COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - the Netherlands Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of the Netherlands
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Netherlands, budget policy, economic policy, economic recovery, economic reform, employment policy, labour market, research policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 219 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - the Netherlands  Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of the Netherlands  {COM(2025) 219 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Higher wages drive economic 
growth amid geopolitical 
uncertainty 

The  Dutch  economy  returned  to  modest 
growth  in  2024,  with  GDP  adjusted  for 
inflation  increasing  by  0.9%.  Following 
economic  stagnation 
in  2023,  the  Dutch 
economy  was  supported  by  real  wage  growth 
picking  up  substantially.  This  resulted  in  an 
increase  in  consumer  spending  especially  in 
the  second  half  of  2024.  Furthermore, 
investment 
government 
and 
increased  significantly.  However, 
spending 
lagging 
contributed 
still 
investments 
negatively to economic growth as they did not 
fully recover following the slump in 2023.  

spending 

increase 
is  set  to 
Economic  growth 
further 
in  2025  before  moderating 
slightly  in  2026.  Annual  growth  is  forecast 
at  1.3%  in  2025  and  1.2%  in  2026.  Strong 
real  wage  growth  is  set  to  lead  to  a  recovery 
in  households’  disposable  income  and  strong 
consumption  growth.  Growth  in  2025  and 
2026  is  also  expected  to  be  supported  by 
increased  government  investment  in  among 
others  defence  and  the  green  transition. 
Private investment is set to recover somewhat 
by the second half of 2025 as the outlook for 
construction improves, but  growth  is  expected 
labour 
to  be  modest  due  to  persistent 
shortages.  Net  trade  is  expected  to  have  a 
negative  contribution  to  GDP  growth  in  2025 
as  the  tariffs  imposed  by  the  US  result  in 
lower exports growth. At the same time, strong 
domestic  demand  –  driven  by  consumer 
spending  and  public  investment  –  is  forecast 
to  result  in  import  growth  being  higher  than 
export growth.  

Risks  to  global  trade  could  negatively 
impact  economic  growth.  The  Netherlands’ 
open  economy  yields  significant  benefits, 
including  productivity  gains  and  economies  of 
scale,  due  to  its  strong  international  trade 
links. However, this openness also renders the 
economy  vulnerable  to  external  risks,  such  as 
trade tariffs and supply chain disruptions.  

the  Harmonised 

While  inflation  in  the  Netherlands  has 
receded,  it  remains  well  above  the  euro 
area average. Inflation in the Netherlands, as 
Index  of 
measured  by 
Consumer Prices, was 3.2% in 2024 (euro area 
2.4%).  While  it  initially  continued  to  fall  in 
2024,  increases  in  excise  duties  on  gas, 
tobacco  and  alcohol  in  the  second  half  of 
2024  led  to  a  surge  in  inflation  in  the 
processed  foods  category.  In  addition,  wage 
growth  and  significant  rent  increases  resulted 
in  services  inflation  above  the  euro  area 
average.  Inflation  is  set  to  decline  gradually 
throughout  2025  (3.0%)  and  2026  (2.0%)  as 
wage  growth  is  expected  to  come  down 
gradually  and  the  increase  in  excise  duties 
only raises inflation temporarily.  

The  Dutch  jobs  market  remains  strong.  It 
is performing well overall, with an employment 
rate of 83.5% in 2024 – one of the highest in 
the  EU  and  above  the  2030  employment 
(see  Annex  13).  The 
target  of  82.5% 
unemployment  rate  stood  at  3.8%  in  April 
2025,  slightly  up  from  3.6%  in  Q2-2024  but 
still historically low and well below pre-COVID 
is 
levels  (4.5% 
expected  to  increase  slightly  in  2025  and 
2026  due  to  slower  employment  growth  as 
new  people  entering  the  jobs  market  take 
longer to find a job. Wage growth accelerated 
to  6.4%  in  2024,  driven  by  higher  wage 
demands  due  to  past 
inflation  and  the 
shortage  in  workers.  Wage  growth  is  set  to 
remain robust in 2025 and 2026, though it is 
expected  to  slow  somewhat  as  wages  have 

in  2019).  Unemployment 

2 

 
 
cumulative  growth  rate  of  net  expenditure  in 
2024 and 2025 taken together is projected at 
14.3%, which is also above the maximum rate 
recommended  by  the  Council.  The  strong 
increase  of  net  expenditure  in  2025  is  driven 
by structural cuts in personal income taxation, 
with  a  budgetary  impact  of  0.3%  of  GDP  as 
well  as  continued  growth on  compensation  of 
employees as well as social payments.  

Macroeconomic challenges remain 

The  Netherlands  faces  vulnerabilities 
large  current  account 
relating  to  a 
surplus  together  with  high  household 
debt  and  high  house  prices.  An  in-depth 
review  was  carried  out  as  part  of  the 
Macroeconomic  Imbalance  Procedure  earlier 
this  year (3). 
long-standing 
It  highlighted 
vulnerabilities,  and  policy  progress  has  been 
limited. 

The current account surplus stands above 
10%  of  GDP  and  is  expected  to  remain 
high, on the back of a substantial surplus 
of  trade  in  goods  and  services.  Excess 
savings  in  the  Dutch  economy  are  largely 
driven  by  the  corporate  sector.  The  main 
contributors  are  small  and  medium-sized 
enterprises  and  Dutch  multinationals.  The 
latter  receive  profits  from  their  worldwide 
operations and largely use them to reinvest in 
their  foreign  affiliates.  This  increases  the 
firms’  retained  earnings  and  with  it  the  net 
lending of the Dutch economy. 

Household  debt  and  house  prices  remain 
high.  The  household  debt-to-GDP 
ratio 
decreased significantly, from 125% in 2010 to 
92%  in  2024,  but  remains  high  compared  to 
the fundamental  benchmark (71%)  and is the 
highest  in  the  EU (4).  The  high  debt  levels 

C/2025/648,10.2.2025,ELI: 
http://data.europa.eu/eli/C/2025/648/oj).  

(3)  European Commission 2025, In-Depth Review 2025 - 
The Netherlands (Institutional Paper 313 2025) 

(4)  Household debt as a share of GDP stood at 92% in 

2024, significantly below its peak of 125% in 2010.  

now largely caught up to price increases of the 
past years. 

The  Netherlands  currently  has  sound 
public  finances  but  faces  risks  due  to 
increases  in  ageing-related  costs  in  the 
medium  to  long  term.  The  government 
deficit  in  2024  stood  at  0.9%  of  GDP  and  is 
expected to rise to 2.1% in 2025 and 2.7% in 
2026.  Government  debt  fell  to  43.3%  of  GDP 
in 2024 and is expected to increase to  45.0% 
in  2025  and  47.8%  in  2026.  As  in  previous 
years,  the  deficit  was  significantly  smaller 
than  planned.  Previously,  this  was  driven  by 
weak execution of spending plans and higher-
than-expected  revenue.  In  2024,  the  main 
factor  was  the  postponement  of  government 
spending  to  later  years,  while  revenue  was 
only  slightly  higher  than  expected.  In  the 
linked  to  the  ageing 
longer  term,  costs 
population  are  expected 
to  a 
significant  increase  in  spending  on  pensions, 
health and long-term care (see Annex 1). As a 
share  of  GDP,  spending  on  long-term  care  in 
the  Netherlands  is  the  highest  in  the  EU.  It  is 
expected to increase by 1.5% of GDP by 2050, 
raising  potential  concerns  about  long-term 
fiscal sustainability (see Section 4). 

lead 

to 

driven 

Net  expenditure  growth  is  expected  to 
breach the maximum rates recommended 
by  the  Council  in  the  coming  years.  In 
2024,  net  expenditure  (1)  in  the  Netherlands 
grew  by  6.8%  (see  Annex  1).  This  increase  is 
mainly 
of 
intermediate  consumption  and  compensation 
of  public  employees  as  high  inflation  in  the 
Netherlands  affected  the  government  budget 
with a lag. In 2025, net expenditure is forecast 
by the Commission to grow by  7.0%, which is 
above 
rate 
(2).  The 
recommended  by 

the  maximum 

the  Council 

growth 

growth 

strong 

by 

expenditure, 

(1)  Net expenditure is defined in Article 2(2) of Regulation 
(EU)  2024/1263  as  government  expenditure  net  of  (i) 
interest 
revenue 
(ii) 
measures, (iii) expenditure on programmes of the Union 
fully  matched  by  revenue  from  Union  funds,  (iv) 
national  expenditure  on  co-financing  of  programmes 
funded  by 
(v)  cyclical  elements  of 
unemployment  benefit  expenditure,  and  (vi)  one-off 
and other temporary measures. 

discretionary 

the  Union, 

(2)  Council  Recommendation  of  21  January  2025  setting 
the  net  expenditure  path  of  the  Netherlands  (OJ  C, 

3 

 
 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

The  Netherlands  performs  well  across  most  SDGs  related  to  macroeconomic  stability 
(SDGs  8  and  17)  and  productivity  (SDGs  4,  8  and 9),  achieving  results that are  better 
than or comparable to the EU average.  

The Netherlands also performs well on most SDGs related to fairness (SDGs 3, 4 and 5), 
outperforming  the  EU  average  in  most  indicators  related  to  health,  education,  gender 
equality,  and  decent  work  and  growth.  However,  in  the  area  of  environmental 
sustainability, the Netherlands still falls behind the EU average (SDGs 7 and 11, 14 and 
15), highlighting the need for further progress in increasing the share of affordable and 
clean energy and reducing net greenhouse gas emissions 

make  households  vulnerable  to  economic 
downturns,  particularly  in  the  context  of  an 
though 
overvalued  housing  market,  even 
immediate risks appear under control. 

Graph 1.1: Change in labour productivity 2009-
2019 with and without mining industry 

Preserving the competitiveness 
edge amid years of low 
productivity growth 

The  Netherlands  remains  a  top  EU 
performer  in  terms  of  productivity  and 
competitiveness, but there are challenges 
to address.  Several  factors  risk  holding  back 
productivity  growth  and  competitiveness, 
including  the  persistent  growing  shortage  of 
workers and labour market segmentation (the 
division  of  the  jobs  market  into  different 
categories  of  workers  with  different  levels  of 
job  security  and/or  access  to  social  and  other 
benefits),  movement  of  labour  towards  less 
productive  sectors,  and  underinvestment  in 
innovation, infrastructure and human capital. 

Source: Eurostat 

In  2023,  the  Netherlands  was  the  fourth 
most  productive  EU  Member  State,  but 
productivity  growth lags  the  EU average. 
Cumulatively,  Dutch  labour  productivity  per 
hour worked rose by only 4.3% between 2009 
and  2019,  about  half the EU  average (5).  This 
places  the  Netherlands  22nd  among  EU 
Member  States  when  it  comes  to  productivity 
growth  in  this  period,  and  well  below  peers 
such  as  Denmark,  Germany  and  Sweden  (see 
Graph  1.1).  A  major  factor  explaining  its 
relative  underperformance  since  2014  is  the 
phasing  out  of  gas  production  from  the 
Groningen  field  (due  to  earthquake  risks).  The 
Netherlands  Bureau 
for  Economic  Policy 
Analysis  estimates  that  the  reduction  in  gas 
production  has 
lowered  overall  annual 
productivity  growth  by  about  0.3  percentage 

(5)  Labour productivity in 2020-2023 was 0.9% (and very 
volatile), slightly higher compared to the previous 
decade 

4 

02468101214161820DKEU27DESENLBE% change 2014-2019With mining industryWithout minining industry 
   
 
 
points on average since 2014 (6). Excluding the 
gas sector, the underlying productivity trend is 
slightly  better  than  the  headline  numbers, 
though there is still a clear slowdown. 

Graph 1.2: Unemployed labour force minus 
number of open vacancies (seasonally 
adjusted) 

From 

sectors. 

resulted 

productivity 

Employment  growth  in  low  productivity 
sectors suggests an inefficient allocation 
of  scarce  labour  resources.  In the last  two 
decades,  overall  sectoral  reallocations  in  the 
composition  of  value  added 
in 
positive growth in average labour productivity. 
Nevertheless,  when  looking  at  the  structural 
shifts  between  sectors  without  accounting  for 
their  growth,  employment  in  low  productivity 
sectors  has  grown  faster  than  employment  in 
high 
a 
macroeconomic perspective, this unfavourable 
sectoral  mix  has  been  detrimental  to  Dutch 
productivity  growth (7),  with  the  structural 
impact being significantly worse than in peers 
such  as  Germany,  Sweden  and  Denmark (8). 
The  relatively  stronger  employment  growth  in 
low  productivity  sectors  is  partly  the  result  of 
population  ageing,  requiring  an  increase  in 
employment  for  example  in  the  healthcare 
sector.  However,  it  is  also  likely  the  result  of 
policies  that  make  it  easier  to  hire  relatively 
low-wage,  flexible  labour.  This  has  benefited 
mostly  low  productivity  sectors,  often  heavily 
reliant  on  flexible  employment  and  migrant 
workers.  Supporting  high  productivity  sectors 
requires  the  availability  of  an  adequately 
skilled workforce, continued investment in R&D 
and  access  to  finance  for  innovation-driven 
companies, in particular scale-ups, to maintain 
the innovative capacity of the Dutch economy 
(see Section 2). 

(6)  CPB (2025). National Productivity Board 2024 annual 

report. 

(7)  CBS (2024). Achtergrond bij de daling van de 
arbeidsproductiviteitsgroei van Nederland. 

(1) EU aggregate excludes Denmark, France and Italy, 
who report incomplete vacancy statistics 
Source: Eurostat 

Pervasive  labour  and  skills  shortages 
limit  the  productive  capacity  of  the 
economy. 
In  Q4-2024,  there  were  108 
vacancies  for  every  100  unemployed  in  the 
Netherlands  (see  Graph  1.2),  with  companies 
consistently reporting worker shortages as the 
largest  factor  by  far  holding  back  their 
businesses (9). The effectiveness of the labour 
force  is  also  hindered  by  labour  market 
segmentation, as reflected in the high share of 
flexible  contracts  and  self-employed  without 
employees.  Firms  with  many  short-term  or 
part-time  workers  tend  to  underinvest 
in 
human  capital  development  and  automation. 
Furthermore,  the  Netherlands  faces  specific 
in  key  sectors  such  as 
skills  shortages 
engineering,  IT,  education  and  healthcare.  A 
worsening  of  education  outcomes  and  a 
relatively  small  share  of  students  enrolled  in 
tertiary  science,  technology,  engineering  and 
mathematics  (STEM)  and  IT  subjects  could 
pose  further  risks  to  future  competitiveness. 
These  shortages  not  only  reduce  productivity 
growth  but  also  make  it  more  difficult  to 
realise  investments  in  order  to  for  example 
advance  the  energy  transition  and  address 
housing shortages (see Section 4).  

(8)  ESB (2024). Lage groei productiviteit mede door 

(9)  CBS (2025). Conjunctuurenquête Nederland, eerste 

ongunstige structuur economie.  

kwartaal 2025. 

5 

-505101520-0.2-0.100.10.20.30.40.50.60.70.81415161718192021222324MillionsMillionsNL (lhs)EU excl. DK, FR, IT (rhs) 
 
 
  
 
energy  prices 

Bottlenecks  in  energy  infrastructure  and 
high 
risk  affecting 
competitiveness. The limited capacity of the 
electricity grid has delayed access to power for 
some  firms  and  slowed  down  the  roll-out  of 
renewable  energy  projects.  Congestion  on  the 
Dutch  grid  is  expected  to  intensify  in  the 
coming  years,  slowing  down  decarbonisation 
and limiting the increase of renewables in the 
energy  mix.  Significant  investments  will  be 
needed 
issues.  The 
Netherlands  stands  out  as  one  of  the  EU 
Member  States  with  relatively  high  electricity 
and gas prices. This is partly because the costs 
of  grid  investments  are  passed  on  directly  to 
consumers (see Section 3).  

resolve 

these 

to 

The  Netherlands’  current  situation 
is 
therefore  one  of  both  abundance  and 
It  remains  one  of  the  most 
shortages. 
productive  and  competitive  in  the  EU  with  a 
strong knowledge base and one of the highest 
per  capita  incomes. However,  to maintain  this 
position, the Netherlands will need to address 
and make effective use of increasingly scarce 
production  factors  such  as  labour,  available 
land and energy. This will require clear choices 
on  how  to  allocate  production  factors  as  well 
as  the  appropriate  social,  labour  and  tax 
policies  to  ensure  the  workforce  is  employed 
and  educated  in  the  most  effective  way.  In 
the 
addition,  significant 
electricity  grid will  be  needed  to lower energy 
costs  and  expand  grid  connections,  alongside 
investments 
research  and 
innovation to maintain the competitive edge of 
the economy. Lastly, firms would benefit from 
more  long-term  regulatory  stability,  as  policy 
shifts  over 
recent  years  have  created 
uncertainty for long-term investment planning. 

in  education, 

investments 

in 

6 

 
Box 2: 

Barriers to private and public investment 

Several  structural  factors  in  the  Netherlands  hold  back  public  and  private  investment, 
constraining  both  private  gross  fixed  capital  formation  (which  has  stagnated  at 
around 10% of GDP since 2010) and leading, among others, to historically high levels 
of underspending of the government budget (0.7% of GDP in 2023). 

•  Dutch firms in different sectors report the lack of skilled workers  as their main 

barrier to production, which hampers private investment and public projects. 

•  The  complexity  of  planning  and  permitting  procedures  for  construction 
significantly delays the building of new dwellings, exacerbating land scarcity. 
•  Congestion  on  the  Dutch  electricity  grid  is  a  significant  bottleneck  in  increasing 
renewables  in  the  energy  mix,  a  barrier  to  new  economic  activity,  and  one  of  the 
causes for relatively high electricity prices. 

•  Excessive  nitrogen  deposition  has  limited  the  issuance  of  new  permits  for  the 
construction  of  dwellings,  renewable  energy  and  industrial  infrastructure  since 
2019. 

•  Distortions  in  the  tax  system,  including  the  preferential  tax  treatment  of 
residential  properties  and  pension  savings,  can  prevent  private  investments  from 
being allocated efficiently, favouring tax-incentivised activities over productive ones. 

These  challenges  also  act  as  a  bottleneck  to  the  implementation  of  EU  funds.  The 
implementation  of  the  Netherland’s  RRP  is  significantly  delayed.  At  present,  the 
Netherlands has fulfilled 40% of the milestones and targets in its RRP. Despite barriers 
in public investment, the Netherlands is not facing issues in the absorption of EU funds. 
Nevertheless,  the  government's  plans  to  reduce  public  funding  and  the  already 
implemented budget cuts, such as regarding the National Growth Fund, are concerning. 

It remains important to accelerate the implementation of cohesion policy programmes. 
The mid-term review offers opportunities to speed up  progress and better address EU 
strategic priorities related to competitiveness, defence, housing, water resilience and the 
energy transition. 

While the Netherlands has leveraged the Strategic Technologies for Europe Platform to 
reallocate  some Cohesion Policy  resources towards  this  priority,  it  can  further support 
the  development  or  manufacturing  of  critical  technologies  in  the  areas  of  digital  and 
deep tech, clean and resource efficient technologies, and biotechnologies.  

7 

 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

landscape  and  ensure  the  Netherlands  keeps 
its position as a European leader.  

Graph 2.1: R&D investment as a share of gross 
value added in sectors C, M and P by country 

(1) C: Manufacturing. M: Professional, scientific and 
technical activities. P: Education 
Source: EU KLEMS  

Improving access to finance for 
innovation-driven businesses 

The Netherlands performs well on access 
to  finance  overall,  but  certain  groups 
require  further  attention.  The  country’s 
financial  markets  provide  a  stable  source  of 
funding  to  the  economy  due  to  a  well-
capitalised  banking  sector  and  stock  market, 
with the largest pension funds in the euro area 
playing  a  crucial  role  in  providing  long-term 
investment  capital  (see  Annex  5).  However, 
some 
small  and 
medium-sized enterprises (SMEs) with funding 
needs  of  up  to  EUR  1  million  and  late-stage 
start-ups  and  scale-ups,  face  difficulties  in 
accessing funding. Access to finance for these 
two  groups  can  be  key  to  boosting innovative 
investment and long-term competitiveness.  

companies,  especially 

Boosting R&D investment 

Fund, 

strong 

reduced 

innovation 
The  Netherlands’ 
leadership  position  starts  to  show  signs 
of deterioration. The Netherlands’ leadership 
in innovation is eroding, as public R&D support 
has  been 
recent  years  and 
in 
corporate  investment  in  many  industries  lags 
behind  the  euro  area  (see  Graph  2.1).  The 
Netherlands  ranks  fourth  among  EU  Member 
States  in  the  Summary  Innovation  Index,  but 
both  overall  and  public  R&D  intensity  are 
below the EU average (see Annexes 3 and 17). 
Recent  budget  cuts,  for  example  to  the 
National  Growth 
together  with 
historically high levels of underspending of the 
government  budget  in  recent  years  (0.7%  of 
GDP  in  2023),  have  further  reduced  public 
funding  for  innovation (10).  At  the  same  time, 
gross  fixed  capital  formation  by  the  non-
financial corporate (NFC) sector has stagnated 
since 2010 and is below the EU average in key 
sectors  like  manufacturing (11).  This  can  be 
detrimental  to  long-term  competitiveness  as 
R&D  supports  sustainable  growth  by  driving 
innovative 
and 
improving  efficiency.  Targeted  public  support 
to  key  competitive  areas (12),  including  by 
investing  in  research  and  testing  facilities (13), 
innovation 
boost 
would 

therefore 

products 

services 

and 

the 

(10)  Public R&D investment stood at 0.67% of GDP in 2023, 
well below the EU average of 0.72%, while in 2021 it 
was on a par with the EU average (0.75% of GDP).  

(11)  Investment as a share of value added in manufacturing, 
information and communication and transport and 
storage is between 3 and 6 percentage points lower 
than in the euro area. For a more detailed analysis, see 
the In-depth review (2025). 

(12)  The National Technology Strategy (2024) outlines 10 
priority technologies such as quantum technology, 
semiconductors, AI and data science. 

(13)  National Technology Strategy (2024).  

8 

02468101214169597990103050709111315171921%NLDKFISE 
 
 
   
While  loans  to  SMEs  have  been  growing 
strongly, smaller SMEs face challenges in 
accessing  finance.  Dutch  SMEs  have  access 
to  a  solid  source  of  available  funding  (see 
Annex  5).  However,  firms  seeking  smaller 
loans cannot access external finance as easily 
as larger SMEs, even though the need for new 
external  finance  of  small  businesses  has 
grown  over  the  last  year.  Overall,  access  to 
finance  is  seen  as  an  obstacle  for  51%  of 
Dutch  SMEs  with  financing  needs,  while  only 
21% of large companies see it as an obstacle 
(14).  This  may  be  partially  explained  by  the 
interest spread between small and large loans, 
which  was  the  highest  in  the  Netherlands  in 
2023  compared  to  other  Eurozone  countries 
(15).  This  is  especially  detrimental  for  small 
businesses, as they are more often in need of 
smaller  loans.  Furthermore,  small  businesses 
are  more  disadvantaged  by  high  fixed  costs 
and  information  asymmetry  (where  one  party 
has  more  or  better  information  than  the 
other).  Policies  aimed  at  lowering  information 
asymmetries  can  reduce  these  problems  and 
thereby  increase  financing  possibilities  for 
SMEs. 

of 

turning 

alternative 

to 
increasingly 
SMEs  are 
alternative  financing  methods,  but  the 
market  needs  professionalisation  to  help 
them  access  viable  financial  options.  The 
(non-bank) 
importance 
financiers is growing. Small loans in particular 
are  increasingly  financed  in  alternative  ways, 
(16), 
such  as  crowdfunding  or 
accounting  for  27%  of  loans  under  EUR  1 
million  and  45%  under  EUR 250 000 
in 
2022 (17).  Nevertheless,  the  market  could 
benefit  from  professionalisation  to  ensure 
transparency  in  relation  to  costs,  conditions 
and  risks.  Without  disclosure  requirements, 
suitability  assessments  or  risk  disclaimers, 
firms  with  limited  financial  expertise  struggle 

factoring 

(14)  CBS (2025) Financieringsmonitor 2024 

(15)  EIF (2023) The European Small Business Finance 

Outlook 2023 

(16)  Instead of relying on traditional borrowing methods, 
factoring boosts cash flow through invoice financing. 
This means the business sells its invoices at a discount 
and benefits from quick cash flow. 

to  identify  credible  funding  alternatives.  This 
could be addressed by implementing Codes of 
Conduct  or  an  accreditation  scheme.  The 
establishment of a Finance hub, as announced 
by the Dutch government in 2024, would help 
SMEs  identify  credible  financial  advisers  and 
lenders. 

and 

start-ups 

The  Dutch  venture  capital  market  is  one 
of  the  deepest  in  the  EU  but  does  not 
support 
scale-ups 
adequately  in  later  rounds.  With  strong 
growth  in  venture  capital  investment  (47%  in 
2024), the Dutch venture capital market is the 
third  largest  in  the  EU (18).  While  the  number 
of  scale-ups  increased  in  2024,  scale-up 
growth  is  at  the  low  end  compared  to  other 
top  EU  ecosystems (19).  Several  government 
initiatives aim to increase start-up funding, but 
there  is  still  a  funding  gap  for  start-ups  with 
capital needs above EUR 10 million. Scale-ups 
seeking  funding  above  EUR  50  million  before 
large-scale 
face 
difficulties (20). Addressing this funding gap by 
using guarantees or fund-to-fund instruments 
could boost start-up and scale-up growth and 
improve  Dutch  competitiveness,  as  these 
companies  show  higher  productivity  growth 
than other new businesses (21). 

commercialisation  also 

(rounds 

Venture capital  investment  relies heavily 
on  foreign  investors  for  larger  rounds. 
Domestic  participation  in  scale-up  venture 
capital 
EUR 100 million) 
above 
declined  sharply  from  67%  in  2023  to  5%  in 
2024, alongside 15% domestic participation in 
the  segment  between  EUR 50 million  and 
EUR 100 million  (breakout  stage) (22).  While 
the  presence  of  foreign  investors  shows  the 
innovation 
attractiveness  of 
ecosystem,  the  weight  of  non-EU  investors 

the  Dutch 

(18)  OECD (2024) Venture capital investments, OECD 

Entrepreneurship Financing Database. The Netherlands 
has the third largest venture capital market, behind 
Germany and France.  

