-2020  period,  the  environmental  investment 
gap  was  estimated  at  EUR  2.3  billion  per  year, 
equivalent to 0.3% of GDP, below the EU average 
of  0.8%.  The  gap  is  estimated  to  be  increasing 
over  the  2021-2027  period  at  close  to  EUR  5 
billion  per  year.  There  remains  an  opportunity  to 
increase  funding, 
in  particular  for  pollution 
prevention and control (a gap of EUR 2.3 billion per 
year), circular economy and waste (EUR 1.5 billion) 
and  sustainable  water  management  (EUR  1.2 
billion) where the gap has increased.   

39 

1,5254181,19102,3031,1511,507005001,0001,5002,0002,5003,0003,500Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
       
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

40 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp128,112.2-24%-29%-27%-33%-48%-10-9Net greenhouse gas removals from LULUCF (2)Kt CO2eq5 5244 6944 3264 3875 0604,523n/an/aShare of energy from renewable sources (1) (3)%2%9%14%13%15%39%--Energy efficiency: primary energy consumption (3)Mtoe70.163.858.560.756.146.2Energy efficiency: final energy consumption (3)Mtoe54.149.545.146.843.438.4Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---25.525.2769.0786.624.4Share of zero-emission vehicles in new registrations (4)% 5.413.920.419.923.3912.1n/aNumber of publicly accessible AC/DC charging points --6458784298113713299178446956n/aShare of electrified railways%73.2%73.2%73.2%74.4%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---34.627.3537.0486.725.1Final energy consumption in buildings2015=100100.8%98.4%94.9%102.2%90.7%104.0%97.2% Climate adaptation         Climate protection gap (5)score 1-4--1.92.02.11.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater4.84.8---3.6--Circular economy | Material footprint (7)tonnes per person8.68.68.27.76.814.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants468381286338-545584-Biodiversity | Habitats in good conservation status (9)%11.514.7                       Common farmland bird index (10)2000=1005961---78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area3.53.753.954.22-9.1--Nitrates in groundwatermg NO3/litre53.3859.4359.21--20.42--Food waste per capitaKg per capita161148-130131-Share of soil in poor health (11)%8341Soil organic matter in agricultural land (12)Mt per ha129----7,904--DistanceEU-27 
 
      
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

This  Annex (70)  sets  out  Netherlands’s 
progress  and  challenges  in  accelerating  the 
net-zero  energy  transition  while  bolstering 
the EU’s competitiveness in the clean energy 
sector (71). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECP) for 2030 (72). 

Graph A7.1: Netherland´s energy retail prices for 
households and industry & service 

in 

renewables  deployment, 

The  Netherlands  has  made  significant 
progress 
in 
particular  for  offshore  wind.  It  continues  to 
implement a broad array of energy efficiency 
in 
measures.  However,  energy  dependency, 
particular  fossil  fuels,  and  grid  congestion  remain 
an issue.    

Retail  energy  prices  in  the  Netherlands  rose 
significantly in 2023.  Average household prices 
for gas and electricity decreased by 40% and 47% 
in  the  second  half  of  2023  compared  to  peak  of 
the  first  half  of  2023,  remaining more  than  50% 
higher than pre-crisis average.  

For  the  industrial  and  services  sector,  both 
gas  and  electricity  average  prices  slightly 
decreased  in  the  second  half  (S2)  of  2023. 
According  to  the  latest  data,  the  gas/industry 
service  average  price  declined  by  25%  compared 
the 
industry 
service/electricity  average  price  decreased  by  7%. 
Both gas/industry service average prices remained 
higher than the pre-crisis level. 

of  2022. 

first 

half 

The 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(70)  It is complemented by Annex 6 as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to mitigate energy poverty and to protect the 
most vulnerable groups, complementing ongoing efforts 
under the European Green Deal, REPowerEU and European 
Green Deal Industrial Plan. 

(71)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(72)  The Netherlands submitted its draft updated NECP in June 

2023. The Commission issued an assessment and 
country-specific recommendations on 18 December 2023. 
Commission Recommendation, Assessment (SWD) and 
Factsheet of the draft updated National Energy and Climate 
Plan of Netherlands - European Commission (europa.eu) 

(1) For Eurostat data (EU and NL), the band consumption is ID 
referring to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness  
(2) JP = Japan 
Source: Eurostat, IEA 

In  relative  terms,  electricity  prices  for  non-
household  consumers  have  increased  significantly 
compared to the US, Japan, and to a lesser extent, 
the UK, thus potentially affecting the international 
competitiveness  of  energy-intensive  industries  in 
the Netherlands. 

41 

0.000.050.100.150.200.250.300.350.400.450.50€/KWhGas (industry & service) - NLGas (industry & service) - EUGas (households) - NLGas (households) - EUElectricity (industry & service) - NLElectricity (industry & service) - EUElectricity (households) - NLElectricity (households) - EU050100150200250300350Index ( 2018 S2 = 100)JPUKUSNLEU 
 
 
   
 
  
  
 
The  Netherlands  has  put  in  place  several 
support  measures  targeted  at  vulnerable 
households  including:    (i)  the  support  given  to 
low-income  households  through  municipalities;  (ii) 
a  21%  cut  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  introduced  a 
price  cap  on  electricity  and  gas that  applied 
from January to December 2023 to the first 
consumed 2 900 kWh of electricity and 1 200 
m3  gas.  Also,  households  making  use  of  district 
heating  will  pay  a  capped  price  of  EUR  47.38/GJ 
for  the  first  37  GJ  they  consume.  All  energy 
consumption above these respective volume limits 
will be charged at the market price.  

In  2024  most  of  these  measures  will  expire 
(except the cut in excise duties on petrol and 
fuel).  Other  measures  have  been  introduced  to 
cope  with  the  sustained  higher  prices:  (i)  a 
temporary  emergency  fund  to  which  consumers 
can apply for support with their energy bills for a 
period of 6 months; (ii) more subsidies to renovate 
buildings and (iii) an increased discount on energy 
tax. 

Energy  dependency  is  still  an  issue  in  the 
Netherlands.  The country is very reliant on fossil 
fuels, which in 2022 were still accounting for 88% 
of  gross  available  energy (73).  Energy 
import 
dependency  has  been  on  an  upward  trend  in  the 
past  decades,  increasing  from  24%  in  2013  to 
80%  in  2022,  with  non-EU  countries’  share  in 
energy imports increasing in parallel, from 52% to 
61%,  

they  are  one  of 

As 
the  main  EU 
gas-producing  countries,  the  role  of  natural 
gas  is  still  very  important  in  the  Dutch 
energy system, and in 2022 it still accounted for 
30%  of  gross  available  energy  and  for  39%  of 
gross  electricity  production (74) 
in  steep 
decline compared to 2021, respectively from 40% 
and 48%).  

(but 

Because  of  the  collapse  of 
indigenous 
production,  import  dependency  on  non-EU 
countries for natural gas went up from 21% 
in  2013  to  62%  in  2022,  with  Russian  gas 
comprising 35% of gas imports. The Groningen 
gas  field  has  ceased  to  operate  since  1  October 
2023  (except in  some  exceptional  circumstances). 
To compensate, a total of 35 bcm is forecast to be 
extracted  from  small  onshore  fields  until  2047. 
The  Netherlands  has  the  third  largest  storage 
capacity  in  the  EU  in  absolute  numbers  after 
Germany  and 
Italy,  with  almost  15.5  bcm, 
representing  46%  of  its  annual  gas  consumption 
in  2022.  Netherlands  fulfilled  its  gas  storage 
obligations  last  winter,  reaching  99.6%  by  1 
November  2023,  and  ended  the  winter  season 
with  a  storage  filled  at  52.88%  by  1  April  2024. 
The  Netherlands  also  benefits  from  two  LNG 
terminals  (in  Eemshaven  and  Rotterdam)  and  six 
underground  gas  storage 
(with  a 
combined capacity of 14.2 bcm).  

facilities 

The Netherlands managed to reduce their gas 
demand between August 2022 and December 
2023 by 28% in comparison with the average of 
the  previous  five  years.  Annual  consumption 
amounted to 33 bcm in 2022 (against 42.3 bcm in 
2021). 

As for the security of electricity supply, there 
were no adequacy issues recorded during the 
first  half  of  2023  according  to  ENTSO-E 
analysis (75), nor are any expected for winter 
2023/24.  To  ensure  the  security  of  its  electricity 
supply,  the  Netherlands  needs  to  increase  the 
flexibility  of  its  grid,  as  the  share  of  weather-
dependent electricity production is increasing.  

The  Netherlands  does  not  have  separate 
targets  for  increasing  flexibility;  however, 
the  organisation  of  the  electricity  market  in 
line with European legislation is laid down in 
its Energy Act. Also, with the increase in installed 
wind  and  solar  power,  a  growing  share  of 
electricity production comes from domestic energy 
sources. 

(73)  Eurostat 

(74)  Ibid.  

(75)  ENTSO-E has developed Costs-Benefits Analysis Guidelines 
for the European Commission that describe how best to 
assess these impacts for each project, taking into account 
social, economic and environmental considerations. 

42 

 
 
 
 
The  Netherlands  has  made  major  efforts  to 
accelerate  the  deployment  of  renewables. 
Renewable  power  generation  capacity  is  growing, 
with  35  627  MW  of  installed  capacity  in  2023,  a 
yearly increase of 21%. The total solar PV capacity 
was 19 600 MW in 2022, up from 14 823 MW in 
2021. Estimates suggest that an additional 4 100 
MW of solar PV panels were installed in 2023.  

(MIEK)  and 

process  is  implemented  through  two  processes: 
the  Multiannual  Programme  for  Infrastructure 
Energy  &  Climate 
the  Federal 
Coordination  Procedure 
(RCR/ProjectProcedure).  
The  Netherlands  should,  as  other  Member  States, 
implement  the  Renewable  Acceleration  Areas 
defined  in  the  revised  Directive  on  Renewable 
Energy (RED III). 

Onshore  wind  capacity  was  6 185  MW  in 
2022,  up  from  5 214  MW  in  2021.  Offshore 
wind capacity stood at 2 570 MW in 2022. In 
2023, the Netherlands built the 1.5 GW ”Hollandse 
Kust  Zuid”,  the  largest  offshore  wind  farm  in  the 
world  so  far.  It  currently  has  4 700  MW  of 
offshore  wind,  (around  16%  of  the  country’s 
electricity production).  

Graph A7.3: Netherland's installed renewable 
capacity (left) and electricity generation mix 
(right) 

(1) "Other" includes solid solid biofuels, renewable municipal 
waste, biogas and geothermal energy 
Source: IRENA, Ember 

The  Netherlands 
renewable  energy 
consumption in 2022 (4).   

reached  14.97% 
of 
in  the  final  energy 

Biomass  accounts  for  40%  of  renewables 
consumption  and  heat  pumps  7%.  And 
geothermal accounted for 2% of final energy 
consumption  in  2022.  The  Dutch  heat  pump 
market  expanded  by  36%  in  2023,  and  accounts 
for  30%  of  all  heating  systems  sold  in  the 
Netherlands. In existing buildings, heat pump sales 
more  than  doubled  from  more  than  50 000  in 
2022  to  almost  110 000  in  2023.  The  Dutch 
government  will  introduce  heat  pumps  as  the 
standard solution in 2026. 

For  offshore  wind,  the  Netherlands  will 
organise  a  new  tender  for  offshore  wind 
equivalent  to  4  GW  in  2024.  The  wind  parks 
need  become  operational  in  2029  and  2030.  At 
the end of 2031, the Netherlands wants to install 
21 GW of offshore wind. It has also established a 
schedule  for  offshore  wind  tenders,  which  will  be 
revised in 2025 to meet the increased ambitions.  

The  country  shows  high  ambitions  for 
hydrogen  as  a  replacement  for  fossil  gas. 
Work  on  preparing  the  existing  gas  pipeline 
network  to  transport  hydrogen  has  been  ongoing 
since  2022  and  the  feasibility  of  large-scale 
hydrogen  storage  in  salt  caverns  in  Groningen  as 
well as in empty gas fields is being explored. The 
Dutch  government  has made  an  additional  EUR  1 
billion available in 2024 for scaling up renewable 
hydrogen production, as well as EUR 3.9 billion for 
the period up to 2030. 

Capacity  constraints  in  the  electricity  grid 
remain  a  significant  bottleneck  for  the 
rollout  of  renewable  energy  installations 
and, 
increasingly,  for  meeting  electricity 
demand.  The  Dutch  electricity  grid  can  no  longer 
accommodate  the  rapidly  growing  demand  for 
transmission  capacity.  This  can  be  seen  in  the 
regular refusal by network operators to allow new 
producers of electricity to connect to the grid.  

Additional  investment  in  the  expansion  of 
at 
electricity 
infrastructure, 
both 
transmission  and  distribution 
is 
levels, 
increased 
therefore  necessary  to  ensure 
penetration of renewable electricity, but also 
to  meet  electricity  demand  and  the  further 
electrification  of  the  economy.  A  substantial 
investment  plan  from  2023  to  2030  of  around 
EUR 60 billion has been agreed.  

The  Dutch  government  conducted  a  study  to 
accelerate  the  granting  of  permits  for 
renewable  energy  projects  and  associated 
infrastructure. The acceleration of the permitting 

Consumer  empowerment  in  the  electricity 
and  gas  sector  is  high  in  the  Netherlands; 
however,  the  lack  of  legal  framework  for 
energy  communities  does  not  support  their 

43 

 
 
uptake.  The  role  out  of  smart  meters  in  the 
Netherlands  is  at  a  high  level,  being  at  88.7%. 
Furthermore,  the  number  of  fixed  price  contracts 
in  both  electricity  and  gas  are  at  33%.  Switching 
rates seem to have dropped slightly last year and 
are at a 17% for both sectors.  

in 

Lastly,  the  number  of  energy  communities 
the  Energy  Communities 
registered 
Repository  is  only  ten.  A  possible  explanation 
could be found in the lack of a legal framework, as 
the  Netherlands  is  currently  working  on  the  new 
Energy  Act,  which  contains  rules  on  energy 
communities.  

The  Netherlands  demonstrated  significant 
progress in reaching the 2030 EU targets for 
energy  efficiency.  In  2022,  the  Netherlands 
decreased its primary energy consumption to 56.1 
Mtoe,  a  7.7%  decrease  compared  to  2021  and 
16.0%  compared  to  2012.  It  had  a  final  energy 
consumption  of  43.4  Mtoe,  a  7.1%  decrease 
compared to 2021 and 16.6% compared to 2012. 
Last  year,  the  best  results  came  from  the 
residential sector which decreased its final energy 
consumption  by  16.0%  and  the  worst  from  the 
transport  sector  which  increased  its  final  energy 
consumption by 6.1%. 

The  Netherlands  continues  to  implement  a 
broad range of energy efficiency policies and 
measures.  The  RRP  supports  the  attainment  of 
this  target  through  the  subsidy  scheme  for 
sustainable  public-sector  buildings 
(EUR  225 
million),  which  promotes  renovation,  and  the 
investment  subsidy  for  sustainable  energy  and 
energy  savings  (EUR  624  million),  which  awards 
grants  for  investment  in  small-scale  heat  pumps, 
solar  boilers,  insulation  and  heat  connections,  to 
improve energy efficiency. About EUR 22 million of 
cohesion  policy  ERDF  and  JTF  funds  allocated  to 
the  Netherlands  for  the  period  2021-2027  cover 
energy  efficiency  investments,  of  which  EUR  15 
million for housing stock renovation. 

including 

The  Netherlands  has  a  wide  range  of 
financial  support  instruments  for  energy 
efficiency 
for 
homeowners,  tax  rebates  for  companies  and 
energy  performance  fees  for  landlords.  However, 
greater  effort  will  be  needed  to  leverage  more 
private  investment  in  energy  efficiency  measures 
in support of the 2030 target. 

schemes 

subsidy 

44 

In  relation  to  buildings,  Netherlands  should 
keep  up  the  positive  contribution  of  the 
residential  sector  to  its  2030  buildings’ 
targets. Between 2020 and 2022 residential final 
energy consumption declined by around 6% while 
in  the  draft  updated  NECP,  a  new  and  more 
ambitious  2030  decarbonisation  target  for  the 
building sector was set. 

country’s 

Heating and cooling represent almost 82% of 
the 
final  energy 
residential 
consumption,  of  which  8%  comes  from 
renewables. Approximately 125 000 heat pumps 
were sold in 2022, an increase of 42% compared 
to  the  previous  year,  reaching  a  total  stock  of 
424 000  installed  heat  pumps  in  the  residential 
sector.  

