Recommendation for a COUNCIL RECOMMENDATION setting the net expenditure path of the Netherlands
Date: 2024-11-26
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Netherlands, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 26.11.2024  COM(2024) 722 final  Recommendation for a COUNCIL RECOMMENDATION setting the net expenditure path of the Netherlands  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

setting the net expenditure path of the Netherlands 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 19 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

1 

2 

3 

A  reformed  EU  economic  governance  framework  entered  into  force  on  30  April 
2024. Regulation (EU) 2024/1263 of the European Parliament and of the Council on 
the  effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive 2011/85/EU on the budgetary frameworks of Member States3 are the core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council  and  to  the  Commission  are  at  the  centre  of  the  new  economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the  adjustment  period,  general  government  debt  is  on  a  plausibly  downward 
trajectory, or stays at prudent levels, and that the government deficit is brought and 
maintained below the reference value of 3% of GDP over the medium term, and ii) 
ensuring the delivery of reforms and investments responding to the main challenges 
identified  in  the  context  of  the  European  Semester  and  addressing  the  common 
priorities of the EU. To that end, each plan is to present a medium-term commitment 

Regulation 

(EC)  No 

Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  of  29  April  2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing 
Council 
ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj). 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
(OJ  L,  2024/1265,  30.4.2024,  ELI: 
for  budgetary 
http://data.europa.eu/eli/dir/2024/1265/oj). 

the  Member  States 

frameworks  of 

2024/1263, 

30.4.2024, 

1466/97 

(OJ 

L, 

EN 

1 

  EN 

 
 
 
 
to  a  net  expenditure4  path,  which  effectively  establishes  a  budgetary  constraint  for 
the duration of the plan, covering four or five years (depending on the regular term of 
legislature in  a Member  State). In  addition,  the plan  is  to  explain how the Member 
State  will  ensure  the  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester,  in  particular  in  the 
country-specific recommendations (including those pertaining to the macroeconomic 
imbalances procedure (MIP), if applicable), and how the Member State will address 
the common priorities of the Union. The period for fiscal adjustment covers a period 
of  four  years,  which  may  be  extended  by  up  to  three  years  if  the  Member  State 
commits  to  delivering  a  set  of  relevant  reforms  and  investments  that  satisfies  the 
criteria set out in Regulation (EU) 2024/1263.  

Following  the  submission  of  the  plan,  the  Commission  should  is  to  whether  it 
complies with the requirements of Regulation (EU) 2024/1263.  

According  to  Article  18  of  Regulation  (EU)  2024/1263,  taking  into  account  the 
assessment  and  based  on  a  recommendation  by  the  Commission,  the  Council  is  to 
recommend  that  the  Member  State  submit  a  revised  national  medium-term  fiscal-
structural plan if it considers that the plan does not comply with the requirements set 
out in Article 16(2), (3) and (5) of that Regulation.    

In case the Member State fails to submit a revised plan within the time limit referred 
to  in  Regulation  (EU)  2024/1263  or  the  revised  plan  does  not  comply  with  the 
requirements  set  out  in  Article  16(2),  (3)  and  (5)  of  that  Regulation,  upon  a 
recommendation from the Commission, the Council should adopt a recommendation 
to  set  the  net  expenditure  path  of  the  Member  State  concerned  in  accordance  with 
Article  19  and,  where  applicable,  endorse  the  set  of  reform  and  investment 
commitments underpinning an extension of the fiscal adjustment period.  

(3) 

(4) 

(5) 

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF THE NETHERLANDS  

(6) 

On  15  October  2024,  the  Netherlands  submitted  its  national  medium-term  fiscal-
structural  plan  to  the  Council  and  to  the  Commission.  The  submission  took  place 
following  an  extension  of  the  deadline  set  out  in  Article  36  of  Regulation  (EU) 
2024/1263,  as  agreed  with  the  Commission in  view  of  the  reasons  provided  by  the 
Netherlands.  