(19)  Interdepartementaal Beleidsonderzoek (2024) Kies voor 

baten. 

(20)  Ibid. 

(21)  ESB (2024) Start-ups groeien harder dan andere 

starters. 

(17)  Kamerstukken II 2023/24, 32637, nr. 578. 

(22)  Techleap (2025), State of Dutch Tech 2025. 

9 

 
 
 
based  on  their  unrealised  returns,  i.e.  actual 
valuation  changes,  even  if  the  asset  was  not 
sold in a given year. To prevent taxpayers from 
facing liquidity risks, real estate and stakes in 
start-ups  would  only  be  taxed  based  on 
realised gains. While the reform addresses the 
Supreme  Court’s  ruling,  it  has  received  a 
negative  opinion  from  the  Dutch  Council  of 
State,  criticising  the  complexity  of  the  new 
system.  The  Council  also  highlights  that  the 
reform does not address distortions related to 
owner-occupied  housing  or  asset  holdings  in 
closely held firms (24). The reform falls short of 
aligning  the  taxation  of  different  types  of 
capital gains across the tax system. 

at 

of 

the 

time 

(around  60%)  in  funding  rounds  above  EUR 
100 million risks these companies leaving the 
market 
large-scale 
commercialisation. In this regard, InvestNL, the 
Dutch investment institute, recently announced 
EUR  250  million 
finance 
instruments  as  part  of  the  EUR  900  million 
initiative  to  facilitate  scale-up  investments.  In 
addition, Invest-NL is exploring the creation of 
a  fund-in-fund  vehicle  to  attract  institutional 
investors, including pension funds (23).  

in  blended 

Reducing distortions in the tax 
system 

The  Dutch  system  of  private  income 
taxation treats certain assets differently 
from the rest, affecting the allocation of 
capital and distorting economic decisions. 
Housing  wealth  and  pension  contributions  are 
given preferential treatment, boosting demand 
in  the  owner-occupied  housing  market  and 
lowering  households’  disposable  incomes  due 
to  high  pension  contributions.  In  addition, 
holding  assets  in  closely  held  companies  (a 
company with the majority of its shares owned 
by a few individuals) allows taxpayers to delay 
tax  payments  on  such  returns,  while  still 
benefiting from those returns through tax-free 
loans 
company.  Furthermore, 
households  with  financial  market  assets  are 
taxed  at  assumed  rates  of  return,  which  is 
unfavourable  when  the  actual  return  is lower. 
The  differential 
financial 
investments  reduces  the  ability  of  the  tax 
system  to  act  as  an  automatic  stabiliser  and 
exacerbates economic inequalities. 

treatment  of 

from 

the 

The  government  has  proposed  a  reform 
of capital gains tax, which only addresses 
part  of  the  distortions.  Savings  and 
investments  are  currently  taxed  based  on 
assumed  returns,  which  has  been  ruled 
unlawful by the Supreme Court. The proposed 
reform introduces a capital gains tax for most 
investments,  like  savings,  shares  and  bonds, 

(23)  Het Financieele Dagblad (2024), Invest-NL takes lead 

on large scale-up fund of funds. 

(24)  Wet werkelijk rendement box 3. - Raad van State 

10 

 
 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

Graph 3.1: Capacity map of the Netherlands, 
March 2025 (offtake of electricity from the 
grid) 

Source: https://capaciteitskaart.netbeheernederland.nl/ 

Important  steps  are  being  taken  to 
alleviate  grid  congestion  through  a 
combination  of  investments  in  the  grid 
and  regulatory 
initiatives.  The  Dutch 
transmission  system  operator  significantly 
increased  investments  in  2023  to  modernise 
and  expand  the  Dutch  transmission  grid.  The 
Netherlands  Authority  for  Consumers  and 
Markets introduced a broad set of measures in 
2024, such as discounts for flexible usage and 
timeframe-bound  contracts,  which  aim  to 
alleviate  grid  congestion.  Despite 
these 
initiatives,  it  is  expected  that  grid  congestion 
will  continue  being  a  major  challenge  in  the 
short  to medium  term.  In addition  to  capacity 
investments, further incentives are needed for 
efficient  grid  use.  Improving  trading  over 
existing  cross-border  infrastructure  remains  a 
challenge.  It  would  therefore  be  beneficial  to 
work  with  the  neighbouring  countries  to 
maximise  cross-zonal  electricity  trading  over 
existing cross-border infrastructure. 

Alleviating energy grid congestion, 
deploying renewable energy and 
speeding up decarbonisation  

Electricity  grid  congestion  remains  a 
major  challenge  in  the  Netherlands.  The 
country 
is  experiencing  widespread  grid 
capacity constraints that are no longer limited 
to rural areas. These constraints occur both at 
transmission  and  distribution  network  level 
and are a major obstacle to the integration of 
renewable energy sources. Grid congestion can 
prevent  the  connection  for  example  of  new 
photovoltaic  installations  to  the  grid.  This 
discourages renewable energy production that 
relies on grid access, limiting the Netherlands’ 
ability  to  meet  its  greenhouse  gas  emissions 
reduction  targets  and  clean  energy  ambitions 
(see  Annex  8).  Furthermore,  grid  congestion 
poses  a  risk  to  security  of  supply,  slows  the 
electrification of the transport sector, hampers 
the  construction  of  new  premises  and 
constrains  business  expansion.  This  impacts 
the Netherlands’ competitiveness, with around 
10 000  large  users  (consumers  or  batteries) 
and  7 500  large  generation  projects  (bigger 
than  household  scale)  on  a  waiting  list  for 
connection to the electricity grid (25).  

(25)  International Energy Agency, Energy Policy Review The 

Netherlands 2024, 
https://iea.blob.core.windows.net/assets/2b729152-
456e-43ed-bd9b-
ecff5ed86c13/TheNetherlands2024.pdf. 

11 

 
 
 
 
The Netherlands has made good progress 
in  renewable  energy  deployment  but 
needs  to  keep  up  the  momentum.  Despite 
progress  in  the  deployment  of  renewable 
energy sources, in particular offshore wind, the 
Netherlands’  renewable  energy  share  is  still 
below  the  targets  set  out  in  the  revised 
Renewable Energy Directive and below the EU 
average  (see  Annex  8).  Its  overall  energy  mix 
in  2023  remained  heavily  reliant  on  fossil 
fuels,  with  oil  accounting  for  43.9%,  natural 
gas  33.8%,  and  coal  5.8%  of  gross  inland 
consumption,  while  renewables  (and  biofuels) 
contributed  13.8%. 
further 
deployment  of  offshore  wind,  it  is  important 
that 
remain 
sufficiently  attractive.  In  this  context,  the 
Netherlands 
exploring 
measures  to  hedge  financial  risks  in  the 
offshore  wind  sector,  including  within  the 
offshore wind supply chain.  

investments 

the  sector 

consider 

ensure 

could 

To 

in 

its 

industrial 

Despite  the  Netherlands'  efforts  to 
decarbonise 
sector, 
including  carbon  pricing  and  tailored 
industry  agreements,  the  country  is  not 
on  track  to  meet  its  2030  sectoral 
emissions target. With projected greenhouse 
emissions  of  38.5 Mt CO2-eq  compared  to  the 
national  sectoral  2030  emissions  reduction 
target  of  29.1 Mt CO2-eq,  further  efforts  are 
needed  to  close  the  gap  and  achieve  the 
desired reduction in industrial greenhouse  gas 
emissions.  For  example,  the  work  on  tailored 
industry agreements could be stepped up and 
the support for innovative solutions continued 
to reduce CO2 emissions (see Annex 7).  

Improving energy affordability and 
efficiency  

in 

the 
Electricity  and  gas  prices 
Netherlands are relatively high compared 
to  neighbouring  countries.  By  way  of 
illustration,  major  industrial  companies  in  the 
to  66%  more  for 
Netherlands  pay  up 
electricity 
in 
counterparts 
their 
(Germany,  France, 
neighbouring  countries 

than 

Belgium) (26). The difference in electricity costs 
between  countries  is  largely  due  to  varying 
network tariffs and rebate schemes. Industrial 
consumers  have  seen  significant  increases  in 
network  tariffs,  which  will  have  a  growing 
impact  on  grid  tariffs  as the  grid  expands.  By 
2030,  grid  costs  are  expected  to  rise  further, 
drivefn  by  higher 
investment  costs.  High 
energy  prices  in  the  Netherlands  affect  the 
attractiveness of the business environment. To 
ensure  a  level  playing  field  with  neighbouring 
Member States, the Netherlands would benefit 
from  addressing  in  particular  the  increase  in 
network 
energy 
affordability  in  the  Netherlands  calls  for  a 
comprehensive  approach  that  considers  the 
interplay  between  energy  prices,  taxation, 
energy  consumption  and  grid  congestion, 
taking  into  account  the  need  to  minimise  the 
fiscal impact of such reforms and preserve the 
price incentive to save energy. (see Annex 8). 

Addressing 

tariffs. 

Increasing  energy  efficiency  can  help 
address  both  energy  affordability  and 
grid congestion. However, the Netherlands is 
falling behind on its progress towards reaching 
the  2030  EU  targets  for  energy  efficiency. 
While  good  progress  has  been  made  in  the 
residential  sector, 
in  which  final  energy 
consumption  fell  by  11.6%,  less  progress  has 
been  made  in  the  transport  sector,  in  which 
final  energy  consumption  increased  by  5% 
(see  Annex  8).  As  a  result,  the  Netherlands  is 
not  on  track  to  meet  its  targets  under  the 
recast  Energy  Efficiency  Directive.  To  increase 
energy  efficiency,  the  Netherlands  would 
benefit  for  example  from  scaling  up  building 
renewable  district 
renovations,  expanding 
heating 
transport 
electrification.  

accelerating 

and 

Flexible  grid  use  in  the  Netherlands  can 
also  have  a  positive  impact  on  energy 
affordability.  It  can  enable  the  efficient 
integration  of  renewable  energy  sources  and 
reduce  peak  demand,  thereby  lowering  the 
overall cost of energy supply and need for grid 
investments. By  optimising energy distribution 

(26)  Letter No. 1372 from the ministers of economic affairs 

and climate and energy, 
https://zoek.officielebekendmakingen.nl/kst-32813-
1372.html#extrainformatie. 

12 

 
 
 
areas  (a  programme  with  the  objective  to 
reach  goals  on  nature,  nitrogen,  climate  and 
water),  additional  measures  are  needed  to 
help  provinces  achieve  environmental  targets 
and reduce nitrogen deposition. 

The agricultural sector in the Netherlands 
remains  a  substantial  contributor  to 
greenhouse  gas  emissions.  A  considerable 
proportion  of  the  emissions  in  the  sector  can 
be  attributed  to  livestock  production.  The 
Netherlands  is  not  on  track  to  reduce  its 
agricultural  sector  emissions,  with  projected 
greenhouse  gas  emissions  of  22  Mt  CO2-eq 
compared  to  the  national  sectoral  2030 
emission  reduction  target  of  17.9  Mt  CO2-eq 
(see Annex 9). Additional efforts to reduce the 
sector’s  environmental 
including 
promoting  organic  farming,  are  therefore 
necessary  and  would  help  the  Netherlands 
reach its climate objectives.  

impact, 

Surface  and  ground  water  quality  in  the 
Netherlands remains a cause for concern. 
Water bodies are particularly challenged in the 
country  due 
to  high  population  density, 
intensive  agriculture  and  land  use  changes. 
Many  Dutch  water  bodies  generally  fail  to 
comply  with  the  Water  Framework  Directive 
and  the  Nitrates  Directive  (see  Annex  9).  The 
current  measures  are  unlikely  to  substantially 
improve  water  quality,  and  progress  towards 
meeting  the  2027  targets  under  the  Water 
Framework  Directive  is  not  on  track.  As  a 
result,  further  efforts  are  needed  to  address 
surface  and  ground  water  quality,  including 
farming  practices  aimed  at  cutting  nutrient 
and  pesticide  pollution  and  greenhouse  gas 
emissions.  

and  consumption,  flexible  grid  use  can  also 
help  reduce  energy  waste  and  minimise  price 
volatility,  leading  to  more  affordable  energy 
prices  for  households  and  businesses.  The 
regulatory  measures  aimed  at  alleviating  grid 
congestion,  as  presented  by  the  Netherlands 
Authority for Consumers and Markets in 2024, 
may  help  pave  the  way  for  a  more  efficient 
and affordable energy market.  

Tackling excessive nitrogen 
deposition and deteriorating water 
quality  

a 

to 

to 

lead 

to  meet 

Excessive  levels  of  nitrogen  deposition 
continue 
significant 
pose 
environmental concern, with an impact on 
the economy as a whole. Excessive levels of 
nitrogen  deposition 
the  over-
fertilisation and acidification of soil and water 
bodies.  A  comprehensive  set  of  measures  is 
needed 
this  challenge,  which 
originates  to  a  large  extent  from  agricultural 
activities. Failing to address excessive levels of 
nitrogen deposition puts significant constraints 
on construction activities, many of which have 
been  put  on  hold  after  rulings  by  the  Council 
of  State  on  18 December 2024 (27)  and  the 
of 
District 
22 January 2025 (28).  Previously  constraints 
had  already  arisen  from  the  ruling  from  the 
state  council  on  19  May  2019  on  the  special 
strategy for tackling excess nitrogen (PAS). The 
uncertainty  on  how  to  address  nitrogen 
deposition  creates  regulatory  risk  and  delays 
infrastructure  investments  needed  to  boost 
the  Dutch  economy  and  its  competitiveness. 
Moreover, following the government’s decision 
to  abandon  the  national  programme  for  rural 

Hague 

Court 

the 

of 

(27)  Judgment of the Council of State of 

18 December 2024, reference number 
202201311/1/R2, 
https://www.raadvanstate.nl/uitspraken/@147425/2022
01311-1-r2/.  

(28)  Judgment of the District Court of The Hague of  

22 January 2025, reference number  
C/09/651046 / HA ZA 23-641, 
https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:RBD
HA:2025:578.    

13 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Tackling structural shortages in a 
tight labour market 

Labour  and  skills  shortages  remain  a 
considerable challenge in the Netherlands 
against  the  background  of  a  growing 
shortage  of  workers.  These  shortages  have 
become  more  widespread  and  are  prevalent 
across  sectors  (see  Annexes  10  and  12), 
especially in education, healthcare, technology 
and  ICT.  31%  of  Dutch  companies  reported 
problems  in  hiring  staff,  compared  to  the  EU 
average  of  20% (29).  Even  though  the  fast 
the 
post-pandemic 
tightness  of  the  labour  market,  structural 
factors  such  as  population  decline,  trends  in 
workforce  growth  and  low  average  hours 
worked  remain  important  drivers.  In  addition, 
the  lack  of  available  and  affordable  housing, 
including  in the underdeveloped  private  rental 
market,  may  hinder  an  efficient  allocation  of 
labour  through  reduced  labour  mobility  to 
move  home  for  work  (see  dedicated  housing 
section below). 

recovery  exacerbated 

Labour  and  skills  shortages  hamper 
productivity  and  competitiveness.  The 
shortages hinder business activity and are one 
of  the  main  barriers  to  long-term  investment 
and  innovation  in  the  Netherlands.  This  also 
affects a range of sectors that are crucial for 
the adoption of green and digital technologies, 
thereby  weighing  on  long-term  productivity 
growth  and  competitiveness.  Acute  shortages 
in the healthcare sector also pose a significant 
risk  to  population  health  in  general  as  recent 
estimates  predict  a  shortage  of  nearly 
265 000  healthcare  staff  by  2033,  including 
for long-term care services.  

(29)  Business and Consumer Surveys. 

The  Netherlands  still  has  an  untapped 
pool  of  potential  workers.  Despite  having 
one of the highest labour market participation 
rates  in  the  EU,  the  Netherlands  still  has  an 
untapped  pool  of  potential  workers  such  as 
people  with  a  migrant  background  and  those 
working  in  part-time  employment,  which  is 
widespread in the Netherlands, in particular for 
women  (see  Annex  10).  This  can  be  at  least 
partially explained  by  difficulties in  combining 
work  with  family  and  care  responsibilities. 
Improving the quality of work and promoting a 
better  work-life  balance  for  working  parents 
and carers can help increase the labour supply. 

presented 

The  government  has  taken  targeted 
measures  and  is  developing  a  broad 
labour  market  agenda.  To  address  the 
challenges, 
the  Dutch  government  has 
introduced targeted measures for key sectors, 
aimed also at increasing the attractiveness of 
these  sectors  related  to  societal  challenges, 
such  as  health  and  education.  In  addition,  the 
recently 
the 
implementation  of  a  broad  labour  market 
agenda (30)  will  be  further  developed 
in 
cooperation  with  stakeholders  in  2025.  The 
package  of  labour  market  measures  to  be 
adopted  before  the  summer  of  2025  is  also 
expected to include a joint agenda on life-long 
learning (in particular following the abolition of 
the STAP budget for adult education in 2023) 
labour  market 
and  a 
infrastructure. 

reform  of 

outline 

the 

for 

labour  shortages 

in  the 
Addressing 
Netherlands  will  require  a  multifaceted 
approach.  Fundamental  choices  with  respect 
to  the  Dutch  labour  market  may  be  required 
and  a  combination  of  policies  could  be 

(30)  Letter to Parliament of 13 December 2024. Uitwerking 

plannen arbeidsmarktkrapte en brede 
arbeidsmarktagenda. 

14 

 
 
 
 
 
considered,  focusing  on  sector-specific  needs 
and  barriers  and  making  productivity-
enhancing  investments.  To  this  end,  effective 
outreach by more targeted and tailored active 
labour  market  policies  may  help  to  increase 
the  labour  supply  in  key  sectors.  Promoting 
better working conditions would also be key to 
encouraging  people  to  work  more  hours.  For 
example,  in  the  healthcare  sector,  limited 
autonomy  and  high  workloads  reduce  the 
attractiveness  of  the  profession  (see  Annex 
14).  Furthermore,  attracting 
talent  and 
boosting  legal  migration  could  further  help  to 
reduce labour shortages. 

innovation 

In  a  tight  labour  market,  investing  in 
is 
skills  development  and 
crucial.  Strengthening  up-  and 
reskilling 
opportunities,  in  particular  for  those  at  the 
margins  of  the  labour  market  and  inactive,  is 
key  to  addressing  skills  shortages  in  a  fast-
evolving,  tight  labour  market.  The  persistent 
shortages  are  also  an  opportunity  to  pursue 
productivity-enhancing investments in order to 
reduce labour demand and encourage mobility 
between  sectors, including  to  those  related  to 
societal  challenges,  and  to  high-productivity 
sectors. 

Reducing labour market 
segmentation 

The high share of flexible employment on 
the  Dutch  labour  market  continues  to  be 
a  concern.  The  percentage  of  flexible  and 
temporary contracts remains far above the EU 
average  (22.6%  vs  11.6%  in  2024),  as  does 
the  number  of  self-employed  people  without 
employees 
total 
employment in 2024). (31) (see Graph 4.1 and 
Annex 10). The prevalence of flexible types of 
employment  is  not  necessarily  driven  by  job-

vs  9.0%  of 

(12.8% 

(31)  As reiterated by the Dutch Council of State in its advice 
on the draft bills: Wet meer zekerheid flexwerkers ( 
W12.24.00062/III) and Wetsvoorstel Verduidelijking 
Beoordeling Arbeidsrelaties en Rechtsvermoeden 
(W12.24.00156/III). 

specific  needs  or  worker  preferences.  Instead, 
institutional drivers and national policy choices 
resulting in differences in tax treatment, social 
security  coverage  and 
labour  protection 
regulations,  as  well  as  a  lack  of  public 
enforcement,  have 
considerable 
financial  incentives  for  employers  to  reduce 
labour 
flexible  working 
costs 
arrangements. 

created 

using 

Graph 4.1: Trends in temporary, part-time and 
self-employed without employees 

(1) Self-employment (without employees) (% of total 
employment); temporary employment (% of employees), 
total, ages 20-64; part-time employment (% of total 
employment), total, ages 20-64 
Source: Eurostat 

The  rise  in  precarious  employment  and 
low-quality 
jobs  affects  vulnerable 
groups  in  particular.  The  high  share  of 
labour 
flexible  employment  and  resulting 
(32)  has  particularly 
market  segmentation 
distortive  effects  for  those  working  at  the 
margins  of  the  labour  market,  such  as  the 
lower  skilled  and  people  with  a  migrant 
background. It has a negative impact on skills 
development, as employers are less inclined to 
for  employees  with 
training 
invest 
in 
flexible 
in 
contracts.  People 
temporary 
employment often also lack appropriate social 
protection  coverage,  may  face  an  increased 
risk  of  in-work  poverty  and  social  exclusion, 
and become trapped in flexible contracts. This 

(32)  The division of the jobs market into different categories 
of workers with different levels of job security and/or 
access to social and other benefits 

15 

0510152025303540452009201020112012201320142015201620172018201920202021202220232024%NLSelf-employment (without employees) - totalTemporary employees 20-64Part-time employment 20-64 
 
 
 
   
 
hampers  inclusive  growth  and  holds  back 
labour productivity (33). 

permanent, flexible and self-employed persons 
without employees). 

Reprioritising education in line 
with an evolving labour market 

in  basic  skills 

The  decline 
in  the 
Netherlands  is  one  of  the  largest  in  the 
EU  and  undermines  education  and  labour 
market  outcomes  and  competitiveness. 
While  the  Netherlands  still  has  a  relatively 
high  share  of  top  performing  students,  the 
number  of  underachievers  has 
sharply 
increased in mathematics, science and reading 
over  the  last  decade  (see  Graph  4.1  &  Annex 
12).  Underachievement  has  also  an  equity 
aspect:  in  the  Netherlands,  it  is  four  times 
more common among disadvantaged students 
than among their advantaged peers. On digital 
skills,  Dutch  8th-graders  (12-year-olds)  score 
the  second  lowest  on  average  in  the  EU  and 
have 
in  scores 
largest  differences 
the 
according  to  the 
level  of  their  parents’ 
education.  As  a  result  of  the  early  academic 
streaming of students into different categories 
of schools, the Dutch school system shows the 
strongest ability-based separation of students 
among all EU countries. Teacher shortages are 
considerable  and  vary  by  the  share  of 
in  the  schools  and 
disadvantaged  pupils 
lack  of  qualified 
between 
learning 
teachers 
student 
to  quality 
outcomes  and  hinder  access 
education for all.  

regions.  The 
impact 
can 

be 

The government has put forward reforms 
to  reduce  incentives  for  the  use  of  self-
employed  persons.  Whereas  some  level  of 
self-employment 
economically 
can 
beneficial,  past  policies  have  created  an 
unequal  playing field between employees and 
self-employed persons without employees and 
has  also  enabled  bogus  self-employment.  To 
address  this,  the  government  is  implementing 
various  measures  to  lower  incentives  for  the 
use  of  self-employment.  This 
includes  a 
gradual reduction of the tax deduction for the 
self-employed  and  the  abolition  of  the  tax 
administration’s  enforcement  moratorium  as 
of  1 January 2025, 
the 
commitments  included  in  the  Dutch  recovery 
and  resilience  plan  (RRP).  In  addition,  the 
introduction  of  a  mandatory  disability 
insurance  for  the  self-employed, the  adoption 
of  a  bill  clarifying 
the  concept  of  an 
employment relationship in the civil code, and 
the  introduction  of  a  legal  presumption  of 
employment  for  those  working  below  a  tariff 
of  EUR  33  are  being  prepared  (all  part  of the 
limit  bogus  self-
to 
RRP).  These  aim 
employment  and 
the  differences 
reduce 
between the self-employed and employees. 

line  with 

in 

instance 

by  abolishing 

Reforms to reduce incentives for the use 
of  flexible  and  temporary  contracts  are 
still pending.  The  government is preparing  a 
bill  aimed  at  providing  job  security  for  those 
working  under  flexible  employment  contracts, 
for 
zero-hours 
contracts. The bill also intends to improve the 
job  security  of  temporary agency  workers,  for 
example  by  shortening  the  most  precarious 
stages  of 
temporary  agency  work  and 
preventing  ‘revolving  doors’  from  temporary 
contracts.  However,  most  of  the  envisaged 
reforms  have  incurred  considerable  delays, 
while fast adoption and implementation is key. 
In  addition  to  these  reforms,  further  steps 
could  be  considered  to  narrow  the  gap  in 
social security, taxation and pensions between 
(i.e. 
the  different  groups  of  workers 

(33)  Ando, S (2020). Productivity in the Netherlands & CBS 

(2021). De Nederlandse productiviteitspuzzel.  

16 

 
 
Graph 4.2: Trends in performance in reading 
and mathematics, PISA mean scores, 2003-
2022 

Source: OECD (2023) 

in 
The  share  of  tertiary  graduates 
science, 
technology,  engineering  and 
mathematics  (STEM)  is  low,  contributing 
to  skills  shortages.  While  the  Netherlands 
has  a  tertiary  attainment  rate  above  the  EU 
average,  the  share  of  STEM  graduates  is  well 
below  the  EU  average.  The  share  of  students 
in  tertiary  education  was only  17.4%  in  2022 
(EU  27.1%), 
increasing  future 
shortages  in  the  sector.  Female  entrants  to 
vocational  education  and  training  and  tertiary 
education  are  far  less  likely  to  choose  STEM 
subjects than their peers in other EU countries 
(see Annex 12). 

leading  to 

skills,  mathematics, 

Several  measures  have  been  taken  to 
improve  basic  skills  and  make  the 
teacher  profession  more  attractive.  In 
2022,  the  ‘Master  plan  for  basic  skills’  was 
launched  to  promote  Dutch  reading  and 
writing 
citizenship 
education  and  digital  literacy.  In  parallel,  new 
learning  goals  are  being  set  in  primary  and 
secondary  education,  with  a  focus  on  basic 
skills  development.  The  measures  introduced 
as  part  of  the  2022  teacher  strategy  aim  to 
make  the  profession  more  attractive.  The 
government committed to a yearly investment 
of  EUR  1.5  billion  in  the  salaries  of  teachers 
and  other  teaching  staff.  The  Netherlands 
could  evaluate  such  measures  and  maintain 
the  most  effective  ones  with  structural 
support  for  a  lasting  impact.  Student  learning 
outcomes  could  be 
improved  by  keeping 
students  of  different  ability  levels  longer 

also 

could 

reduce 

together  and  making  it  easier  to  transition 
between  different  educational  tracks.  The 
Netherlands 
the 
performance  gap  between  advantaged  and 
disadvantaged  students  by  allocating  extra 
resources to disadvantaged schools. Enrolment 
in STEM programmes in higher education could 
be increased by providing targeted educational 
support  and  career  guidance  to  students  in 
secondary  education,  especially  to  girls  and 
students with a migrant background. 