With regard to R&D spending expressed as a 
share of gross domestic product, it stands at 
2.3%  of  GDP  in  2022  (not  energy  specific), 
slightly  higher  than  the  EU  average  of 
2.23%.    Making  use  of  European  coordination 
mechanisms  and  tools,  such  as  the  Strategic 
the  Mission 
Energy  Technologies  Platform, 
Innovation,  and 
further 
streamlining the  national  with  European  wide  R&I 
policies.  With  regard  to  skills  in  the  green  and 
digital  transition,  making  use  of  the  Net  Zero 
Academies can help further strengthening national 
competences in strategic technologies. 

others  will  help 

for 

but 

clean 

exhibits 

foothold 

turbines, 

countries 

Netherlands  remains  highly  dependent  on 
non-EU 
energy 
technologies,  particularly  for  components  of 
positive 
wind 
developments in solar module manufacturing 
and  a  growing 
in  battery 
manufacturing.  In  early  2024,  the  Netherlands 
launched 
initiative,  a  national 
research,  innovation  and  industrial  investment 
program  to  stimulate  PV  manufacturing  in  the 
Netherlands and Europe. This initiative builds on a 
dynamic  ecosystem  of  small  and  innovative  PV 
module  manufacturers, 
e.g. 
Westknollendam 
The  Hague.  Overall 
manufacturing capacity for PV ought to increase.  

the  SolarNL 

based 

and 

in 

Despite  a  substantial  deployment  of  on  and 
offshore  wind 
no 
energy, 
manufacturing  capacity  for  wind  turbine 
components  in  the  Netherlands.  Regarding 
battery  facilities,  the  opening  of  the  first  lithium-
ion battery factory in Helmond last year paved the 

there 

is 

 
way  forward.  This  capacity  is  likely  to  increase  in 
future  if  the  gigafactory  project  carried  by  an 
Anglo-Korean  company  materialises.  When 
it 
comes  to  hydrogen,  backed  by  the    investments 
carried  out  in  the  framework  of  the  state  aid 
supported Important Project of Common European 
Interest  Hy2Tech  program,  the  Fuel  Cell  Giga 
Factory (FCGF) project in Arnhem is set to pioneer 
the initial industrial deployment of large-scale fuel 
cell manufacturing, set to come online in 2026. 

45 

 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

46 

20192020202120222019202020212022Import Dependency [%] 64.4%68.1%58.4%80.2%60.5%57.5%55.5%62.5%of Solid fossil fuels 102.1%91.9%99.6%102.1%43.3%35.8%37.3%45.8%of Oil and petroleum products 101.0%100.4%85.7%107.3%96.7%96.8%91.7%97.7%of Natural Gas 26.2%45.0%33.7%64.7%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 44.1%41.6%34.6%16.3%39.7%41.3%41.1%21.0%of Crude Oil32.8%24.1%31.1%23.1%28.8%26.7%26.4%19.5%of Hard Coal41.1%53.6%38.2%10.4%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)42.3                 43.7                 42.8                 44.8               43.6               42.1               33.4               Gas Consumption year-on-year change [%]4.1%3.2%-2.0%4.5%-2.7%-3.4%-20.6%Gas Imports - by type (in bcm)45.9                 24.2                 31.3                 35.9               36.5               31.0               39.0               Gas imports - pipeline44.2                 23.2                 28.0                 26.5               27.8               22.1               19.8               Gas imports - LNG1.71.03.39.48.68.919.2               Gas Imports - by main source supplier (in bcm) (1)United States-                   0.0                   0.3                   2.1                 2.6                 3.7                 8.6                 Russia12.6                 8.5                   14.7                 15.8               15.2               10.7               6.4                 Norway19.9                 9.3                   12.6                 11.5               10.6               10.8               9.3                 United Kingdom5.8                   2.8                   2.1                   1.6                 2.7                 1.0                 4.7                 Angola-                   -                   0.1                   0.2                 0.2                 0.2                 2.7                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals1                      1                      1                      2                    2                    LNG Storage capacity (m3 LNG)540,000          540,000          540,000          720,000        720,000        Underground StorageNumber of storage facilities6                      6                      6                      6                    7                 Technical Capacity (bcm)11.8                 12.7                 13.0                 13.0               12.9               20162017201820192020202120222023Gross Electricity Production (GWh) (2)115,158          117,168          114,380          121,411        123,278        122,093        121,810        -              Combustible Fuels100,032       99,395         95,965         99,973       94,787       88,305       78,513       -              Nuclear3,960           3,402           3,515           3,910         4,087         3,828         4,156         -              Hydro100              61                 72                 74               46               88               50               -              Wind8,170           10,569         10,549         11,508       15,278       18,046       21,401       -              Solar1,602           2,204           3,708           5,399         8,567         11,304       17,079       -              Geothermal0000000-              Other Sources1,293           1,536           571              547             512             522             611             -              Gross Electricity Production [%]Combustible Fuels86.9%84.8%83.9%82.3%76.9%72.3%64.5%-              Nuclear3.4%2.9%3.1%3.2%3.3%3.1%3.4%-              Hydro0.1%0.1%0.1%0.1%0.0%0.1%0.0%-              Wind7.1%9.0%9.2%9.5%12.4%14.8%17.6%-              Solar1.4%1.9%3.2%4.4%6.9%9.3%14.0%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources1.1%1.3%0.5%0.5%0.4%0.4%0.5%-              Net Imports of Electricity (GWh)4,914              3,506              7,970              855                2,660-             253                4,266-             -              As a % of electricity available for final consumption 4.4%3.1%7.0%0.8%-2.4%0.2%-3.9%-              Electricity Interconnection [%]-               18.1%18.6%22.9%25.9%16.3%13.7%12.0%Share of renewable energy consumption - by sector [%]Electricity12.6%13.8%15.2%18.2%26.4%33.3%39.9%-              Heating/cooling5.2%5.8%6.2%7.2%8.1%7.8%8.6%-              Transport4.8%5.8%9.5%12.3%12.6%9.0%10.8%-              Overall5.8%6.5%7.4%8.9%14.0%13.0%15.0%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)65.97           94.78           337.59         354.16          185.97          as a % of total VC investment (3) in Netherlands start-ups and scale-ups4.9%5.2%5.4%10.1%7.0%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)275.8           259.2           420.7           -              -              Public R&I (% GDP)0.03%0.03%0.05%-              -              Private R&I (EUR mln)799.3           627.2           -               -              -              Private R&I (% GDP)0.10%0.08%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYNetherlandsEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

climate 

neutrality 

the  Netherlands’ 
The  Annex  monitors 
in  ensuring  a  fair  transition 
progress 
towards 
and 
environmental sustainability, particularly for 
in  vulnerable 
workers  and  households 
situations. The number of jobs in the Dutch green 
economy  has  risen  quickly.  Between  2015  and 
2021,  total  jobs  in  the  environmental  goods  and 
(to  around 
services  sector  grew  by  39.4% 
188 000)  (EU:  18.2%),  reaching  2%  of  total 
employment  (EU:  2.7%).  Also,  between  2015  and 
2022,  the  greenhouse  gas  emission  intensity  of 
Netherlands’s  workforce  (see  Graph  A8.1  and 
Table A8.1) declined from 22.1 to 15.3 tonnes per 
worker,  indicating  a  positive  trend  in  the  green 
transition,  even  though  it  is  still  above  the  EU 
average  (14.3  tonnes  per  worker  in  2022) (76).  In 
line 
Council 
Recommendation  of  2022  on  ensuring  a  fair 
transition 
the 
Netherlands is investing in the skills needed  for a 
fair  green  transition  and  for  implementing  the 
REPowerEU  plan,  mostly 
the  Just 
Transition  Fund  (JTF)  as  well  as  with  actions 
supported  by  the  European  Social  Fund  Plus 
(ESF+).  

towards  climate  neutrality (77), 

objectives 

through 

with 

the 

of 

The transition is occurring in the context of a 
tight  labour  market.  In  2023,  employment  in 
industries (78) 
Netherlands’ 
energy-intensive 
comprised 1.3% of total employment (3.5% in the 
EU).  In  line  with  the  Dutch  climate  agreement,  a 
large  proportion  of  the  jobs  with  a  high  share  of 
CO2  emissions  are  expected  to  be  phased  out  in 
the coming years. On the other hand, employment 
in mining and quarrying has risen by 11.2% since 
2015 to around 14 900 workers in 2023, which is 
less  than  a  year  before,  as  major  onshore  gas 
extraction ended in October 2023. The job vacancy 
rate in construction (see Graph A8.2), a key sector 
for  the  green  transition,  is  considerably  higher 
than  the  EU  average  (6.8%  vs  3.6%  in  2023),  in 

(76)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for the 
Netherlands, such indicators were calculated based on 
employment statistics in the national accounts. This may 
result in limited comparability across the two reports. 

(77)  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. 

(78)  Mining and quarrying (NACE B), chemicals (C20), minerals 

line  with  the  perception  of  small  and  medium-
sized enterprises (SMEs) in the sector, where 67% 
reported  that  skills  shortages  are  holding  them 
back in general business activities (79). According to 
the  European  Labour  Authority  (ELA) (80),  labour 
shortages were reported in 2023 for a number of 
occupations 
required  specific  skills  or 
knowledge  for  the  green  transition (81),  including 
engineering 
insulation 
technicians and building and related electricians. 

electrical 

workers, 

that 

Graph A8.1: Fair transition challenges in the 
Netherlands 

Source: Eurostat, EU Labour Force Survey, EMPL-JRC GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

Shortages  in  labour  and  skills  remain  a 
challenge in the Netherlands.  Tightness across 
sectors  prevails  (see  Annex  14),  while  the  overall 
skills mismatch in the Netherlands is very low (see 
Annex 5). Skills are key for smooth labour market 
transitions  and  preserving  jobs  in  transforming 
sectors. In the Netherlands, 48% of SMEs reported 
that  the  skills  required  for  greening  business 
activities  are  becoming  more 
(EU: 
42%) (79). If the Netherlands matches its projected 
contribution  to  the  EU’s  2030  renewable  energy 
target,  between  3  400  and  11 400  additional 
skilled workers will be needed for the deployment 
of  wind  and  solar  energy,  which  may  require  an 
investment 
skills  of  EUR  121.3-151.7 
million (82). The Dutch recovery and resilience plan 

important 

in 

(79)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(80)  Based on the European Labour Authority 2024 EURES Report 
on labour shortages and surpluses 2023, i.e. data submitted 
by the EURES National Coordination Offices. 

(81)  Skills and knowledge requirements are based on the 

European Skills Competences and Occupations (ESCO) 
taxonomy on skills for the green transition. 

(C23), metals (C24) and automotive (C29) 

(82)  EMPL-JRC AMEDI+ project. 

47 

0.00.51.01.52.02.5Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalityNL Latest vs EU LatestEU LatestNL 2015 vs EU Latest 
 
 
  
 
 
Table A8.1:  Key indicators for a fair transition in the Netherlands 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

envisages,  among  other  things  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.  

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

Russia’s  war  of  aggression  against  Ukraine, 
despite  the  emergency  measures  implemented  in 
the  Netherlands.  In  particular,  14.9%  of  the 
population  at  risk  of  poverty  (AROP)  (EU:  20.1%) 
and  4.9%  of  lower  middle-income  households  (in 
deciles 4-5) (EU: 11.6%) were unable to keep their 
homes adequately warm in 2022. The Netherlands 
tackles  energy  poverty  primarily  through  general 
social  policy.  In  this  context  there  is  scope  for 
increasing  focus  on  facilitating  access  to  energy 
efficiency  and  renewable  energy  as  per  the 
Commission  Recommendation  on  energy  poverty 
(2023/2407). On the other hand, in January 2023, 
38.9%  of  population  at  risk  of  poverty  spent  a 
considerable proportion of their budget (more than 
6%) on private transport fuels (EU: 37.1%) (84).  

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

living 

in  energy  poverty 

Higher energy prices increased the number of 
households 
in 
2022. The share of the population unable to keep 
their  homes  adequately  warm  increased  from 
2.9%  in  2015  to  5.3%  in  2022,  below  the  EU 
average (9.3%) (83). The indicator increased by 2.9 
percentage points between 2021 and 2022 on the 
back  of  energy  price  increases  due  to  supply 
constraints caused by the COVID-19 pandemic and 

(83)  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 – the TNO – defines households as energy poor 
when facing a low household income combined with either  
high expenditure on energy, or housing with poor quality 
insulation. 

48 

Environmental inequalities remain an issue in 
the  Netherlands,  despite  being  below  the  EU 
average.  The  consumption  footprint  for  20%  of 
the  population  with  the  highest  income  was  1.6 
times higher than the footprint of the poorest 20% 
in  2021 (85)  (EU:  1.8).  For  the  richest  households, 
the footprint is highest for food and mobility while 
for  the  poorest  households  it  is  for  food  and 
housing.  The  average  levels  of  air  pollution  in 
2021  stood  below  the  EU  average  (9.7  vs  11.4 
µg/m3 PM2.5), with 50% of the population living in 
regions  exposed 
levels  of  air 
pollution (86).  This  led  to  a  significant  impact  on 
health,  affecting  vulnerable  groups  in  particular, 

critical 

to 

(84)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(85)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

(86)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%BCDEFHEU 2022NL 2022NL 2015IndicatorDescriptionNL 2015NLEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes22.115.3 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)1.6%1.3% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries21.8%23.6% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm2.9%5.3% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport30.2%38.9% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.61.6 (2021)2.7 (2021) 
       
 
 
 
  
 
and  around  5 700  premature  deaths  annually (87). 
Meanwhile,  in  the  past  3  years,  twice  as  much 
solar  power  was  generated  than  in  all  previous 
years (88), and the Netherlands has more installed 
solar  energy  per  capita  than  any  other  Member 
State (89).  

The Netherlands is setting up a wide range of 
policy  instruments  to  promote  a  fair  green 
transition. Measures have been envisaged under 
the  JTF  to  upskill  potential  employees  in  green 
jobs and sectors, as well as mitigate potential risks 
for the most vulnerable, which can arise during the 
transition  process.  The  Netherlands  is  making 
efforts  to  seize  the  opportunity  provided  by  the 
green  transition  to  increase  the  labour  market 
participation  of  underrepresented  or  vulnerable 
groups.  Only  30%  of  all  green  positions  in  2021 
were held by women (90). Furthermore, the country 
has introduced systematic and in-depth analytical 
and  assessment  tools  for  monitoring  the  socio-
economic  and  distributional  impacts  of  the  green 
transition.  The  action  plan  for  Green  and  Digital 
Jobs addresses various labour market challenges – 
particularly shortages in relevant sectors. However, 
fine-tuning these actions towards the people most 
affected by the transition would be welcome (91). 

(87)  EEA - Air Quality Health Risk Assessment 

(88)  https://www.cbs.nl/nl-

nl/longread/rapportages/2023/hernieuwbare-energie-in-
nederland-2022/5-zonne-energie 

(89)  https://www.statista.com/statistics/612412/installed-solar-

photovoltaics-capacity-eu/ 

(90)  OECD (2023), Job Creation and Local Economic 
Development: Bridging the Great Green Divide 

(91)  Based on the monitoring review of the Council 

Recommendation on ensuring a fair transition towards 
climate neutrality, which took place in October 2023. 

49 

 
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

20%,  chemicals  for  24%,  the  metals  industry  for 
8%,  while  9%  came  from  other  industries (94). 
Between  2019  and  2023,  overall  ETS  emissions 
declined by about 30%. Greenhouse gas emissions 
from  refineries slightly  rose,  by  4%.  All  other  ETS 
sectors  saw  their  emissions  decline,  by  between 
18%  and  44%.  In  the  Netherlands,  the  EU  ETS  is 
supplemented by a CO2 levy. 

Graph A9.2: Trends in material use 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
circularity, 
the  Netherlands’ 
to 
essential 
competitiveness (92).  In  this  regard,  the  priority 
for the Netherlands is the use of circular materials 
in industry and construction. 

boost 

The Netherlands’ circular economy transition 
is  on  track  to  achieve  the  EU  Circular 
Economy Action Plan goals thanks to a highly 
efficient economy and waste management. In 
2022, the Netherlands ranked second in the EU for 
lowest  material  footprint.  The  material  footprint 
decreased  from  7.9  to  6.8  tonnes  per  capita 
between 2016 and 2022, versus an EU average of 
14.8  tonnes  per  capita.  The  Netherlands  has 
reduced  its  waste  production  per  capita,  reaching 
7.2 tonnes per capita in 2020, almost twice the EU 
average. There is still room to make better use of 
the potential of the circular economy transition to 
drive  the  decarbonisation  of  the  Netherlands’ 
industry.  The  Dutch  national  energy  and  climate 
plan  includes  very  good  references  to  circular 
economy in the national objectives and targets.  