Process prior to the submission of the plan 

(7) 

Prior to the submission of its plan, the Netherlands requested technical information5, 
which  the  Commission  provided  on  21  June  2024,  and  published  on  15  October 

4 

5 

Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net  of  (i) interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii)  expenditure  on  Union 
programmes fully matched by revenue from Union funds,  (iv) national expenditure on co-financing of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures. 
Prior  guidance  transmitted  to  the  Member  States  and  Economic  and  Financial  Committee  includes 
technical information i) without and with an extension of the adjustment period (covering 4 and 7 years, 
respectively), and ii) with and without the deficit resilience safeguard. It also includes the main initial 
conditions  and  underlying  assumptions  used  in  the  Commission’s  medium-term  government  debt 

EN 

2 

  EN 

 
 
 
 
20246. The technical information indicates the level of the structural primary balance 
in 2028 that is necessary to ensure that the general government deficit is maintained 
below  3%  of  GDP  over  the  medium  term  and  that  the  general  government  debt 
remains  below  60%  of  GDP  over  the  medium  term,  in  the  absence  of  further 
budgetary  measures  beyond  the  4-year  adjustment  period.  The  medium  term  is 
defined as the ten-year period after the end of the adjustment period. The technical 
information was prepared and transmitted to the Member State under two scenarios: 
a  scenario  including  consistency  with  the  deficit  resilience  safeguard7,  in  line  with 
Article  9(3)  of  Regulation  (EU)  2024/1263,  and  a  scenario  without  this  safeguard. 
The technical information for the Netherlands sets out that, in order to comply with 
the  applicable  fiscal  rules  over  an  adjustment  period  of  4  years,  and  based  on  the 
Commission’s assumptions, the structural primary balance should amount to at least 
0.1% of GDP at the end of the adjustment period (2028; scenario without the deficit 
resilience  safeguard),  as  per  the  following  table.  For  information,  considering  also 
the  deficit  resilience  safeguard,  the  structural  primary  balance  should  amount  to  at 
least 0.1% of GDP at the end of the adjustment period (2028). However, the deficit 
resilience  safeguard  is  not  a  requirement  for  the  Netherlands,  which  is  eligible  for 
technical information. 

Table 1: Technical information provided by the Commission to the Netherlands 

Final year of the adjustment period 
Minimum value of the structural primary balance (% of GDP), scenario without the deficit 

resilience safeguard 

For information only: Minimum value of the structural primary balance (% of GDP), scenario 

with the deficit resilience safeguard 

2028 

0.1 

0.1 

 Source: Commission’s calculations. 

(8) 

6 

7 

In  line  with  Article  12  of  Regulation  (EU)  2024/1263,  the  Netherlands  and  the 
Commission engaged in a technical dialogue in July and August 2024. The dialogue 
centred on the net expenditure path envisaged by the Netherlands and its underlying 
assumptions,  as  well  as  the  envisaged  delivery  of  reforms  and  investments 
responding to the main challenges identified in the context of the European Semester 
and the common priorities of the Union in fair green and digital transition, social and 
economic resilience, energy security and the build-up of defence capabilities. 

in 

2023 

Sustainability  Monitor 

the  Commission’s  Debt 

projection  framework.  The  reference  trajectory  was  calculated  on  the  basis  of  the  methodology 
described 
(https://economy-
finance.ec.europa.eu/publications/debt-sustainability-monitor-2023_en).  It  is  based  on  the  European 
Commission  Spring  2024  Forecast  and  its  medium-term  extension  up  to  2033,  and  long-term  GDP 
growth  and  ageing  costs  are  in  line  with  the  joint  Commission-Council  2024  Ageing  Report 
(https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-budgetary-
projections-eu-member-states-2022-2070_en). 
https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/national-medium-term-fiscal-
structural-plans_en#netherlands  
The deficit resilience safeguard established in Article 8 of Regulation (EU) 2024/1263 establishes that 
the annual improvement in the structural primary balance is of 0.4 percentage points of GDP (or 0.25 
percentage points of GDP in case of an extension of the adjustment period) until the structural deficit is 
lower than 1.5% of GDP. 