Unlocking the housing supply 

The housing market rebounded strongly in 
2024,  with  house  prices  expected  to 
continue  growing  rapidly  in  2025.  House 
prices decreased for the first time in a decade 
in  2023.  This  drop  proved  only  temporary,  as 
the 2024 upswing in house prices is  expected 
to  continue  in  the  coming  years,  fuelled  by 
declining  interest  rates,  rising  wages  and 
persistent  supply  shortages (34).  As  a  result, 
the  Dutch  housing  market  continues  to  be 
overvalued (35).  

The  high  cost  of  housing  is  a  major 
source  of  financial  strain  for  many 
households.  Dutch  households  allocate  a 
significant  share  of  their  income  to  housing 
expenses.  The  underdeveloped  private  rental 
market is particularly challenging, with mostly 
limited  options  available, 
high  costs  and 
posing significant affordability challenges and 
increased  poverty  risks  for  low-  and  middle-
income  households.  The  Randstad  region  is 
disproportionately affected. 

The high cost of housing also has broader 
implications 
country’s 
internal 
competitiveness. 
labour mobility, make it difficult for companies 
to  attract  foreign  talent,  and  increase  labour 

the 
It  can  hinder 

for 

(34)  See the Innovation, business environment and 

productivity section on tax distortions in the housing 
market. 

(35)  See 2025 In-depth review of macroeconomic 
imbalance in the Netherlands for a more 
comprehensive analysis of the Dutch housing market. 

17 

4554654754854955055155255355452003200620092012201520182021NL - readingEU - readingNL - mathematicsEU - mathematics 
  
 
costs as firms need to offer higher salaries to 
offset the high cost of living (see Annex 11).  

A  significant  obstacle  to  the  supply  of 
new  homes  is  the  complex  and  time-
consuming  planning  and  permitting 
process.  The  number  of  new  homes 
decreased  to  only  82 000  in  2024  (of  which 
64  000  were  newly  constructed  dwellings), 
versus the government target of 100 000 new 
homes  each  year  (36).  The  estimated  housing 
shortage therefore increased to over 400 000 
homes.  One  major  barrier  to  increasing  the 
supply are planning and permitting procedures. 
These  can  currently  take  up  to  6  or  7  years, 
out  of  an  average  construction  time  of  10 
years,  due  to  limitations  in  planning  and 
administrative 
project 
developers  and  municipalities  (for  example 
slowness  in  issuing  building  permits),  lengthy 
appeal  procedures  and  extensive  building 
requirements. 

capacity 

among 

The  government  recently  proposed  the 
Housing  Management  Enhancement  Act 
(‘Wet  versterking  regie  volkshuisvesting’)  to 
issue,  which 
address  this 
is  also  partly 
the  Dutch  RRP.  This 
into 
incorporated 
legislation 
instead  of 
includes  parallel 
sequential  planning  and  shortened  appeal 
periods  to  speed  up  the  development  of  new 
homes.  Swift  adoption  and  implementation  of 
this legislation is now crucial.  

At  the  same  time,  there  are  more 
bottlenecks  impeding  the  supply  of  new 
homes.  These  bottlenecks  include  high  costs 
and  lack  of  available  land,  elevated  interest 
rates,  labour  shortages  (see  Section  4)  and 
challenges related to the green transition, such 
as  restrictions  related  to  excessive  nitrogen 
deposition  and  electricity  grid  congestion  (see 
Section 3). Addressing these issues will require 
a comprehensive approach. 

policy 

Recent 
developments  may 
exacerbate  the  existing  supply  shortages 
in  the  private  and  social  rental  sectors. 

The expansion of rent price controls, although 
intended  to  protect  tenants,  may  reduce  the 
already  scarce  supply  of  rental  properties, 
particularly in larger cities (37). To facilitate the 
expansion  of  the  private  rental  sector  and 
accelerate the construction of new homes, it is 
incentives  between 
essential  to  rebalance 
home 
The 
and 
government also announced that it will freeze 
rents  in  the  social  rental  sector  in  2025  and 
2026. As this will affect cash flows of housing 
corporations,  it  risks  directly  impacting  the 
realisation  of  new  housing  projects  and 
thereby undermine supply in the rental sector 

renting (38). 

ownership 

Maintaining the fiscal 
sustainability of long-term care 

The  Dutch  long-term  care  system  faces 
significant  challenges  from  an  ageing 
population,  costly 
institutional  care, 
generous  coverage  of  dependents  and 
labour shortages. The Netherlands fares well 
compared to the majority of Member States in 
terms  of  adequacy,  availability  and  quality  of 
the long-term care system as well as the size 
of the workforce dedicated to it. However, the 
system is increasingly putting pressure on the 
government  budget.  In  2022,  total  long-term 
care  spending  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 projects  that the increase in long-term 
care  spending  by  2070  in  the  Netherlands  is 
also  one  of  the  largest  in  the  EU.  Labour 
shortages  are  also  weighing  on  the  system. 
Estimates  suggest  that  by  2040,  the  long-
term  care  sector  will  require  around  7.3%  of 
the  country’s  workforce,  up  from  4.1%  in 
2020 (39).  

Despite  a  major  reform  of  the  long-term 
care  system  in  2015,  the  proportion  of 
expenditure and recipients in institutional 

(37)  Het kadaster (2024). Investeerders 3e kwartaal 2024: 

Investeerders verkochten meer woningen. 

(36)  Economisch Instituut voor de Bouw (2025). 

Verwachtingen bouwproductie en werkgelegenheid 
2025. 

(38)  See footnote 28. 

(39)  IBO Ouderenzorg, 2023. 

18 

 
 
 
their 

care  is  still  relatively  high.  Among  other 
factors,  this  is  due  to  co-payments,  i.e.  own 
contributions  by  patients  to  the  cost  of  the 
care  they  receive,  not  being  aligned  across 
different  types  of  benefits.  The  system  would 
work more efficiently if the patients’ choice of 
care  setting  would  be  mainly  determined  by 
their  individual  care  needs,  instead  of  which 
co-payments. 
setting  minimises 
Additional  investments  in  prevention  to  delay 
the  onset  of  long-term  care  needs  and  a 
further 
the  delivery  of 
community-based care could also help reduce 
costs.  These  improvements  could  ensure  that 
the benefits of the system are allocated more 
efficiently  without  compromising  the  high 
coverage  and  quality  of  the  system.  Although 
the  coalition  agreement  of 
the  current 
government  suggests  measures  along  the 
lines described above, the government has not 
yet made concrete proposals. 

improvement 

in 

19 

 
KEY FINDINGS 

To  boost  competitiveness,  sustainability  and 
social  fairness,  the  Netherlands  would  benefit 
from: 

• 

• 

• 

implementing  the  RRP, 
including  the 
swiftly 
chapter; 
REPowerEU 
implementing  cohesion  policy,  taking 
advantage  of  the  opportunities  under  the 
mid-term  review  and  making  optimal  use 
of EU instruments, including InvestEU and 
STEP, to improve competitiveness; 

improving  R&D  intensity,  including  by 
targeting  public  support  to  investments  in 
key competitive areas;  

improving access to finance for smaller 
businesses, start-ups and scale-ups, with a 
focus on funding for commercialisation; 

•  reducing  distortions  in  the  tax  system 
by  better  aligning  the  tax  treatment  of 
different types of assets; 

•  reduce  overall  reliance  on  fossil  fuels 
the  deployment  of 
energy 

improving 

by  accelerating 
renewables 
efficiency; 

and 

increasing 

•  decreasing  electricity  grid  congestion 
the 
the 
by 
grid, 
and 
transmission 
implementing 
solutions  and 
flexibility 
maximising  cross-zonal  electricity  trading 
over existing cross-border infrastructure; 

capacity  of 
distribution 

•  addressing 

excessive 

nitrogen 
deposition  and  deterioration  of  water 
quality including by promoting sustainable 
practices in agriculture;  

•  tackling 

labour 

shortages 

by 
incentivising 
part-time 
employment to work more hours, increasing 
the  participation  of  people  with  a  migrant 
productivity-
boosting 
background, 

people 

in 

enhancing  investments,  and  encouraging 
labour mobility to high-productivity  sectors 
and those with societal challenges, such as 
education and health; 

•  reducing  labour  market  segmentation 
by  swiftly  adopting  and  implementing  the 
reforms  on  the  use  of  self-employed 
persons  and 
temporary 
contracts; 

flexible  and 

•  tackling 

skills 

shortages 

by 
strengthening  up-  and  reskilling  through 
targeted  and  tailored  active  labour  market 
policies; 

to 

by 

•  addressing  the  sharp  decline  in  basic 
skills 
implement 
continuing 
measures  aimed  at  making  the  teaching 
profession  more  attractive,  especially  for 
those  teaching  at  disadvantaged  schools, 
and  keeping  students  of  different  ability 
levels longer together; 

• 

incentivising  STEM  programmes  by 
providing  targeted  education  support  and 
career advice; 

•  unlocking the housing supply by, among 
others,  simplifying  planning  and  permitting 
procedures; 

•  ensuring 

the 

availability 

and 
affordability  of  the  private  rental 
market by rebalancing incentives between 
home  ownership  and  renting  and  making 
investments more attractive; 

•  ensuring the sustainability of the long-
term  care  system  by  allocating  benefits 
more  efficiently,  aligning  co-payments  in 
the  different 
further 
increasing  investments  in  prevention,  and 
services 
facilitating 
instead of institutional care. 

community-based 

settings, 

care 

20 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the recommendation 
Defence expenditure 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
Projected change in age-related expenditure in 2024-2040 and 2024-2070 

23 

26 

26 

33 

37 

37 

40 

44 

51 

56 

56 

62 

68 

75 

75 

79 

82 

86 

87 

90 

90 

92 

99 

27 
27 
28 
28 
28 
29 
29 
30 
30 

 
 
 
A1.10.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A2.2. 
Indicators for financial activity risk, in % of GDP 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators. 
A5.1. 
Financial sector indicators 
A6.1. 
The Netherlands. Selected indicators on administrative burden reduction and simplification 
A6.2. 
Digital Decade targets monitored through the Digital Economy and Society Index 
A7.1. 
Key clean industry and climate mitigation indicators: Netherlands 
A8.1. 
Key Energy Indicators 
A9.1. 
Key indicators tracking progress on climate adaptation, resilience and environment 
A13.1.  Social Scoreboard for Netherlands 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Netherlands 

LIST OF GRAPHS 

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 
Retail energy price components for household and non-household consumers, 2024 

Accounting maturity by government sector (2025, 2030) 
Tax wedge for single and second earners, % of total labour costs, 2024 
Tax revenue shares in 2023 

A1.1. 
A2.1. 
A2.2. 
A4.1.  Making Business Easier: selected indicators* 
A5.1. 
Net savings-investment balance 
A5.2. 
International investment position 
A5.3. 
Capital markets and financial intermediaries 
A5.4. 
Composition of NFC funding as % of GDP 
A5.5. 
Composition of households’ financial assets per capita and as a % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A6.3. 
Participation rate of 25-64 year olds in adult learning (%) by occupation 
A7.1. 
GHG emission intensity of manufacturing and energy intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A7.3. 
A8.1. 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A10.1.  Key rates: activity , unemployment, long-term unemployment, youth unemployment, NEET 
A10.2.  Labour shortages in the Netherlands 
A10.3.  Employment by type (permanent, temporary, self-employed), year-on-year changes 
A11.1.  At-risk-of-poverty or social exclusion rate and its components (AROP, SMSD, LWI) 
A12.1.  Underachievement rate in mathematics by students’ socio-economic background, PISA 2022 
A12.2.  Adult learning 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in the Netherlands 
A16.1.  Distribution of RRF funding in the Netherlands by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in the Netherlands 
A17.1.  Average annual GDP per head growth vs GDP per head in 2013 
A17.2.  Labour productivity per hour 

The Netherlands’ installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency (1) on ecosystem services (2) of the gross value added generated by economic sector in 2022 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

24 

31 
34 
36 
39 
43 
50 
52 
52 
61 
67 
74 
86 
88 
95 
96 
100 

32 
33 
35 
41 
44 
45 
45 
47 
48 
51 
51 
53 
57 
58 
59 
62 
63 
64 
72 
75 
76 
77 
79 
84 
84 
87 
87 
90 
93 
93 
99 
100 

26 

26 

 
 
 
33 

37 

37 

40 

44 

51 

56 

56 

62 

68 

75 

75 

79 

82 

86 

87 

90 

90 

92 

99 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

25 

 
 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  the 
Netherlands, including how the Netherlands is responding to  Council recommendations issued under the 
reformed Economic Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024  (40),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

The Netherlands submitted its plan on 15 October 2024. The plan covers the period until 2028, presenting 
a  fiscal  adjustment  over  four  years.  On  21  January  2025,  the  Council  adopted  the  Recommendation 
setting the net expenditure path of the Netherlands (41).  

The assessment of the implementation of the Council Recommendation setting the net expenditure path 
of the Netherlands is carried out on the basis of outturn data from Eurostat and the Commission’s Spring 
2025 Forecast and taking into account the Annual Progress Report (APR), that the Netherlands submitted 
on 29 April 2025. Furthermore, in the context of the Commission Communication of 19 March 2025 (42), 
on  accommodating  defence  expenditure  within  the  Stability  and  Growth  Pact,  the  annex  reports  the 
projected increase in defence expenditure based on the Commission Spring 2025 Forecast.  

The Annex is organised as follows. First, developments in government deficit and debt are presented 
based  on  the  figures  reported  in  Table  A1.1.  Then,  the  assessment  of  the  implementation  of  the 
Council Recommendation setting the net expenditure path of the Netherlands follows, based on 
the relevant figures presented in Tables A1.2 to A1.8, including data on defence expenditure.   

The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024(43). 

Developments in government deficit and debt  

The Netherlands’ government deficit amounted to 0.9% of GDP in 2024. Based on the Commission Spring 
2025  Forecast,  it  is  projected  to  increase  to  2.1%  of  GDP  in  2025.  The  government  debt-to-GDP  ratio 
amounted  to  43.3%  at  the  end  of  2024  and,  according  to  the  Commission,  is  projected  to  increase  to 
45.0% end-2025. Since 2015, the debt ratio has declined by about twenty percentage points. The increase 
of  the  deficit  in  2025  reflects  mainly  personal  income  tax  cuts,  increasing  government  spending  on 
compensation of employees and intermediate consumption due to a higher-than-expected base in 2024 
and a reduction of some revenue components due to anticipation effects that boosted revenue in 2024. 
Differences between the projections in the APR and the Commission Spring 2025 Forecast are mainly due 
to higher assumed underspending of budgeted funds in the latter.  

(40)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(41)  OJ C, C/2025/648, 10.02.2025, ELI: http://data.europa.eu/eli/C/2025/648/oj  

(42)  Communication  from  the  Commission  accommodating  increased  defence  expenditure  within  the  Stability  and  Growth  Pact of  19 

March 2025, C(2025) 2000 final. 

(43)  European Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

26 

 
 
 
 
 
 
Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Developments in net expenditure  

The net expenditure (44) growth of the Netherlands in 2025 is forecast by the Commission (45) to be above 
the recommended maximum, corresponding to a deviation of  1.4% of GDP. Considering 2024 and 2025 
together,  the  cumulative  growth  rate  of  net  expenditure  is  also  projected  above  the  recommended 
maximum cumulative growth rate, corresponding to a deviation of 1.4% of GDP. The national authorities 
also forecast net expenditure growth of the Netherlands in 2025, as well as the cumulative growth rate 
considering 2024 and 2025 together, to be above the recommended maximum. The difference between 
the Commission's calculations of the net expenditure growth and the estimates of national authorities as 
presented  in  their  APR  is  mainly  due  to  lower  projected  utilisation  of  funds  budgeted  for  2025  in  the 
Commission 2025 spring forecast.  

The annual deviation in 2025 and the cumulative deviation in 2024 and 2025 are above the 0.3% of GDP 
and 0.6% of GDP thresholds. 

Table A1.2:  Net expenditure growth 

* The cumulative growth rates are calculated by reference to the base year of 2023  
Source: Council Recommendation setting the net expenditure path of the Netherlands, Annual Progress Report (APR) and 
Commission's calculation based on Commission Spring 2025 Forecast (COM). 

Source:  

General  government  defence  expenditure  in  the  Netherlands  remained  stable  at  1.3%  of  GDP  between 
2021  and  2023(46).  According  to  the  Commission  Spring  2025  Forecast,  expenditure  on  defence  is 
projected at 1.5% of GDP in 2024 and 1.5% of GDP in 2025.  

(44)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union 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-off and other temporary measures.  

(45)  Commission Spring 2025 Forecast, European Economy-Institutional paper 318, May 2025. 

(46)  Eurostat, government expenditure by classification of functions of government (COFOG). 

27 

2024OutturnAPRCOMAPRCOM1General government balance% GDP-0.9-2.3-2.1-2.8-2.72General government gross debt% GDP43.345.045.047.847.8Variables20252026RECAPRCOMRECAPRCOM2024n.a.5.7%6.8%n.a.n.a.n.a.20253.5%7.9%7.0%10.4%14.2%14.3%20263.3%3.4%3.8%14.0%n.a.18.6%AnnualCumulative*Growth rates 
 
                                   
 
 
                                   
 
 
 
 
Table A1.3:  Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the 
recommendation 

* The growth rate for 2024 is not a recommendation but serves to anchor the base, as the latest year with outturn data when 
setting the net expenditure path is year 2023. 
Source: Commission Spring 2025 Forecast and Commission's calculation 

Table A1.4:  Defence expenditure 

Source:  Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation 

Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

28 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC461.2497.4527.5559.52Interest expenditurebn NAC7.37.98.99.83Cyclical unemployment expenditurebn NAC-0.60.31.21.84Expenditure funded by transfers from the EUbn NAC2.11.71.41.45National co-financing of EU programmesbn NAC0.30.30.30.36One-off expenditure (levels, excl. EU funded)bn NAC0.05.00.08.57=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC452.1482.3515.7537.88Change in net nationally financed primary expenditure (before DRM)bn NAC30.233.522.19DRM (excl. one-off revenue, incremental impact)bn NAC-0.4-0.52.510=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC30.633.919.511Outturn / forecast net expenditure growth% change6.77%7.0%3.8%12Recommended net expenditure growth*% change6.9%3.5%3.3%13=(11-12) x 7Annual deviationbn NAC-0.617.12.514 (cumulated from 13)Cumulated deviationbn NAC-0.616.518.915=13/17Annual balance% GDP-0.11.40.216=14/17Cumulated balance% GDP-0.11.41.517p.m. Nominal GDP  bn NAC1067.61134.11191.61238.2Variables2021202220232024202520261Total defence expenditure% GDP1.31.31.31.51.51.62of which: gross fixed capital formation% GDP0.30.20.20.20.20.22024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change1.01.91.31.51.22Private consumption% change1.22.61.92.41.83Government consumption expenditure% change3.61.91.81.31.34Gross fixed capital formation% change-0.52.30.84.01.55Exports of goods and services% change0.42.00.71.81.96Imports of goods and services% change0.32.81.23.22.2Contributions to real GDP growth 7- Final domestic demandpps1.32.31.42.41.48- Change in inventoriespps-0.50.20.10.2-0.19- Net exportspps0.1-0.3-0.3-0.80.010Output gap% pot GDP-0.7-0.8-1.0-1.0-1.211Employment % change1.00.30.30.30.212Unemployment rate%3.73.83.94.04.013Labour productivity% change-0.11.60.91.21.014HICP % change3.23.03.02.42.015GDP deflator% change5.23.63.72.72.616Compensation of employees per head% change6.45.95.15.03.717Net lending/borrowing vis-à-vis the rest of the world% GDP9.8n.a.10.1n.a.10.520252026Variables 
 
                                 
 
 
 
        
 
 
 
                                 
 
 
Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Table A1.7:  Debt developments 

* End of period.  
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

29 

2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue43.042.042.142.642.4of which:2- Taxes on production and imports11.110.911.011.211.33- Current taxes on income, wealth, etc.14.813.914.114.214.24- Social contributions12.512.912.612.912.65- Other (residual)4.64.34.44.34.38=9+16Expenditure 43.944.444.345.445.2of which:9- Primary expenditure43.243.743.544.544.4of which:10- Compensation of employees 8.68.78.78.68.611- Intermediate consumption6.66.46.66.36.612- Social payments20.821.321.421.621.713- Subsidies1.41.51.41.61.414- Gross fixed capital formation3.23.23.23.43.315- Other2.62.62.33.02.816- Interest expenditure0.70.70.80.90.818=1-8General government balance-0.9-2.3-2.1-2.8-2.719=1-9Primary balance-0.2-1.6-1.4-2.0-2.020Cyclically adjusted balance-0.5n.a.-1.5n.a.-2.021One-offs0.00.00.0-0.7-0.722=20-21Structural balance-0.4-1.9-1.5-1.6-1.323=22+16Structural primary balance0.3-1.1-0.8-0.7-0.5Variables (% GDP)202520262024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)43.345.045.047.847.82=3+4+8Change in the ratio (pps. of GDP)-1.81.61.62.82.8Contributions**3Primary balance0.21.61.42.02.04≈5+6+7'Snow-ball' effect-2.0-1.6-1.3-1.0-0.9of which:5- Interest expenditure0.70.70.80.90.86- Real growth effect-0.4-0.8-0.5-0.6-0.57- Inflation effect-2.2-1.5-1.6-1.2-1.28'Stock-flow' adjustment-0.11.61.61.81.820252026Variables 
 
                                 
 
 
 
 
                                 
 
 
Table A1.8:  RRF – Grants 

Source: Annual Progress Report 

Cost of ageing  

Total age-related spending in the Netherlands is projected to rise from 21% of GDP in 2024 to 
about  23%  in  2040  and  24.5%  in  2070  (see  Table  A1.9).    The  overall  increase  is  driven  by  the 
projected  rise  in  long-term  care  and  pension  spending,  with  a  lower  impact  from  rising  healthcare 
expenditure. Of the projected increase of 1.7 pps in public pension by 2070, 1.2 pps would take place by 
2040. 

Public healthcare expenditure is projected at 5.8% of GDP in 2024 (below the EU average of 
6.6%) and is expected to increase by 0.4 pps by 2040 and by a further 0.3 pp by 2070 (47).   

Public  expenditure on  long-term  care (48)  is  projected  at  3.9% of  GDP  in  2024  (above  the  EU 
average of 1.7%) and is expected to increase by 1 pp of GDP by 2040 and by a further 0.8 pps 
of  GDP  by  2070.  This  increase  in  long-term  care  expenditure  contributes  significantly  to  fiscal  risk. 
Addressing inefficiencies could improve fiscal sustainability without reducing the universality and quality 
of the Dutch system, as discussed in the 'Skills, Quality Jobs and Social Fairness’ section.  

Table A1.9:  Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC). 

(47)  Key performance characteristics, recent reforms and investments are discussed in Annex 11 ‘Health and health systems’.  

(48)  The quality and the accessibility of the long-term care system are covered in Annex 9 ‘Social policies’.   

30 

Revenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.00.00.00.10.10.22Cash disbursements of RRF grants from EUn.a.0.00.00.00.10.10.020202021202220232024202520263Total current expenditure0.00.10.10.10.10.10.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.00.00.00.00.06=4+5Total capital expenditure0.00.00.00.00.00.00.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP)NL21.01.20.41.0-0.42.123.1NLEU24.30.50.30.4-0.30.925.2EUNL21.01.70.71.8-0.73.524.5NLEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
                                 
 
 
  
 
 
National fiscal framework 

The  Netherlands  have  chosen  to  split  the  Independent  Fiscal  Institution  (IFI)  tasks  on  two 
already  well-established  institutions,  which  could  benefit  from  more  formal  independence 
safeguards. The Council of State (CoS) has only two persons working on IFI issues, as it only performs 
part of the IFI tasks. It seems to keep a relatively low media profile when it comes to its IFI tasks and is 
not subject to any external review. As the IFI part is completely embedded in the CoS, it may complicate 
name/role recognition among the public. The Netherlands Bureau for Economic Policy Analysis (CPB) is a 
well-resourced  institution  with  a  solid  reputation  for  impartiality  and  with  a  strong  media  presence. 
However, some of its independence features, such as access to information and CV requirements for its 
leadership, could be strengthened as they are based on tradition rather than legal provisions. 

The  Netherlands  have  good  practices  in  place  for  the  appraisal,  selection  and  budgeting  of 
investment  projects  in  the  mobility  sector.  The  rules  of  the  Multiannual  Programme  for 
Infrastructure,  Spatial  Planning  and  Transport  (MIRT)  apply  to  projects  or  programmes  in  the  physical 
domain,  in  which  the  Ministry  of  Infrastructure  and  Water  Management  is  involved  as  a  potential  co-
financing party (49), which is, by far, the largest portfolio of investment projects (50). The MIRT rules define 
four phases of projects and there is no automatic flow from one phase to the next. 75% of capital and its 
sources needs to be identified before a project can go to the first phase, which ensures strict prioritisation. 
The Mobility Fund governs all budgetary aspects related to the national MIRT mobility investment projects. 
The fund has a 14-year horizon, the whole cost of the project is budgeted up-front based on multi-annual 
commitment  appropriations  and  there  is  a  clear  breakdown  between  capital  (operations)  costs, 
maintenance costs and available fiscal space. Once appropriated, capital allocation can only be changed 
with parliamentary approval. Standard methodology for estimating routine maintenance costs is in place 
for all new projects, but not always for completed infrastructure.   