Graph A9.1: ETS emissions by sector since 2013 

Source: Eurostat 

The Netherlands is one of the EU’s leaders in 
resource  efficiency,  but  it  is  still  highly 
reliant on imports. The circular material use rate 
and  resource  productivity  are  the  highest  among 
the  EU  countries  and 
reached  27.5%  and 
4.63 purchasing  power  standards  per  kilogram, 
respectively, 
in  2022.  Resource  productivity 
expresses  how  efficiently  the  economy  uses 
material  resources  to  produce  wealth.  Improving 
resource  productivity  can  help  minimise  negative 
impacts  on 
reduce 
dependence on volatile raw material markets. The 
Netherlands was dependent on imports for 82.9% 
of  materials  used  in  2022,  compared  with  an  EU 
average of 22.4%, making it one of the countries 
that  are  most  vulnerable 
to  supply  chain 
disruptions.  Water  abstraction  for  manufacturing 
purposes  accounted  for  26.2%  of  total  water 
abstracted  in  2019,  making  manufacturing  the 

the  environment  and 

Source: European Commission 

In  2023,  greenhouse  gas  emissions  covered 
by the EU’s emissions trading system (ETS) in 
the  Netherlands (93)  have  declined  by  30% 
since  2018.  In  2023,  about  39%  of  greenhouse 
gases  emitted  by  ETS 
the 
Netherlands  came  from  power  generation  (EU 
average:  57%).  Refineries  accounted  for  about 

installations 

in 

(92)  See also Annexes 6, 7 and 12. 

(93)  This analysis excludes air travel. For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

(94)  In 2019, almost half of the greenhouse gas emissions 

classified as coming from ‘other industries’ apparently came 
from the manufacture of chemicals. 

50 

00.20.40.60.81010203040506070809020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherNetherlands (both axes)05101520253020182019202020212022Material footprint Netherlands (tonnes/capita)Material footprint EU-27 (tonnes/capita)Circular material use rate Netherlands (%)Circular material use rate EU-27 (%) 
 
 
  
 
       
 
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

sector  with  the  second-highest  impact  on  water 
resources after electricity production. 

slower  pace  than  the  EU  average.  A  similar  trend 
can be observed for the non-residential floor area. 

Graph A9.3: Treatment of municipal waste 

Source: Eurostat 

is 

and 

still 

scope 

for 
demolition 

improving 
These 
waste 
construction 
management.  The  Netherlands’  recovery  rate 
stayed  at  100%  in  2020,  achieving  the  Waste 
Framework Directive’s target for 2020. The whole 
population  is  connected  to  at  least  secondary 
wastewater  treatments.  Large  businesses  in  the 
Dutch  construction  sector  are  advanced 
in 
reporting  circular  business  models  covering  waste 
materials  but  also  energy  and  water.  Still,  the 
amount of waste generated from construction and 
demolition  activities  per  capita  is  one  of  the 
highest  in  the  EU  and  has  remained  relatively 
stable over the last few years. 

it 

its 

The Netherlands is a front runner in circular 
economy;  maintaining  its  ambitious  action 
would  help 
first-mover 
retain 
advantage. The Netherlands is an eco-innovation 
leader  according  to  the  2022  Eco-Innovation 
Scoreboard,  where  the  country  ranked  9th  with  a 
score  of  118.8.  As  of  September  2023,  the 
Netherlands  totalled  89  awarded  EU  Ecolabel 
licences and 1 744 products with the EU Ecolabel, 
showing  a  growing  and  good  take-up  of  products 
and licences. 

The Netherlands is among the top performers 
regarding waste management. The Netherlands 
is  increasing  its  municipal  waste  recycling,  which 
reached  a  rate  of  57.8%  in  2021.  The  country  is 
on  track  to  meet  the  2025  recycling  targets  for 
municipal and packaging waste and the landfilling 
target  for  2035.  The  recycling  rate  of  plastic 
packaging  is  above  the  EU  average,  measuring 
48.9%.  However,  the  Netherlands  recycled  only 
71.1%  of  its  e-waste  in  2021,  10  percentage 
points less than the EU average. Furthermore, the 
country  registered  13  new  patents  on  waste 
recycling in 2020, showing a decline compared to 
previous years. 

Existing  buildings  could  be  used  more 
efficiently.  In  2023,  the  Netherlands’  building 
permits index, based on useful floor area, stood at 
101.1 (95),  showing  relatively  stable  construction 
activities since 2015. The residential floor area per 
capita stood above the EU average in 2020, 47.79 
versus  52.33m2  per  capita,  but  increased  at  a 

(95)  With 2015 as base (2015=100). 

51 

511508533515473010020030040050060020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)3.53.74.04.54.6-2.52022Circular material use rate (%)25.825.627.228.527.5-11.52022Eco-innovation index (2013=100)109.7112.3118.2116.0118.8-121.52022Recycling of plastic packaging (%)52.057.249.248.9--40.72021Cost of air emissions from industry (EUR bn)18.317.516.216.3--352.72021Built environmentRecovery rate from construction and demolition waste (%)100.0-100.094.0--89.02020Soil sealing index (base year = 2006)103.9-----103.42018Non-residential floor area (m2 per capita)16.716.816.9---18.02020Waste backfilled (%)----0.0-9.92020 
 
        
 
   
 
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 Netherlands’ 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) (96).  Under 
Cohesion Policy, an additional EUR 0.2 billion (11% 
of  the  country’s  total  Cohesion  Policy  funding)  is 
allocated 
digital 
transformation (97). 

country’s 

the 

to 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  The  Netherlands’ 
national roadmap outlines the actions it intends to 
take  to  reach  the  objectives  and  targets  at 
national level. The first Report on the State of the 
Digital  Decade  highlighted  the  need  to  accelerate 
and deepen the collective efforts to reach the EU-
wide  targets  and  objectives (98).  Among  others,  a 
digitally 
the 
population 
development  and  adoption  of  digital  technologies 
and  leads  to  productivity  gains  and  new  business 
models.  It  also  leads  to  higher  inclusion  and 
participation 
increasingly 
in  an  environment 
shaped  by  the  digital  transformation (99).  Digital 
technologies,  infrastructure  and  tools  all  play  a 
the 
in  addressing 
role 
structural 
challenges, 
strategic  dependencies, 
including 
cybersecurity and climate change.  

increases 

current 

skilled 

(96)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(97)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 cohesion policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(98)  European Commission (2023): Report on the state of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(99)  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) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

52 

The  Netherlands  generally  performs  very 
well when it comes to basic digital skills, but 
the  ICT  labour  market  still  suffers  from 
important  shortages  of  technically  skilled 
staff.  The  country  has  the  highest  share  of 
individuals  with  at  least  basic  digital  skills  in  the 
EU (83% versus an EU average of 56%). Moreover, 
according  to  the  last  available  data  (2023),  6.9% 
of  individuals  in  employment  in  the  Netherlands 
are ICT specialists, compared to 4.8% in the EU on 
average.  However,  ICT  labour  shortages  remain 
and  are  reported  to  be  a  major  factor  limiting 
progress in the Dutch digital  transition. The Dutch 
RRP  includes  measures  to  further  promote  digital 
skills,  at  both  secondary  and  higher  education 
level.  A  new  action  plan  was  also  introduced  to 
address  the  issue  of  ICT  shortages  in  the  labour 
market.  

The 

(VHCN) 

coverage. 

The  Netherlands  performs  well  on  digital 
infrastructure  and  connectivity,  with  a  high 
level  of  overall  5G  and  very  high  capacity 
network 
country 
continues to score well above the EU average, with 
100%  of  populated  areas  having  overall  5G 
coverage  and  98%  of  households  having  VHCN 
already since 2022. Despite the high 5G coverage, 
there  is  still  significant  room  for  improvement 
when  it  comes  to  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 with the 
launch of the 3.6 GHz band this year – is crucial in 
this regard. 

are 

businesses 

successfully 
Dutch 
integrating  new  digital  technologies,  scoring 
above  average  on  all  key  metrics.  However, 
more investments and funding are needed to 
reach  the  highest  levels  of  performance  in 
the  EU  for  all  advanced  technologies.  The 
share of enterprises using cloud computing (57%) 
is  well  above  the  EU  average  (39%)  according  to 
the  latest  data  available  (2023),  although  it 
appears to have decreased from the 60% reported 
in  2021.  The  share  of  SMEs  with  at  least  a  basic 
level  of  digital  intensity  (79%  versus  an  EU 
average  of  58%),  and  the  use  of  artificial 
intelligence  (AI),  cloud  or  data  analytics  (71% 
versus an EU average of 55%) are also above the 
EU  average.  However,  the  share  of  enterprises 
using  AI (13.4%)is lagging behind the use of cloud 
services  (57.4%)  and  data  analytics  (48.6%).  To 
address the risk of falling behind in the use of AI, 

 
 
 
 
the  Dutch  RRP  includes  investments  in  the  more 
wide-spread  use  of  AI  systems  in  both  business 
and  academia,  to  improve  competitiveness  and 
productivity.  In  2022,  6.9%  of  enterprises  in  the 
Netherlands  reported  ICT  service  outage  due  to 
cyberattacks  (e.g.  ransomware  attacks,  denial  of 
service  attacks).  Over  the  same  year,  34.3%  of 
enterprises  developed  or  reviewed  their 
ICT 
security policy within the previous 12 months.  

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.  Citizens 
and  companies  have  access 
to  electronic 
identification (eID) solutions – DigiD for individuals 
and  eHerkenning  for  companies  –  that  have been 
notified under the eIDAS scheme. On access to e-
health records, the Netherlands scored 69 in 2022, 
slightly  below  the  EU  average  of  72.  The  Dutch 
RRP  includes  measures  to  support  the  further 
digitalisation 
by 
public 
facilitating  digital  access  to  documents.  It  also 
envisages further investments in the digitalisation 
of  the  justice  system  and  in  upgrading  the  IT 
systems  of  the  central  government.  The  RRP  also 
includes measures to enable remote healthcare by 
improving  e-services  and  to  strengthen  data 
exchange between health institutions, as well as to 
improve research in the sector.  

administration 

of 

53 

 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index 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 evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU 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.   

Source: Digital Economy and Society Index 

54 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills79%79%83%56%80%% individuals20212021202320232030ICT specialists (1)6.7%7.2%6.9%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage91%98%98%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)52%63%78%64%-% households2021202220232023Overall 5G coverage97%100%100%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity75%NA79%58%90%% SMEs2021202320232030Data analyticsNANA49%33%-% enterprises20232023Cloud60%60%57%39%-% enterprises2021202120232023Artificial intelligence13%13%13%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA71%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens85858679100Score (0 to 100)20212022202320232030Digital public services for businesses88898785100Score (0 to 100)20212022202320232030Access to e-health recordsNA697279100Score (0 to 100)2022202320232030Netherlands 
 
     
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  the  Dutch  research  and 
innovation  system,  which 
is  essential  for 
delivering  the  twin  transition  and  ensuring  long-
term competitiveness. 

initiative  to  support  knowledge  development,  R&I 
projects  that  boost  economic  growth.  Under  the 
first three investment rounds, EUR 11 billion of the 
total  EUR 20  billion  NGF  budget  were  committed 
to 53 projects in eight thematic areas. 

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. 

system. 

this.  Furthermore,  with 

Stepping  up  R&I-related  public  and  private 
commitments  for  sustainability  is  important 
for  strengthening  the  societal  impact  of  the 
Dutch  R&I 
The  mission-driven 
Innovation  Policy  and  Invest-NL  provide  relevant 
frameworks  for 
the 
Innovation  Covenant 
renewed  Knowledge  and 
(KIC) (103)  for  2024-2027,  businesses,  knowledge 
institutions, 
other 
organisations reaffirmed their shared commitment 
to mission-driven innovation policy for the coming 
years. 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 (RRP) (104). 

authorities 

public 

and 

to 

Thanks 

the  European 
to 

The  Netherlands  is  an  ‘Innovation  leader’ 
ranking fourth among the EU Member States, 
Innovation 
according 
Scoreboard (100). 
continuous 
improvements 
country’s 
performance  lead  over  the  EU  has  remained 
stable. The Netherlands scores particularly high on 
all  the  indicators  related  to  the  attractiveness  of 
the  research  system  and  the  linkages  in  the 
innovation ecosystem. 

2015, 

since 

the 

R&D  intensity (101)  slightly  increased  in  the 
last years, thanks to a growing business R&D 
intensity.  In  2022  the  R&D  intensity  reached 
2.30%  and  it  is  now  above  the  EU  average  of 
2.24%.  This  results  from  a  positive  trend  since 
2018  (the  lowest  level  of  2.14%  in  2018). 
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 growth in business R&D intensity, 
which  reached  1.56%  in  2022,  above  the  EU 
average  (1.48%).  Public  R&D  intensity,  at  0.74%, 
remains very close to the EU average (0.73%). 

The National Growth Fund, put in place by the 
authorities  in  2020,  aims  to  leverage  the 
efficiency  of  the  Dutch  R&D  system.  Overall, 
the  indicators  point  to  the  high  efficiency  of  the 
Dutch R&D system: investments in the Dutch R&D 
system are effective, making it possible to ensure 
innovation 
thereby  Dutch 
productivity  and  competitiveness.  This  has  been 
the  Dutch  authorities  which 
recognised  by 
leveraged  this  competitive  advantage  by  making 
investment in R&I one of the pillars of the 2021-
2025  National  Growth  Fund  (NFG) (102),  a  5-year 

leadership 

and 

(100) 2023 European Innovation Scoreboard (EIS), country profile: 

Netherlands 
https://ec.europa.eu/assets/rtd/eis/2023/ec_rtd_eis-country-
profile-nl.pdf. The 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). 

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

percentage of GDP. 

(102) National Growth Fund 

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

(103) KIC 2024-2027 

https://open.overheid.nl/documenten/2cc3f116-c82a-487c-
8588-9f7b30b17ab2/file  

(104) Estimated amount of Recovery and Resilience Facility 

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

55 

 
 
 
 
 
 
Table A11.1:Key innovation indicators 

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

56 

EUaverage (1)R&D intensity (GERD as % of GDP)1.72.152.322.272.32.24Public expenditure on R&D as % of GDP0.890.770.780.770.740.73Business enterprise expenditure on R&D (BERD) as % of GDP0.821.351.551.51.561.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 16.115.414.18::9.6Patent Cooperation Treaty patent applications per billion GDP (in PPS)5.26.15.06::3.4Public-private scientific co-publications as % of total publications1010.711.311.611.57.6Public expenditure on R&D financed by business enterprise (national) as % of GDP:0.060.0620.06:0.054New graduates in science & engineering per thousand pop. aged 25-349.2:11.212.4:16.9Graduates in the field of computing per thousand population aged 25-342.4:2.53:3.4Total public sector support for BERD as % of GDP:0.2440.2790.278:0.204R&D tax incentives: foregone revenues as % of GDP0.1350.1350.1540.162:0.104Share of environment-related patents in total patent applications filed under Patent Cooperation Treaty  (%)11.91011.5 ::14.7Venture capital (market statistics) as % of GDP0.040.030.0770.1320.1410.085Employment share of high growth enterprises measured in employment (%):17.3516.95::12.5120222021The Netherlands201020152020Finance 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  
 
 
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

The  Netherlands  has  a  highly  productive 
economy,  but  productivity  growth  has  been 
low  for  more  than  a  decade.  Between  1980 
and  2007,  the  Dutch  economy  was  as  productive 
as  the  US  economy  and  one  of  the  most 
productive  EU  countries (105).  However,  after  the 
2007-2008  financial  crisis,  productivity  growth 
weakened  compared  to  the  euro  area  and  peer 
economies.  Over  2000-2023,  labour  productivity 
growth was lower than its peers and the euro area 
average  (see  Graph  A12.1)  Real  GDP  per  person 
employed  has  been  growing  at  or  below  the  euro 
area average, starting in 2009. 2020 was the only 
year  when  Dutch  productivity  growth  was  above 
the  euro  area  average  (1.7%  vs  1.1%),  but  this 
was  an  atypical  year  marked  by  crises.  The 
Netherlands  is  forecast  to  record  productivity 
growth  rates  at  the  euro  area  average 
in 
2024 (106). 

pools in the Netherlands (trillions in pension funds, 
retained profits (109)) are mainly directed to outside 
the  country  for  various  reasons,  including  the 
yields and small size of the Dutch economy.  