EN 

3 

  EN 

 
 
(9) 

(10) 

According to the information provided by the Netherlands in its plan, a consultation 
process  with  relevant  national  stakeholders  (including  social  partners)  prior  to 
submission as foreseen in Article 11(3) of Regulation (EU) 2024/1263 did not take 
place, in line with the transitional provisions foreseen in Article 36(1), point (c), of 
Regulation (EU) 2024/1263. 
The Council of State (as Dutch independent fiscal institution) delivered an opinion8 
on  the  macroeconomic  forecast  and  the  macroeconomic  assumptions  underpinning 
the  multi-annual  net  expenditure  path.  The  Council  of  State  concluded  that  the  net 
expenditure  path  in  the  medium-term  fiscal-structural  plan  does  not  meet  the 
requirements of  the Regulation  and that the Netherlands will need to make  a fiscal 
effort in addition to the measures presented by the government in the draft budget for 
2025.  

(11) 

The  plan  was  presented  to  the  national  parliament  on  17  September  2024,  together 
with the draft budget for 2025. It was afterwards adopted by the Ministry of Finance 
on 12 October 2024.  

Other related processes 

(12) 

(13) 

On 16 October 2024, the Netherlands submitted its Draft Budgetary Plan for the year 
2025.  The  Commission  adopted  an  opinion  on  this  Draft  Budgetary  Plan  on  [26 
November 2024]9.  

On  19  June  2024,  the  Commission  concluded  that  the  Netherlands  is  experiencing 
macroeconomic  imbalances.  In  particular,  the  Netherlands  faces  vulnerabilities 
related to high private debt in a context of an overvalued housing market, which have 
cross-border relevance and remain relevant despite some improvements10. 

(14) 

On 21 October 2024, the Council addressed to the Netherlands a series  of country-
specific recommendations (CSRs) in the context of the European Semester11. 

SUMMARY OF THE PLAN AND THE COMMISSION’S ASSESSMENT THEREOF 

(15) 

In line with Article 16 of Regulation (EU) 2024/1263, the Commission assessed the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook  

(16) 

Economic  activity  in  the  Netherlands  grew  by  0.1%  in  2023.  The  stagnation  was 
driven  by  high  inflation  and  the  weak  external  environment  holding  back  exports. 
According  to  the  European  Commission  Autumn  2024  Forecast,  the  economy  is 
expected  to  grow  by  0.8%  in  2024,  on  the  back  of  improvements  in  real  wages 
supporting  private  consumption.  Real  GDP  is  set  to  increase  by  1.6%  in  2025  and 

8 
9 
10 

11 

The opinion of the Council of State can be found in Annex II of the plan. 
Commission Opinion on the Draft Budgetary Plan of the Netherlands, 26.11.2024, C(2024)9062 final. 
‘Communication from the Commission to the European Parliament, the Council, the European Central 
Bank, the European Economic and Social Committee, the Committee of the Regions and the European 
Investment Bank’, COM (2024) 600 final, Appendix 4 
Council  Recommendation  on  economic,  budgetary,  employment  and  structural  policies  of  the 
Netherlands, not yet published. 

EN 

4 

  EN 

 
 
 
 
(17) 

1.5%  in  2026,  supported  by  continued  wage  growth,  falling  inflation  and  an 
improved  external  environment  supporting  trade.  Over  the  forecast  horizon  (i.e., 
2024-2026), potential GDP in the Netherlands is expected to grow by 1.9% in 2024, 
1.7% in 2025 and 1.5% in 2026, as the labour contribution to potential growth drops 
from 0.9% in 2024 to 0.5% in 2026. The unemployment rate stood at 3.6% in 2023, 
and is  projected by the Commission to  amount to  3.7% in  2024,  3.8% in 2025 and 
3.9% in 2026. Inflation (GDP deflator) is projected to decrease from 7.3% in 2023 to 
5.0% in 2024, and to reach 3.0% in 2025 and 2.3% in 2026.  