Table A1.10:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

(49)  Ministry of Infrastructure and Water Management. (2022). Rules of the game of the Multiannual Programme in Infrastructure, 

Space and Transport (Dutch). The Netherlands. 

(50)  Samset, K. F., Volden, G. H., Olsson, N., & Kvalheim, E. V. (2016). Governance Schemes for Major Public Investement Projects: a 
comparative study of principles and practices in six countries. Ex Ante Academic Publisher; The Concept research program; 
Norwegian University of Science and Technology. 

31 

2023The NetherlandsEU AverageCountry Fiscal Rule Strength Index (C-FRSI)19.7614.52Medium-Term Budgetary Framework Index (MTBFI)0.950.73 
 
     
 
 
 
Public Accounting 

The Netherlands is less advanced in implementing accrual accounting for government relative 
to  the  EU  average,  in  particular  within  the  central  government  (see  Graph  A1.1,  left  chart). 
Furthermore, the Netherlands has no plans to move towards accrual accounting in the medium term (see 
Graph A1.1, right chart). Accrual accounting as a public accounting standard provides a comprehensive and 
transparent overview of a public body’s financial position and performance and can support sustainability 
and intergenerational equity.   

Graph A1.1: Accounting maturity by government sector (2025, 2030) 

Source: Tables 3 and 19 of Updated accounting maturities of EU governments and EPSAS implementation cost. 

32 

0%10%20%30%40%50%60%70%80%Central governmentLocal governmentSocial security fundsGeneral governmentSubsectorsTotalAccounting maturity by government sector in 2025NLEU0%10%20%30%40%50%60%70%80%Central governmentLocal governmentSocial security fundsGeneral governmentSubsectorsTotalProjected accounting maturity by government sector in 2030NLEU 
     
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  the  Netherlands’  tax  system.  It 
includes  information  on:  (i)  the  tax  mix;  (ii) 
competitiveness  and  fairness  aspects  of  the  tax 
system;  and  (iii)  tax  collection  and  compliance. 
Furthermore,  it  provides  information  on  risks  of 
aggressive tax planning activity. 

The Netherlands’ tax mix and revenue are in 
line with the EU average. In 2023 the total tax 
revenue  amounted  to  38.6%  of  GDP,  close to  the 
EU  average  of  39.0%.  Of  the  different  tax  bases, 
labour  taxes  represented  the  most  important 
source  of  revenue  in  2023  (17.9%  of  GDP), 
followed  by  consumption  taxes  (11.1%  of  GDP), 
slightly  above  the  EU  average  (10.5%  of  GDP). 
Between  2010  and  2023,  consumption  taxes 
decreased  by  0.2  percentage  points  as  a 
percentage  of  GDP,  although  VAT 
revenues 
increased slightly, by 0.6 percentage points (51). In 
2023,  VAT  revenues  amounted  to  EUR  75.349 
million (52).  

There  is  scope  to  align  the  taxation  of 
different  types  of  income  from  wealth.  In 
2024, the Netherlands received a country-specific 
recommendation  that  highlighted  the  need  to 
reconsider the favourable tax treatment of returns 
from primary residence properties, pension wealth 
and  investments  held  in  closely  held  companies. 
Specifically, pension savings benefit from tax relief 
up to relatively high income levels. Furthermore, in 
the  case  of  housing,  tax  benefits  are  provided 
through  generous  mortgage  interest  deductibility, 
coupled  with  a  low  tax  on  imputed  rents  from 
homeownership.  Consequently,  there  is  a  high 
concentration of household wealth in illiquid types 
of  wealth,  which  may  increase  the  severity  of 
economic  downturns  and  encourage  tax  planning 
strategies.  The  ongoing  reform  of  the  Box  3 
system,  following  a  judgment  by  the  Supreme 
Court, to tax wealth on the basis of actual returns 
may  partially  address  some  of  these  issues  and 
further increase the progressivity of the Dutch tax 
system. 

Non-tax  compulsory  payments  (e.g. pension 
contributions)  drive  up  the  compulsory 
payment  wedge  on  labour.  In  2023,  the  tax 

(51)  Taxation Trends Data (TAX_TYPE for SSCs, VAT, PIT and CIT, 
TAX_EC_FUNC for Environmental taxes and Property taxes).  

(52)  VAT gap in the EU - Publications Office of the EU (Table 64). 

wedge  in  the  Netherlands  was  considerably lower 
than the EU average at various wage levels (Graph 
A2.1)(53). However, the tax wedge does not include 
compulsory  contributions  under  collective  labour 
agreements  that  are  paid  by  employees  and 
employers to  collectively managed pension  funds. 
When  non-tax  compulsory  payments  are  factored 
in,  the  compulsory  payment  wedge  for  single 
earners  in  2024  amounted  to  41.7%,  49.4%  and 
54.8% for wages of 67%, 100% and 167% of the 
average  wage  respectively.  These  levels  are  well 
above the EU average. Aggregate tax expenditures 
represent a sizeable share of personal income tax 
revenue in the Netherlands. A recent study shows 
that  simulated  tax  expenditures  in  areas  such  as 
employment, housing, education, health and family 
can  reduce  government  revenues  from  personal 
income taxation by 22%, or 2% of GDP(54).  

Graph A2.1: Tax wedge for single and second 
earners, % of total labour costs, 2024 

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

The  progressive  income  tax  system  in  the 
Netherlands  reduces  income  inequality  more 
than  the  EU  average.  In  2023  the  reduction  in 
income 
inequality,  as  measured  by  the  Gini 
coefficient,  was  9.4  points,  surpassing  the  EU 
average  reduction  of  7.7  points.  However,  wealth 
is more unevenly distributed than income, with the 

(53)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
taxes  and  employee  and  employer 
social-security 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

(54)  Turrini,  A.,  Guigue,  J.,  Kiss,  A.,  Leodolter,  A.,  Van  Herck,  K., 
Neher,  F.,  Leventi,  C.,  Papini,  A.,  Picos,  F.,  Ricci,  M.  and  F. 
Lanterna  (2024).  Tax  Expenditures  in  the  EU:  Recent  Trends 
&  New  Policy  Challenges. Discussion  Paper  212,  European 
Commission. 

33 

20.426.935.141.226.941.749.454.820253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - NLSingle earner - EU averageSecond earner -  NLSecond earner -  EU averageSingle earner - NL (with NTCP) 
 
 
      
 
 
Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).        
(2) A higher value indicates a stronger redistributive impact of taxation.  
(*) EU-27 simple average.  
(**) forecast value for 2023. For more details on the VAT gap, see European Commission, Directorate-General for Taxation and 
Customs Union, VAT gap in the EU - 2024 report,  https://data.europa.eu/doi/10.2778/2476549   
For more data on tax revenues and 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, OECD 

Gini  coefficient  for  wealth  inequality  reaching 
0,723 in 2023(55).  

increasing 

In  2025  the  Netherlands  implemented  a 
reform  of  the  personal  income  tax  system, 
its  progressivity.  The 
further 
reform  created  a  new  income  tax  bracket  and 
reduced the tax rate for the lower income bracket. 
It  created  a  second  income  tax  bracket  for  those 
earning between EUR 38,441 and EUR 76,817 per 
year.  For  those  earning  less  than  EUR  38,441  per 
year,  the  tax  rate  was  reduced  from  36,97%  to 
35,82%.  Furthermore,  a  recently  planned  reform 
to phase out the preferential tax regime for highly 
educated  foreign  employees  has  been  partially 
reversed. According to the 2025 Dutch tax plan, a 
27%  deduction  on  personal  income  tax  (down 
from  30%)  will  be  allowed  for  a  period  of  five 
years  for  a  higher  qualifying  salary.  This  regime 
has  been  assessed  as  having  a  medium  level  of 
aggressiveness 
EU 
schemes(56). 

compared  with 

other 

(55)  Ongelijkheid in inkomen en vermogen huishoudens. Centraal 

Bureau voor de Statistiek. 

There  is  scope  to 
increase  the  use  of 
recurrent  property  taxes  in  the  context  of 
housing  shortages.  In  2023,  recurrent  taxes  on 
immovable  property  represented  0.6%  of  GDP, 
slightly  below  the  EU  average  0.9%  of  GDP.  The 
housing imbalances in the Netherlands are further 
exacerbated  by  the  mortgage  interest  relief  tax 
scheme,  which  in  practice  offsets  property  taxes. 
This  scheme  has  been  found  to  have  a  negative 
impact  on  macroeconomic  stability  by  increasing 
volatility  and  driving  up  prices  in  the  housing 
market,  and  by  increasing  the  accumulation  of 
household  debt.  The  Netherlands  received  a 
country-specific  recommendation  to  reduce  the 
relief scheme in 2019, 2022, 2023 and 2024.   

Revenues  from  environmental  taxes  fell  by 
2.6  percentage  points  of  total  tax  revenues 
between  2013  and  2023(57)  but  remain 
among  the  highest 
In  2023 
environmental  taxes  represented  2.8%  of  GDP 
compared  with  2.0%  of  GDP  for  the  EU.  Since 
2010, environmental taxes as a share of GDP have 
decreased  by  1  percentage  point.  At  the  same 

in  the  EU. 

(56)  New Forms of Tax Competition in the European Union, An 

Empirical Investigation. EU Tax Observatory, November 2021 

(57)  Taxation Trends Data (TAX_TYPE for SSCs, VAT, PIT and CIT, 
TAX_EC_FUNC for Environmental taxes and Property taxes).  

34 

NLMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)36.139.238.138.637.840.239.739.0Taxes on labour (% of GDP)19.619.018.217.919.820.520.120.0of which, social security contributions (SSC, % of GDP)13.713.112.512.112.913.012.712.7Taxes on consumption (% of GDP)11.312.011.211.110.911.210.910.5of which, value added taxes (VAT, % of GDP)6.57.37.17.16.87.37.47.1Taxes on capital (% of GDP)5.18.28.79.57.18.58.78.5Personal income taxes (PIT, % of GDP)7.18.27.78.98.69.69.49.3Corporate income taxes (CIT, % of GDP)2.43.84.84.92.22.93.23.2Total property taxes (% of GDP)1.31.81.61.41.92.22.11.9Recurrent taxes on immovable property (% of GDP)0.60.80.70.61.11.11.00.9Environmental taxes (% of GDP)3.83.42.92.82.52.42.12.0Effective carbon rate in EUR per tonne of CO2 equivalentsNA125.9NA120.0NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)28.321.722.921.220.433.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)38.135.035.835.135.140.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)22.822.822.822.821.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.09.79.69.48.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)12.511.835.532.6VAT gap (% of VAT total tax liability, VTTL) (**)5.37.97.86.67.0Progressivity & fairnessTax administration & complianceBy tax baseSome tax typesThe NetherlandsEU-27 
 
 
 
       
 
time,  in  2023  the  Netherlands  had  the  highest 
effective  carbon  rate  of  the  EU  (i.e.  the  price  of 
emissions  across  the  economy),  with  a  price  of 
EUR 120.0 per tonne of CO2 equivalents in 2023, 
well above the EU average of EUR 84.8 per tonne 
of  CO2  equivalent.  Furthermore,  the  Dutch  RRP 
includes measures to reform energy, air travel and 
car  taxation.  The  aim  of  these  reforms  is  to 
promote and accelerate the green transition. In the 
first quarter of 2025, the Netherlands presented a 
plan  for  a  new  reform  of  car  taxation.  Further 
measures  are  expected  to  be  implemented  in  the 
course of 2026. 

Graph A2.2: Tax revenue shares in 2023 

(32.6%)(58). 

gap  was  estimated  at  7.8%  of  the  VAT  total  tax 
liability (VTTL). This is similar to the level of 2022, 
where  the  VAT  policy  gap  was  stable,  with  an 
increasing  VAT  rate  gap  and  a  decreasing  VAT 
exemption  gap.  Outstanding  tax  arrears  in  2022 
represented  nearly  one  third  (11.8%)  of  the  EU 
average 
terms  of  on-time 
In 
payments,  performance  remained  stable,  with 
rates  higher  than  95%  between  2019  and  2021 
(PIT, CIT, PAYE(59)  and VAT)(60). Similar trends were 
observed in the same period in on-time filing rates 
(PIT,  CIT,  PAYE  and  VAT),  with  the  Netherlands 
ranking among the top five in the EU, with positive 
performance  exceeding  95%.  The  Dutch  Tax 
Administration  has  worked  to  increase  the  pre-
filling of tax returns(61) to improve compliance and 
prevent accidental mistakes by taxpayers. 

the 

for  23.1%  of 

Furthermore,  while 

The  tax  administration  in  the  Netherlands 
performs well, although challenges remain. In 
particular, the resource ratios of ICT operating cost 
(as  a  percentage  of  operating  expenditure)  are 
among the highest in the EU. In 2022 these costs 
accounted 
total  operating 
expenditure(62). 
IT 
infrastructure  needs  to be  modernised,  significant 
efforts  are  being  made  to  keep  existing  systems 
running and adjust them to new tax measures. In 
the  Dutch  Administration  has 
this  context, 
digital 
developed 
a 
transformation  strategy,  which 
the 
necessary  digital  skills  for  a  successful  digital 
transformation  in  parts  of  the  administration.  In 
January  2023,  the  Netherlands  had  an  opening 
twenty-nine  mutual  agreement 
inventory  of 
(MAP)  cases(63).  Nine  cases  were 
procedure 
initiated  in  2023.  The  average  processing  time  in 
2022 was among the shortest in the EU.  

three-to-five-year 

identifies 

(58)  Source of data: 2024 European Semester : Country Reports 
(page 78). For a better overview of ‘Tax arrears in relation to 
collection by tax type’, see to that effect: 12. Derived 
indicators: payment, arrears, audit, disputes and litigation - 
ISORA (accessed on 27 January 2025). 

(59)  “Pay-as-you-earn” refers to a system where employers 
deduct taxes from income and pay them on behalf of 
employees.  

(60)  Source of data: 12. Derived indicators: payment, arrears, 

audit, disputes and litigation - ISORA 

(61)  Source of data: 

https://data.rafit.org/regular.aspx?key=74180896  

(62)  Source of data: Resource ratios: Cost, Resource Rations 

(accessed on 31 January 2025).  

(63)  Statistics on pending APAs and MAPs in the EU - European 

Commission 

Source: Taxation trends data, DG TAXUD 

through 

environment 

The Dutch corporate tax system applies rates 
above  the  EU  average  but  supports  the 
lower 
business 
complexity and R&D support. The top statutory 
tax  rate  is  25.8%,  above  the  EU  average.  At  the 
same  time,  the  forward-looking  effective  average 
tax rate (EATR) has remained stable over the past 
decades  and  stood  at  22.8%  in  2023,  above  the 
EU  average  of  18.9%.  Support 
for  R&D 
expenditure is above the EU average. Examples of 
important  support  schemes  are  (i)  a  reduction  of 
withholding  tax  for  companies  conducting  R&D 
activities;  and  (ii)  an  innovation  box  scheme  that 
offers a reduced tax rate on income derived from 
qualifying assets. The lower complexity of the tax 
system  compared  with  the  EU  average  further 
supports a strong business environment. The 2025 
tax plan includes further measures to support the 
business  environment  by  raising  the  general  limit 
on interest deductions for corporation tax purposes 
from  20%  to  25%,  bringing  it  closer  to  the  EU 
average.  

The  Netherlands  performs  strongly  in  terms 
of tax compliance. In 2023, the VAT compliance 

35 

51.226.921.946.528.824.8Tax revenue shares in 2023, Netherlands (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital 
       
 
Specifically, in 2023 the inward and outward flow 
of  FDI  as  a  share  of  GDP  were  among  the  top 
three  in  the  EU,  at  381.8%  and  397.6%  of  GDP 
respectively.  However,  since  the  relevant  reforms 
were  implemented  to  curb  the  ATP  risk,  these 
economic  indicators  have  moved  closer  to  the  EU 
average.  

Since  2021,  the  Netherlands  has  completed 
multiple  reforms  under  its  recovery  and 
resilience  Plan  (RRP)  to  curb  the  risk  of 
aggressive  tax  planning  (ATP).  Specifically,  it 
interest  and 
introduced  withholding  taxes  on 
royalty  payments  to  listed  zero-  and  low-tax 
jurisdictions in 2021 and on dividend payments in 
2024.  These  reforms  were  undertaken to  address 
the  ATP-related  issues  raised  in  the  country-
specific 
the 
recommendations  made 
Netherlands  in  2019  and  2020.  In  addition,  the 
Netherlands  have  made  several  amendments  to 
the  Corporate  Income  Tax  Act  to  limit  loss  relief, 
eliminate tax exemptions on negative interest and 
positive  currency  results,  and  limit  loss  relief  for 
corporations. Despite these positive developments, 
there  is  room  for  further  improvement.  According 
to  the  IMF,  the  Netherlands  hosts  significant 
investments 
through  empty  corporate  shells 
(special  purpose  entities)(64).  In  particular,  there 
may  be  some  ATP  risks  associated  with  Stichting 
administratiekantoor 
(STAK)  structures,  which 
could  be  used  as  vehicles  for  tax  evasion  and 
avoidance(65).  

to 

Table A2.2:  Indicators for financial activity risk, in 
% of GDP 

Source: European Commission 

Since  enacting  the  reforms,  the  Netherlands 
has  moved  closer  to  the  EU  average  on 
indicators. 
several 
However, 
foreign  direct 
investments  (FDI),  dividend,  interest  and  royalty 
payments  in  the  Netherlands  remain  significantly 
disproportionate  and  above  the  EU  average. 

relevant 
financial 

economic 

flows  of 

(64)  Jannick Damgaard, Thomas Elkjaer and Niels Johannesen 
(2019), The rise of Phantom Investments, IMF Finance & 
Development, September 2019, Vol. 56, No. 3 

(65)  National Risk Assessment Witwassen 2023, WODC 

36 

2019 2023 Inward 480.10%381.80%Outward613.3% 397.60%Received 22.40%22.20%Paid 13.90%14.90%Received 5.40%4.20%Paid 3.70%3.10%Received7.50%3.30%Paid 7.50%2.7% Stock of FDIDividendsInterestRoyalties 
 
      
 
 
 
 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

The  Netherlands  remains  an 
innovation 
leader,  driven  by  a  lean  and  efficient  R&D 
system, but this leadership position is at risk 
due  to  a  declining  relative  performance  and 
reduced  public  support  for  R&D.  The  2024 
European  Innovation  Scoreboard  (EIS)  (66)  ranks 
the Netherlands among the innovation leaders for 
most  of  the  indicators.  However,  the  Netherlands’ 
performance  was  below  the  EU  average  over  the 
last  8 years,  increasing  by  7.8%  compared  to  a 
10%  growth  rate  in  the  EU.  This  leadership 
position  is  achieved  with  relatively  limited  R&D 
investment: Dutch R&D intensity, at 2.23% of GDP 
in  2023,  is  below  the  rates  of  other  strong  R&I 
performers  in  the  EU  and  globally.  In  particular, 
public  R&D  intensity  is  below  the  EU  average, 
pointing  to  a  highly  efficient  Dutch  R&D  system. 
While  the  Netherlands  has  maintained  a  top 
position globally, ranking 8th according to the 2024 
Global  Innovation  Index (67),  there  is  a  visible 
downward trend in relative terms, as it ranked 2nd 
in  2018.  In  this  context,  the  government  plans  to 
reduce  public  support  to  R&I.  As  a  result, 
increasing  mismatches  between  skills  supply  and 
demand  could  endanger  the  Dutch  ambition  of 
maintaining  its  position  as  a  leading  knowledge 
and innovation country.  

Science and innovative ecosystems 

The  Netherlands  has  an  excellent  and  highly 
efficient science base producing high-quality 
research  output,  but  its  performance  is 
eroding.  The  quality  of  research  outputs,  as 
measured  by  the  share  of  the  country’s  scientific 
publications  within  the  top  10%  most  cited 
publications,  remains  well  above  the  EU  average 
(14.5%  vs  9.6%),  but  has  been  on  a  slightly 
decreasing trend over the last decade (down from 
16.3% in 2011). In 2023, investment in public R&D 
stood at 0.67% of GDP, well below the EU average 

(66)  2024  European 

Innovation  Scoreboard,  country  profile 

https://ec.europa.eu/assets/rtd/eis/2024/ec_rtd_eis-country-
profile-nl.pdf.  The  scoreboard  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). 

(67)  Global  Innovation  Index  2024https://www.wipo.int/edocs/gii-

ranking/2024/nl.pdf 

of 0.72%, while in 2021 it was on par with the EU 
average  of  that  year  (0.75%  of  GDP).  Such  a  low 
level  will  make  it  hard  for  the  Netherlands  to 
maintain  its  leading  position  of  excellence  in 
science. 

Business innovation 

The  Dutch  innovation  ecosystem  benefits 
from  very  good  science-business  linkages 
and  entrepreneurial  dynamism,  but 
its 
technological 
performance 
development 
deteriorated  in  the  last  decade.  Business-
science linkages are strong, as shown for instance 
by  the  percentage  of  public-private  scientific  co-
total  number  of 
the 
publications  among 
publications,  which  is  well  above  the  EU  average 
(11.8%  vs  7.7%).  The  Netherlands  also  benefits 
from  a  significantly  higher  total  entrepreneurial 
activity  than  the  EU  average  and  can  rely  on  a 
dynamic  and  innovative  start-up  sector.  Public 
efforts  to  promote  and  help  start-ups  and  scale-
ups (e.g. through the Techleap group (68) have been 
effective in  supporting  the  growth  of  the  start-up 
ecosystem, with regional specialisations starting to 
arise  around  university  hubs.  Business  enterprise 
expenditure  on  R&D  as  a  percentage  of  GDP  has 
remained stable around the EU average in the last 
decade.  In  2023,  it  rose  to  1.56%,  above  the  EU 
average 
technology 
developments  as  captured  by  patent  data,  the 
number  of  patent  applications  filed  under  the 
Patent  Cooperation  Treaty  per  billion  GDP  (in 
PPS €)  is  above  the  EU  average  (4.4  vs  2.8  in 
2022)  but  has  decreased  since  2015  (when  it 
stood at 6.0). 

of  1.49%. 

Regarding 

The  recently  adopted  national  technology 
strategy (NTS) (69) may provide a policy lever 
to  strengthen  technological  innovation,  but 
its  success  will  depend  on  adequate  public 
support.  The  strategy  provides  guidance  on  the 
development, application and upscaling of selected 
key  enabling  technologies  through  a  combination 
of  government  investments,  industry-academia 
at 
collaboration 

partnerships, 

aimed 

and 

(68)  Techleap.nl 

(69)  National technology strategy  

37 

 
 
 
 
 
 
 
strengthening  competitiveness  and 
long-term 
prosperity.  To  prioritise  resources,  the  strategy 
outlines 10 priority technologies such as quantum 
technology, semiconductors, AI and data science. It 
will be monitored through regular progress reports 
and  evaluations.  Given  the  high  ambition  of  the 
NTS,  sufficient  public  resources  will  be  critical  to 
guide  and  attract  private  investments.  Recent 
budget  cuts,  for  example  related  to  the  National 
Growth Fund, are therefore a matter of concern. 

The  Netherlands  scores  above  the  EU 
average  on  the  digitalisation  of  SMEs  and 
the  adoption  of  advanced  technologies  by 
enterprises.  Dutch  SMEs  continue  to  show  good 
results  in  basic  digitalisation:  in  2024,  80.8%  of 
SMEs had at least a basic level of digital intensity, 
which  is  above  the  EU  average  of  72.9%.  The 
adoption  of  advanced  technologies  by  Dutch 
businesses  is  also  above  the  EU  average.  Recent 
figures  show  an  accelerated  AI  adoption  rate, 
increasing from 13.4% in 2023 to 23.1% in 2024. 
Similar  trends  are  observed  for  the  adoption  of 
data  analytics  and  advanced  cloud  services  (in 
2023,  48.6%  of  enterprises  had  adopted  data 
analytics vs the EU average of 33.2%, and 57.4% 
of  enterprises  had  adopted  cloud  solutions vs  the 
EU average of 38.9%). 

Financing innovation 

Venture  capital  levels  have  increased,  but 
scale-up funding is at the low end compared 
to other top-performing countries. With regard 
to venture capital investment levels, at 0.116% of 
GDP the Netherlands outperforms the EU average 
of 0.078%, with impressive growth (from 0.028% 
to  0.116%)  over  the  period  2016-2023.  This  has 
allowed  the  Netherlands  to  boast  one  of  the 
strongest tech ecosystems within the EU. However, 
according  to  the  2024  state  of  Dutch  tech 
report (70),  scale-up  funding  is  at  the  low  end 
compared  to  other  top  ecosystems  and  is  heavily 
dependent  on 
foreign  venture  capital.  The 
relatively  low  availability  of  large-scale  venture 
capital  may  pose  barriers  for  start-ups  looking  to 
scale up significantly. 

Innovative talent 

innovation 

performance 

Shortages  of  skilled  workers  risk  affecting 
and 
Dutch 
competitiveness.  The  Netherlands  outperforms 
the  EU  average  in  terms  of  the  share  of  young 
people with tertiary education and engagement in 
lifelong  learning.  However,  despite  an  increasing 
trend  over  the  last  decade,  the  country  is  still 
lagging  behind  in  terms  of  new  graduates  in  the 
science  and  engineering  field  (12.0  per  thousand 
population aged 25-34 vs the EU average of 17.5). 
The number of graduates in the field of computing 
also remains slightly below the EU average (3.4 vs 
3.6 in 2022). Although the Netherlands has put in 
place  an  action  plan  for  green  and  digital  jobs  in 
2023 (71),  recent  policies  to  limit  the  intake  of 
international  students  and  budget  cuts 
in 
international  education  could  have  a  negative 
impact on attracting and retaining top talent at all 
levels. 
Increasing  mismatches  between  skills 
supply  and  demand  might  potentially  impact 
and 
Dutch 
competitiveness. 

performance 

innovation 

Entrepreneurship education is well developed 
in  higher 
in  the  Netherlands,  especially 
education,  but  there  is  a  lack  of  data  on 
students’  entrepreneurship  competencies. 
According  to  the  Global  Entrepreneurship  Monitor 
2023 (72),  entrepreneurial  education  in  school  and 
at post-secondary education is above the average 
of  high-income  countries,  with  the  Netherlands 
ranking  third  out  of  16  surveyed  countries.  In 
higher  education,  the  Centres  of  Entrepreneurship 
set  up under the action programme for education 
and  entrepreneurship  coordinate,  organise  and 
support  entrepreneurship  education.  However, 
there is no data available on participation rates in 
entrepreneurship  education  or  on  students’ 
entrepreneurial  attitudes,  skills  and  behaviour  at 
any educational level. 