Industry  is  a  factor  of  diversification  and 
resilience for the Dutch economy. It accounted 
for  16.6%  of  Dutch  gross  value  added  in  2023, 
which  makes  it  the  second  largest  sector  of  the 
Dutch  private  economy,  after  retail (110).  The 
government targets a manufacturing share of 10-
15% of GDP, reflecting its desire to keep a strong 
industrial base in the Netherlands as a foundation 
for prosperity and resilience via the diversification 
structure (111)  Businesses 
of 
contributed  two  thirds  of  R&D  expenditure  in 
2022 (112).  Industry  performed  well  over  the  last 
three  years  in  terms  of  productivity,  as  shown  in 
Graph A12.2.  

the  economic 

Graph A12.1: Labour productivity (GDP per hour 
worked) in purchasing power standards and as 
percentage of the EU in 2023 vs growth rate 
2000-2023 

Graph A12.2: Real labour productivity, hours 
worked, 2015=100 

Source: AMECO database, European Commission 

Low  investment  in  the  Netherlands  is  a 
contributing  factor  to  its  poor  productivity 
growth.  The  level  of  net  public  investment  in 
2023  was  well  below  the  EU  average.  Over  the 
last  5  years,  the  average  addition  to  the  public 
capital  stock  (in  GDP  terms)  was  one  third  of  the 
EU  average (107).  Among  its  peers,  only  Germany 
had  a  lower  rate.  Since  2010,  the  Netherlands’ 
total  investment  (as  a  share  of  GDP)  has  been 
below  that  of  the  EU  and  euro  area  except  for 
2015  and  2022 (108).  The  very  large  investment 

(105) OECD Database. Where no source for the data is given, the 

source is the table at the end of this Annex. 

(106) 2024 Commission Spring Forecast, Table 27. 

Source: European Commission 

Construction  plays  an  important  role  in 
addressing one of the key challenges for the 
Netherlands  –  housing.  Property  prices  in  the 
country  have  doubled  in  the  last  10  years.  The 
government set itself a target of building 981 000 

(109) The Dutch Central Bank (DNB) reported that pension funds 
had assets under management of EUR 1.54 trillion in Q1-
2023 (down from EUR 1.92 trillion in 2021). 82% of these 
funds were invested abroad. See DNB, ‘Dutch Pension Funds 
Invest More in the Netherlands’, 13 June 2023.  

(110) Eurostat, Gross value added by industry. 

(111) Ministry of Economic Affairs and Climate, ‘New Strategic and 

(107) Commission calculation based on Eurostat data. 

Green Industrial policy’ (July 2022). 

(108) Eurostat, total investment. 

(112) Eurostat, gross expenditure on R&D. 

57 

0.00.20.40.60.81.01.21.41.6020406080100120140160BENLUSDEDKSEUKFIATEA19EU27Annual average % changePPS per hour, % EUIncome in 2000Income in 2023Growth 2000-2023(rhs)9095100105110115201520162017201820192020202120222023Industry (except construction)ConstructionWholesale and retail trade, transport, accommodation and food serviceactivitiesInformation and communicationFinancial and insurance activitiesProfessional, scientific and technical activities; administrative and supportservice activities 
 
     
 
     
 
 
homes  by  2030  to  ease  the  housing  shortage. 
However,  reaching  this  target  is  likely  to  be 
challenging  as  labour  shortages,  issues  related  to 
environmental  requirements,  the  slow  permitting 
process  and  tighter  financial  conditions  dampen 
construction  activity.  The  number  of  construction 
permits issued in 2023 – 55,000 – is lower than in 
previous  years.  The  construction  sectors’  share  in   
f  gross  value  added  increased  slightly  from  4.7% 
in 2022 to 4.9% in 2023 (5.7% in the EU). 

a 

Decarbonisation 
challenge. 
remains 
Netherlands is one the heaviest polluters in the EU 
(6th in 2020 in terms of greenhouse emissions per 
capita (113);  see  also  Annex  6).  The  installed  share 
of  renewable  electricity  capacity  in  electricity 
production has increased recently and reached the 
EU  average.  For  the  country  to  reach  its  2030 
climate  target  of  reducing  emissions  by  55% 
compared  to  1990  levels,  it  will  need  to  quickly 
and thoroughly implement planned measures. The 
previous 
substantial 
resources to greening, but the main challenge lies 
in implementation.  

government 

allocated 

The 

environment. 

Greening  the  economy  fast  enough  is  a  key 
factor  in  preserving  the  quality  of  the 
business 
business 
environment has traditionally been a key strength 
of  the  Dutch  economy.  But  delivering  on  climate 
targets  will  be  a  key 
issue  for  economic 
the  coming  years  affecting 
performance 
companies’ decisions to stay in the Netherlands or 
relocate,  as  will  other  important  developments  at 
EU  and 
the  OECD 
agreement  on  profit  taxation,  US  technology 
sanctions  against  China).  Several  big  firms  have 
moved their main headquarters abroad in the last 
3 years.  

international 

level 

(e.g. 

in 

Companies  are  affected  by 
labour  and 
material  shortages.  These  shortages  are  acute 
in  the  Netherlands:  34.6%  of  companies  reported 
problems  in  hiring  staff  compared  to  the  EU 
average  of  23.3%,  while  23%  are  experiencing 
difficulties 
factors  of 
production,  which  is  also  above  the  EU  average 
(17.2%).  The  job  vacancy  rate  is  double  the  EU 
average  but  close  to  peers.  Availability  of  skilled 

the  material 

finding 

(113) Eurostat. 

staff 
is 
investment (114).  

the  main  barrier 

to 

long-term 

in 

the 

can 

In  2023, 

the  country’s 

The  Netherlands  is  well  integrated  into  the 
improve 
Single  Market,  but 
its 
Single  Market 
performance 
Scoreboard. 
trade 
integration  in  the  single  market  for  goods  and 
services  (45.60%  of  GDP)  was  above  the  EU 
average  (43%).  The  OECD  restrictiveness  index 
shows  that  the  Netherlands  has  the 
lowest 
barriers  for  trading  in  services  among  all  EU 
countries.  The  2023  Single  Market  Scoreboard 
indicates  that  performance 
is  below  the  EU 
average  on  both  the  transposition  deficit  and 
conformity deficit. The Netherlands solved 73% of 
SOLVIT cases (48) it handled as lead centre (below 
the EU average of 88.3%). 

has 

Netherlands 

The 
successfully 
implemented  the  components  needed  to 
connect  to  the  Once-Only  Technical  System 
(OOTS).  As  part  of  the  Single  Digital  Gateway 
Regulation, the system will  enable the automated 
cross-border  exchange  of  evidence  between 
competent  authorities,  improving  online  access  to 
information,  administrative 
procedures,  and 
assistance  within  the  EU.  The  onboarding  of  the 
Dutch  competent  authorities  is  crucial  for  the 
system  to  function  smoothly  and  to  reduce 
administrative burden. 

Small  and  medium-sized  enterprises  (SMEs) 
face  multiple  challenges  and  could  benefit 
from  better  access  to  finance  and  public 
procurement.  The  top  concerns  for  SMEs  are 
related to staff shortages and energy prices. They 
could  take  better  advantage  of  the  large  public 
the  Netherlands (115), 
procurement  market 
in 
including  by  opening  up  more  sectors  (such  as 
social  housing)  to  competition.  Splitting  calls  for 
tender  may  help  SMEs  (16%  split  calls  in  the 
Netherlands vs 30% in EU in 2022). 

(114) As reported by Dutch companies in the EIB Investment 

Survey, 2023 edition.  

(115) OECD data for 2021 show that public procurement 

accounted for around 45% of government expenditure or 
20% of GDP. These figures place Netherlands at the top of 
the table for both EU and OECD countries.  

58 

 
 
 
Table A12.1:Industry and the Single Market 

Source: Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index.  
* Own Commission calculations for the EU27 average 

loans  than  EU  companies.  This 

The  EIF  index  on  access  to  finance  signals  that 
SMEs  in  the  Netherlands  face  more  difficulties  in 
is 
accessing 
confirmed  by  the  2023  EIB  Investment  Survey, 
where  the  share  of  Dutch  companies  that  use 
external  sources  to  finance  investment  (around 
30%)  is  the  second  lowest  in  the  EU,  well  below 

the  EU  average  (43%).  The  same  study  shows, 
however,  that  Dutch  companies’  dependence  on 
bank  loans  is  limited,  as  they  have  internal 
resources  to  fall  back  on  (e.g.  it  has  the  highest 
share  of  internal  financing  and  one  of  the  lowest 
rates of financially constrained firms). 

59 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP14,53,744,143,8Net Public investment, level of public capital stock, net of depreciation, % GDP10,40,50,40,20,21,2Real labour productivity per person in industry (% yoy)2-2,5-2,38,20,7-4,9-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)25,25,5-5,64119,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP241,740,544,250,145,642,9Transposition deficit, % of all directives not transposed30,611,61,40,60,7Conformity deficit, % of all directives transposed incorrectly31,41,71,31,61,21,1SOLVIT, % resolution rate per country380,678,089,278,073,088,3Number of pending infringement proceedings3232624212325,9RestrictionsEEA Services Trade Restrictiveness Index40,030,030,030,030,030,05Single bids, % of total contractors3151313191928,6Direct Awards, %36979118,1Material Shortage (industry), firms facing constraints, %59,58,024,339,323,017,2Labour Shortage using survey data (industry), firms facing constraints, %522,714,823,336,934,623,3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)23,62,64,25,44,92,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,180,190,190,180,30,22Installed renewables electricity capacity, % of total electricity produced20,20,30,30,450Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle711,09,89,012,010,022,2Bankruptcies, Index (2015=100)263,453,130,135,654,9105,6Business registrations, Index (2015=100)2126,3121,4138,1142,6150,1120,2Payment gap - corporates B2B, difference in days between offered and actual payment8--211131315Payment gap - public sector, difference in days between offered and actual payment8--111131616Share of SMEs experiencing late payments in past 6 months, %933,125,022,724,629,648,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,230,210,260,25-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values 0,170,330,280,21-0,17NetherlandsHEADLINE INDICATORSEconomic StructureSINGLE MARKETComplianceBusiness demographyLate paymentsAccess to financeSource: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index. Public procurement ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEs 
 
     
 
Graph A13.2: Share of employed by occupation and 
by sector 

ANNEX 13: PUBLIC ADMINISTRATION 

twin 

The  Netherlands’  public  administration  is 
essential  for  the  economy’s  competitiveness 
by,  in  particular,  shaping  the  conditions  for 
the 
creating  a 
transitions  and 
favourable  business  environment.  While  the 
Netherlands’  government  effectiveness  score 
remains one of the highest in the EU, it has fallen 
for the second year in a row, reaching its lowest-
ever  level (Graph  A13.1).  This  is  coupled  with  a 
reduction in trust in government (116). 

Graph A13.1: Government effectiveness 

Notes: 2023 data 
High-skilled occupations: managers, professionals, technicians, 
and associate professionals; medium-skilled occupations: 
clerical support workers, service and sales workers, skilled 
agricultural, forestry and fishery workers, craft and related 
trades workers, plant and machine operators and assemblers; 
c) low-skilled occupations: elementary occupations 
Source: Eurostat. Employment by sex, age, occupation, and 
economic activity. 

The  Netherlands  is  one  of  the  EU’s  best 
performers  in  digital  public  administration. 
The  level  of  e-government  maturity  is  high  (the 
Netherlands: 85.2%, EU: 75.8%) with a wide range 
of  services  offered  digitally  and  a  high  level  of 
user  centricity  (the  Netherlands: 96.2%,  EU: 93%). 
The share of e-government users continues to rise, 
reaching  96%  of  internet  users  (EU: 75%).  The 
Netherlands  has  started  implementing  the  Digital 
Government  Act  (known  as  Wdo)  that  aims  at 
increasing 
the  security,  privacy  and  user-
friendliness of digital services. 

but 

in 
gaps 

the 
The  quality  of  policymaking 
Netherlands 
in 
high, 
is 
implementation limit policy impact. The fall of 
the  government  in  July  has  limited  the  caretaker 
government’s  ability  to  develop  major  initiatives. 
The 
recent  parliamentary 
inquiries (117)  have  contributed  to  discussions  on 
‘good governance’ and could result in policymaking 
reforms by the government that will be formed. In 
October  2022,  the  Netherlands  launched  a  new 

results  of 

three 

Notes: average value over 2018-2022 and change over 
2018-2022. 
The GDP per head bar shows the mean value of the 
government effectiveness indicator for the group of EU 
countries belonging to the same GDP per head cluster as the 
Netherlands (EU countries are ranked in terms of their GDP 
per head and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators. 

The share of public administration employees 
with higher education and their participation 
in  adult  learning 
indicate  a  high-skilled 
workforce  compared  to  the  EU-27  (Chart 
A13.2).  Gender  parity 
in  senior  civil  service 
positions  has  improved  in  the  last  5  years  but 
remains  slightly  below  the  EU  average  (Table 
A13.1).  The  ratio  of  25-49  to  50–64-year-old 
workers  in  public  administration  went  up  in  2023 
(Table  A13.1)  against  the  backdrop  of  a  visible 
employment increase in the 25-49 age bracket.  

(116) Standard Eurobarometer, 2023. 

(117) These inquiries were related to (i) gas extraction in 

Groningen, (ii) the childcare allowance affair and (iii) the 
government’s handling of the COVID-19 pandemic. 

60 

-0.50.00.51.01.52.0NLEU-27GDP perhead clusterChange 2018-2022Average 2018-20220%10%20%30%40%50%60%70%80%90%100%NLEU27NLEU27NLEU27Publicadministration (O)Publicadministration,education andhealthcare O-QTotal economyHigh-skilled occupationsMedium-skilled occupationsLow-skilled occupationsArmed forces 
 
     
 
   
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If not available, the latest value available 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: E-government activities of individuals via websites, 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). 

the  government (118).  The 

policy  preparation  framework  that  was  rolled  out 
throughout  2023  and  will  become  a  standard 
across 
framework 
emphasises  the  use  of  evidence  and  the  need  to 
gather  evidence  from  many  sources,  including 
academic 
and 
stakeholders.  In  addition,  the  first  Staat  van  de 
Uitvoering  (state  of  implementation)  reports  on 
gaps  in  policy  implementation  that  limit  the 
effectiveness  of  public  policies  and  reduce  public 
trust (119).  

research, 

analytics 

data 

judges  and  public  prosecutors  have  expressed 
concerns  about  staff  shortages  and  high 
workloads. Initiatives to improve access to justice, 
including  reflections  on  a  reform  of  the  legal  aid 
system,  are  ongoing.  The  level  of  digitalisation  is 
advanced. Improved digital  tools enable  people to 
initiate  and  follow  proceedings  online  although 
there 
civil, 
administrative  and  criminal  proceedings.  More 
judgments  have  been  published  online,  but  the 
publication  rate  is  low.  On  judicial  independence, 
no systemic deficiencies have been reported (120). 

improvement 

room 

for 

in 

is 

The lack of data on the efficiency of litigious 
civil and commercial cases prevents properly 
justice  system’s  overall 
evaluating  the 
efficiency.  Efficiency  has 
in  first-
improved 
instance  administrative  cases  (257  days  in  2022 
compared  to  265  days  in  2021).  The  overall 
quality  of  the  justice  system  is  good.  However, 

(118) Rijksoverheid, 2022. 

(119) Staat van de Uitvoering, 2023. 

(120) For more details, see the 2024 EU Justice Scoreboard and 
the Commission’s 2024 Rule of Law Report (forthcoming). 

61 

NL20192020202120222023EU-27(2)1n/an/an/a96.995.575.02n/a82.085.185.385.275.830.80.90.90.80.80.8456.1 (b)58.657.6 (b)59.360.752.9524.623.636.0 (b)33.732.917.9625.423.420.217.211.69.271.41.51.4 (b)1.51.61.580.90.90.90.9n/a0.792.32.32.32.3n/a1.410n/an/a2.07n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher 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 
Pillar’s  20  principles  and  the  EU  headline  and 
national  targets  for  2030  on  employment,  skills 
and poverty reduction. 