Regarding fiscal developments, in 2023 the Netherlands’ general government deficit 
amounted  to  0.4%  of  GDP.  According  to  the  European  Commission  Autumn  2024 
Forecast, it is set to reach 0.2% of GDP in 2024 and to increase to 1.9% of GDP in 
2025 and, on a no-policy change basis, to 2.4% in 2026. The European Commission 
Autumn  2024  Forecast  includes  the  Netherlands’  draft  budget  for  2025  that  the 
government  proposed  to  the  national  parliament  in  September  2024.  General 
government  debt  was  45.1%  of  GDP  at  end-2023.  According  to  the  European 
Commission Autumn 2024 Forecast, the debt ratio is expected to decline to 43.3% of 
GDP  at  end-2024.  It  is  projected  to  increase  to  44.3%  of  GDP  at  end-2025  and 
46.6%  at  end-2026.  The  fiscal  projections  by  the  Commission  do  not  consider  the 
policy commitments in the medium-term plans as such until they are underpinned by 
credibly announced and sufficiently specified concrete policy measures. 

Net expenditure path and main macroeconomic assumptions in the plan 

(18) 

(19) 

(20) 

The  Netherlands’  national  medium-term  fiscal-structural  plan  covers  the  period 
2025-2028 and presents a fiscal adjustment over four years.  

The  plan  contains  all  information  required  by  Article  13  of  Regulation  (EU) 
2024/1263. 

The plan commits to the net expenditure path indicated in Table 2, corresponding to 
average  net  expenditure  growth  of  4.2%  over  the  years  2025-2028.The  technical 
information  (assuming  a  linear  adjustment  path)  is  consistent  with  an  average  net 
expenditure  growth  of  3.2%  over  the  adjustment  period  (2025-2028).  The  net 
expenditure path committed to in the plan is reported to lead to a structural primary 
balance of -0.8% of GDP at the end of the adjustment period  (2028). This is lower 
than the minimum  level  of the structural  primary balance of  0.1% of GDP in  2028 
provided  by  the  Commission  in  the  technical  information  on  21  June  202412.  The 
plan  assumes  potential  GDP  growth  to  decrease  gradually  from  2.1%  in  2024  to 
1.4%  in  2028.  In  addition,  the  plan  expects  the  growth  rate  of  the  GDP  deflator  to 
decrease from 5.1% in 2024 to markedly lower rates between 2025 (2.7%) and 2028 
(2.4%). 

12 

In the scenario without the deficit resilience safeguard. 

EN 

5 

  EN 

 
 
 
 
Table 2: Net expenditure path and main assumptions in the Netherlands’s plan 

2024 

2025 

2026 

2027 

2028  Average over the period 

Net expenditure growth 

(annual, %) 

Net expenditure growth 

(cumulative, from base 
year 2023, %) 

6.9 

6.8 

3.5 

2.1 

4.3 

6.9 

14.1 

18.1 

20.7 

25.9 

Potential GDP growth (%) 
Inflation (GDP deflator growth) 

(%) 

2.1 

5.1 

1.8 

2.7 

1.7 

2.6 

1.5 

2.6 

1.4 

2.4 

of validity of the 
plan 

 2025-2028 

4.2 

n.a. 

1.6 

2.6 

Source: Medium-term fiscal-structural plan of the Netherlands and Commission calculations. 

Implications of the plan’s net expenditure commitments for general government debt 

(21) 

If the net expenditure path committed to in the plan and the underlying assumptions 
materialise,  general  government  debt  would,  according  to  the  plan,  gradually 
increase from 45.0% of GDP in 2024 to 51.1% of GDP at the end of the adjustment 
period  as  per  the  following  table.  After  the  adjustment,  over  the  medium  term  (i.e. 
until 2038), the debt ratio is expected to cross the Treaty reference value of 60% of 
GDP in 2033 according to the plan and reach 70.7% in 2038. 

Table 3: General government debt and balance developments in the Netherlands’ plan 

2023 

2024 

2025 

2026 

2027 

2028 

2038 

45.1 

45.0 

46,7 

49,7 

50,1 

51,1 

70.7 

-0.4 

-1.8 

-2.5 

-3.4 

-2.1 

-2.5 

-4.0 

Government 
debt 
(% of GDP) 
Government 
balance 
(% of GDP) 

Source: Medium-term fiscal-structural plan of the Netherlands. 