(70)  State of Dutch Tech 2024 

25 Years and Growing. 

(71)  Action plan green and digital jobs 

(72)  Global Entrepreneurship Monitor 2023/2024. Global Report: 

38 

 
 
 
 
 
 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the highest number of country data 
Source: Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

39 

R&D intensity (gross domestic expenditure on R&D as % of GDP)1.92.142.272.222.182.23:2.243.45Public expenditure on R&D as % of GDP0.830.720.760.750.680.67:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 1615.314.514.5:::9.612.3Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population3.33.13.43.53.43.4:4.1:International co-publications as % of total number of publications53.661.464.965.265.765.9:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP1.081.421.511.461.491.56:1.492.7Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.450.510.490.480.48::0.40.3Researchers employed by business per thousand active population4.76.97.67.88.38.5:5.6:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)5.9554.84.4::3.2:Employment share of high-growth enterprises measured in employment (%)15.7821.8116.95::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::80.09:80.8372.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::48.56:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::60.25:57.4468.5438.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::13.1:13.3723.0613.48:Public-private scientific co-publications as % of total number of publications10.611.511.411.711.811.8:7.78.9Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0910.060.060.0590.052::0.050.02Total public sector support for BERD as % of GDP0.1640.2610.2790.2780.251::0.2040.251 R&D tax incentives: foregone revenues as % of GDP0.1330.160.1540.1580.1310.128:0.1020.141BERD financed by the public sector (national and abroad) as % of GDP0.0310.1010.1250.1160.120::0.1000.110Venture capital (market statistics) as % of GDP, total (calculated as a 3-year moving average)0.0230.0350.0680.10.1130.116:0.078:Seed funding (market statistics) as % of GDP 2.27.85.37.78.18.4:7.3:Start-up and early-stage funding (market statistics) as % of GDP 46.859.267.349.851.752.6:44.0:Later stage and scale-up funding (market statistics) as % of GDP 50.932.927.242.640.239:48.7:New graduates in science and engineering per thousand population aged 25-3410.910.311.212.412.012.0:17.6:Graduates in the field of computing per thousand population aged 25-342.51.82.533.4::3.6:2023EU average (1)USA2024Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed in businessesPublic support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationFinancing innovationInnovative talent20222021The Netherlands 201220172020 
 
 
 
 
 
 
 
 
 
 
            
 
ANNEX 4: MAKING BUSINESS EASIER 

The  Netherlands  has  a  generally  favourable 
business environment, as attested by a range 
of  international  rankings.  The  quality  of  the 
business  environment  has 
recently  declined 
slightly.  The  regulatory  and  administrative  burden 
on companies is increasing. Firm action to remove 
the  main  barriers  to  investment  in  construction 
may improve the business environment. 

Economic framework conditions 

to 

rank 

The  Netherlands  has  a  generally  favourable 
business  environment.  The  latest  editions  of 
the 
rankings  continue 
international 
Netherlands highly, testifying to the attractiveness 
of  its  business  environment.  The  OECD (73)  places 
the country fourth in the EU and fifth overall (out 
of  40  countries).  The  Institute  for  Management 
Development (74)  ranks  it  the  ninth  out  of  67 
countries.  The  Economist  Intelligence  Unit (75)  has 
it in 11th place out of 82 jurisdictions. 

The  quality  of the business  environment  has 
slightly  declined  in  recent  years.  In  all  the 
rankings  mentioned  above, 
the  Netherlands' 
performance  has  recently  seen  a  decline.  The 
score for the OECD PMR was higher in 2018. IMD’s 
rank  is  below  those  of  2020-2023  (from  fourth 
down  to  sixth).  EIU  downgraded  it  to  11th  place 
overall  (from  sixth  place  previously)  and  sixth 
place  in the  EU  (down  from  fourth).  Several  large 
firms  have  relocated  their  main  headquarters  out 
of the Netherlands in the last four years (Unilever, 
Shell,  DSM).  The  departure  of  another  company 
(ASML)  was  averted  by  a  concerted  government 
effort. 

to  have 

The regulatory and administrative burden on 
companies  appears 
increased 
recently.  Dutch  companies  increasingly  report 
business  regulations  as  a  major  barrier  to  long-
term  investment (76).  Over  30%  of  firms  devote 
more  than  10%  of  staff  to  fulfil  regulatory 
requirements, one of the highest levels in the EU. 

(73)  OECD, Product Market Review (PMR), 2024. 

(74)  IMD, World Competitiveness Index 2024. 

(75)  EIU, Business Environment Rankings, 2024. 

is  scope 

The  administrative  requirements  to  set  up 
new  businesses  seem  high  and  may  hinder 
business  dynamism.  There 
for 
improving  the  licensing  and  permitting  system  by 
bringing  it  more  into  line  with  international  best 
practice  (keeping  an  inventory  of  all  licences, 
reviewing  it  regularly,  adopting  the  ‘silence  is 
consent’ principle, tailor the length and complexity 
of the licensing process to the risks inherent in the 
licensed activities) (77). 

Regulatory and administrative 
barriers 

Decisive  action  to  remove  the  main  barriers 
to  investment  in  construction  may  improve 
the  business  environment.  The  construction 
sector’s  performance  is  tightly  linked  to  many  of 
the challenges faced by the Dutch economy (such 
as  housing  shortages,  green  infrastructure,  low 
public  and  overall  investment,  labour  shortages, 
and  attracting  skilled  labour).  Residential  property 
prices  in  the  country  have  doubled  in  the  last  10 
years. The housing shortage is currently estimated 
at 400 000 homes. The construction sector’s share 
in  national  gross  value  added  increased  slightly 
from  5%  in  2023  to  5.2%  in  2024  but  remains 
below  the  EU  average  (5.6%).  Some  of  the  main 
causes of the slow supply response in housing are 
known  (slow  planning  and  permit  procedures, 
scarcity  of  building  space, 
financial 
conditions,  labour  shortages,  nitrogen  emissions-
related  restrictions).  Measures  are  under  way  to 
address  them,  including  with  EU  support  (RRF). 
Implementation  is  key  and  should  be  sped  up. 
However, other measures such as rent controls or 
corporations 
special 
disincentivise investment and competition. 

for  housing 

treatment 

tighter 

costs  are 

High  energy  costs  negatively  affect  the 
attractiveness  of  the  business  environment. 
Energy 
for 
the 
companies (78)  (see  Annex  8).  Keeping  a  strong 
industrial  base  in  the  country  depends  to  a 
significant extent on affordable energy. The much-
needed investment in energy infrastructure, which 
is  under  way,  is  affecting  energy  prices.  A  study 

concern 

top 

(76)  EIB  Investment  Survey  (EIB  IS),  2024.  The  2024  share  of 
companies  signalling  regulation  as  a  barrier  is  significantly 
larger compared to 2023 (51% vs 42%). 

(77)  OECD,  PMR  2024.  The 

relevant 

indicator  puts 

the 

Netherlands in 30th place, well above average. 

(78)  EIB IS 2024. 

40 

 
 
 
 
 
commissioned by the Ministry of Economic Affairs 
and Climate found that major industrial companies 
in the Netherlands are paying up to 66% more for 
electricity  than  their  counterparts  in  neighbouring 
countries (Germany, France, Belgium). 

Graph A4.1: Making Business Easier: selected 
indicators* 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) firms, (4) SMEs. 
*Q4 data on trade integration is not yet available. 
Sources: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE 
survey. 

SMEs  are  performing  well  but  there  is  room 
for 
the 
improvement.  The  gap  between 
productivity of large and small companies is small. 
Nevertheless, a particular area of concern in recent 
years is the low productivity of the self-employed 
professionals  without  employees.  There  are  more 
than  one  million  self-employed  people  in  the 
Netherlands and their productivity is less than half 
that  of  SMEs.  SME  access  to  bank  loans  and  the 
huge national public procurement market could be 
improved.  Late  payments  between  businesses 
increased in 2024 (16.8 days) and are now above 
the  EU  average  (15.6  days)  and  at  the  highest 
level in five years. The government performance in 
paying  businesses  is  better  than  the  EU  average 
(13.7 vs 15.1 days).  This was an improvement on 
the previous year. 

41 

Companies  are  affected  by 
labour  and 
material  shortages.  These  shortages  have 
lessened  but  are  still  high:  31%  of  companies 
reported problems in hiring staff compared to the 
EU average of 20%, while 12.5% had experienced 
difficulties  finding  production  materials,  which  is 
also above the EU average (10%). The job vacancy 
rate is double the EU average but close to that of 
peers.  The  availability  of  skilled  staff  is  the  main 
barrier  to  long-term  investment.  Some  prominent 
measures  (e.g.  the  tax  break  on  personal  income 
tax  for  highly  educated  foreign  employees)  keep 
the Netherlands attractive for highly skilled foreign 
labour  but  have 
increasingly 
contested. 

recently  been 

The  deployment  of  5G  stand-alone  core 
networks  has  undergone  significant  delays. 
After several delays due to legal  proceedings, the 
Netherlands  recently  (March  2024)  launched  the 
auction  of  the  3.6  GHz  band  for  the  terrestrial 
provision  of  wireless  broadband  electronic 
communications  services  (5G).  This  delay  reflects 
the low percentage of 5G pioneer bands assigned 
(33.3% against an EU average of 73.4%). The roll-
out  of  5G  in  the  3.6  GHz  band  by  Dutch  telecom 
operators will be essential, as it will support high-
bandwidth  applications  (such  as  video  streaming, 
virtual reality) and enable future applications (like 
smart cities and other advanced technological use 
cases). 

Single Market 

can 

improve 

The  Netherlands  is  well  integrated  into  the 
Single  Market  but 
its 
performance  on  the  Single  Market  and 
Competitiveness  Scoreboard. 
In  2023,  the 
country’s  trade  integration  with  the  single  market 
for  goods  and  services  (45.60%  of  GDP)  was 
above  the  EU  average  (43%).  The  2025  Single 
Market  Scoreboard 
indicates  that  the  Dutch 
performance is below the EU average on both the 
transposition  deficit  (percentage  of  transposed 
time)  and  conformity  deficit 
directives  on 
(percentage  of  incorrectly  transposed  directives). 
The  number  and  duration  of  Single  Market 
infringement  cases  are  both  at  the  EU  average 
level.  The  Netherlands  solved  74%  of  SOLVIT 
cases  it  handled  as  lead  centre  (below  the  EU 
average of 85%). 

30.79.712.544.05.547.916.61041.624.50102030405060from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27NL 
      
that 

face 

fewer 

index  shows 

restrictiveness 

Professions 
regulatory 
constraints than in most OECD countries. The 
OECD 
the 
Netherlands has the lowest  barriers for trading in 
services  of  any  EU  Member  State,  except  for 
accountants.  This  is  partly  due  to  accountants 
being  also 
for  auditing.  Retail 
distribution  could  benefit  from  a  reduction  in 
supply 
regulatory 
constraints  affect  Dutch  retailers  which  face 
restrictions  when  trying  to  source  products  from 
other  Member  States.  The  restrictions  limit  the 
choice  of  products  on  the  Dutch  market  and  lead 
to higher consumer prices. 

barriers (79). 

responsible 

Territorial 

(79)  OECD, PMR 2024. 

42 

 
 
Table A4.1:  Making Business Easier: indicators. 

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**The 2024 data on single bids is provisional and subject to revision. Please note that approximately 10% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Sources: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, 
(7) OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data space (PPDS). 

43 

POLICY AREA20202021202220232024EU-27 average8.024.339.323.012.510.014.823.236.934.630.720.22.64.25.44.94.62.32.95.215.24.70.913.4-90.697.898.3-78.8-51.963.477.7-64.0-97.0100100-89.3Regulatory environment9.89.012.69.75.524.5-1.711.113.012.516.815.6-1.111.413.216.213.715.1from public or private entities in the last 6 months25.022.724.629.6--from private entities in the previous or current quarter----30.747.9from public entities in the previous or current quarter----9.716.641.746.151.947.544.041.60.0320.0320.0320.0320.0370.0501.01.61.40.60.90.81.71.31.61.21.20.978.089.278.073.074.084.924.021.023.023.025.024.41313191924-97911127.0NetherlandsINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
       
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

sale  of  intellectual  property  rights  for  about  EUR 
90  billion.  Hence,  most  of  the  Dutch  net  savings, 
i.e.  after  accounting  for  the  investments  that  are 
necessary  to  merely  maintain  the  existing  capital 
structure  of  the  economy,  are  used  to  finance 
projects abroad. 

Graph A5.1: Net savings-investment balance 

Source: AMECO. 

Consistent  with  its  regular  position  of  a  net 
creditor  to  the  rest  of  the  world,  the  Dutch 
economy has accumulated significant foreign 
assets and shows a positive net international 
investment position. As of Q3 2024, total assets 
on  foreigners  equated  to  839%  of  GDP,  while 
liabilities  to  foreigners  stood  at  782%  of  GDP, 
resulting in a net international investment position 
(NIIP) equivalent to 57% of GDP (see Graph A5.2). 
At  the  same  time,  the  accumulated  net  foreign 
direct investment  reached  72%  of  GDP,  while  the 
net  stock  of  other  investments  rose  to  38%  of 
GDP.  Due  to  the  higher  value  of  foreigners’ 
investments  in  the  Dutch  capital  markets  than 
Dutch  portfolio  investments  abroad,  as  of  Q3 
2024  the  portfolio  balance  showed  a  net  liability 
equivalent  to  59%  of  GDP.  The  stock  of  official 
contributed  6 
foreign 
percentage  points  of  GDP  to  the  aggregate 
positive  NIIP.  Thus,  while  the  Dutch  economy 
appears  to  be  deeply  integrated  in  international 
capital  flows,  including  as  a  major  recipient  of 
foreign  capital,  it  remains  nevertheless  a  net 
capital  exporter,  notably  by  means  of  direct  and 
other investments abroad. 

exchange 

reserves 

to 

Against  the  backdrop  of  high  domestic 
savings  and  significant  net  foreign  assets, 
the  Dutch  economy  benefits  from  deep 
national  capital  markets  and  well-developed 
and stable banking and non-banking financial 
sectors.  Even  though  highly  developed  financial 
intermediation  contributes  positively 
the 
financing of the economy, conditions for small and 
medium enterprises and the direct participation of 
retail investors in the capital markets could still be 
improved.  Dutch  companies  rely  extensively  and 
more than their EU peers on internal resources to 
finance  their  investments.  A  well-capitalised  and 
profitable banking sector provides a stable source 
of funding to the economy. The Dutch venture and 
growth capital market is one of the deepest in the 
EU and finances investments that have a material 
importance  for  the  economy.  The  very  large 
occupational 
the 
landscape  of  institutional  investors,  while  also 
accounting  for  the  high  indirect  participation  of 
households  in  capital  markets.  However,  direct 
retail  participation  in  capital  markets  is  relatively 
low,  including  due  to  tax  rules  that  discourage 
savings in the form of stocks. The insurance sector 
remains 
especially 
considering the high risk of flooding. 

funds  dominate 

undeveloped, 

relatively 

pension 

Availability and use of domestic 
savings 

The  Dutch  economy  invests  the  largest  part 
of  its  relatively  high  net  savings  abroad.  In 
the  last  decade,  the  private  savings  ratio,  net  of 
fixed  capital  consumption,  persistently  fluctuated 
around  its  ten-year  average  of  12.6%  of  GDP, 
reaching a maximum of 17.6% in 2021 (see Graph 
A5.1).  The  net  private  investment  ratio,  which 
measures the net contribution of the private sector 
to  capital  accumulation 
in  the  country,  was 
significantly  more  volatile,  exhibited  a  ten-year 
average of 4.1% of GDP and reached a maximum 
of  8.3% 
last  decade,  the 
government  budget  balance,  which  was  quite 
volatile,  resulted  in  a  comparatively  low  average 
deficit  of  0.5%  of  GDP.  Thus,  the  high  positive 
balance  between  net  domestic  savings  and  net 
investment,  together  with  the  low  government 
deficit, led to a structurally high net lending by the 
Netherlands  to  foreigners  that  averaged  8.0%  of 
GDP,  with  an  exceptional  peak  of  17.2%  in  2022, 
due  to  a  capital  account  inflow  triggered  by  the 

in  2015. 

In  the 

44 

-20-100102030402017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate savings, netPrivate savings, grossBorrowing from the rest of the world 
 
     
 
 
Graph A5.2: International investment position 

Source: ECB. 

Structure of the capital markets and 
size of the financial sector 

The  Dutch  economy  stands  out  with  one  of 
the  deepest  domestic  capital  markets  in 
Europe. The market capitalisation of listed equity 
reached  127%  of  GDP  at  end-2023  (see  Graph 
A5.3), which is the fourth highest among member 
states,  after 
Ireland,  Denmark  and  Sweden. 
Characteristically, the total market capitalisation is 
split  almost  equally  between  non-financial  and 
financial  corporations,  which  reflects  the  strong 
role  played by finance in the Dutch economy. The 
outstanding  volume  of  debt  securities  reached 
198%  of  GDP  at  end-2023,  which  is  also  among 
the highest national scores in the EU. Bonds issued 
by  other  financial  institutions,  which  are  neither 
banks nor pension funds or insurance corporations, 
represented  the  highest  share  with  46%  of  the 
total,  followed  by  debt  securities  issued  by  banks 
(26%)  and  by  the  government 
(19%).  The 
structure  of  the  debt  securities  market  in  the 
Netherlands  has  been  relatively  stable  over  the 
last  years,  except  for  bonds  issued  by  non-
financial  corporations, 
the  share  of  which 
increased from 8% to 10% of the total. 

Even  though  the  financial  sector  in  the 
Netherlands  remains  dominated  by  banks, 
non-bank  financial  intermediation  is  very 
much  developed  along  all  segments.  After 
peaking at 311% of GDP in 2020, the size of the 
banking  sector  decreased  to  259%  of  GDP  in 
2023,  which  is  in  line  with  the  EU  average  of 
257% and slightly below the EA average of 268%. 
Foreign presence is limited and accounts for about 
9%  in  terms  of  assets.  With  the  top  five  MFIs 
representing  almost  82%  the  sector,  banking 

45 

concentration  appears  to  be  significantly  higher 
than  the  EU  average  of  54%,  which  is  also 
reflected  in  significantly  lower  inter-bank  lending 
in  the  Netherlands  than  elsewhere  in  the  EU.  The 
pension  funds  sector,  with  total  assets  of  almost 
150%  of  GDP  at  end-2023,  dominates  non-bank 
intermediation and is the largest in the EU, and the 
fifth  largest  worldwide.  Investment  funds,  though 
their 
total  assets  dropped  by  almost  50 
percentage  points  to  80%  of  GDP  between  2020 
and  2023,  remain  significant  (see  section  on 
institutional 
Insurance  corporations, 
whose  assets  were  equivalent  to  42%  of  GDP  as 
of  end-2023,  are  relevant  as  well,  even  if  they 
appear  less  developed  than  the  EU  average  of 
55% of GDP. 

investors). 

Graph A5.3: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO. 

Resilience of the banking sector 

The  Dutch  banking  sector 
is  stable,  as 
suggested  by  healthy  financial  soundness 
indicators.  Dutch  banks  enjoy  a  satisfactory 
capital  position,  with  an  average  common  equity 
tier  1  (CET1)  ratio  of  16.8%  as  of  Q3  2024, 
slightly above the EU average of 16.6% (see Table 
A5.1).  When  additional  Tier  1  and  Tier  2  capital 
instruments  are  included,  the  total  capital  ratio 
reached  21.5%,  which  was  above the  EU  average 
of 20.1%. However, the capital adequacy ratios of 
Dutch  banks  have  been  declining  since  2020, 
including due to the introduction of a floor on risk 
weights  for  mortgages  as  of  2022.  According  to 
the  2023  EU-wide  stress  tests  conducted  by  the 
severe  adverse 
EBA  and 

the  ECB, 

the 

-1500-1000-50005001000150020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIPNon-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300  Listed equity                          Bonds                          Assets by sector% of GDP 
   
   
macroeconomic scenario would produce a material 
impact, with a peak-to-through negative effect on 
the  CET1  ratios  that  varied  between  4.54  basis 
points for Rabobank and 10.25 basis points for de 
Volksbank.  For  all  banks  the  end-of-period  CET  1 
ratio would remain above the regulatory minimum, 
with the 8.9% projection for ING being the lowest. 
At the end of 2023, Dutch banks’ aggregate MREL 
level  (Minimum  Requirement  for  Own  Funds  and 
Eligible  Liabilities)  stood  at  33.9%,  which  was  5.1 
percentage points above the required level. 

could 

developments 

is  strong,  risks  of 
While  asset  quality 
deterioration warrant continuous monitoring. 
Credit  quality  is  high,  with  the  ratio  of  non-
performing  loans  (NPLs)  having  reached  1.3%  as 
of  Q3  2024,  which  is  the  lowest  since  2015  and 
below  the  EA  average  of  1.9%.  This  satisfactory 
performance reflects both the general strength of 
the  Dutch  economy  and  the  efficiency  of  the 
foreclosure and insolvency regimes in the country. 
However, trade distortions and other unfavourable 
geo-political 
impact 
negatively  the  very  open  Dutch  economy.  The 
number of company insolvencies has been on the 
rise  lately  and  the  share  of  restructured  SME 
loans,  though  remaining 
increased. 
Moreover,  high  indebtedness  in  the  Netherlands 
remains  a  general  concern.  As  of  end-2023,  the 
indebtedness  of  NFCs,  although  on  a  declining 
trend,  remained  much  elevated  at  97.2%  of  GDP 
(EU  average  of  62.7%).  Households’  indebtedness 
followed  the  same  declining  trend  and  stood  at 
94.5%  of  GDP  (EU  average  of  51.8%).  Another 
specific risk stems from the country’s exposure to 
climate risk. According to the IMF, as of end-2020, 
52%  of  banks’  assets  were  related  to  areas 
vulnerable 
this  specific 
vulnerability,  the  Dutch  banking  sector  remains 
generally  resilient  to  flood  events,  with  no  bank 
expected  to  see  its  capital  falling  below  the 
minimum  capital  requirements  even  in  the  most 
adverse flood scenario. 

to  flooding.  Despite 

low,  has 

Dutch  banks  have  ample  liquidity  buffers. 
While  recently  the  structural  relation  between 
loans and deposits has evolved unfavourably, with 
the  loan-to-deposit  ratio  increasing  from  101.3% 
at  end-2021  to  109.5%  as  of  Q3  2024,  banks 
over-comply with their minimum liquidity ratios. As 
regards  their  preparedness  to  face  short-term 
liquidity  outflows,  significant  and  less-significant 
institutions  exhibited  liquidity  coverage  ratios  of 
149%  and  228%  respectively  as  of  Q3  2024 
(156%  for  the  sector  as  a  whole).  As  regards  the 

46 

longer-term  structural  adequacy  between  assets 
and  liabilities,  the  same  institutions  showed  net 
stable  funding 
ratios  of  136%  and  148% 
respectively  as  of  Q3  2024  (138%  for  the  sector 
as  a  whole).  As  of  Q3  2024,  the  banking  system 
had  an  aggregate  liquidity  buffer  of  EUR  522  bn, 
out  of  which  EUR  471  bn  was  held  by  the 
significant institutions. 

The  profitability  of  Dutch  banks  has  been 
high, though earnings are expected to fall as 
interest  rates  continue  to  decline.  As  Dutch 
banks’  net  interest  margins  widened  during  the 
period  of  interest  rate  hikes  by  the  Eurosystem, 
their  profitability  is  expected  to  decline  in  the 
ongoing  phase  of  rate  decreases.  The  return-on-
equity, which has hit its highest level since at least 
2016,  reached  11.8%  as  of  Q3  2024,  well  above 
the  EU  average  of  10%.  Similarly,  at  0.8%  the 
return-on-assets  was  also  historically  high  and 
slightly  above  the  EU  average  of  0.7%.  So  far 
Dutch  banks’  profitability  has  resisted  well  to  the 
declining  interest  rates,  including  thanks  to  their 
capacity to optimise efficiency,  as evidenced by a 
cost-to-income ratio that improved from 59.8% in 
2018 to 50.1% as of Q3 2024. 