(3.8% for men and 1.8% for women) report doing 
so  involuntarily (121),  which  is  the  lowest  share  in 
the EU. Nonetheless, the wide gender gap in part-
time employment (42.3 pps against an EU average 
of  20.2  pps  in  2023)  fuels  a  very  high,  although 
slightly decreasing, gender pension gap  (40.0% in 
2022, from 65 to 79 years). 

Table A14.1:Social Scoreboard for the Netherlands 

To 

market 

segmentation, 

The  Dutch  labour  market  is  performing  well 
overall,  but  challenges  persist  in  terms  of 
labour 
and 
employment and social outcomes for certain 
groups.  The  employment  rate  in  the  Netherlands 
was  83.5%  in  2023,  well  above  the  EU  average 
(75.3%), and unemployment remains low (3.6% in 
March  2024).  However,  the  level  of  flexible  and 
temporary  contracts  remains  far  above  the  EU 
average  (23.4%  vs  12.2%  in  2023),  as  does  the 
number  of 
self-employed  workers  without 
employees  (11.7%  vs  7.5%).  Equal  opportunities 
and  fair  working  conditions,  including  income 
levels  and  social  protection  coverage,  remain  a 
challenge  for  certain  groups.  Over  a  million  self-
employed  people  without  employees  are  not 
insured  for  unemployment  benefits,  paternity 
for  accidents  at  or 
benefits,  or  benefits 
occupational 
social 
improve 
diseases. 
protection  for  the  self-employed,  the  Netherlands 
included  a  reform  in  its  recovery  and  resilience 
plan 
introduce  mandatory  disability 
insurance  for  this  group.  The  poverty  rate  of 
temporary  contract  workers  is  significantly  higher 
than  for  workers  with  a  permanent  contract. 
Although  the  disability  employment  gap  closed 
slightly in 2022, it remains above the EU average 
(25.2 percentage  points  (pps)  vs  21.4 pps).  And 
while the employment rate of people born outside 
the EU is just above the EU average of 64.6% (in 
2023), the  gap  with people  born in the  country  is 
over twice as big as the average gap  at EU  level. 
Labour  market  participation  of  women  and  their 
number  of  hours  worked  have  recently  increased, 
with  a  gender  employment  gap  that  is  below  the 
EU  average  (7.8  pps  vs  10.2  pps  in  2023). 
However,  at  13.0%  in  2022,  the  gender  pay  gap 
was  still  slightly  above  the  EU  average.  Women 
are  overrepresented  among  part-time  workers 
(61.2% compared to 27.9% in the EU in 2023), in 
a country where part-time and other non-standard 
forms  of  employment  remain  widespread.  At  the 
same  time,  only  2.3%  of  those  working  part-time 

(RRP)  to 

Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat. 

transitions  and  undermine 

Labour  and  skills  shortages  remain  a 
challenge,  which  may  affect  the  green  and 
digital 
the 
Netherlands’  economic  competitiveness.  Job 
tightness  is  prevalent  in  different  sectors  but  is 
particularly high in services, ICT, technical jobs and 
construction.  The  growing  shortage  of  teachers 
across  the  education  system,  as  well  as  in 
vocational education and training (122), is a serious 
the  green  and  digital 
issue,  also  because 
transitions  require  a  sufficiently  skilled  workforce. 
Retiring  teachers  are  not  replaced  at  a  sufficient 

(121) https://ec.europa.eu/eurostat/databrowser/view/ 

lfsa_eppgai/default/table?lang=en  

(122) Code rood: lerarentekort loopt verder op (werk.nl) 

62 

56.16.382.74.87.83.983.53.60.5111.916.513.933.7925.21072.30.2Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
   
 
 
 
in 

than 

leave 

people 

people, 

teachers 

lower-skilled 

labour  potential 

rate,  and  many  novice 
the 
profession after the first few years. Participation in 
vocational  education  and  training  and  adult 
learning 
the 
remains  significantly  higher 
Netherlands 
in  other  Member  States. 
However, those for whom life-long learning would 
have  the  largest  positive  impact  participate  less, 
including 
on 
temporary contracts and are not close to getting a 
job such as the (long-term) unemployed and those 
who  are  out  of  the  labour  force.  Despite  the 
decentralised system which enables a tailor-made 
approach,  there  is  a  difference  between  regions 
and municipalities in their outreach to people who 
have  difficulties  in  finding  a  job  or  training  (and 
whose 
is  greatly  needed). 
Continued investment in improving basic, technical 
and  digital  skills,  increasing  mobility  between 
sustainable  employability,  and 
sectors  and 
improving 
inclusiveness  of 
education and training for all, are essential 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  make 
investments  to  increase  the  number  of  people 
from  groups  in  an  unfavourable  employment 
and/or vulnerable social situation who find work or 
training,  to  help  tackle  labour  shortages  and 
activate  people’s  untapped  skills  and 
labour 
potential. In addition, the Just Transition Fund, with 
its  focus  on  emission-intensive  regions  most 
transition,  provides 
affected  by 
upskilling  and  reskilling  opportunities  to  workers 
and people at the margins of the labour market to 
ensure  that  people  have  the  necessary  skills  for 
the transition. 

the  quality  and 

the  climate 

Although  the  share  of  people  at  risk  of 
poverty  or  social  exclusion  (AROPE)  in  the 
Netherlands is  stable and  well  below the  EU 
average,  some  groups  face  significant  risks, 
such  as  people  with  a  migrant  background, 
children  and  persons  with  disabilities.  In 
2022,  35.1%  of  people  living  in  the  Netherlands 
who  were  born  outside  the  EU  were  at  risk  of 
poverty  or  social  exclusion,  20.6  pps  higher  than 
the  share  of  people  born  in  the  Netherlands.  The 
second  generation  of  people  with  a  migrant 
background has a much greater risk of poverty: in 
2022, 29.3% of children with parents born outside 
the  Netherlands  were  at  risk  of poverty.  This  rate 
is  more  than  four  times  higher  than  the  one  for 

in 

children  whose  parents  were  born 
the 
Netherlands (123).  While  overall  child  poverty  and 
social  exclusion  is  below  the  EU  average  (12.7% 
compared  to  19.3%  in  2022),  the  poverty  gap 
(AROP)  for  children  compared  to  adults  increased 
significantly,  by  8.3  pps  from  2020  to  2021,  and 
remaining  at  26.0  pps in  2022 (124).  In  addition,  a 
quarter of persons with disabilities were at risk of 
poverty or social  exclusion in 2022, a rate that is 
more  than  double  that  for  persons  without 
disabilities.  There  is  therefore  scope  for  greater 
social policy action for the Netherlands to reach its 
national target to reduce the number of people at 
risk  of  poverty  or  social  exclusion  by  163 000  by 
2030,  taking  into  account  the  gaps  that  persist 
between different groups.  

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, special extraction excl. guided on-the-job training. 
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

for 

especially 

The  housing  cost  overburden  remains  a 
lower-income 
challenge, 
households. The housing cost overburden rose by 
1.7 pps to 10% in 2022 and is now above the EU 
average  (8.7%).  Housing  costs,  as  a  proportion  of 
a  household’s  disposable  income,  are  especially 
high for households with an income below 60% of 
the  median  equivalised  income  (46.6%),  which  is 
far above the EU average of 37.9%. Inflation and 
energy  prices,  in  combination  with  the  lack  of 
affordable  and  suitable  housing,  have  negatively 
affected  household  disposable 
in 
particular  among  the  most  vulnerable  and  lower 
income  groups.  Tenants  are  disproportionately 
affected: 41.4% of tenants who rent at the market 
price  experience  housing 
cost  overburden, 
compared  to  26.1%  of  tenants  renting  at  a 

incomes, 

(123) Eurostat: ilc_li34  

(124) Eurostat: ilc_li11 

63 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 83.5(2023)56.1(2022)54(2022)Poverty reduction2 (thousands)-163-15 000Employment (%)82.578Adult learning1 (%)6260 
 
  
 
 
reduced price (such as for social housing) and 2% 
of homeowners with a mortgage or loan (125).  

(125) Eurostat: tessi164  

64 

 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Netherlands’  education  and  training  system 
based on the 2023 Education and Training Monitor 
and  the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results. 

Basic  skills  have  deteriorated  dramatically, 
representing  a  risk  for  skills  development, 
labour  productivity  and  competitiveness. 
While 
in  2012  the  share  of  underachieving 
students was below the EU 2030 target (15%) and 
well below the EU average in all three domains, by 
2022  it  had  almost  doubled  in  mathematics  and 
science,  and  it  was  2.5  times  higher  in  reading 
than  in  2012.  The  underachievement  rate  only 
remains  below  the  EU  average  in  mathematics. 
Almost half of foreign-born students underachieve 
in  mathematics  (48.5%),  while  for  native-born 
the 
students  with 
underachievement  rate 
lower 
in  mathematics 
(37.9%).  Underachievement 
increased 
disadvantaged 
students (26.1% in 2018 vs 42% in 2022). A steep 
decline  in  the  basic  skills  of  fourth  grade  pupils 
was  also  observed  in  the  2021  Progress  in 
International  Reading  Literacy  Study 
(PIRLS). 
Compared  with  2016,  the  share  of  low  achievers 
nearly  doubled (126).  The 
increasing  share  of 
underachieving  students  is  especially  a  challenge 
regarding already existing skill shortages. 

parents  born  abroad, 

is  considerably 

especially 

among 

Graph A15.1: Underachievement rates by field, 
PISA 2012, 2018 and 2022 

Source: OECD (2023). 

The shares of top performers in mathematics 
and science are among the highest of the EU 
countries.  Even  though  their  share  decreased 

(126) European Commission: Children’s reading competence and 
well-being in the EU: an EU comparative analysis of the 
PIRLS results 

significantly in mathematics (by 3 pps) since 2018, 
the rate is almost twice as high as the EU average 
in 2022 (15.4% vs EU: 7.9%). In science, the share 
remained stable,  and it is now one of the highest 
rates  in  the  EU  with  at  10.5%  (EU:  6.9%).  In 
reading, the rate decreased by 2.1 pps since 2018, 
but it remains above the EU average (7.0% vs EU: 
6.5%).  5.7%  of  disadvantaged  students  are  top 
performers, the highest share in the EU (EU:1.8%). 
Differences  between  schools  have  the  greatest 
impact on pupils’ performance of all EU countries, 
reflecting ability-based tracking from an early age. 

In  May  2022, 

The  Netherlands  has  taken  measures  to 
improve  learning  outcomes  and  to  promote 
equal  opportunities. 
the 
government launched a basic skills master plan for 
early  childhood  education  and  school  education. 
The  plan  promotes  Dutch  reading  and  writing 
skills,  mathematics,  citizenship  education  and 
digital  literacy.  In  October  2022,  a  subsidy  was 
created to fund school breakfasts and/or lunch for 
primary and secondary schools where over 30% of 
students come from low-income families. 

in  the  big  urban  areas, 

The  Netherlands  faces  growing  teacher 
shortages in all sectors. In 2021-2022, 9.5% of 
teaching and 13.6% of director positions were not 
filled  in  primary  education (127).  Shortages  are 
highest 
in  special 
education, in schools with a disadvantaged student 
population,  and  in  schools  that  were  assessed  as 
very  weak  by  the  Inspectorate  of  Education. 
Shortages  often  oblige  schools  to  use  emergency 
solutions  such  as  employing  teachers  not  yet 
qualified, merging classes, or asking pupils to stay 
at home for a day (128). 

Several  measures  aim  to  enhance  the 
attractiveness  of  the  teaching  profession. 
The  Education  Agreement  of  April  2022,  between 
the  Ministry  of  Education,  Culture  and  Sciences, 
the  trade  unions  and  sectoral  organisations, 
involved  closing  the  salary  gap  between  primary 
and  secondary  school  teachers;  for  this,  the 
government  set  aside  EUR 919  million  per 
year (129). 
contains 
agreement 

also 

The 

(127) Ministerie van Onderwijs, Cultuur en Wetenschap: 

Trendrapportage Arbeidsmarkt Leraren po, vo en mbo 2022 

(128) Ministerie van Onderwijs, Cultuur en Wetenschap: 

Trendrapportage Arbeidsmarkt Leraren po, vo en mbo 2021 

(129) Ministerie van Onderwijs, Cultuur en Wetenschap: 

Lerarenstrategie 

65 

0510152025303540NLEUNLEUNLEUMathematicsReadingScience%2012201820222030 EU target 
 
   
 
 
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

commitments for additional funding to reduce the 
workload in secondary education (EUR 300 million) 
and  more  funding  for  continuous  professional 
development (EUR 118 million).  In February 2023, 
a  proposal  was  approved  to  enhance  teacher 
quality, 
Teachers’ 
Professionalisation,  financed  from  the  National 
Growth Fund. 

the  National  Plan 

for 

Participation  in  early  childhood  education 
and  care  (ECEC)  from  age  3  is  higher  than 
the  EU  average.  From  age  3,  93.0%  of  children 
in  the  Netherlands  participate  in  ECEC,  above  the 
EU average (92.5%) but below the EU-level target 
(96%)  for  2030.  A  special  form  of  ECEC  is  the 
early 
for 
disadvantaged  children.  While  the  number  of 
participating  children  from  the  target  group 
remained  stable  between  2019  and  2021,  the 
number of available places fell between 2020 and 
2021.  The  shortages  are  greater  in  moderately 
and  highly  urban  areas  (28.6%) (130),  which  may 

education 

childhood 

scheme 

(130) Inspectie van het Onderwijs: De Staat van het Onderwijs 

66 

put at risk the development of children who most 
need these services. 

The  share  of  early  school  leavers  is  below 
the  EU-level  target,  but  it  slightly  increased 
in  2023.  At  6.3%,  the  Netherlands  is  well  below 
the  EU-level  ceiling  (less  than  9%)  for  early 
leavers  from  education  and  training,  but  this  is 
higher  than  the  historic  low  of  2021  (5.1%). 
National  data  on  the  number  of  young  people 
dropping out from school each year over the past 
decade without obtaining a basic qualification also 
indicates  a  comparable  trend,  only  briefly  broken 
during  the  years  of  school  closures  linked  to  the 
pandemic.  Based  on  the  recent  increase,  the 
government  initiated  some  new  actions  to  reduce 
the number of early school leavers (131). 

The  tertiary  attainment  rate  is  among  the 
highest in the EU. 54.5% of the population aged 
25-34 holds a tertiary degree (EU: 43.1%). Overall 

(131) Ministerie van Onderwijs, Cultuur en Wetenschap: Kamerbrief 

over hoofdlijnen aanvalsplan voorkomen voortijdig 
schoolverlaten en begeleiden naar een kansrijke toekomst 

96%94.1%201391.8%201389.4%92.2%93.0%202192.5%2021,dReading< 15%14.0% 18.0%24.1% 22.5%34.6%202226.2%2022Mathematics< 15%14.8% 22.1%15.8%22.9%27.4%202229.5%2022Science< 15%13.1% 16.8%20.0%22.3%27.3%202224.2%2022< 9 %8.9%12.6%7.3%10.5%6.3%9.5%Men10.5%14.5%9.3%12.1%7.3%11.3%Women7.2%10.6%5.3%8.7%5.2%7.7%Cities8.2%b11.2%6.8%9.4%6.0%8.6%Rural areas9.8%b14.0%9.0%11.0%6.3%9.9%5By country of birthNative8.7%11.3%7.0%9.2%5.8%8.2%EU-born13.2%26.2%15.6%22.4%13.2%21.0%Non EU-born12.1%30.1%9.4%23.0%9.0%21.6%6Socio-economic gap (percentage points)18.2:20.829.532.1202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :94.9% 64.5%45%41.4%34.1%47.6%38.7%54.5%43.1%Men37.7%29.1%42.8%33.3%50.4%37.6%Women45.0%39.2%52.5%44.2%58.8%48.8%Cities48.8%b43.5%52.6%49.0%60.3%53.3%Rural areas29.1%b24.8%34.8%27.7%37.3%31.7%Native43.1%35.4%49.6%39.7%56.0%44.2%EU-born42.0%29.3%40.5%36.7%50.2%40.2%Non EU-born29.8%24.2%32.8%31.0%46.9%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::57.1%201637.4%201656.1%202239.5%202226.9%201322.7%201327.7%23.8%25.5%202124.5%2021201220182023IndicatorTargetNetherlandsEU-27NetherlandsEU-27NetherlandsEU-271Participation 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 urbanisationTertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over 
 
 
 
   
 
participation  in  vocational  education  and  training 
and  in  lifelong  learning  activities  is  high  (see 
Annex 14). 