Thus, according to the plan, general government debt is on an upward path and would 
not  stay  below  the  Treaty  reference  value  of  60%  of  GDP  over  the  medium  term. 
Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the net expenditure path put forward in the plan is not consistent with the requirements 
for debt as set out in Articles 6, point (a), and 16(2) of Regulation (EU) 2024/1263. 

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(22) 

Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit would increase from 1.8% of GDP in 2024 to 2.5% in 2025, and temporarily 
increase  further  above  3%  (3.4%)  in  2026  before  moderating  to  2.1%  in  2027  and 

EN 

6 

  EN 

 
 
 
then  rising  again  to  2.5%  in  2028.  Thus,  according  to  the  plan,  the  general 
government balance would not exceed the 3% of GDP reference value at the end of 
the  adjustment  period  (2028).  However,  in  the  ten  years  following  the  adjustment 
period  (i.e.  until  2038),  the  government  deficit  would  exceed  3%  of  GDP.  The 
government  deficit would cross the Treaty  reference value of 3% in  2029 and then 
gradually  increase  to  4.0%  by  2038.Therefore,  based  on  the  plan’s  policy 
commitments and macroeconomic assumptions, the net expenditure path put forward 
in the plan is not consistent with the requirement for the deficit as set out in Articles 
6, point (b), and 16(2) of Regulation (EU) 2024/1263.  

Fiscal strategy of the plan  

(23) 

The  plan  does  not  include  an  indicative  fiscal  strategy  to  implement  the  net 
expenditure  path  of  the  plan.  The  precise  specification  of  the  relevant  policy 
measures  is  to  be  confirmed  or  adjusted  and  quantified  in  the  annual  budgets.  The 
government’s coalition agreement for the period from 2024 to 2028 foresees income 
tax  cuts  at  the  start  of  the  mandate,  which  are  compensated  by  increases  in  value-
added  tax  on  certain  products  in  2026  and  expenditure  cuts  on,  among  others, 
development  aid,  salaries  in  the  public  sector  and  asylum,  towards  the  end  of  the 
mandate. The Draft Budgetary Plan for 2025 specifies  the policy measures through 
which the targeted net expenditure growth rate for 2025 of 6.8% will be achieved13.  

Reform  and  investment  intentions  in  the  plan  responding  to  the  main  challenges 
identified in the context of the European Semester and addressing the common priorities 
of the Union 

(24) 

(25) 

The plan describes policy intentions concerning reforms and investments to respond 
to the main challenges identified in the context of the European Semester, especially 
the CSRs, including those pertaining to MIP, and to address the common priorities of 
the  EU.  The  plan  includes  an  extensive  list  of  over  70  reforms  and  investments 
addressing the common priorities of the EU, of which 14 are financially supported by 
the Recovery and Resilience Facility.  

Concerning the common priority of a fair green and digital transition, including the 
climate objectives set out in Regulation (EU) 2021/1119, the plan includes over 20 
reforms and investments, such as the Multiannual Energy and Climate Infrastructure 
Programme,  public-private  research  programmes  under  the  Digital  Economy 
Strategy  and  the  Dutch  Climate  Fund,  among  others.  The  plan  also  describes 
measures under the recovery and resilience plan (RRP) to tackle network congestion, 
construction  of  energy  infrastructure  and  research  on  quantum  computing.  The 
reforms  and  investments  included  in  the  plan  intend  to  address  the  CSRs  to  make 
further efforts for sustainable agriculture issued in 2022, 2023 and 2024, to foster the 
transition  to  renewable  energy,  including  investments  in  the  grid  issued  in  2019, 
2022, 2023 and 2024, to foster investments,  research and innovation to  support  the 
green and digital transition issued  in  2019, 2020 and 2022 and  to  address  transport 
bottlenecks issued in 2019. The plan includes reforms and investments to address the 
CSRs  pertaining  to  the  macroeconomic  imbalances  procedure  to  accelerate  the 

13 

See  Commission  Opinion  on  the  Draft  Budgetary  Plan  of  the  Netherlands,  26.11.2024,  C(2024)9062 
final. 