Resilience of the non-bank financial 
intermediaries 

The liquidity risks to which pension funds are 
currently  exposed  are  abating  as  the 
transition  from  defined  benefits  to  defined 
contributions  is  taking  place.  The  pension 
funds sector in the Netherlands, which is the fifth 
largest  worldwide  after  the  USA,  Canada,  the  UK 
its  total  assets  rise  to 
and  Australia,  saw 
EUR 1 831 bn as of mid-2024, which is still below 
their  peak  of  EUR  1  980  bn  at  end-2021.  Assets 
are  held  mainly  in  debt  instruments  and  listed 
equities.  The  derivatives  in  their  portfolios  entail 
liquidity risks, notably due to the reliance on well-
functioning  repo  markets.  However,  thanks  to  the 
transition  from  defined  benefits 
to  defined 
contributions,  initially  planned  for  2023  but  now 
delayed to 2028, the risk of fire sales for liquidity 
reasons  will  ease.  The  gradually  ongoing  reform, 
which  is  closely  monitored  by  De  Nederlandsche 
Bank  (DNB)  and  the  Authority  for  the  Financial 
Markets,  will  reduce  potential  tensions  between 
generations  and  will  provide  a  better  alignment 
between  the  risk  exposures  of  the  various  age 

 
cohorts.  Meanwhile,  the  issue  is  alleviated  by  the 
fact  that  the  Dutch  pension  system  is  still  in  an 
accumulation  phase,  where  cash  inflows  exceed 
outflows.  Thus,  the  pension  funds’  funding  ratio 
reached  118.5%  as  of  Q2  2024,  with  no  fund 
having  had  a  funding  ratio  below  105%  for  the 
preceding four quarters. 

invested 

The  insurance  sector  is  in  a  broadly  sound 
position.  It  has  been  undergoing  consolidation 
over  the  last  two  decades,  with  the  number  of 
supervised entities going down from 358 in 2004 
to  128  as  of  Q3  2024.  Only  15  entities  are  life-
insurers, while 8 companies deal with reinsurance. 
The insurance penetration rate is the 15th highest 
worldwide.  As  of  end-2023,  the  solvency  ratio  of 
185%,  though  above  statutory  requirements  and 
robust, was significantly below the EU  average of 
260% and lower than in the past year. Assets are 
mostly 
investment 
undertakings,  followed  by  mortgages  and  loans, 
and  government  bonds. 
In  recent  years,  as 
insurance  corporations  have  expanded  their  asset 
allocation  to  private  assets,  including  more  risky 
the  aggregate 
investments, 
and 
riskiness  of  their  asset  portfolios  has  increased. 
Given 
the 
Netherlands, climate change is the highest risk for 
Insurance  and 
Dutch 
Occupational  Pensions  Authority  (EIOPA)  allocates 
a high score (3) to the coastal flood protection gap 
and  a  relatively  high  score  (2.5)  to  the  general 
flood protection gap. 

insurers.  The  European 

the  geographical 

specificity  of 

collective 

liquid 

less 

in 

Sources of business funding and the 
role of banks 

Even  though  Dutch  companies  are  more 
indebted  than  their  EU  peers  on  average, 
they  rely  relatively  moderately  on  debt 
finance  to  fund  their  activities.  Financial 
borrowing  by  non-financial  corporations  (NFCs)  in 
the Netherlands reached more than 97% of GDP in 
2023,  which  is  significantly  higher  than  the  EU 
average of about 63% (see Graph A5.4). However, 
given  the  overall  much 
larger  size  of  the 
aggregate  balance  sheet  of  Dutch  NFCs,  which 
reached 365% of GDP at end-2023 (versus an EU 
average  of  230%),  the  relative  share  of  financial 
loans in their funding structure (26.7%) is slightly 
lower than the EU average (27.2%). 

To  fund  their  investments,  Dutch  companies 
rely on internal resources more than their EU 
peers.  The  2024  EIB  Investment  Survey  shows 
that,  in  2023,  Dutch  NFCs  financed  almost  four 
fifths  (78%)  of  their  investments  with  internal 
resources,  well  above  the  two  thirds  (66%) 
characteristic  of  the  average  EU  company.  At  the 
same  time,  only  8%  of  companies 
in  the 
Netherlands  believe  they  invested  too  little  in  the 
last three years, as opposed to 14% in the EU. This 
suggests  that  there  is  a  low  overall  investment 
gap.  However,  this  may  not  be  the  case  for  all 
firms,  especially  for  the  4%  of  companies  that 
consider themselves financially constrained. 

Graph A5.4: Composition of NFC funding as % of 
GDP 

(1) Reference period is end-2023. 
Source: Eurostat. 

The  highly  developed,  well-capitalised  and 
profitable  banking  sector  provides  a  stable 
source of funding to the economy. Overall, the 
banking  sector  appears  quite  solid,  with  good 
liquidity and capital positions, as well as improved 
operational  efficiency  and  profitability,  all  slightly 
above  EU  average  levels  (see  Table  A5.1).  With 
about  3%  of  bank  loans  to  NFCs  non-performing 
(3.4%  on  average  in  the  EU),  the  corporate  loan 
portfolio of Dutch banks appears of about average 
quality,  even  though  a  relatively  lower  portion  of 
these  non-performing  exposures  (26%  versus  an 
EU  average  of  43%)  are  covered  by  provisions. 
Altogether these elements suggest that businesses 
in the Netherlands are unlikely to face challenges 
in  accessing  stable  and  affordable  bank  loans  in 
the future. 

Credit  demand, which  contracted recently  as 
the  cost  of  borrowing  spiked,  has  been 
relatively moderate and has started to show 
signs of recovery since the easing of interest 

47 

050100150200250300350400NLEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
rates  resumed.  After  growing  by  4%  and  2.5% 
respectively  in  2021  and  2022,  credit  to  NFCs 
contracted  by  1%  in  2023.  Meanwhile,  in  these 
three  years  aggregate  credit  to  NFCs  in  the  euro 
area  expanded  by  3.5%, 6.1%  and  0.2%  in  2021, 
2022 and 2023 respectively. Since end-2023, the 
recovery  of  credit  growth  in  the  Netherlands 
(+1.1%)  has  been  somewhat  stronger  than  in  the 
euro  area  (+0.9%).  Overall,  as  of  October  2024, 
bank loans to NFCs reached 35.7% of GDP, slightly 
above  the  euro  area  average  of  34%.  Loans  to 
small  and  medium-sized  enterprises  (SMEs)  grew 
by 22% over the last five years, while loans to all 
other NFCs practically stagnated. However, despite 
reaching almost EUR 174 bn as of end-2024, their 
relative  share  in  total  NFC  loans  of  28.5% 
remained  much  behind  the  EU  average  of  40.2%. 
Lately,  companies  have  been  impacted  by  rising 
financing  costs.  Based  on  data  from  the  ECB, 
interest  rates  on  new  corporate  loans,  all  types 
and  maturities  combined,  peaked  at  5.25%  in 
October  2023,  up  from  1.32%  two  years  earlier. 
By  October  2024,  the  interest  rates  on  new 
corporate loans had moderated to 4.56%. 

Retail investment in capital markets 

investors. 

The highly developed  and deep stock market 
in the Netherlands offers multinationals and 
to  global 
companies  access 
domestic 
institutional 
Amsterdam 
The 
Euronext  offers  domestic  and  foreign  companies 
access to global capital markets, including due to a 
high-tech  trading  environment.  As  part  of  the 
Euronext family, it benefits from the deepest pool 
of  liquidity  in  Europe  and  participates  in  the 
largest pan-European equity market, while being a 
leading exchange for liquidity. Despite a significant 
decrease  in  the  number  of  initial  public  offerings 
(IPOs) in 2023, the Amsterdam Exchange index of 
the 25 largest and most actively traded companies 
grew  by  more  than  30%  between  end-2022  and 
mid-2024, before stagnating since then. 

in  pension 

Thanks  to  their  large  and  often  automatic 
investments 
funds,  Dutch 
households  have  a  rather  high  participation 
in  capital  markets  by  EU  standards,  which 
nevertheless  lags  behind  the  US.  As  of  end-
2023,  households’  aggregate  financial  assets 
equated  to  288%  of  GDP,  which  is  above  the  EU 
average  of  209%, but  significantly  behind  the  US 

average  of  437%.  Dutch households’  investments 
in  insurance  and  pension  funds,  relative  to  GDP, 
are  almost  three  times  larger  than  on  average  in 
the  EU.  However,  direct  holdings  of  bonds  and 
equity  are  significantly  lower,  both  in  nominal 
amounts per capita and relative to GDP (see Graph 
A5.5). As of end-2023, Dutch households held less 
than  20%  of  their  financial  wealth  in  cash  and 
bank  deposits,  as  opposed  to  32%  on  average  in 
the  EU.  However,  the  share  of  cash  and  deposits, 
which has been on the rise already since 2020, is 
expected  to  increase  further  because  of  a  2023 
tax  reform  that  discourages  savings  in  stocks. 
Moreover,  in  2023  households’  direct  holdings  of 
listed shares (1.9% of their total financial wealth), 
of  bonds  (0.2%)  and  of  investment  funds  (3.5%) 
fell  significantly  below  the  EU  averages  of, 
respectively, 4.8%, 2.7% and 10%. 

Graph A5.5: Composition of households’ financial 
assets per capita and as a % of GDP 

(1) Reference period is end-2023. 
Source: Eurostat. 

The role of domestic institutional 
investors 

Large  pension  funds,  which  dominate  the 
landscape  of  institutional  investors  in  the 
Netherlands,  contribute  significantly  to  the 
financing  of  the  economy.  With  total  assets 
equating almost 170% of GDP as of Q2 2024, the 
pension  funds  sector  in  the  Netherlands  accounts 
for about two thirds of pension funds in the EU. As 
assets are held mainly in investment funds (38%), 
debt  securities  (33%)  and  listed  equities  (18%), 
the  sector’s  contribution  to  the  financing  of  the 
economy is material. Despite challenges due to the 
to 
ongoing 

transition  from  defined  benefits 

48 

050100150200250300350050100150200NLEUNLEUper capita (000 EUR) (lhs)% of GDP GDP (rhs)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
  
defined contributions, delayed from 2023 to 2028 
because  of  widespread  opposition  in  society  and 
some  specific  liquidity  risks,  the  sector  has  been 
performing  well  since  2022.  Pension  funds  in  the 
Netherlands  raised  14%  of  the  funds  committed 
to  venture  capital  and  private  equity  between 
2007  and  2023,  which  is  slightly  below  the  EU 
average of 15%. 

Following  two  decades  of  consolidation,  the 
insurance  sector  remains  less  developed 
than the EU average. As of end-2023, the total 
assets of insurance companies in the Netherlands 
stood at 42% of GDP, lower than the EU average 
of  55%  and  below  their peak  from  2020  at  68% 
of  GDP.  Based  on  data  from  the  European 
Insurance  and  Occupational  Pensions  Authority 
(EIOPA)  on  insurance  companies’  asset  exposure, 
as  of  Q3  2024,  the  sector’s  aggregate  balance 
sheet  was  invested  primarily  in  investment  funds 
(23%),  and 
(32%),  mortgages  and 
government  bonds  (17%).  The  financing  of  the 
corporate  sector,  through  bonds  (12%)  or  equity 
(8%), was comparatively less significant. 

loans 

In  addition  to 
insurance  companies  and 
pension  funds,  asset  management  is  an 
important segment of the financial sector in 
the Netherlands. After increasing by 7% in 2023 
up to almost EUR 2 tn, assets under management 
reached 192% of GDP, which is more than double 
the  EU  average  of  95%.  As  of  end-2023,  the 
Netherlands was the legal domicile for investment 
funds  with  total  assets  of  EUR 826 bn,  while 
residents’ 
stood  at 
EUR 1 124 bn. 

investments 

funds 

in 

The depth of venture and growth 
capital 

capital 

private 

The  Netherlands  is  a  regional  leader  in 
venture 
equity 
and 
investments  in  the  EU.  The  average  annual 
value  of  private  equity  (PE)  and  venture  capital 
(VC) investments relative to nominal GDP went up 
to 1% and 0.12% respectively in the period 2021-
2023  from  0.7%  and  0.05%  in  2015-2020, 
remaining  persistently  higher  than  the  respective 
EU  averages  (0.6%  and  0.08%).  Over  the  past 
decade,  the  country  has  emerged  as  a  prominent 
regional  player 
the  start-up  ecosystem, 
showcasing  remarkable  growth  and  offering  a 

in 

favourable  environment  for  innovative  business 
projects.  It  has  become  home  to  33  ‘unicorns’ 
(‘unicorns’  are  unlisted  companies  valued  at 
EUR 1 bn  or  more)  and  more  than  6 500  funded 
start-ups,  which  ranks  it  within  the  top  15  global 
destinations  for  venture  and  growth  capital.  In 
2023,  VC  investments  totalled  about  EUR 1.9 bn, 
with  domestic 
(28%) 
investors in the lead. Energy (21%), fintech (20%), 
(12%)  and 
health 
transportation  (10%)  were  the  main  investment 
sectors. 

(13%),  company  software 

(47%)  and  European 

PE  and  VC  investments  have  a  material 
importance  for  the  Dutch  economy.  The  total 
investments  of  EUR 84 bn  for  2007-2023  have 
backed  companies  that  employ  8.1%  of  the 
workforce in the country. The depth of venture and 
growth  capital  in  the  Netherlands  is  supported  by 
favourable  business  environment  and  a 
a 
is  attractive  for 
trustworthy  ecosystem  that 
investors. 

Financing the green transition 

Both  NFCs  and  financial  institutions  have 
been  active 
the  green 
in  supporting 
transition.  Since  2022,  the  outstanding  volume 
of  bonds  with  sustainable  characteristics  has 
increased  by  50%  and  reached  EUR 255 bn  in 
October  2024.  Non-bank  financial  intermediaries 
(34%),  banks  (29%)  and  NFCs  (21%)  have  been 
the  main  issuers,  well  ahead  of  the  central 
government (8%). As regards domestic holdings of 
bonds  with  sustainable  characteristics, 
they 
increased by almost  60% between end-2022 and 
September  2024,  reaching  EUR 148 bn.  Pension 
funds  (60%),  banks  (20%)  and  investment  funds 
(10%) are the main investors. 

To  gain  insights  into  the  carbon  intensity  of 
the  financial  sector,  De  Nederlandsche  Bank 
has  developed  carbon  emission  indicators. 
These indicators, which can be used to assess the 
carbon  footprint  of  the  different  financial  sector 
segments,  show  that  when  the  impact  of  indirect 
investments 
investment  funds 
appear  to  be  relatively  more  geared  towards  less 
industries,  particularly  when 
carbon-intensive 
compared  to  insurance  corporations  and  pension 
funds. 

is  considered, 

49 

 
Netherlands  first  on  financial  knowledge.  It 
shows  that  43%  of  Dutch  citizens  have  a  high 
level  of  financial  knowledge  (26%  in  the  EU)  and 
18% have a low level  (24% in the EU). Moreover, 
only  8%  of  Dutch  respondents  (23%  in  the  EU) 
declare that  they  feel  some degree  of  discomfort 
using digital financial services. 

Financial literacy 

literacy 

to  foster 

The  very  high  level  of  financial  literacy  of 
the Dutch population contributes to the high 
share of capital market investments in their 
financial  wealth.  Dutch  society  recognises  that 
financial 
retail 
is  crucial 
investors’  participation  in  capital  markets  and  to 
familiarise  SMEs  with  alternatives 
to  bank 
financing.  The  Netherlands  has  had  a  national 
financial literacy strategy in place since 2008. The 
current  2024-2026  national  strategy  is  based  on 
the  EU/OECD  competence framework  and  aims to 
prepare people,  from  a  young  school  age,  to  take 
financially  sound  decisions.  De  Nederlandsche 
Bank is convinced that wiser financial  choices are 
beneficial  both  for  individuals  and  for  the  overall 
economy.  It  is  therefore  committed  to  promoting 
responsible  financial 
financial  education  and 
behaviour. It provides a wide range of ready-made 
tools  and  programmes  to  support  schoolteachers. 
Moreover,  as  a  founding  member  of  the  Money 
Wise  Platform,  it  also  cooperates  with  other 
financial  experts  and  educational  professionals, 
especially during National Money Week. 

As  a  result  of  these  educational  measures, 
the  2023  Eurobarometer  on  monitoring 
in  the  EU  ranks  the 
financial 

literacy 

Table A5.1:  Financial sector indicators 

(1) Annualised data. EU data for credit growth and pension funds refers to the EA average. 
Source: ECB, Eurostat, EIOPA, DG FISMA CMU Dashboard, AMECO. 

50 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)316.5294.9291.0311.2296.6288.9259.3254.3248.4Common Equity Tier 1 ratio16.817.016.917.917.816.516.716.816.6Total capital adequacy ratio22.122.422.923.222.721.221.221.520.1Overall NPL ratio (% of all loans)2.11.91.81.91.41.31.31.31.9NPL (% loans to NFC-Non financial corporations)4.84.34.34.83.33.23.03.23.5NPL (% loans to HH-Households)1.21.21.11.31.31.01.01.02.2NPL-Non performing loans coverage ratio29.826.025.927.230.726.826.125.842.1Return on Equity18.88.17.73.18.27.710.911.810.0Loans to NFCs (% of GDP)34.732.230.329.628.226.724.623.630.0Loans to HHs (% of GDP)73.971.268.170.465.460.156.654.944.5NFC credit annual % growth-0.8-0.8-1.80.94.02.5-1.01.50.8HH credit annual % growth0.10.10.2-0.91.21.71.02.50.7Stock market capitalisation (% of GDP)149.1122.0152.0151.8171.8120.8127.1125.769.3Initial public offerings (% of GDP)0.291.090.002.142.040.000.01-0.05Market funding ratio52.550.950.846.350.248.347.0-49.6Private equity (% of GDP)0.630.830.840.960.991.220.64-0.41Venture capital (% of GDP)0.050.050.060.090.140.100.10-0.05Financial literacy (composite)------53.0-45.5Bonds (as % of HH financial assets)0.30.30.20.20.20.20.2-2.7Listed shares (as % of HH financial assets)1.61.51.61.62.01.91.9-4.8Investment funds (as % of HH financial assets)3.73.33.33.03.63.43.5-10.0Insurance/pension funds (as % of HH financial assets)61.962.364.465.061.655.456.4-27.8Total assets of all insurers (% of GDP)64.860.362.868.159.344.742.040.454.8Pension funds assets (% of GDP)--209.9235.9222.1170.9168.7167.723.41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.Banking sectorNon-banks sector 
 
   
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

its  competitiveness.  While 

The  Netherlands’ 
institutional  framework 
the 
influences 
quality  of  policymaking  is  generally  high,  the 
country  has  identified  further  scope  to  simplify 
complex  regulations,  improve  delivery  of  public 
services, and reduce administrative burden for the 
businesses. The Netherlands has made progress in 
digital  public  services,  ranking  above  the  EU 
average  in  the  availability  of  public  services  for 
citizens and businesses, and has a high uptake of 
e-government  services.  Both  the  civil  service  and 
justice system continue to function well. 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

Quality of legislation and regulatory 
simplification 

Regulatory  practices  for  developing  and 
evaluating  legislation  are  above  the  EU 
average  and  have  improved  from  2021  to 
impact  assessments,  public 
2024.  Ex-ante 
consultations,  and  reviews  of  existing  regulations, 
show  similar  performance  for  primary  and 
subordinate  legislation.  Stakeholder  engagement 
and  ex-ante  assessments  are  stronger  than  ex-
post  evaluations,  though all  remain  above  the  EU 
average.  The  policymaking  is  supported  by  a  rich 
ecosystem  of  institutions  for  producing  high-
quality knowledge. The main area of improvement 
is  the  uptake  of  evidence  in  concrete  policy 
processes  (82).  There  is  also  room  to  enhance 
transparency  requirements  in  regulatory  impact 
assessments  across  primary  and  subordinate 
legislation (Graph A6.2). 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

(1) EU-27 from 2019; EU-28 before 
Source: Standard Eurobarometer surveys 

and 

Judicial 

average. 

Trust in public institutions remains above the 
subnational 
EU 
government’s  authorities  achieving  higher  scores 
than  the  central  government  (Graph  A6.1).  When 
asked about aspects that can increase trust in the 
Dutch  public  administration,  42%  of  citizens 
pointed to greater transparency in decision-making 
and  use  of  public  money  (EU:  44%)  and  37%  to 
more  communication  with  citizens  (EU:  31%)  (80). 
The perceived quality of government has remained 
broadly stable at values above the EU average (81).  

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

for 

The  Netherlands  also  has  mechanisms  in 
regulation  and 
place 
simplifying 
identifying  administrative  burdens 
(table 
A6.1).  The  policy  preparation  framework  was 
revised  in  2022/2023.  A  recent  evaluation  found 

(80)  Understanding  Europeans’  views  on  reform  needs  -  April 

2023 - - Eurobarometer survey, Country Fact Sheet. 

(81)  Inforegio - European Quality of Government Index 

(82)  JRC. Building capacity for evidence-informed policymaking in 
governance  and  public  administration  in  a  post-pandemic 
Europe 

51 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system NLRegional or local public authorities EU27Regional or local public authorities NLGovernment  EU27Government  NL0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsNL_StakeholderengagementNL_Regulatory ImpactAssessmentNL_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27 
 
      
 
   
 
 
 
Table A6.1:  The Netherlands. Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source: OECD (2025), Regulatory Policy Outlook 2025 (https://doi.org/10.1787/56b60e39-en) and Better Regulation across the 
European Union 2025 (forthcoming). 

that  the  framework  remains  underutilised  (83).  In 
addition, the 2024 State of implementation (Staat 
van de Uitvoering) report highlights the complexity 
of  laws  and  regulations,  and  inadequate  data 
exchange  between  public service  providers  as  key 
bottlenecks  to  futureproofing  of  public  services 
(84).  

regulation 
The  OECD  product  market 
indicator  shows 
the  Netherlands’ 
that 
licensing system is slightly more burdensome 
than  the  EU-27  average.  There  is  room  to 
further  align  it  with  best  practices.  For  example, 
the  government  does  not  keep  an  up-to-date 
inventory  of  all 
licences 
required/issued to businesses by public bodies (see 
also Annex 6). 

the  permits  and 

Social dialogue  

Social  dialogue  is  embedded  in  a  well-
institutionalised 
structured  and  strongly 

(83)  Rijksoverheid, 2024. 

(84)  Staat van de Uitvoering, 2024. 

framework.  Clear  procedures  and  structures  are 
in  place  for  consulting  social  partners  on  the 
implementation  of  national 
development  and 
reforms and important economic and social issues 
more  generally  (the  ‘Polder  model’),  for  instance 
through  the  Sociaal-economische  Raad  (SER),  a 
key  advisory  body  to  the  government.  There  is  a 
strong  tradition  of  both  bipartite  as  well  as 
tripartite  cooperation  between  the  government, 
employers,  and 
important 
economic  and  social  issues  (including  planned 
major  reforms)  with  a  view  to  finding  consensus 
(85). 

trade  unions  on 

Digital public services 

The Netherlands is generally performing well 
on the digitalisation of public services (Table 
A6.2).  On  both  availability  of  public  services  for 
citizens (85.9 out of 100) and for businesses (86.7 

(85)  For an analysis of the involvement of the Netherlands’ social 
partners at national level in the European Semester and the 
Recovery  and  Resilience  Facility,  see  Eurofound  (2025), 
National-level  social  governance  of  the  European  Semester 
and the Recovery and Resilience Facility. 

52 

Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
 
 
 
   
 
 
Table A6.2:  Digital Decade targets monitored through the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

out  of  100),  it  ranks  above  the  EU  average 
(respectively 79.4 and 85.4).  

Digital  Gateway,  and  is  ready  to  roll  out  services 
for citizens and business (88). 

The  Netherlands  can  still 
improve  on 
ensuring  citizens’  online  access  to  e-health 
records.  The  country  had  an  overall  e-health 
maturity score of 72.5 in 2023. This compares to a 
maturity  score  of  79.1  in  the  EU,  which  shows 
scope  for  improvement  especially  since  78.8%  of 
Dutch citizens sought health information online in 
2023,  well  above the  EU average  of  56%(86).  The 
Netherlands  could  improve  its  e-health  maturity 
score by making more health data types available 
to  people  through  the  online  access  service  and 
increasing  the  supply  of  health  data  by  including 
more categories of healthcare providers.  

The use of e-government services by internet 
users  is  also  very  high  (95.5%,  EU:  75%).  In 
recent years, eID has attracted a lot of attention in 
its  potential  to 
the  country,  particularly  for 
facilitate  business  operations,  but  also  for  tax, 
pension and education purposes. Data shows that 
about  95%  of  Dutch  citizens  used  their  eID  to 
access public services in 2023(87).  

The Netherlands is now closer to being ready 
for  the  seamless,  automated  exchange  of 
authentic documents and data across the EU. 
It  has  completed  its  first  transactions  using  the 
Once-Only Technical System, part of the EU Single 

Graph A6.3: Participation rate of 25-64 year olds 
in adult learning (%) by occupation 

Source: European Commission, based on the Labour Force 
Survey. 

Civil service 

The  civil  service  functions  well  but  could  be 
affected  by  planned  reductions.  The  ratio  of 
staff aged 25-49 to staff aged 50-64 has lowered 
slightly, 
indicating  a  relative  ageing  of  the 
workforce. The ratio is close to the EU average but 
is  significantly  lower  than  that  for  the  whole 
workforce.  The  government’s  coalition  agreement 

(86)  European Commission. Digital Decade 2024: Country reports 

(87)  Ibid. 

(88)  European Commission, Once-Only Technical System 

Acceleratormeter 

53 

0510152025303540NLEU-27NLEU-27NLEU-27NLEU-272021202220232024Public administration and defence; compulsory social securityHigh-skilled occupationsMedium-skilled occupationsUnskilled occupationsArmed forcesTotal economyDigital Decadetarget by 20302022202320242024EU-27Digitalisation of public services185858679100Score (0 to 100)20212022202320232030288898785100Score (0 to 100)202120222023202320303na697279100Score (0 to 100)20212022202320232030Digital public services for businessesAccess to e-health recordsNetherlandsEU-27Digital public services for citizens 
 
   
 
 
 
  
 
includes  a  22%  reduction  in  the  number  of  civil 
servants  at  central  level  and  a  reform  of  the 
senior  civil  service,  both  of  which  could  influence 
future  staff  ratios.  The  planned  reduction  in  the 
number of civil servants follows a significant 33% 
in  the  central  government  sector 
expansion 
between  2015  and  2023  (89).  Since  2021,  more 
than a third of staff have taken in adult learning, 
significantly  higher  than  the  EU  average  (Graph 
A6.3). Gender parity is steadily improving (90), and 
parity  has  almost  been  achieved  at  senior  level, 
with nearly 47% of women in senior management 
positions (91). 

Integrity 

or a public procurement contract in practice in the 
last three years (96).  