67 

 
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  in  the  Netherlands  is  above 
the  EU  average  but  has  declined  since  2019 
due  to  the  COVID-19  pandemic.  In  2022,  life 
expectancy  partially  rebounded,  as  COVID-19 
mortality declined (132). In general, the Netherlands 
fares  comparatively  well  in  avoiding  deaths  from 
treatable  causes.  However,  cancer  mortality  is 
above  the  EU  average,  with  one  of  the  main 
mortality causes being lung cancer. This correlates 
leading 
with  tobacco  consumption  being  the 
behavioural  risk  factor  for  mortality 
in  the 
Netherlands. 
In  2021,  cancer  mortality  was 
followed by cardiovascular diseases and COVID-19 
as main causes of deaths. 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

Health  spending  relative  to  GDP  in  the 
Netherlands  was  slightly  above  the  EU 
average  in  2021.  It  was  slightly  down  in  2020, 
however  (despite  an  8%  increase  in  nominal 
terms).  This  is  in  line  with  a  trend  reflecting  the 
effect  of  economic 
recovery  after  2020. 
Provisional  data  for  2022  (from  the  OECD) 
in  total  spending  on 
indicate  a  stark  drop 
healthcare  to  10.2%  of  GDP.  Public  sources  cover 
a  high  proportion  of  health  expenditure,  resulting 
in  a  low  proportion  for  out-of-pocket  payments. 
There  is  also  a  large  voluntary  health  insurance 
sector,  covering  services  outside  the  statutory 
benefits package for healthcare. Based on the age 

(132) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

68 

profile  of  the  Dutch  population,  the  projected 
increase  in  public  expenditure  on  health  by  2070 
as  a  share  of  GDP  is  0.7 percentage  points  (pps), 
compared to 0.6 pps for the EU overall (see Graph 
A16.2 and Annex 21). 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Baseline scenario 
Source: European Commission / EPC (2024) 

Spending  on  preventive  care  more  than 
doubled  in  nominal  terms  from  2020  to 
2021.  In  2021  it  accounted  for  8.7%  of  total 
health  spending  –  above  the  EU  average  of  6%. 
The  increase  was  attributable  to  expenditure  on 
COVID-19  testing,  tracing  and  vaccines,  which 
collectively accounted for more than two thirds of 
spending  on  preventive  care  in  2021.  Provisional 
data  for  2022  (from  the  OECD)  indicate  a  stark 
drop  to  5.7%  of  total  health  spending  going  on 
preventive care. 

The  country  has  a  strong  primary  care 
system.  This  is  combined  with  a  relatively  low 
number  of  hospital  beds  per  population,  and  low 
hospital  admission  rates  compared  to  other  EU 
countries. This corresponds with a higher spending 
per capita on outpatient care than the EU average 
on the one hand, and lower spending on inpatient 
care on the other hand. 

Structural  shortages  of  certain  health 
workers are an ongoing challenge. The number 
of  doctors  relative  to  the  population  is  slightly 
below the EU average, while the number of nurses 
relative to the population is above the EU average. 
Nurses  in  the  Netherlands  participate  in  task-
sharing  and  advanced  practices,  creating  a 
comparatively  attractive  job  profile.  Moreover,  in 
recent  years,  there  has  been  a  sharp  increase  in 
the number of healthcare workers, who constitute 
15% of the total workforce. However, nursing staff 
are  overburdened  in  certain  settings,  such  as 
hospitals,  and  not  all  trained  nurses  work  (full-

81.881.982.281.481.481.780.981.081.380.480.180.6201720182019202020212022NetherlandsEU6.65.80.60.702468EUNetherlands% of GDP20242070increase 
 
   
 
   
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

time) in the profession. There is also an increasing 
trend  for  health  workers  to  be  self-employed 
instead of being salaried. Public campaigns aim to 
‘Ik  Zorg’,  for 
increase  the  number  of  staff. 
instance, brings together people who want to work 
in  healthcare  and  organisations 
looking  for 
employees.  Recent  estimates  forecast  a  shortage 
of  almost  200 000  staff  by  2033  (including  for 
long-term care services) (133). In autumn 2022, the 
Dutch  Ministry  of  Health  published  a  programme 
to  future-proof  the  healthcare  labour  market, 
which  will  look  at  new  ways  of  organising  care 
processes,  retention  of  staff  and  space  for 
learning  and  development (134).  The  programme 
builds  on  the  need  for  organisational  change,  as 
growth  in  demand  for  healthcare  is  expected  to 
outstrip supply in its current form. 

Through  its  recovery  and  resilience  plan 
(RRP),  the  Netherlands  plans  to 
invest 
EUR 172 million  (3.15%  of  the  RRP’s  total 
value) in healthcare. Health-related investments 
are planned in surge capacity of additional human 
resources for crisis times (including a new national 
healthcare reserve), architectural 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  at  times  of  an 
acute  crisis  but  does  not  sufficiently  address 
structural  labour  shortages  in  the  health  sector. 

(133) Kamerbrief nieuwe arbeidsmarktprognose zorg en welzijn 

2023 | Brief | Prognosemodel Zorg en Welzijn 
(prognosemodelzw.nl). 

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

Furthermore,  under  the  EU  cohesion  policy  funds 
programmed  for  2021-2027,  the  Netherlands 
plans  to  invest  around  EUR 7 million  in  e-health 
services and applications (135). 

(135) The EU cohesion policy data reflect the status as of 13 May 

2024. 

69 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)64,761,459,059,7NA93.3 (2021)Cancer mortality per 100 000 population269,8266,6261,3256,2NA235.4 (2021)Current expenditure on health, % GDP 10,010,111,211,1NA10.9 (2021)Public share of health expenditure, % of current health expenditure82,182,885,084,9NA81.1 (2021)Spending on prevention, % of current health expenditure 3,23,34,68,7NA6.0 (2021)Available hospital beds per 100 000 population318302291295NA525 (2021)Doctors per 1 000 population3,73,83,83,9NA4.1 (2021)*Nurses per 1 000 population11.2**10.8**11.1**11.4**NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***9,79,58,58,39,119.4 (2022) 
 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  the  Netherlands.  It 
provides  an  analysis  of  economic,  social,  and 
territorial  cohesion  in  the  Dutch  regions  and 
assesses  emerging  investment  needs  to  foster 
social  development,  and 
economic  growth, 
competitiveness in the country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

Regional  disparities  in  GDP  (gross  domestic 
product)  per  capita  have  remained  stable 
over the last decade. The Noord-Holland region, 
which  includes  the  capital  Amsterdam,  had  the 
highest GDP per capita (168% of the EU average, 
2022)  as  well  as  the  highest  GDP  per  capita 
growth  (2.1%)  between  2013  and  2022  (Figure 
A17.1).  The  3  regions  with  the  lowest  GDP  per 
capita,  Drenthe,  Flevoland,  and  Friesland,  had  a 
GDP  per  capita  just  below  the  EU  average  and 
fairly  low  growth  rates:  0.48%,  0.96%  and  1% 
respectively.  In  Groningen,  GDP  per  capita  shrunk 
by -0.97%, which was mainly due to the shutdown 
of natural gas extraction. 

Graph A17.1: The Netherlands, NUTS2: GDP per 
capita (2012) and GDP growth (2013-2022) 

Source: DG REGIO calculations based on JRC (ARDECO) and 
Eurostat data 

showed 

productivity 

Labour 
regional 
variations in line with differences in GDP per 
capita.  Noord-Holland  and  Groningen  were  the 
most  productive  regions  (respectively  125%  and 
117% of the EU average) while labour productivity 
in  Drenthe  and  Friesland  was  below  the  EU 
average (85% and 87% respectively). Average real 
productivity growth between 2013 and 2022 was 
fairly low ranging between -2.0% in Groningen and 

in  Noord-Holland,  Noord-Brabant  and 

1% 
Overijssel. 

Graph A17.2: The Netherlands, NUTS2: Labour 
productivity (real GVA per worker), EU-27, 2000-
2022 

Source: ARDECO, DG REGIO elaboration 

The Dutch regions tend to have high level of 
human  capital.  The  share  of 
the  Dutch 
population aged 30-34 with a high education was 
high  at  54.3%  (2023),  reaching  66.9%  in  Utrecht 
and  62.5%  in  Noord-Holland.  Only  Zeeland  (34.7 
%), Flevoland (39.5 %) and Drenthe (35.7 %) had 
a rate just below the EU average of 43.9 %. In all 
regions the percentage of early school leavers was 
below  the  EU  average  of  9.5%  (2023).  However, 
the increasing share of underachieving students is 
a  challenge,  especially  regarding  already  existing 
skill shortages. 

All  Dutch  regions  ranked  well  above  the  EU 
average  in  terms  of  competitiveness,  but 
differences  exist  (Map  A17.1).  The  Regional 
Competitiveness  Index  (2022) (136)  tended  to  be 
lower  in  the  northern  regions  and  Zeeland  and 
higher  in  the  regions  in  the  western  part  of  the 
country.  The  index  value  varied  between  117  in 
Friesland to 151 in Utrecht.  

Innovation  performance  remained  high  with 
moderate  regional  differences.  In  2023,  the 
Netherlands  remained  one  of  the  five  innovation 
leaders  in  the  EU  according  to  the  European 
innovation  scoreboard.  Compared 
to  2022, 
innovation  performance  has  increased  for  all  12 
regions.  Six  are  innovation  leaders  and  six  strong 
innovators.  Noord-Holland  was 
the  most 
innovative region with a regional  innovation index 

(136) https://ec.europa.eu/regional_policy/information-
sources/maps/regional-competitiveness_en  

70 

 
 
 
 
 
Table A17.1:Selected indicators at regional level in the Netherlands 

Source: Eurostat, EDGAR database 

at  137%  of  the  EU  average.  Friesland’s  index 
stood  at  the  EU  average  and  Drenthe  scored  just 
above the average (102%). 

rate at 4.3% in 2023, which was still below the EU 
lowest 
average  of  6.1%.  Zeeland  had 
unemployment with 2.1%.  

the 

Map A17.1:  The Netherlands, NUTS2: Regional 
Competitiveness Index (2022) 

Source: DG REGIO, JRC 

All  regions  had  a  high  level  of  employment 
and  a  low  unemployment  rate.  Employment 
rates  ranged  from  79.9% in  Limburg  to  85.1% in 
Utrecht in 2022. The unemployment rate remained 
stable.  Flevoland  had  the  highest  unemployment 

71 

Labour  market  shortages  remained  high  in 
2023 (137).  In  the  Netherlands,  114  job  vacancies 
were  recorded  per  100  unemployed  in  the  third 
quarter  of  2023,  slightly  down  from  122  in  the 
third quarter of 2022. Labour market tightness in 
the  third  quarter  of  2023  was  the  highest  in 
Zeeland  (150)  followed  by  Utrecht  (137).  Labour 
market tightness was the lowest in Groningen (86) 
and Flevoland (87). While labour market shortages 
are  high,  the  Netherlands  also  has  significant 
unused 
labour  potential,  such  as  part-time 
workers. 

The  share  of  population  at-risk-of-poverty 
and social exclusion (the AROPE rate) showed 
regional  differences.  In  the  Netherlands,  the 
AROPE rate stood at 16.5% in 2022. With 22.2%, 
Groningen  had  the  highest  rate  followed  by  Zuid-
Holland  and  Noord-Holland  with 
respectively 
18.8%  and  18.7%.  Utrecht  (13.1%)  and  Noord-
Brabant (13.7%) had the lowest AROPE rates. 

The  transition  to  a  carbon-neutral  economy 
affected  regions  differently.  Regions  with 

(137) CBS (Statistics Netherlands), 2023. 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP per head growthEmployment rateUnemployment rateAt-risk-of-poverty or social exclusionPopulation  with high educational attainmentEU Regional Competitiveness Index 2.0 Innovation performanceIndex, EU27 = 100, 2022Index, EU27 = 100, 2022Average % change on the preceding year, 2013-2022Average % change on the preceding year, 2013-2022% of population aged 20-64, 2023% of active population,  2023% of population, 2022% of population aged 30-34, 2023Index, EU27 = 100, 2022Regional performance group, 2023European Union1001000.701.4475.3            6.1              21.643.9            100Nederland1311080.501.3383.5            3.6              16.5            54.3            137.0Groningen132117-2.00-0.9780.4            4.2              22.2            55.6            120.2Strong innovator +Friesland (NL)94870.201.0083.64.0              17.6            48.3            117.0Strong innovator -Drenthe8985-0.200.4884.03.3              15.9            35.7            119.3Strong innovator -Overijssel109901.001.6784.52.9              15.0            46.9            125.5Strong innovator +Gelderland108940.601.3183.73.3              15.2            50.0            135.7Innovation Leader - Flevoland951000.800.9682.74.3              14.4            39.5            140.6Strong Innovator +Utrecht1591160.501.6585.13.3              13.1            66.9            151.1Innovation Leader - Noord-Holland1681251.002.1084.03.8              18.7            62.5            140.6Innovation Leader Zuid-Holland127110-0.200.5282.94.0              18.8            54.3            142.5Innovation Leader - Zeeland1111030.701.3984.02.1              14.6            34.7            118.6Strong Innovator - Noord-Brabant1321061.001.8584.93.2              13.7            54.3            140.6Innovation Leader - Limburg (NL)116990.801.6779.93.4              16.2            49.0            131.4Innovation Leader - NUTS 2 region 
 
 
 
 
 
   
 
transforming 

clusters  of  emission-intensive  industries (138)  face 
challenges  in  reducing  greenhouse  gas  emissions, 
sustainably 
industries, 
developing  alternative 
sustainable  economic 
activities,  and  reskilling  and  upskilling  workers. 
Widespread  congestion  of  the  power  grid,  which 
hinders  electrification  and  limits  new  connections, 
complicates the transition.  

their 

Investment  and  subnational  reform  needs 
ahead  

cohesion 

innovation, 

the  Netherlands, 

policy 
In 
focus  on 
investment  priorities  mainly 
supporting 
labour  market 
opportunities  for  vulnerable  groups  and  the 
country’s  green  and  digital  transition.  The 
priorities  set  out  in  the  2021-2027  programmes, 
which  were  adopted  in  2022,  remain  valid  under 
the  current  economic  and  social  circumstances. 
The Netherlands would benefit from continuing to 
invest  in  research  and  innovation  under  the 
framework  of 
regional  smart  specialisation 
strategies, in addressing the important challenges 
that  it  faces  related  to  the  energy  and  climate 
in 
transition  and  the  circular  economy,  and 
integrated  sustainable  urban  development. 
It 
would  also  benefit  from  continuing  to  invest  in 
life-long  learning  and  up-  and  reskilling,  including 
for the transition to a climate-neutral economy, as 
well  as 
improve  employment 
opportunities  for  those  at  the  margins  of  the 
labour market and for inactive people. 

in  actions  to 

Further  areas  of  priority  in  the  context  of 
cohesion  policy  for  the  Netherlands  include 
developing,  testing  and  piloting  solutions  to 
tackle  the  congestion  of  the  power  grid.  The 
Netherlands  could  benefit  from  the  opportunities 
for  Europe 
under 
Platform 
critical 
in 
technologies  to  support  industry  transformation 
and 
in  net-zero 
technology manufacturing. 

the  Strategic  Technology 
investments 

investments 

to  boost 

facilitate 

to 

(138) The main areas of emission-intensive industries in the 
Netherlands are Delfzijl/Eemshaven in the province of 
Groningen, the North-Sea channel area (Amsterdam/Ijmond), 
Rotterdam and West-North-Brabant, Zeeuws-Vlaanderen and 
other zones in Zeeland, and South-Limburg. The JTF 
programme for the Netherlands supports six areas that are 
situated in or closely linked to these areas.  

72 

 
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

due  to  the  liquidity  availability  in  the market.  The 
return on equity of 12.6% in September 2023 was 
the highest in 7 years, as was the return on assets 
(0.8%  in  Q3-2023).  However,  because  of  the 
relatively  long  fixed-interest-rate  period  on  the 
asset  side,  the  time  needed  for  higher  interest 
rates  to  be  reflected  in  the  income  of  banks  is 
longer  than  in  the  case  of  funding.  In  effect,  less 
tighter 
accommodative  monetary  policy  and 
financial 
financing  conditions  can  push  up 
institutions’  funding  costs  and 
the 
liquidity risk. The increase in the bank tax approved 
in 2023 could also negatively impact Dutch banks’ 
profitability and their ability to build up buffers. 

increase 

Graph A18.1: Evolution of credit activity 

important 

institutions. 