EN 

7 

  EN 

 
 
 
(26) 

(27) 

deployment of renewables and boosting investments in network infrastructure issued 
in 2022 and 2023, stepping up skills and competences needed for the green transition 
issued  in  2023,  improving  energy  efficiency  in  buildings  and  accelerating 
investments  in  sustainable  transport  and  sustainable  agriculture  issued  in  2022  and 
2023.  

Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  the  plan  includes  an  extensive  list  of  over  40 
reforms  and  investments  grouped  under  several  policy  areas  such  as  the  housing 
market,  education,  healthcare,  pensions,  labour  market  and  taxation.  Some  of  these 
investment and reforms are included in the RRP, such as the disability insurance for 
self-employed, the revision of the pension law or the extension of intensive care. The 
reforms  and investments  included in  the plan intend to  address  the CSRs to reduce 
incentives to  use flexible or temporary contracts issued  in 2022, 2023 and 2024, to 
promote adequate social protection for the self-employed and to  reduce  bogus self-
employment issued in 2019, 2020 and 2022. The reforms and investments in the plan 
also  intend  to  tackle  labour  and  skills  shortages,  including  the  up  and  re-skilling 
opportunities  to  improve  basic  skills  issued  consecutively  since  2019,  and  to 
strengthen  the  health  system  issued  in  2020.  However,  the  plan  does  not  include 
reforms  to  address  the  expected  increase  in  age-related  expenditure  by  making  the 
long-term  care  system  more  cost-effective  and  to  encourage  mobility  to  high-
productivity sectors and  sectors related to  societal  challenges. Under the  social and 
economic  resilience  priority,  the  plan  includes  reforms  and  investments  on  the 
housing  market  that  intend  to  address  the  CSRs  pertaining  to  the  macroeconomic 
imbalances  procedure  by  reducing  the  household  debt  bias  and  by  ensuring  the 
affordability  and  availability  of  housing  in  the  private  rental  market,  two 
recommendations addressed to the Netherlands in consecutive years since 2019, and 
by removing obstacles for residential construction issued in 2023 and 2024.   

Concerning  the  common  priority  of  energy  security,  the  plan  includes  reforms 
contributing  to  energy  security  through  legislation  to  structurally  improve  the 
security  of  gas  supply  and  the  energy  savings  obligations  for  companies  and 
institutions, among others. The plan also describes the policy intention to implement 
measures to strengthen resilience by reducing dependencies on critical raw materials 
and  boosting  the  manufacturing  of  net-zero  technologies.  Some  of  the  reforms  and 
investments are included under the RRP to tackle network congestions, to update the 
regulatory framework for gas and electricity energy systems and to foster the use of 
green  hydrogen  technologies.  The  reforms  and  investments  included  in  the  plan 
intend  to  address  the  CSRs  to  foster  the  transition  to  renewable  energy,  including 
investment  on  the  grid  issued  in  2019,  2022,  2023  and  2024  and  tackle  transport 
bottlenecks  issued  in  2019.  The  plan  includes  reforms  and  investments  to  address 
CSRs,  which  pertain  to  the  macroeconomic  imbalances  procedure  insofar  as  they 
recommend  increasing  investments  in  the  deployment  of  renewables  and  network 
infrastructure issued in 2022 and 2023, energy efficiency in buildings and sustainable 
transport  issued  in  2022,  and  to  reduce  reliance  on  fossil  fuels  issued  in  2022  and 
2023.  

(28) 

Concerning  the  common  priority  of  defence  capabilities,  the  plan  includes  a  set  of 
investments to be implemented between 2024 and 2028 that consist of the acquisition 
of  equipment,  renewal  of  real  estate  infrastructure,  including  to  ensure  its 
sustainability, and the modernisation and replacement of tactical IT infrastructure.  