A  National  Risk  Assessment  on  Corruption, 
which  commenced  in  April  2024,  has  been 
identify  the 
commissioned  and  aims  to 
largest corruption threats, as well  as potential 
resilience  against  corruption  in  the  public  and 
private  sectors  at  a  local,  provincial  and  national 
level.  In  recent  years,  the  healthcare  sector  has 
also  proven  to  be  another  high-risk  area  for 
corruption,  including  through  a  corruption  case  at 
the  country’s  largest  cardiology  department,  and 
the  Fiscal  Intelligence  and  Investigation  Service 
with  its  Anti-Corruption-Centre  and  prosecution 
have increased their efforts in this regard (97). 

implemented. 

Business  perception  on  corruption  is  below 
the  EU  average  and  new  anti-corruption 
priorities  are  being 
In  the 
Netherlands,  53%  of  companies  consider  that 
corruption  is  widespread  (EU  average  64%)  and 
only  13%  consider  that  corruption  is  a  problem 
when  doing  business  (EU  average  36%)  (92). 
Moreover,  45%  of  companies  believe  that  people 
and businesses caught for bribing a senior official 
are appropriately punished (EU  average 31%)  (93). 
The  investigation  and  prosecution  of  corruption-
related  offences  continue  to  function  properly, 
including  in  high-level  cases,  but  the  OECD  has 
effective 
concerns 
raised 
(94). 
enforcement  of 
Preventing infiltration of organised crime groups in 
the civil service and police through corruption is a 
strategic  priority,  including  through  a  specific 
government 
subversive 
organised  crime  (95).  Furthermore,  only  16%  of 
companies (EU average 27%) think that corruption 
has prevented them from winning a public tender 

foreign  bribery  cases 

programme 

regarding 

against 

the 

It 

for 

remains 

register 

transparency 

A 
lobbying 
Members  of  Parliament  is  in  place,  but  it  is 
basic  and  there  is  no  register  for  contacts 
(ministers  and  state 
with  government 
secretaries). 
individual 
responsibility of each minister and state secretary 
to  disclose  their  agendas  and  their  legislative 
footprints, which can challenge the equal access to 
high-level officials for companies. The government 
has  commissioned  additional  research  to  further 
evaluate  the  effects  of  the  measures  in  place  in 
the lobbying field (98). 

the 

Justice 

the 

justice  system 
The  efficiency  of 
continues to be high. The disposition time in civil 
and commercial cases in first instance courts was 
82 days in 2022 (no data available for 2023). The 
estimated time  to  resolve  administrative  cases  at 
first  instance  courts  rose  (267  days  in  2023,  up 
from 257 in 2022).  The level of digitalisation has 
judicial 
As 
further 

improved. 

regards 

(89)  Rijksoverheid, 2024 

(90)  Ibid. 

(91)  European Institute for Gender Equality, 2024. 

(92)  Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024). 

(96)  the 2024 country-specific chapter for the Netherlands of the 

(93)  Ibid. 

(94)  See the 2024 country-specific chapter for the Netherlands of 

Rule of Law Report. 

(97)  Ibid., pp. 20-21. 

the Rule of Law Report, pp. 14-15. 

(98)  See the 2024 country-specific chapter for the Netherlands of 

(95)  Ibid., pp. 12-13. 

the Rule of Law Report, p. 18. 

54 

 
 
 
independence, no systemic deficiencies have been 
reported (99). 

(99)  For more detailed analysis of the performance of the justice 
system  in  the  Netherlands,  see  the  upcoming  2025  EU 
Justice Scoreboard and 2024 Rule of Law Report. 

55 

 
 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

The Netherlands faces significant challenges 
regarding  its  clean  industry  transition  and 
climate  mitigation.  While  the  manufacturing 
sector  has  made  strides  in  reducing  greenhouse 
gas emissions intensity, decarbonisation remains a 
challenge and requires enhanced policy measures, 
especially on energy affordability, and investments 
in  clean  technologies.  The  country’s  strategic 
dependency on critical raw materials is among the 
highest in the EU.  This annex reviews the areas in 
need of urgent attention in the Netherlands’ clean 
industry  transition  and  climate  mitigation,  looking 
at different dimensions. 

Strategic autonomy and technology 
for the green transition  

Net zero industry 

has 

The  Netherlands’s  manufacturing  capacity, 
although  modest  relative  to  other  Member 
States,  is  diversified  across  all  net-zero 
technologies(100) 
important 
and 
development  potential.  The  Netherlands’  net-
zero  manufacturing  capacity  amounts  to between 
350  and  550  MW/y  (2-3%  of  EU  capacity)  for 
solar PV; between 300 and 350 MW/y (a negligible 
share  of  total  EU  capacity)  for  wind turbines;  and 
between  300  and  500  MWh/y  (a  negligible  share 
of  total  EU  capacity)  for  battery  and  storage 
technologies.  

Additionally,  there  are  at  least  eight  production 
facilities  for  heat  pumps.  As  a  lead  innovator  in 
to  significant  pools  of 
the  EU  and  home 
capital(101),  the  Dutch  economy  has  the  potential 
to further develop net-zero manufacturing.  

The  policy  framework  supporting  the  scale-
up of net-zero manufacturing is progressing, 
but  remains  fragmented,  focused  on  a 
sectoral approach. The SolarNL initiative aims at 
building several plants and producing high-quality, 

(100) European Commission: Directorate-General for Energy, The 
net-zero manufacturing industry landscape across the 
Member States 2025, 
https://data.europa.eu/doi/10.2833/2181110   

(101) See European Innovation Scoreboard 2024. 

56 

easily  recyclable  solar  panels.  Two  action  plans 
dedicated  to  batteries  and  heat  pumps  could 
support the build-up of manufacturing capacity for 
net-zero technologies in the country. However, the 
Netherlands  would  benefit  from  the  introduction 
of  non-price  criteria  in  auctions  for  net  zero 
technologies and streamlined industrial permitting 
processes.  

A vast array of investment support schemes 
is in place to promote net-zero technologies. 
In July  2024, the European Commission approved 
a state aid scheme of up to EUR 750 million under 
the  Temporary  Crisis  and  Transition  Framework. 
This  will  also  allow  investment  in  building  up 
production  capacities  for  batteries,  solar  and 
electrolyser technologies.  

in  7 

is  participating 

IPCEI 
The  Netherlands 
initiatives  at  EU  level.  The  largest  amounts  of 
to  hydrogen  and 
resources  are  committed 
microelectronics. 
national 
Additionally, 
promotional  bank  (InvestNL)  and  the  National 
Growth  Fund  provide 
investment  and  grants 
supporting  an  innovative  and  resilient  solar  and 
batteries value chain. 

the 

Critical raw materials  

strategic  dependency  on 

Dutch  manufacturing  heavily  depends  on 
imports  of  critical  raw  materials  needed  for 
the  green  and  digital  transitions.  The 
Netherlands’ 
raw 
materials in 2023 is one of the highest in the EU, 
suggesting  limited  diversification in  its  sources  of 
supply2.  A  Task  Force  on  Strategic  Dependencies 
has  been  set  up  and  is  working  to  identify  and 
address 
dependencies, 
including in raw materials.  

high-risk, 

strategic 

In 2023, the value of imported unprocessed critical 
raw  materials  amounted  to  EUR  17  billion  (7.4 
billion  without  transit).  Aluminium,  nickel,  coking 
coal  and copper dominate (EUR 14 billion or 87% 
of  the  total).  China  is  only  the  ninth-largest 
supplier  of  critical 
the 
Netherlands.  In  2022,  the  country  was  the  EU’s 
largest  importer  of  critical  raw  materials  from 
non-EU sources.3 

raw  materials 

to 

 
 
 
 
 
 
The  recycling  rate for  e-waste, a  key  source 
of  critical  raw  materials,  stood  at  72.6%  in 
2022, which is below the EU average of 81%. The 
reuse and recycling rate for end-of-life vehicles is 
well  above  the  EU  average  (87.2%  vs.  89%  in 
2022). This points to the need to avoid the loss of 
critical  raw  materials,  especially  as  the  car 
industry shifts to battery-electric vehicles. 

Climate mitigation 

Industry decarbonisation 

The manufacturing sector in the Netherlands 
has progressed with reducing greenhouse gas 
emissions,  but  challenges  remain.  About  a 
quarter  of  the  greenhouse  gas  emissions  in  the 
Netherlands  come  from  manufacturing (102).  In 
2022,  the  sector  emitted  320  g  CO2eq  of 
greenhouse  gases  per  euro  of  gross  value  added 
(GVA),  about  18%  more  than  the  EU  average 
(270 g).  Since  2017,  the  greenhouse  emissions 
intensity  of  manufacturing  has  declined  by  29%, 
more  than  in  the  EU  overall  (20%).  Among  the 
Netherlands’  emissions 
from  manufacturing 
activity,  57%  are  related  to  energy  and  the 
remainder  comes  from  industrial  processes  and 
product  use  –  the  same  shares  as  in  the  EU 
overall.  

gas 

greenhouse 

The 
of 
manufacturing  in  the  Netherlands  has  been 
improving,  as  regards  both  energy-related 
emissions (103). 
and 

non-energy-related 

intensity 

(102) In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat. 

(103) For the GHG emissions intensity of GVA related to energy use 
and  industrial  processes  and  product  use  respectively,  GHG 
emissions  are  from  inventory  data  in  line  with  the  UNFCCC 
Common  Reporting  Format  (CRF),  notably  referring  to  the 
source sectors CRF1.A.2 –  fuel combustion in manufacturing 
industries  and  construction  and  CRF2  –  industrial  processes 
and  product  use.  The  CRF1.A.2  data  broadly  correspond  to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator  for  both  intensities)  are  aligned  with  this 

57 

of 

intensity 

emissions 

Between  2017  and  2022,  the  energy-related 
its 
greenhouse 
manufacturing  industry  declined  by  30%,  nearly 
twice  as  much  as  in  the  EU  overall  (16%).  In  the 
same  period, 
the  share  of  electricity  and 
renewables  in  the  final  energy  consumption  of 
manufacturing remained broadly stable at around 
25%,  the  lowest  share  in  the  EU.  The  energy 
intensity  of  manufacturing  in  the  Netherlands 
decreased  by  about  27%  between  2017  and 
2022,  from  1.8  GWh  per  euro  of  gross  value 
added 
industrial 
processes and product use, the emissions intensity 
from  these  sources  of  Dutch  manufacturing 
declined  by  34%,  significantly  more  than  the  EU 
overall 
the  process  and 
product-related  emissions  intensity  just  below  EU 
average levels, at 97 g CO2eq per euro of GVA. 

to  1.3  GWh/€.  Concerning 

(23%),  bringing 

Graph A7.1: GHG emission intensity of 
manufacturing and energy intensive sectors, 
2022 

Source: Eurostat. 

Energy-intensive 

Energy-intensive  industries  in  the  Nether-
lands  are  facing  increasing  competitiveness 
industries (104) 
pressure. 
the  Netherlands 
accounted 
for  15% 
manufacturing  gross  value  added 
in  2022. 
Although electricity prices for industry have eased 
since 2023, they have seen very large increases in 
recent  years  and  remain  high  compared  to 

of 

sectoral  coverage.  Therefore,  they  are  not  fully  consistent 
with the data referred to in other part of this section. 

(104) Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

00.511.522.533.54C-C19C17C20C23C24KG CO2eq / €NetherlandsEU-27 
 
 
  
 
internationally (105). 
neighbouring  countries  and 
Energy  costs  are  the  top  concern  for  companies 
(106).  This,  along  with  broader  global  competition, 
puts  pressure  on  industrial  production  in  the 
Netherlands.  The  country  saw  a  decline 
in 
manufacturing  output  of  approximately  7%  by 
October 2024, compared to its peak in June 2023; 
the  GDP  share  of  energy-intensive  industries 
dropped significantly in particular (107). 

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

Source: Eurostat, 2024, sts_inpr_a. 

The Netherlands has implemented a range of 
policies  to  drive  the  decarbonisation  of  its 
industrial  sector,  but  additional  efforts  are 
still  needed.  Key  measures  (108)  include  the 
introduction  of  carbon  pricing  mechanisms,  such 
as  the  CO2  levy  for  industry,  which  complements 
the EU ETS by setting a minimum carbon price for 
large  industrial  emitters.  The  country  has  also 
introduced  novel  tailor-made  agreements  with 
company-specific 
facilitate 
industry 
decarbonisation pathways, although they have run 
into delays  (109). These policies are complemented 
with  public  funding  for  innovation  and  clean 
the 
energy  projects  through  programs  such 

to 

(105) Electricity 2024 - Analysis and forecast to 2026 
(106) For a detailed analysis of energy prices, see Annex 8 on the 

affordable energy transition. 

(107) See Manufacturing output down by 2.5 percent in October | 

CBS 

(108) For an overview of industry decarbonisation policies, see 

Nationaal Programma Verduurzaming Industrie | Nationaal 
Programma Verduurzaming Industrie. 

Sustainable  Energy  Transition  Incentive  Scheme 
(SDE++). The Netherlands is also promoting public-
private  partnerships  to  drive 
innovation  and 
scaling of low-carbon technologies, exemplified for 
instance  by  the  Port  of  Rotterdam’s  hydrogen 
initiatives  and  CCS  projects  like  Porthos.  These 
efforts  are  underpinned  by  strategic  clean  energy 
infrastructure 
these 
initiatives, the Netherlands is off track in industrial 
sector  emissions,  with  projected  greenhouse 
emissions  of  38.5 Mt CO₂eq  compared  to  the 
national  sectoral 2030 emissions reduction target 
of  29.1 Mt CO2eq (110),  indicating  that  additional 
efforts are needed. 

investments. 

Despite 

Reduction  of  emissions  in  the  effort  sharing 
sectors 

The  Netherlands  is  projecting  a  gap  to  its  -
48% 2030 effort sharing target based on the 
data  provided  in  its  final  updated  national 
energy  and  climate  plan  (NECP).  However,  it 
its  2030  ESR  obligations  by 
can  meet 
accumulating  unused  emission  allocations 
in 
2021-2029.  A  new  Dutch  government  was  sworn 
in on 2 July  2024, shortly after the final  updated 
NECP  was  submitted  to  the  Commission.  While 
most of the policies and measures outlined in the 
final updated Dutch NECP remain relevant, several 
have  been  adjusted  to  align  with  the  new 
administration’s  plans.  KEV  2024 (111)  confirms 
that,  also  with  these  adjustments,  the  country 
remains  on  track  to  stay  within  its  cumulative 
2021-2030 ESR emissions cap.  

(110) See: Klimaat- en Energieverkenning 2024 | Planbureau voor 

de Leefomgeving. 

(109) Klimaat- en Energieverkenning 2024. 

(111) PBL, Klimaat- en Energieverkenning 2024, 24 October 2024. 

58 

7075808590951001051102017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of other non-metallic mineral productsManufacture of basic metals 
      
 
 
Graph A7.3: Greenhouse gas emissions in the 
effort sharing sectors, 2005 and 2023 

around EUR 8.4 billion per year in the Netherlands, 
with  a  further  EUR  1.6  billion  provided  for  waste 
management  that  does  not  come  under  the 
circular  economy.  Around  0.3%  of  this  combined 
financing for circularity and waste comes from the 
EU  budget,  with  no  further  contribution  from  the 
Recovery  and  Resilience  Facility.  EIB 
loans 
identified  in  support  of  circularity  and  waste 
represent 0.2% of the total. This leave’s the lion’s 
share to be covered by national sources (99.5% of 
the  total  financing).  The  Netherlands  is  estimated 
to  need  total  additional  investment  of  EUR  1.5 
billion per year for its circular economy transition, 
including waste management, representing 0.16% 
of its GDP (114). 

Source: European Environment Agency 

Zero pollution industry 

Sustainable industry 

Circular economy transition 

is  one  of 

The  Netherlands 
the  best 
performers  in  the  EU  regarding  circular 
economy  and  waste  recycling.  In  2023,  the 
circular  use  of  materials  in  the  Netherlands 
(30.6%)  is  the  highest  in  Europe  (EU  average  of 
11.8%.)  In  addition,  the  Netherlands  generated 
EUR  5.46  per  kg  of  material  consumed  in  2023, 
putting it well above the EU’s average for resource 
productivity  of  EUR  2.23  per  kg.  In  2024  a  new 
infringement case was opened by the Commission 
against the Netherlands for not meeting, by 2021, 
the agreed collection rate for waste electronic and 
electric 
The 
Netherlands  has  put 
in  place  a  National 
Programme for Circular Economy 2023-2030 (112), 
following  up  on  the  broader  2016  Programme  on 
a  Fully  Circular  Economy  by  2050 (113),  under 
which  the  country’s  objective  was  to  achieve  a 
50% reduction in the use of primary raw materials 
by 2030.  

(INFR(2024)2121). 

equipment 

investment 

Current 
circularity 
transition  have  been  insufficient.  Circular 
economy investment  across  the  economy  reaches 

the 

in 

Air  quality  in  the  Netherlands  is  generally 
good,  with  some  exceptions.  Emissions  of 
several  air  pollutants  have  fallen  significantly  in 
the Netherlands since 2005, while GDP growth has 
continued.  According  to  the  inventories  submitted 
under  Article  10(2)  of  the  National  Emission 
reduction  Commitments  (NEC)  Directive  in  2024, 
the  Netherlands  meets  its  emissions  reduction 
commitments for 2020-2029 for the air pollutants 
NOx,  non-methane  volatile  organic  compounds 
(NMVOC),  sulphur  dioxide  (SO2),  ammonia  (NH3) 
and  PM2.5.  According  to  the  latest  projections 
submitted  under  that  Article,  the  Netherlands 
projects 
reduction 
commitments for 2030 onwards for NOx, NMVOC, 
SO2, NH3 and PM2.5. The Netherlands submitted its 
updated  national  air  pollution  control  programme 
(NAPCP) to the Commission on 5 December 2023.  

its  emissions 

to  meet 

Dutch  industry  continues  to  release  large 
amounts  of  air  and  water  pollutants.  Around 
4 400 industrial installations are required to have 
a  permit  based  on  the 
Industrial  Emissions 
Directive  (IED),  with  most  of  them  falling  in  the 
intensive  rearing  of  poultry  and  pig  sector  (61%), 
followed by the waste-management sector (21%). 
The  Netherlands  has  relatively  high  damage 
caused by air pollution estimated at EUR 2.3 billion 
for  2021  (the  8th  highest  in  the  EU).  In  terms  of 
emission intensity it has the 10th highest value of 
EUR 21.7 of damage per thousand EUR GVA and is 
above  the  EU  average  of  27.5  EUR/thousand  EUR 

(112) Ministry of Infrastructure and Water Management, 2023, 
National Circular Economy Programme 2023-2030, Link. 

(113) Ministry of Infrastructure and Water Management, 2016, 
National Agreement on the Circular Economy, Link. 

(114) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

59 

01020304050607020052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
      
 
 
GVA  in  emissions  intensity.  The  main  contributors 
to emissions to air are the intensive rearing sector 
(including  poultry  and  pigs), 
the  electricity 
production  sector  and  the  metal  sector  and 
chemicals production. 

The costs of pollution remain far higher than 
the  investment  in  pollution  prevention  and 
control. The latest available annual estimates for 
the  Netherlands  by  the  European  Environment 
Agency (115)  attribute  5 300  deaths  a  year  (or 
53 100 years of life lost (YLL)) to fine particulate 
matter  (PM2.5) (116)  in  2022;  1 900  attributable 
deaths a year (or 19 300 YLL) to nitrogen dioxide 
(NO2) (117),  and  1 800  attributable  deaths  a  year 
(or  18 600  YLL)  to  ozone (118).    To  meet  its 
environmental  objectives  on  pollution  prevention 
and control (zero pollution), the Netherlands needs 
to  provide  an  additional  EUR  2.3  billion  per  year 
(0.25%  of  GDP),  mostly  related  to  clean  air  and 
noise (119).  The  adequate  implementation  of  the 
final  updated  national  climate  and  energy  plan 
(NECP)  with 
for 
sustainable  energy  and  transport  would  largely 
deliver this. 

investment 

included 

the 

(115) EEA, 2024, Harm to human health from air pollution in 

Europe: burden of disease status, 2024, Link. 

(116) Particulate matter (PM) is a mixture of aerosol particles (solid 
and liquid) covering a wide range of sizes and chemical 
compositions. PM2.5 refers to particles with a diameter of 2.5 
micrometres or less. PM is emitted from many human 
sources, including combustion. 

(117) Nitrogen dioxide (NO2) refers to a group of gases called NOx, 

which also comprises nitrogen monoxide (NO). NOx is 
emitted during fuel combustion e.g. from industrial facilities 
and the road transport sector. 

(118) Low-level  ozone  is  produced  by  photochemical  action  on 
pollution. This year, for the first time, the impact of long-term 
exposure  to  ozone  has  also  been  considered.  In  previous 
analysis  by  the  European  Environment  Agency,  only  the 
impact of short-term exposure was estimated. 

(119) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

60 

 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Netherlands 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

61 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW350-550 (m)- Electrolyzer, MW-- Wind (b: blade, t: turbine, n: nacelle), MW300-350 (n)- battery, MWh300-500Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %487489493497502501498539561New zero-emission vehicles, electricity motor, %1.925.4113.8220.5019.7523.4730.831.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %80.480.681.082.582.982.724.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.450.430.410.420.380.320.30.340.27Share of energy-related emissions in industrial GHG emissions45.244.445.944.444.643.442.944.842.5Energy-related GHG emissions intensity of manufacturing182.9165.5159.8161.3150.9128.9-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption23.924.924.924.824.525.625.343.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€1.831.731.661.701.521.341.281.291.09Share of energy-intensive industries in manufacturing production15.27.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.350.320.270.240.320.270.21-0.730.68- chemicals and chemical products (NACE C20)2.162.062.222.482.121.912.23-1.251.26- other non-metallic mineral products (NACE C23)0.870.810.660.630.620.530.56-2.532.24- basic metals (NACE C24)4.093.793.893.713.403.483.42-2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -27.5-33.8-34.4- domestic road transport-14.4-15.6-28.3-27.7-28.2-25.21.45.2- buildings-11.3-14.0-18.4-11.5-29.9-34.421.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %128.192.984.884.1-48.0-10-9.3Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person9.09.39.38.78.56.014.715.0Circular material use rate, %25.8      25.6      27.1      28.5      27.2      30.6      11.611.1Resource productivity, €/kg4.1        4.4        4.8        5.5        5.6        7.1        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants461      374      282      332      458      -702571Air pollution damage cost intensity, per thousand € of GVA    21.7          27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.8   0.9NetherlandsEU-27NetherlandsEU-27NetherlandsEU-27 
 
  
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the  final  updates  to  the  national  energy  and 
climate plans (NECPs) for 2030. 

The  Netherlands  has  made  good  progress  in 
its  energy  transition.  In  particular,  the  country 
has  advanced  in  renewable  energy  deployment, 
above all in offshore wind (although the renewable 
energy share is still below the EU target). Progress 
towards  reaching  the  2030  EU  targets  for  energy 
efficiency  has  slowed  down.  Grid  congestion 
remains a major issue.  

Energy prices and costs 

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

In  contrast 

Netherlands’s  retail  electricity  prices  for 
households  have  significantly  decreased  in 
to  2023,  where  Dutch 
2024. 
consumers  paid  more  than  the  EU  average,  in 
2024  they  have  observed  lower  than  EU  average 
prices.  Network  costs  cover  42.5%  of  total  retail 
electricity  prices  for  households,  compared  to 
27.2% as the EU average. At the same time, while 
on  average  in the  EU  a  quarter  of  total  costs  are 
constituted  by  taxes,  public  fiscal  intervention 
reduces  total  cost  by  12.2%  in  the  Netherlands.  

62 

Retail  gas  prices  for  households  have  also 
significantly  declined  but  are  still  the  second 
highest in the EU. Taxes represent a high share of 
gas  prices,  53.7%  of  total  costs  vs  27.8%  EU 
average.  

Retail energy prices for industrial consumers 
have  decreased  but  remain  above  the  EU 
average.  Taxes  constitute  20.5%  of  electricity 
cost  for  non-household  consumers,  vs  15.4%  in 
the EU as an avg.  

in 

its 

electricity  mix, 

Thanks  to  a  large  share  of  renewables 
(50.8%) 
the 
Netherlands  had  the  EU’s  eighth-lowest 
wholesale  electricity  prices,  averaging  77.2 
EUR/MWh  in  2024(120)  (EU  average  of  84.7 
EUR/MWh).  Along  with 
the  broader  Central 
Western  European  (CWE)  region,  the  Netherlands 
experienced  price  spikes  in  the  winter  months  of 
early 2024 which occurred amid demand increases 
due  to  a  cold  winter  (+6.7%  and  +10.0%  in  Jan. 
and Feb. vs the same period in 2023, respectively). 
Prices  picked  up  again  in  the  second  half  of  the 
year  amid  rising  natural  gas  costs  and  surged  in 
winter  as  the  Netherlands  ramped  up  costly 
natural  gas-fired  generation  and  coal-fired 
generation (+62.4% and +39.1% in Nov. and Dec. 
vs  same  period  in  2023,  respectively)  due  to  the 
Dunkelflaute experienced in the region (121). 

(120) Fraunhofer (ENTSO-E data) 

(121) 
Yearly  electricity  data,  Ember 
generation data throughout the paragraph) 

(consumption  and 

 
 
 
 
 
 
by  reinforcing  the  electricity  grid  to  be  compliant 
with  the  70%  target  by  the  end  of  2025.  In 
addition,  the  Dutch  transmission  system  operator 
TenneT  has  requested  and  been  granted  a 
derogation  from  the  70%  target,  on  the  grounds 
loop  flows  from  neighbouring 
of  excessive 
Member  States,  most  notably  Germany.  A 
derogation  enables  a  lower  level  of  trades  for  a 
time-limited  period  if  needed  for  operational 
security  reasons.  Reducing  the  level  of  loop  flows 
in  a  structural  manner  is  necessary  for  efficient 
and  improved  cross-zonal  trading  in  the  Core 
region. 