The Netherlands has well-developed financial 
markets, with a relatively large domestically 
owned banking sector. Although smaller than a 
decade ago, the Dutch banking sector is one of the 
largest  in  the  EU,  both  in  relative  and  nominal 
terms.  Total  assets  are  equivalent  to  283.2%  of 
GDP,  and  about  93%  of  assets  are  domestically 
owned, while the five largest banks hold 82.5% of 
Dutch financial institutions’ total assets. The Dutch 
National  Bank  (DNB)  has  identified  one  global 
systemically  important  institution  and  four  other 
systemically 
The 
Netherlands  has  deep  financial  markets,  with  a 
sizeable  non-bank  financial  intermediation  (NBFI) 
sector  of  EUR  8  trillion  in  2022.  Although  on  a 
slightly  declining  trend  since  its  peak  in  2019, 
Non-Bank Financial Institution (NBFI) sector assets 
are still almost twice the size of the banking sector 
and  among  the  largest  in  the  world (139).  The 
narrow  measure  of  NBFI  sector  assets,  including 
only  components  which  resemble  vulnerabilities 
that  also  occur  in  the  banking  sector,  declined  in 
2022  to  their  lowest  level  since  2010  (EUR  362 
billion) (140) to about 38% of GDP. The Netherlands 
is  a  significant  issuer  of  green  bonds,  which 
accounted  for  6%  of  its  total  outstanding  debt in 
July 2023. Among the issuers of green bonds, the 
financial  holding  companies  are  the  largest  (EUR 
44  billion),  followed  by  non-financial  corporations 
(EUR 31 billion) and banks (EUR 27 billion). 

the  future  by 

The  banking  sector  is  adequately  capitalised 
and  profitable,  but  banks  could  be  affected 
less  accommodative 
in 
monetary policy and the  increased bank  tax. 
The  capital  of  the Dutch banking  sector  exceeded 
minimum  requirements  in  Q3-2023  and  was 
slightly  above  the  previous  year’s  level.  The  total 
capital  ratio  increased  by  0.4  percentage  points 
from end-2022, reaching 21.5% in Q3-2023, while 
the  common  equity tier  1  ratio  was  at  16.8%,  up 
from  16%  in  the  previous  year.  The  liquidity 
position  was  comfortable  in  Q2-2023,  with  the 
liquidity  coverage  ratio  inching  up  to 160.9%  and 
the  net  stable 
ratio  at  135.9%. 
funding 
Profitability  improved,  as  Dutch  banks  benefited 
from  the  rise  in  interest  rates  that  has  only  to  a 
limited  extent  been  passed  through  to  depositors 

(139) FSB - Global Monitoring Report on Non-Bank Financial 

Intermediation. 

(140) DNB Statistics. 

Adjusted for loan sales and securitisations. 
Source: ECB. 

While asset quality is currently strong, there 
is  a  risk  of  deterioration  in  the  future.  After 
strong lending activity in 2021 and 2022, the pace 
of lending slowed in 2023, turning negative in the 
second  half  of  the  year.  In  September  2023, 
loans  and  advances  were  6.6% 
outstanding 
in  September  of  the  previous 
smaller  than 
year (141),  due 
repayments  and  a  slight 
contraction in lending to companies. Credit quality 
is  currently  strong,  with  the  annualised  non-
performing  loan  (NPL)  ratio  historically  low  (1.3% 
in  Q3-2023),  and  lower  than  the  EU  average  of 
1.8%.  The  coverage  rate  is  also  relatively  low 
(25% in Q3-2023), while slower economic growth, 
the  high  level  of  private  sector  indebtedness, 
higher interest rates and higher inflation have the 

to 

(141) EBA Risk Dashboard. 

73 

-10-5051015200920102011201220132014201520162017201820192020202120222023Total privateNFCHH% 
 
 
 
  
 
 
Table A18.1:Financial Soundness Indicators 

(1) Last data: Q3 2023. 
(2) Data is annualized. 
(3) Data available for EA countries only, EU average refers to EA area.  
Source: ECB, Eurostat. 

potential  to  generate  an  increase  in  credit  losses 
and consequently may require higher provisions in 
the  future.  Non-financial  corporations  (NFCs)  face 
higher risk than households as the fixation period 
on  NFC  debt  is  shorter,  and  56%  of  total  Dutch 
corporate  debt  is  due  to  mature  or  have  an 
interest-rate  review  within  the  next  2  years.  In 
addition, 
the  number  of  bankruptcies  has 
increased since Q1 2023, although it is still lower 
than  before 
the  COVID-19  pandemic.  For 
households, only 13% of mortgage debt is due to 
mature or have an interest-rate review in the next 
2 years. To increase banks’ resilience as risks build 
up,  the  DNB  has  increased  the  countercyclical 
capital  buffer  from  1.0% to  2.0%,  effective  as  of 
31 May 2024. 

Although  there  are  no  visible  signs  of 
distress in real-estate markets, the exposure 
of  banks  to  this  sector  raises  risks.  Since 
2015,  house  prices  in  the  Netherlands  have 
continuously 
in  September 
increased,  peaking 
2022  (a  90%  increase  compared  with  September 
2015).  However,  they  have  fallen  since  2022, 
posing  a  risk  of  negative  equity  for  some 
homeowners.  Household  outstanding  debt  as  a 
percentage of GDP remains high, albeit on a path 
of continuous decline (90% in Q2-2023 vs 102.6% 
3 years earlier), driven by relatively generous loan-
to-value  limits  on  mortgage  borrowing  and  tax 
relief  on  mortgage  payments.  However,  this  debt 
gets  reduced  gradually,  and  banks  are  well 
capitalised. The mortgage NPL ratio was as low as 
0.9% in June 2023, and below the total NPL ratio 
in  the  Netherlands  (1.3%),  while  higher  costs  due 

to  interest-rate  hikes  are  being  passed  on  to 
borrowers only gradually, given the relatively high 
share  of  fixed-rate  loans.  In  addition,  Dutch 
households’  wealth  is  high  and  rising,  although  a 
large part of it is held in less-liquid assets such as 
pension  and  insurance  funds.  On  the  back  of 
growing  cyclical  and  structural  risks,  as  well  as 
higher  construction  costs,  the  value  of  Dutch 
commercial real estate (CRE) has fallen in the past 
year by 13%. Banks’ outstanding exposure to CRE 
has been on an upward trend for the last 4 years, 
reaching  8.75% (142)  of  total  lending  in  Q2-2023 
(vs  35.8%  household-mortgage  exposure).  The 
NPL  ratio  on  these  CRE  loans  has  inched  up  0.3 
percentage points since Q1-2023, to 3.2% in June 
2023, but it is still low by historical standards (the 
average was 5.5% between 2016 and 2022). The 
average interest rate on new real estate loans was 
around  4.7%,  almost  double  the  rate  of  3  years 
earlier.  Although  the  average  loan-to-value  ratio 
has  fallen  to  below  60%  in  recent  years,  around 
20%  of  CRE  loans  are  under-collateralised.  In 
addition,  the  high  indebtedness  of  Dutch  NFCs, 
although on a decreasing trend, increases the risks 
of  default  and  of  loan  losses  in  the  event  of 
default.  The  risks  stretch  outside  the  banking 
sector,  and 
into  other  financial  markets,  as 
investments  in  CRE  account  for  7%  of  pension 
funds’ balance sheets and 8% of those of insurers. 
Vulnerabilities  in  open-ended  investment  funds 
invested  in  CRE  also  warrant  close  monitoring,  as 
large-scale  withdrawals  could  exacerbate  a  price 

(142) EBA Risk Dashboard. 

74 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)322.0299.9297.0319.0303.7299.5267.7257.0184.6Share (total assets) of the five largest banks (%)83.884.784.784.384.182.5--69.6Share (total assets) of domestic credit institutions (%)192.693.393.794.291.592.492.7-62.9NFC credit growth (year-on-year % change)-0.7-0.3-1.01.67.32.40.7-2.4HH credit growth (year-on-year % change)0.00.20.2-1.01.21.60.8-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)2.11.91.81.91.41.31.31.81.8- capital adequacy ratio (%)22.122.422.923.222.721.221.519.620.1- return on equity (%)28.88.17.73.18.27.712.29.913.2Cost-to-income ratio (%)157.359.858.158.057.055.747.952.844.9Loan-to-deposit ratio (%)1117.7117.5119.4104.3101.3104.3104.493.380.2Central bank liquidity as % of liabilities1.51.41.46.87.82.80.4-0.7Private sector debt (% of GDP)247.6241.3229.9233.1223.7210.1-133.0118.4Long-term interest rate spread versus Bund (basis points)20.518.018.213.44.523.535.8107.7104.2Market funding ratio (%)52.150.350.044.949.847.8-50.839.8Green bonds outstanding to all bonds (%)3---3.14.55.77.04.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
 
  
 
correction in the market, even though most Dutch 
open-ended  funds  allow  redemptions  only  once  a 
year. 

if  interest  rates  rise  suddenly,  as  pension  funds 
may need cash to meet margin calls in portfolios. 

above 

statutory 

The  Dutch 
insurance  sector  has  shown 
resilience, despite falling asset valuations. In 
2022, insurers’ solvency ratio of 189% was robust, 
and  well 
requirements. 
Nevertheless, this level was slightly below that of 
the previous year, as the average solvency ratio of 
life  insurers  fell  in  2023  compared  with  2022. 
Total  assets  have  been  decreasing  slowly  since 
Q4-2020, and the trend became steeper in 2022, 
when  total  assets  reached  EUR  438  billion,  16% 
less than in 2021. The decrease occurred mostly in 
the  first  half  of  2022,  due  to  the  lower  value  of 
the  main  invested  assets.  The  increasing  damage 
from  natural  hazards  raises  important  issues  for 
non-life  insurers  and  could  lead  to  changes  in 
cover and premiums. In addition, many consumers 
are  not  sufficiently  aware  of  the  possibilities  of 
insuring  themselves  against  climate  damage  or 
that  can  be 
are  unaware  of 
insured (143).  Among 
to 
taken 
address  the  protection  gap  in  the  Netherlands:  (i) 
‘flooding’ was added as a standard category in the 
EU’s  standard 
insurance  product-information 
document;  and  (ii)  in  accordance  with  the  Dutch 
Disaster  Act,  partial  compensation  for  damages 
from  flooding  may  now  be  available  from  the 
government  for  both  private 
individuals  and 
companies.  

the  measures 

the  claims 

Dutch  pension  funds  have  benefited  from 
higher  interest  rates,  but  these  higher  rates 
also entail risks. In 2022, the increase in interest 
rates  decreased  the  value  of  pension  funds’ 
liabilities,  with  a  positive  effect  on  the  nominal 
policy funding ratio (120% in Q4-2022). However, 
in  2023  the  trend  reversed,  as  the  value  of  their 
liabilities  exceeded  that  of  their investments.  This 
meant  that  by  the  end  of  the  year  the  funding 
ratio had declined to 114.6%, from 123.1% in Q3-
2023.  This  was  partly  the  result  of  the  pension 
indexation  granted  in  2023,  following  the  high 
level  of  inflation  in  2022.  Higher  interest  rates 
have  benefited  pension  funds’  solvency  positions, 
but there is a risk of losses due to price corrections 
in  the  real-estate  market  as  well  as  in  financial 
markets. This risk is accentuated by the increasing 
investment of pension funds in riskier assets. The 
significant use of derivatives poses a liquidity risk 

(143) AFM Annual Report 2022; Radar survey. 

75 

 
 
 
 
 
 
 
 
ANNEX 19: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  the  Netherlands  tax  system.  It 
includes  information  on  the  tax  structure  (the 
types  of  taxes  that  the  Netherlands  derives  most 
of  its  revenue  from),  the  tax  burden  on  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  2022,  total  Dutch  tax  revenues 
were  38.5%  of  its  GDP,  which  was  slightly  below 
the  EU  aggregate  of  40.2%  (Table  A19.1).  The 
main sources of tax revenues in the Netherlands in 
2022  were  labour  taxes  (18.4%  of  GDP)  and 
consumption  taxes (11.0%  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. 
Pollution  and  resources  taxes  account  for  14.1% 
of environmental tax revenue, the highest share in 
the  EU.  However,  there  could  be  potential  to 
strengthen  the  application  of  the  ‘polluter  pays’ 
principle.  The  Netherlands  has  only  implemented 
two  of  the  six  main  types  of  pollution  and 
resources taxes (i.e. taxes on waste landfilling and 
incineration  and  plastic  products).  There  remains 
scope to implement the other four types (i.e. taxes 
on  NOx  emissions,  waste  loadings  to  water, 

Table A19.1:Taxation indicators 

fertilisers  and  pesticides).  The  Netherlands  has 
its  energy  tax  system  by 
recently  reformed 
shifting taxation from electricity  to gas. Revenues 
from  capital  taxes  are  higher  than  the  EU 
aggregate,  but  different  sources  of  wealth  are 
taxed  at  very  different  rates,  incentivizing  in 
particular  the  accumulation  of  illiquid  forms  of 
wealth.  Revenues  from  property  taxes  (expressed 
as  a  percentage  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 
mortgage 
interest  tax  relief  encourages  the 
accumulation of household illiquid debt. 

The  tax-benefit  system  reduces 
income 
inequality, but non-tax compulsory payments 
(e.g. pension  contributions)  drive  up  the 
compulsory  payment  wedge  on  labour.  In 
2023,  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 
by  employees  and  employers 
to  privately 
managed  pension  funds.  If  non-tax  compulsory 
payments  are  included,  the  compulsory  payment 
wedge  for  a  single  earner  amounted  in  2023  to 
42.4%,  49.8%  and  54.9%  with  a  wage  of  67%, 
the  average  wage, 
100%  and  167%  of 

(1) Forward-looking effective tax rate (OECD).  
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

76 

NL2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)35.539.939.238.537.940.040.440.2Labour taxes (as % of GDP)19.520.519.118.420.021.320.720.3Consumption taxes (as % of GDP)11.011.911.811.010.810.711.211.0Capital taxes (as % of GDP)5.07.58.39.17.18.08.68.9Of which, on income of corporations (as % of GDP)2.33.13.94.82.42.53.03.4Total property taxes (as % of GDP)1.31.91.91.71.92.32.22.1Recurrent taxes on immovable property (as % of GDP)0.60.90.90.71.11.21.11.0Environmental taxes as % of GDP3.53.23.02.42.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)28.323.321.722.921.233.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)38.136.135.035.835.141.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)23.723.724.519.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.09.39.79.68.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)11.712.540.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)5.44.0-0.24.99.75.4Tax structureProgressivity & fairnessTax administration & complianceThe NetherlandsEU-27 
 
 
 
       
 
respectively.  These  levels  are  well  above  the  EU 
average.  Labour  taxation  is  more  progressive  in 
the  Netherlands  than  in  the  EU  as  a  whole.  This 
contributes to the higher ability of the tax-benefit 
system to reduce income inequality (as measured 
by  the  Gini  coefficient)  than  the  EU  average  in 
2022. (Table A19.1). In the Netherlands, taxes and 
benefits reduced the Gini coefficient on average by 
9.6 pps in 2022 (compared with the EU average of 
7.9 pps). 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023, with 
and without non-tax compulsory payments 
(NTCPs) 

Note: The second earner tax wedge assumes a first earner at 
100% of the average wage and no children. For the 
methodology of the tax wedge for second earners, see OECD, 
2016, Taxing Wages 2014-2015.  
Source: European Commission and OECD 

In its Recovery and Resilience Plan (RRP), the 
Netherlands has included measures to reduce 
differences  between  employees  and  self-
employed.  To  reduce  the  incentives  stemming 
from the tax system to become self-employed, the 
maximum  amount  that  a  self-employed  may 
deduct  from their  taxes  will  be  gradually  reduced 
from  EUR 6 310  EUR  in  2022  to  EUR 3 710  in 
2026.  The  maximum  deductible  amount 
is 
expected to reach EUR 1 200 EUR or less in 2030.  

In  2024,  the  Netherlands  has  introduced 
some  measures  to  increase  capital  taxation. 
The  box  3  rate  (taxation  on  income  from  assets) 
increased  from  32% in  2023  to  36%.  In  addition, 
the  tax-free  allowance  in  box  3  has  not  been 
indexed.  The  tax-free  allowance  has  therefore 
remained 
the 
government  announced  that  the  exemption  for 
green  investments  in  box  3  will  be  reduced  from 
EUR 65 072 in  2023 to  EUR 30 000 in  2025,  and 
the implementation of a new box 3 system, based 
on actual returns, has been postponed from 2026 
to  2027.  For  box  2  (taxation  on  income  from  a 

Furthermore, 

EUR 57 000. 