EN 

8 

  EN 

(29) 

(30) 

The  plan  provides  information  on  the  consistency  and,  where  appropriate, 
complementarity, with the Netherlands’ RRP. The reforms and investments outlined 
in  the  plan  complement  several  actions  undertaken  under  the  RRP  that  also 
contribute to the common priorities of the EU. The new reforms and investments in 
the  plan  are  consistent  with  the  measures  under  the  RRP.  For  example,  the  energy 
market  reform  package  included  in  the  REPowerEU  chapter  contributes  to  a  fair 
green  and  digital  transition,  as  well  as  energy  security,  and  the  measures  on 
centralised planning to increase housing supply and to strengthen the health system 
in the RRP contribute to social and economic resilience.  

The plan aims to contribute to meet the public investment needs of the Netherlands 
related to the common priorities of the EU. Concerning the common priority of a fair 
green  and  digital  transition,  the  investments  set  out  in  the  plan  amount  to  around 
EUR 43 billion. Concerning the common priority of social and economic resilience, 
the  plan  foresees  investment  needs  amounting  to  EUR  10  billion  under  housing, 
labour market and care-related investment. In relation to the energy security common 
priority,  the  plan  outlines  mostly  reforms,  but  it  envisages  EUR  300  million 
investment  needs  for  the  deployment  of  green  hydrogen  technologies,  partially 
covered  by  the  RRP.  Under  the  common  priority  of  defence  capabilities,  the 
investment needs outlined in the plan amount to EUR 55 billion.  

Conclusion of the Commission’s assessment 

(31) 

Overall, the Commission is of the view that the Netherlands’ plan does not  comply 
with the requirements of Article 16(2) of Regulation (EU) 2024/1263 given the lack 
of  consistency  of  the  net  expenditure  path  of  the  plan  with  the  debt  and  deficit 
requirements  of  that  Regulation.  The  plan  states  the  following:  “If  the  Commission 
and the Council consider that the net expenditure path proposed by the Netherlands 
is  not  in  line with the Regulation,  the Netherlands shall  waive its right  to submit a 
revised plan as provided for in Article 18 of the Regulation and understands that the 
Council,  on  a  recommendation  from  the  Commission  on  the  basis  of  the  technical 
information  provided  by  the  Commission,  may  recommend  an  expenditure  path 
under  Article  19  of  the Regulation.  The  government  sees  a  recommendation  for  an 
expenditure path on the basis of the technical information as proper implementation 
of  the  European  fiscal  rules.”  Taking  into  account  that  the  Netherlands  does  not 
intend  to  submit  a  revised  plan  in  accordance  with  Article  18  of  Regulation  (EU) 
2024/1263, the net expenditure path is to be recommended in line with Article 19 of 
that  Regulation  based  on  the  Commission’s  technical  information  provided  on  21 
June 2024.  

OVERALL CONCLUSION 

(32) 

On  the  basis  of  the  Commission  assessment,  the  waiver  by  the  Netherlands  of  its 
right to submit a revised plan under Article 18 and in accordance with Article 19 of 
Regulation  (EU)  2024/1263,  the  net  expenditure  path  based  on  the  technical 
information provided by the Commission on 21 June 2024 should be recommended 
by the Council to the Netherlands. 

HEREBY RECOMMENDS that the Netherlands 

EN 

9 

  EN 

 
 
 
1. 

Ensure  that  net  expenditure  growth  does  not  exceed  the  maxima  established  in 
Annex I to this Recommendation. 

In  addition,  the  Council  invites  the  Netherlands  to  ensure  the  delivery  of  reforms  and 
investments  responding  to  the  main  challenges  identified  in  the  context  of  the  European 
Semester, in particular in the country-specific recommendations, and addressing the common 
priorities of the Union. 

EN 

10 

  EN 

 
 
ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
The Netherlands 

Years 

2025 

2026 

2027 

2028 

Growth rates 
(%) 

Annual 

3.5 

3.3 

3.0 

3.0 

Cumulative (*) 

10.4 

14.0 

17.5 

21.0 

(*) The cumulative growth rates are calculated by reference to the base year of 2023. 

Done at Strasbourg, 

For the Council 
The President 

EN 

11 

  EN