‘substantial  interest’ (144),  the  tax  rate  was  26.9% 
in  2023.  However,  box  2  is  divided  into  two 
brackets  from  2024  onwards.  The  first  bracket 
taxes box 2 income up to EUR 67 000 per person 
at a rate of 24.5%. The second bracket will apply a 
rate of 33% to any income exceeding this amount.  

to 

doing  well 

The  Netherlands 
on 
is 
digitalisation  of  the  tax  administration, 
which  can  help  reduce  compliance  costs. 
According 
the  OECD  Tax  Administration 
2023 (145),  the  Netherlands  scores  highly  on  filing 
tax,  with  more  than  98%  of  tax  returns  being 
submitted electronically, i.e. online (100% for VAT 
and  CIT  returns  in  2021).  The  VAT  gap  (the  gap 
between  revenues  actually  collected  and  the 
the  Netherlands 
theoretical 
decreased from 5.4% in 2019 to 4% in 2020. The 
strong VAT gap decrease in 2021 has to be seen in 
the context of anomalies related to the COVID-19-
induced  economic  crisis,  such  as  increased  tax 
compliance  by  companies  so  that  they  could 
qualify for COVID-19 support measures. Estimates 
indicate  that  the  VAT  gap  is  expected  to  have 
bounced back to 4.9% in 2022 (2). 

liability) 

tax 

in 

non-EU 

decreased 

countries 
in  2017 

The  flows  of  royalty  payments  made  from 
the  Netherlands  and  of  interest  payments 
decreased  significantly,  albeit  from  high 
levels.  As  Graph  A19.2  shows,  royalty  payments 
to 
from 
(and  an  estimated 
EUR 46.8 billion 
EUR 56 billion in 2019)  to around EUR 24.5 billion 
in 2021, with a substantial drop to EUR 14.2 billion 
in  2022. 
Interest  payments  decreased  from 
EUR 21 billion in 2019 to EUR 10.8 billion in 2021 
and remained stable in 2022 with a slight increase 
to  EUR 11 billion.  Recently  implemented  reforms 
are likely to have contributed to this decrease.  

In  the  context  of  the  RRP,  the  Netherlands 
has  introduced  several  reforms  to  increase 
transparency  and  tackle  aggressive  tax 
planning.  To  counter  the  use  of  special  purpose 

(144) A Dutch resident who (either alone or together with a spouse 
or other close relatives) holds at least 5% of the shares or a 
class of shares in a company or who holds rights to acquire a 
5% interest in a company has a ‘substantial interest’. The 
benefits derived from this ‘substantial interest’ are taxable in 
box 2. 

(145) Electronic filing | Tax Administration 2023 : Comparative 
Information on OECD and other Advanced and Emerging 
Economies | OECD iLibrary (oecd-ilibrary.org). 

77 

21.227.235.141.027.242.449.854.920253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - NLSingle earner - EU averageSecond earner -  NLSecond earner -  EU averageSingle earner - NL (with NTCP) 
      
 
entities  for  aggressive  tax  planning  purposes (146), 
the Netherlands has introduced a new withholding 
tax  on  royalties  and  interest  payments  between 
affiliated  entities  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  and 
continues  to  have  an  impact  on  interest  and 
royalty flows.  

Other reforms were introduced as a part of a 
broader  effort  by  the  Netherlands  to  tackle 
tax avoidance. Previous reforms included further 
limits  to  loss  relief  and  an  anti-abuse  provision 
concerning  the  arm’s 
length  principle.  These 
measures  are  already  in  force.  The  Netherlands 
has  also  introduced  a  dividend  withholding  tax 
that  applies  to  affiliated  entities  when  payments 
are  made  to  low-tax  jurisdictions  or  tax  abuse  is 
taking place. The new dividend withholding tax has 
been  applied  since  1 January 2024,  so  its  impact 
will be measured only in the next period. 

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 

(146) Among the special purpose entities existing in the 

Netherlands, there are also special vehicles (the so-called 
Dutch STAKs - Stichting Administratiekantoor) that are not 
commonly used for the type of tax avoidance countered by 
the recently introduced measure, but still constitute legal 
structures potentially leading to tax avoidance due to their 
lack of transparency. 

78 

010203040506020152016201720182019202020212022RoyaltiesInterest 
      
 
 
 
 
 
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) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

79 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)2.80.01.36.24.30.10.81.5Potential growth (y-o-y).0.91.51.81.92.11.81.7Private consumption (y-o-y)0.8-0.40.34.36.60.41.51.7Public consumption (y-o-y)3.01.41.35.01.63.02.62.0Gross fixed capital formation (y-o-y)6.2-4.13.82.91.81.8-2.11.2Exports of goods and services (y-o-y)6.62.03.18.04.5-1.3-0.12.4Imports of goods and services (y-o-y) 6.81.13.46.23.8-0.8-0.12.8Contribution to GDP growth:Domestic demand (y-o-y)2.4-0.71.23.83.51.30.91.5Inventories (y-o-y)0.00.00.00.4-0.2-0.7-0.10.0Net exports (y-o-y)0.40.80.02.01.0-0.6-0.1-0.1Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.20.80.80.91.21.00.8Capital accumulation (y-o-y).0.50.50.60.60.60.50.5Total factor productivity (y-o-y).0.30.20.40.40.40.40.4Output gap-0.4-1.1-0.9-0.32.00.0-1.1-1.3Unemployment rate6.05.86.24.23.53.63.94.0GDP deflator (y-o-y)2.01.01.42.95.57.83.72.3Harmonised index of consumer prices (HICP, y-o-y)1.51.91.02.811.64.12.52.0HICP excluding energy and unprocessed food (y-o-y)1.01.71.21.65.57.42.62.2Nominal compensation per employee (y-o-y)2.12.21.82.14.06.25.93.8Labour productivity (real, hours worked, y-o-y)1.60.20.22.80.4-1.0-0.20.8Unit labour costs (ULC, whole economy, y-o-y)0.42.31.9-2.03.67.85.72.6Real unit labour costs (y-o-y)-1.51.30.5-4.8-1.90.01.90.3Real effective exchange rate (ULC, y-o-y)-0.50.30.4-2.1-0.10.91.20.2Real effective exchange rate (HICP, y-o-y)-0.2-0.50.20.21.9-0.4..Net savings rate of households (net saving as percentage of net disposable income)3.06.911.617.012.7...Private credit flow, consolidated (% of GDP)11.97.62.29.66.9...Private sector debt, consolidated (% of GDP)228.8243.3248.2223.7210.1...of which household debt, consolidated (% of GDP)107.9116.6106.898.992.4...of which non-financial corporate debt, consolidated (% of GDP)120.9126.7141.3124.9117.7...Gross non-performing debt (% of total debt instruments and total loans and advances) (1).2.42.11.31.2...Corporations, net lending (+) or net borrowing (-) (% of GDP)8.06.94.08.917.216.718.218.5Corporations, gross operating surplus (% of GDP)27.327.726.727.127.028.127.928.0Households, net lending (+) or net borrowing (-) (% of GDP)-2.41.43.65.63.2-6.2-5.9-6.1Deflated house price index (y-o-y)2.4-3.64.611.16.0-10.0..Residential investment (% of GDP)6.04.84.45.55.45.1..Current account balance (% of GDP), balance of payments7.77.27.312.19.310.110.210.2Trade balance (% of GDP), balance of payments8.58.49.911.310.811.1..Terms of trade of goods and services (y-o-y)-0.1-0.50.4-1.1-2.72.30.60.3Capital account balance (% of GDP)-0.4-0.3-0.10.111.1-0.2..Net international investment position (% of GDP)-5.510.371.193.375.271.8..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-64.3-73.2-22.921.418.525.3..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)326.3387.0390.6335.7345.1312.6..Export performance vs. advanced countries (% change over 5 years)..-1.87.53.30.6..Export market share, goods and services (y-o-y)-1.5-2.70.7-2.8-2.1-2.4-3.5-1.2Net FDI flows (% of GDP)4.65.82.514.213.60.8..General government balance (% of GDP)-0.6-3.8-0.4-2.2-0.1-0.3-2.0-2.1Structural budget balance (% of GDP)..0.0-1.9-1.1-0.8-1.3-1.4General government gross debt (% of GDP)47.159.758.251.750.146.547.148.4forecast 
 
 
 
  
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  the  Netherlands  over  the  short, 
medium  and  long  term.  It  follows  the  multi-
dimensional 
European 
Commission’s  2023  Debt  Sustainability  Monitor, 
updated  based  on  the  Commission  2024  spring 
forecast. 

approach 

the 

of 

1  –  Short-term  risks  to  fiscal  sustainability 
are 
low.  The  Commission’s  early-detection 
indicator  (S0)  does  not  point  to  any  major  short-
term  fiscal  risks  (Table A21.2) (147).  Government 
gross financing needs are expected to decrease to 
around  10%  of  GDP  on  average  over  2024-2025 
(Table A21.1, Table 1).  The  sovereign  credit  rating 
has  been  steadily  improving  and  has  returned  to 
investment  grade  at two of  the  four  major  rating 
agencies by the cut-off date of this report.  

2  –  Medium-term  fiscal  sustainability  risks 
appear low.   

The  DSA  shows  that,  under  the  baseline,  the 
is  projected  to 
government  debt  ratio 
increase  over  the  medium  term  to  around 
56% of GDP in 2034 (Graph 1, Table 1) (148). The 
assumed  structural  primary  balance  (a  deficit  of 
0.6% of GDP, excluding changes in cost of ageing) 
contributes  to  these  developments.  This  appears 
plausible  compared  with  past  fiscal  performance, 
indicating that the country has room for corrective 
action.  At the  same  time, the  baseline  projections 
up  to  2034  benefit  from  a  still  favourable 
(although  diminishing)  snowball  effect  of  -0.7  pp. 

(147) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(148) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary deficit, before changes in ageing costs, of 0.6% of 
GDP from 2024 onwards; (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 ahead); (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; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 1.2%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

Government gross financing needs are expected to 
slowly increase over the projection period, reaching 
10.5%  of  GDP  in  2034,  above  the  level  forecast 
for 2024.  

four 

The  baseline  projections  are  stress-tested 
against 
deterministic 
alternative 
scenarios to assess the impact of changes in 
key  assumptions  relative  to  the  baseline 
(Graph 1).  Under  the  historical  structural  primary 
balance  (SPB)  scenario  (i.e.  the  SPB  returns  to  its 
historical 15-year average) the debt ratio would be 
lower  than  under  the  baseline  by  about  4 pps.  in 
2034. However, under the adverse interest-growth 
rate  differential  scenario  (i.e.  the  interest-growth 
rate  differential  deteriorates  by  1 pp.  compared 
with the baseline), the debt ratio would be  higher 
than under the baseline by around 4 pps. in 2034. 
Under  the  financial  stress  scenario  (i.e.  interest 
rates  temporarily  increase  by  1.0 pp.  compared 
with  the  baseline)  the  government  debt  ratio 
would  be  almost  unchanged  compared  with  the 
lower 
baseline 
structural  primary  balance  scenario 
the 
projected cumulative improvement in the SPB over 
2023-2024  is  halved)  the  debt  ratio  would  be 
higher than under the baseline by about 2 pps. in 
2034. 

in  2034.  Finally,  under 

(i.e. 

the 

to 

plausible 

The  stochastic  projections  indicate  low  risk, 
pointing to the moderate sensitivity of these 
unforeseen 
projections 
events (149). These stochastic simulations indicate 
a 64% probability that the debt ratio will be higher 
in 2028 than in 2023, entailing low risk given the 
initial  low  debt  level.  In  addition,  the  uncertainty 
surrounding  the  baseline  debt  projections  (as 
measured by the difference between the 10th and 
90th  debt  distribution  percentiles)  is  low,  reaching 
around  16  pps.  of  GDP  in  five  years’  time) 
(Graph 2).  

3  –  Long-term  fiscal  sustainability  risks 
appear  overall  medium.  This  assessment  is 
based  on  the  combination  of  two  fiscal  gap 
indicators,  capturing  the  required  fiscal  effort  to 
stabilise  debt  (S2  indicator)  and  bring  to  60%  of 

(149) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

80 

 
 
 
 
 
 
 
GDP  (S1  indicator)  over  the  long  term (150).  This 
assessment  is  mainly  driven  by  the  projected 
increase in ageing costs and the favourable initial 
budgetary  position.  Hence,  these  results  are 
conditional  on  the  country  maintaining  a  sizeable 
SPB over the long term. 

debt  (in  total  debt).  On  the  other-hand,  risk-
mitigating 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. 

The  S2  sustainability gap indicator points  to 
medium  risk.  The  S2  indicator  suggests  that  the 
Netherlands  would  need  to  improve  its  structural 
primary  balance  by  4.6  pps.  of  GDP  in  2025  to 
ensure  debt  stabilisation  over  the  long  term.  This 
result is underpinned by the projected increase of 
ageing  costs  (2.8  pps.  of  GDP)  and  the  initial 
unfavourable budgetary position (1.8 pps. of GDP). 
The  key  factors  behind  the  increase  in  ageing 
care 
costs  are  expenditure 
(contributions of 1.6 pps.), pensions (1.2 pps.) and 
health  care  (0.6  pp.),  which  is  partly  offset  by 
education  spending 
(Table  A21.1, 
Table 2).  Hence,  additional  measures  may  be 
required  to  further  improve  the  efficiency  of  the 
Dutch 
its  fiscal 
sustainability. 

long-term  care  system  and 

(-0.7  pp.) 

long-term 

in 

The  S1  indicator  points  to  medium  fiscal 
sustainability  risks.  The  indicator  shows  that  a 
consolidation  effort  of  3.0  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 2.0 pps. of GDP), and 
initial  budgetary  position 
the  unfavourable 
(contribution 
GDP) 
by 
(Table A21.1, Table 2).  

pps. 

1.2 

of 

4  –  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  and  the 
relatively  high  share  of  short-term  government 

(150)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt in the long term. It is complemented 
by the S1 indicator, which measures the permanent SPB 
adjustment in 2025 to bring the debt ratio to 60% by 2070. 
The impact of the drivers of S1 and S2 may differ due to the 
infinite horizon component considered in the S2 indicator. For 
both the S1 and S2 indicators, the risk assessment depends 
on the amount of fiscal consolidation needed: ‘high risk’ if 
the required effort exceeds 6 % of GDP, ‘medium risk’ if it is 
between 2% and 6% of GDP, and ‘low risk’ if the effort is 
negative or below 2% of GDP. The overall long-term risk 
classification combines the risk categories derived from S1 
and S2. S1 may notch up the risk category derived from S2 if 
it signals a higher risk than S2. See the 2022 Debt 
Sustainability Monitor for further details. 

81 

 
 
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. 

82 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)51.750.146.547.148.448.648.749.049.650.551.552.954.356.0Changes in the ratio-3.0-1.5-3.70.61.40.20.20.30.60.81.11.31.51.7of whichPrimary deficit1.7-0.4-0.31.31.41.31.21.11.31.41.71.92.02.2Snowball effect-4.1-4.2-3.0-1.3-1.0-1.1-1.0-0.8-0.6-0.6-0.6-0.6-0.6-0.6Stock-flow adjustments-0.63.1-0.30.60.90.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)11.310.77.39.610.29.59.59.69.910.310.711.211.712.2S1S2Overall index  (pps. of GDP)3.04.6of which Initial budgetary position1.21.8Debt requirement-0.3Ageing costs2.02.8of which    Pensions0.91.2     Health care0.40.6     Long-term care1.21.6Education-0.5-0.7Table 2. Breakdown of the S1 and S2 sustainability gap indicators303540455055606520212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p903040506020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWMEDIUMLOWLOWDebt level (2034), % GDP56.052.358.360.156.2Debt peak year20342034203420342034Fiscal consolidation space97%85%100%97%97%Probability of debt ratio exceeding in 2028 its 2023 level64%Difference between 90th and 10th percentiles (pps. GDP)16.5Source: European Commission (for further details on the Commission's multidimensional approach, see the 2023 Debt Sustainability Monitor)(1)Debtlevelin2034.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty.(Forfurtherdetailson the Commission's multidimensional approach, see the 2023 Debt Sustainability Monitor)LOWLOWMEDIUMMEDIUMMEDIUMShort termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)