The  Netherlands  faces  a  major  challenge  at 
both  transmission  and  distribution  network 
level.  Due  to  constraints  and  increasing  demand, 
many  consumers,  including  industrial  consumers 
and  housing  estates,  cannot  be  connected  to  the 
grid. Steps are being taken to reinforce the system 
via  a  major  budget,  but  improvements  will  take 
time.  TenneT,  the  transmission  network  operator, 
plans to invest EUR 38 billion from 2024 to 2034. 
The  national  grid  operator  expects  to  carry  out 
around 700 major infrastructure projects including 
grid  extensions,  replacement  investments,  new 
customer  connections,  offshore  wind  farms  and 
reconstruction projects.  

the 

capacity, 

Due  to  the  existence  of  a  high  level  of 
interconnection 
Dutch 
linked  to 
electricity  market 
is  strongly 
markets 
in  neighbouring  countries.  The 
interconnection  capacity  stood  at  over  15%  in 
2021  but  is  set  to  fall  to  7.12%  by  2025  due  to 
increasing  renewables.  Enhancing  trading  over 
existing  cross-border  infrastructures  remains  a 
challenge. It would therefore be beneficial to work 
with  the  neighbouring  countries  to  maximize 
cross-zonal  electricity  trading  over  existing  cross-
border 
infrastructures  and  develop  flexibility 
solutions  to  contribute  facing  grid  connection 
issues. 

The Energy Act has been reformed to update, 
modernise  and 
integrate  the  regulatory 
framework  for  gas  and  electricity  energy 
systems.  The  energy  market  reform  package 
includes  measures  that  aim  to  reduce  congestion 
on  the  electricity  grid.  In  2023,  62 GWh  of 
total 
renewables  were  curtailed 

(0.3%  of 

Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) CWE gives average prices in the central-western European 
market (Belgium, France, Germany, Luxembourg, the 
Netherlands and Austria). 
Source: S&P Platts and ENTSO-E 

Flexibility and electricity grids 

Whilst  the  Netherlands  has  ensured  that 
70%  of  transmission  capacity  is  offered  for 
cross-zonal  trade  at  the  high-voltage  direct 
current  (HVDC)  bidding  zone  borders  with 
Denmark and Norway, this is not the case for 
cross-zonal  trade  within  the  Core  capacity 
calculation  region  (CCR).  The  Netherlands  is 
part  of  the Core(122)  and  the  Hansa(123)  CCRs.  The 
requirement  to  make  a  minimum  of  70%  of 
capacities available for cross-border trade has not 
yet  been  implemented  in  most  Core  Member 
States,  including  the  Netherlands.  In  December 
2019,  the  Ministry  of  Economic  Affairs  and 
Climate  Policy  of  the  Netherlands  adopted  an 
action plan establishing a linear trajectory for the 
minimum  capacity  available  for  cross-zonal  trade 

(122) Core is the CCR which covers central European countries 

namely Austria, Belgium Czechia, Germany, France, Croatia, 
Hungary, the Netherlands, Poland, Romania, Slovenia, 
Slovakia and, once connected, Ireland. A CCR is a group of 
countries which calculate cross-border electricity trade flows 
together. 

(123) Norway, Sweden, Denmark, the Netherlands, Germany and 

Poland are part of the Hansa CCR. 

63 

 
 
 
renewable  energy  production)  (124),  while  day-
ahead negative prices occurred 315 times (125). 

The Netherlands’ reported electricity storage 
capacity  is  around  600 MWh.  The  country  is 
expecting  more  capacity  to  be  installed  in  the 
coming  years  due  to  the  increasingly  congested 
electricity  grid  networks.  This  capacity  will  be 
large-scale  renewable  electricity 
derived  from 
generation.  As  a  result,  national  transmission 
system  operators  and  distribution 
system 
operators  have  recognised  the  need  to  create  a 
flexible  electricity  system  and  have 
more 
announced  the  goal  to  have  at  least  10 GW  of 
battery storage by 2030. 

The  Netherlands  identifies  in  its  NECP  the 
development  of  non-fossil  flexibility  as  a 
priority and is working to implement the new 
flexibility  provisions  of  the  EU  electricity 
market design package. One of the advantages 
for  the  Netherlands  is  the  fact  that  more  than 
80%  of  connection  points  in  the  country  already 
have a remotely readable measuring device (smart 
meter). 

The regulatory framework already allows the 
use  of  flexibility  in  the  electricity  system  in 
several  ways,  for  example  through  congestion 
management,  aggregation  and  demand  response 
services.  This  flexibility  also  extends  to  supply 
contracts  with  flexible  tariffs  and  the  option  to 
have multiple suppliers on a single connection. The 
country  has  opened  its  balancing  services  to  all 
types  of  new  actors  and  distributed  energy 
the  Netherlands  allows 
resources. 
electricity  storage  systems  to  participate  in  both 
the day-ahead and intraday markets. 

Finally, 

response 

The  Netherlands  is  on  track  to  facilitate 
and 
demand-side 
consumer 
empowerment.  However, 
some  barriers 
remain.  Currently  the  roll-out  of  smart  meters is 
above 80%. This has facilitated the introduction of 
dynamic contracts, which have increased to 4% of 
total  contracts.  This,  together  with  a  29%  rate  of 
prosumers,  creates  many  options  for  demand 
response. One of the barriers that can be tackled is 
the  proliferation  of  the  net  metering  scheme. 
Regarding  energy  communities,  this  number  has 

(124) ACER. 
(125) ENTSO-E. 

grown to 698 communities. Current new legislation 
entailing  a  definition  as  well  as  a  further 
framework has also been introduced. 

In  2023,  electricity  accounted  for  22.9%  of 
the  Netherlands’  final  energy  consumption, 
equal  to  the  EU  average  of  22.9%,  and  this 
share  has  remained  largely  stagnant  in  the 
last  decade  (126).  When  it  comes  to  households, 
electricity  accounts  for  23.8%  of  final  energy 
consumption, while in industry it represents 23.6% 
(see  also  Annex  4).  For  the  transport  sector,  this 
share remains negligible at 3.5%. Further progress 
in electrification across sectors is required for cost 
effectively  decarbonising 
the  economy  and 
bringing  the  benefits  of  affordable  renewable 
generation to consumers. 

Renewables and long-term contracts 

Renewable  energy  participation 
in  final 
consumption  is  currently  15%,  with  a  plan  to 
increase it to between 32% and 42% by 2030. In 
2024,  renewable  energy  sources  (RES)  accounted 
for 50% (vs EU  overall RES share of 47%)  of the 
electricity mix, increasing from 47% in 2023. 

Graph A8.3: The Netherlands’ installed renewable 
capacity (left) and electricity generation mix 
(right) 

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

The Dutch permitting regulations and support 
system are overall strongly aligned with the 
Commission’s Recommendation. In 2023-2024, 
the Dutch authorities took several important steps 

(126) CAGR (compound annual growth rate) of 1.8% between 

2013 and 2023 and minimum/maximum share of 19.2% 
and 22.9%, respectively. 

64 

 
 
 
 
to improve the framework for granting permits for 
important 
projects  on  renewables.  The  most 
change has been the adoption of the Environment 
Act, which successfully addresses issues related to 
simplified  and  faster  procedures  and  focuses  on 
public  consultation  during  renewables  project 
development.  A  strong  point  of  the  Dutch  system 
is  the  existence  of  a  well-functioning  one-stop-
shop  for  digitalised  application  and  the  permit-
granting process. 

The Netherlands has also introduced a single 
contact  point  for  granting  permits  for 
renewables generation assets. This streamlines 
the process for building, repowering and operating, 
thus  reducing  the  number  of  authorities  involved. 
is 
Better 
ensured  by  the  multi-year  infrastructure  energy 
and climate programme (MIEK). 

internal  coordination  and  planning 

for  PEC  under  the  recast  Energy  Efficiency 
Directive (Directive (EU) 2023/1791). 

The Netherlands has notified the Commission 
of  its  comprehensive  heating  and  cooling 
the 
assessment 
application  of  high-efficiency  cogeneration  and 
efficient  district  heating  and  cooling  in  line  with 
Article 25(1) of the Energy Efficiency Directive. 

identifying 

potential 

for 

In relation to buildings, it would be beneficial 
if  the  Netherlands  were  to  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%  and  data  from  2023 
indicate  that  this  downward  trend  has  continued 
and even intensified. 

legislative 

concerning 

developments 

Based  on  available  evidence,  there  are  no 
specific 
the 
opening  of  support  schemes,  in  terms  of 
either 
or 
implementation  experience  through  pilot 
schemes. The Netherlands has not put forward a 
good  plan 
that  deployment  of 
renewable energy will increase to meet the agreed 
targets. 

requirements 

indicate 

to 

Energy efficiency 

sector, 

There  has  been  a  slowing  in  the  progress  of 
the  Netherlands  towards  reaching  the  2030 
EU targets for energy efficiency.  In 2023, the 
Netherlands’  primary  energy  consumption  (PEC) 
was  53.81  Mtoe,  a  4.3%  decrease  compared  to 
2022.  Its  final  energy  consumption  (FEC)  was 
40.98  Mtoe,  a  2.6%  decrease  compared  to  2022. 
As  in  2022,  the  best  results  came  from  the 
energy 
residential 
consumption fell by 11.6%. The worst results were 
in  the  transport  sector,  in  which  final  energy 
consumption  increased  by  5%.  Moreover,  the 
national  climate  and  energy  outlook  (October 
2024)  estimates  that  the  Netherlands  has  only  a 
5% chance of meeting its 2030 energy efficiency 
targets (for  both  PEC  and  FEC),  based  on  existing 
and  planned  policies.  As  a  result,  the Netherlands 
is  not  on  track  to  meet  its  2030  national 
contribution of 38.41 Mtoe for FEC and 46.2 Mtoe 

in  which 

final 

final 

residential 

Heating  and  cooling  represent  80%  of  the 
energy 
country’s 
consumption.  Approximately  167 000  heat 
pumps  were  sold 
in  2023,  representing  an 
increase of 66% compared to the previous year. In 
this  context, 
is  worrying  that  the  Dutch 
government  has  announced  that the  obligation to 
install  a  heat  pump  when  replacing  an  individual 
heater from 2026 onwards will be cancelled. 

it 

improvements, 

There  are  several  measures  in  place  to 
support  energy 
including 
support  for  the  installation  of  heat  pumps, 
covering  up  to  EUR 5 100  of  the  cost15.  New 
connections to the gas grid have been banned for 
new buildings since 201814. 

The  Netherlands  continues  to  deploy  a  wide 
range  of  financial  support  instruments  for 
energy efficiency, including subsidy schemes for 
homeowners,  tax  rebates  for  companies  and 
energy  performance  fees  for  landlords.  At  the 
same  time,  more  action  would  be  useful  to 
in  energy 
leverage  more  private 
efficiency measures in support of the 2030 target. 

investment 

Security of supply and diversification 

the  country 

Although 
is  not  directly 
dependent  on  Russian  gas,  the  Netherlands 
has committed to phasing out Russian gas as 
soon  as  possible.  On  the  demand  side,  security 
of  supply  will  be  strengthened  through  the 

65 

 
acceleration  of  the  energy  transition  and  gas 
savings.  The  Netherlands  consumed  on  average 
28% less gas in the first 10 months of 2024 than 
in the pre-crisis average. 

the 
Regarding  oil  security  of  supply, 
Netherlands  is  already  importing  oil  from 
diversified sources (mainly, Belgium, Norway 
and the UK). The Dutch oil infrastructure plays an 
important  role  in  north-west  Europe’s  security  of 
supply, in terms of the import and export of oil and 
oil  products.  The  country  is  willing  to  continue  to 
do this in the future. 

Fossil fuel subsidies 

In  2023,  environmentally  harmful  (131)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 
2030  represented  0.38%  (132)  of  the  Netherlands’ 
GDP  (133),  below  the  EU  weighted  average  of 
0.49%.  Tax  measures  accounted  for  99%  of  this 
volume,  while  the  remaining  share  was  direct 
grants.  Additionally, 
the  Netherlands’  2023 
Effective  Carbon  Rate  (134)  averaged  EUR  120.03 
per tonne of CO₂, above the EU weighted mean of 
EUR 84.80 (135). 

progress 

renewables, 

Despite 
the 
in 
Netherlands’  overall  energy  mix  in  2023 
remained  heavily  reliant  on  fossil  fuels,  with 
oil  accounting  for  43.9%,  natural  gas  33.8%,  and 
coal 5.8% of gross inland consumption (127), while 
renewables (and biofuels) contributed 13.8% (128). 

As  part  of  its  national  energy  system  plan 
(129),  the  Netherlands  plans  to  build  two 
nuclear  power  plants,  set  to  start  operating 
end 2030. The national energy system plan sees 
room  for  3,5-7  GW  of  nuclear  energy  capacity  in 
the  Dutch  electricity  mix  by  2050.  As  of  today, 
there  is  now  only  one  nuclear  power  plant 
operating  in  the  Netherlands  –  the  Borssele 
nuclear  power  plant,  which  was  built  in  the  early 
1970s  and  has  a  net  capacity  of  0.48 GW.  In 
it  produced  approximately  3%  of  the 
2023, 
country’s  power  generation.  In  the  2024  coalition 
agreement  (130),  the  government  announced  the 
ambition  to  build  four  new  conventional  nuclear 
power  plants,  with  additional  room  for  the 
development of small modular reactors (SMRs).  

(127) Nuclear heat and non-renewable waste accounted for 1.4% 
and  1.3%,  respectively.  Electricity  and  heat  are  excluded  to 
avoid double-counting, focusing on primary energy sources. 

(128) Gross inland consumption (Eurostat). 

(129) Nationaal plan energiesysteem, 2023. 

(130)Coalition Agreement - Elaboration of the outline agreement 

by the cabinet, 13 September 2024, 

https://open.overheid.nl/documenten/ronl-
f525d4046079b0beabc6f897f79045ccf2246e08/pdf 

66 

(131) Direct  fossil  fuel  subsidies  that  incentivise  maintaining  or 
increasing  in  the  availability  of  fossil  fuels  and/or  use  of 
fossil fuels. 

(132) Numerator  is  based  on  volumes  provided  by  the  Dutch 
authorities.  For  all  Member  States,  it  includes  public  R&D 
expenditures  for  fossil  fuels  as  reported  by  the  IEA  (Energy 
Technology RD&D Budgets) and excludes, for methodological 
consistency,  excise  tax  exemption  on  kerosene consumed  in 
intra-EU27  air  traffic  and  for  the  Netherlands,  exemption 
from the use of diesel in international navy. 

(133) 2023 Gross Domestic Product at market prices, Eurostat   

(134) The  Effective  Carbon  Rate  is  the  sum  of  carbon  taxes,  ETS 
permit  prices  and  fuel  excise  taxes,  representing  the 
aggregate effective carbon rate paid on emissions. 

(135) OECD (2024), Pricing Greenhouse Gas Emissions 2024 

 
 
 
 
 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

67 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.1364          0.0875              0.3035              0.2433          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]58.1%229.7%86.6%69.7%36.6%54.3%55.6%47.8%Network costs46.1%75.9%27.9%42.5%26.7%25.3%24.8%27.2%Taxes and levies including VAT-4.2%-205.6%-14.5%-12.2%36.7%20.3%19.6%25.0%VAT17.4%10.1%17.4%17.3%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.1013          0.1481              0.2055              0.1642          0.0684              0.0948          0.1121          0.1128          Energy & supply29.2%53.7%54.2%36.8%43.7%61.0%64.5%53.9%Network costs9.6%6.8%6.1%9.5%22.5%17.3%17.1%18.3%Taxes and levies including VAT61.2%39.6%39.8%53.7%33.8%21.7%18.4%27.8%VAT17.4%13.2%17.8%17.4%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.1168          0.1910              0.2404              0.1949          0.1242              0.1895          0.1971          0.1661          Energy & supply43.7%62.0%58.5%49.6%43.0%66.5%63.0%55.8%Network costs13.1%9.4%10.4%16.2%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT31.3%18.3%16.6%20.5%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0341          0.0682              0.0731              0.0593          0.0328              0.0722          0.0672          0.0517          Energy & supply63.7%76.4%72.6%57.5%66.2%77.3%77.3%68.7%Network costs2.9%1.5%2.0%2.5%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT19.4%10.1%9.6%27.3%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)102.6241.296.177.5111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)117,168        114,380            121,408            123,278        122,170           121,573        121,331        -Combustible Fuels99,395       95,965           99,973           94,787       88,305          78,541       67,602       -Nuclear3,402         3,515             3,910             4,087         3,828            4,156         3,985         -Hydro61               72                  74                  46               88                  50               69               -Wind10,569       10,549           11,508           15,278       18,123          21,566       29,525       -Solar2,204         3,708             5,399             8,567         11,304          16,657       19,578       -Geothermal-              -                 -                 -              -                 -              -              -Other Sources1,536         571                544                512             522                602             571             Gross Electricity Production [%]Combustible Fuels84.8%83.9%82.3%76.9%72.3%64.6%55.7%-Nuclear2.9%3.1%3.2%3.3%3.1%3.4%3.3%-Hydro0.1%0.1%0.1%0.0%0.1%0.0%0.1%-Wind9.0%9.2%9.5%12.4%14.8%17.7%24.3%-Solar1.9%3.2%4.4%6.9%9.3%13.7%16.1%-Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-Other Sources1.3%0.5%0.4%0.4%0.4%0.5%0.5%-Net Imports of Electricity (GWh)3,5067,970855-2,660253-4,266-5,660-As a % of electricity available for final consumption 3.1%7.0%0.8%-2.4%0.2%-3.9%-5.3%-Electricity Interconnection [%]18.1%18.6%22.9%25.9%16.3%13.7%12.0%10.3%Share of renewable energy consumption - by sector [%]Electricity13.8%15.2%18.2%26.4%33.3%39.7%46.4%-Heating and cooling5.8%6.2%7.2%8.1%8.1%9.1%10.2%-Transport5.8%9.5%12.3%12.6%9.2%11.1%13.4%-Overall6.5%7.4%8.9%14.0%13.1%15.1%17.4%-20202021202220232020202120222023Import Dependency [%] 68.0%58.4%80.2%70.4%57.5%55.5%62.5%58.3%of Solid fossil fuels 91.9%99.6%102.1%102.4%35.8%37.2%45.9%40.8%of Oil and petroleum products 100.4%85.7%107.4%92.6%96.8%91.7%97.8%94.5%of Natural Gas 45.0%33.7%64.6%65.2%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 37.0%29.7%10.1%3.4%41.0%40.9%20.7%9.3%of Crude Oil26.5%32.2%23.7%0.0%25.7%25.2%18.4%3.0%of Hard Coal53.6%38.2%10.4%0.0%49.1%47.4%21.5%1.0%2017201820192020202120222023Gas Consumption (in bcm)43.7               42.9                  44.8                  43.6               42.1                  33.4               31.5               Gas Consumption year-on-year change [%]3.3%-1.9%4.5%-2.7%-3.5%-20.6%-5.9%Gas Imports - by type (in bcm)24.0               31.1                  35.6                  36.2               30.9                  38.8               40.3               Gas imports - pipeline23.1               27.8                  26.2                  27.5               22.0                  19.6               15.0               Gas imports - LNG1.03.39.48.78.919.225.3Gas Imports - by main source supplier [%]United States0.1%1.0%6.5%7.9%14.0%28.9%44.4%Norway39.8%40.5%35.0%32.4%36.6%25.7%23.0%Belgium1.8%3.2%6.1%5.3%5.5%7.1%6.8%Russia31.7%45.2%40.2%37.0%29.7%10.1%3.4%NetherlandsEU 
 
   
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

The  main  challenges  in  the  Netherlands  are 
water  quality,  nature  protection  and 
biodiversity 
loss,  as  well  as  the  GHG 
emissions.  Biodiversity is under severe pressure. 
Nitrogen deposition (136)  is  a  big problem because 
it leads to over-fertilisation and acidification of the 
soil  and  water.  The  Netherlands  would  benefit 
from  adopting  farming  practices  aimed  at  cutting 
nutrient  and  pesticide  pollution,  as  well  GHG 
emissions  and 
improving  soil  health.  The 
Netherlands  is  vulnerable  to  the  impacts  of 
climate  change,  in  particular  sea-level  rise  and  a 
rainfall, 
higher 
heatwaves and prolonged droughts. 

intensity  and 

frequency  of 

Climate adaptation and preparedness 

The  Netherlands  faces  increasing  impacts 
from  climate  change  due  to  its  unique 
geography (137). About 59% of the country’s land 
area is at risk of flooding from the sea and major 
rivers, with nearly 26% of the country lying below 
sea level (138). Heavy precipitation is another cause 
of flooding in the Netherlands (139) and floods, and 
their damage will increase due to climate change. 
The  Netherlands  also  faces  the  risk  of  recurring 
extreme events, such as intense floods, which can 
have  cumulative  impacts  and  create  significant 
budgetary  pressure (140).  Heatwaves  are  expected 
to  become  more  frequent  and  intense,  posing 
health risks, particularly for vulnerable populations 
such as older people. Over the period 1991-2020, 
31% of heat-related mortality (approximately 250 
deaths  per  year)  was  attributable  to  climate 
change.  Prolonged  droughts  may  put  a  strain  on 
water  resources,  affecting  the  agricultural  sector 

(136) The two gas compounds (ammonia and nitrogen oxides) are 
generally referred to as ‘nitrogen’ in the context of its impact 
on  nature  and  the  environment  in  general.  Ammonia  and 
nitrogen  oxides  have  different  emission  sources  but  cause 
cumulative and significant damage to the health of humans 
and the environment, especially Natura 2000 sites. 

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

Netherlands, see Klimaatschadeschatter 

(138) Most of this (55% of the Netherlands) is protected by dunes, 
dikes, dams or engineered structures, while just 4% is not. 

(139) Planbureau voor de Leefomgeving, Correctie formulering 
over overstromingsrisico Nederland in IPCC-rapport, Link. 

and the stability of dikes and infrastructure due to 
soil subsidence (141). 

risks 

already 

Climate 
caused 
have 
substantial  loss  of  life  and  economic  losses. 
the  Netherlands 
Between  1980  and  2023, 
suffered economic losses of EUR 10.97 billion due 
to  extreme  weather-  and  climate-related  events, 
with  39% insured.  This  makes  the  country  one  of 
the  EU  Member  States  with  the  highest  levels  of 
insurance  cover  against  extreme  events.  Over  the 
same  period,  3 918  fatalities  were  recorded (142). 
Climate  risks  are  set  to  increase  in  the  future, 
which can lead to higher insurance premiums (143). 

The 

(NAS) 

updated 

strategy 

provides 

damages. 

The  Netherlands  has  intensified  its  climate 
to  mitigate 
change  adaptation  efforts 
potential 
delta 
programme  addresses  most  of  the  country’s 
adaptive  measures,  including  those  for  rising  sea 
levels,  extreme  weather  events,  and  increased 
rainfall  and  droughts (144).  The  national  climate 
adaptation 
a 
comprehensive  framework  for  addressing  climate 
infrastructure, 
risks  across  sectors, 
agriculture  and  energy (145).  A  new  NAS,  planned 
for 2026, will include 15 adaptation pathways and 
emphasise  the  concept  of  ‘just  resilience’.  Other 
key  initiatives  include  the  ‘Room  for  the  River’ 
project (146),  which  enhances  flood  resilience  by 
allowing  more  space  for  rivers  to  manage  high 
water  levels,  and  the  ‘Sand  Motor’ (147)  project, 
which uses natural sand replenishment for coastal 
protection.  The  ‘Climate-Proof  Cities’  programme 
infrastructure  and  water-
promotes  a  green 

including 

(141) Government of the Netherlands, Climate adaptation in 

agriculture, Link. 

(142) EEA, 2024, Economic losses from weather- and climate-

related extremes in Europe, Link. 

(143) PBL, 2024, Klimaatrisico’s in Nederland, de huidige stand 

van zaken, Link. 

(144) The  programming  of  measures  is  updated  annually  in  the 
Delta  Programme.  The  more  strategic  objectives  within  the 
Delta Programme, known as the Delta Decisions, are updated 
every six years. See: Home | Delta Programme. 

(145) Nationale klimaatadaptatiestrategie (NAS), Link. 

(146) Ministry of Infrastructure and Water Management, Room for 

the River, Link. 

(147) Ministry of Infrastructure and Water Management, The Sand 

(140) EEA, 2024, European Climate Risk Assessment. 

Motor, Link. 

68 

 
 
 
 
 
 
lacks  a  clear 

sensitive  design  in  urban  planning (148).  Despite 
the 
initiatives,  which  will  also  help 
these 
Netherlands  prepare 
for  natural  disasters 
exacerbated  by  climate  change,  the  Dutch  policy 
framework 
for 
adaptation (149). It also lacks targeted programmes 
to  address  emerging  climate  threats,  such  as 
changes  in  wildfires  and  the  spread  of  invasive 
species  and 
tropical  diseases.  The  Dutch 
authorities  intend  to  address  these  emerging 
threats in the 2026 update of their NAS. 

legal  basis 

to 

framework 

The  Netherlands  has  established  a  robust 
institutional 
facilitate 
cooperation  on  adaptation  efforts.  It  includes 
the  national  adaptation  strategy,  which  involves 
collaboration  by  many  ministries,  and  the  Delta 
Programme, supported by the delta fund. Strategic 
objectives  are  adopted  every  six  years,  and  the 
programme 
the  national 
parliament  annually.  Key  institutions  involved  in 
these  efforts  include  Rijkswaterstaat, the  national 
agency for water management, provinces, regional 
water  authorities  and  municipalities.  However, 
adaptation  has  not  yet  been  well  integrated  into 
broader  governmental  policies  and 
long-term 
planning, including at regional and local level. 

submitted 

to 

is 

Water resilience 

Large  areas  of  the  Netherlands  are  subject 
to  water  stress  due  to  high  demands  from 
manufacturing  and  energy.  These  sectors  are 
heavily  dependent  on  water  supply,  in  particular 
cooling.  The 
manufacturing  and  electricity 
Netherlands’ 
is 
considerable,  standing  at  EUR 76  per  m3  of 
abstracted  water 
in  2022,  but  showing  a 
decreasing  trend  over  a  five-year  period (150).  The 
water  exploitation  index  plus  (WEI+)  stood  at  4% 
in  2022,  with  the  worst  seasonal  value  being  6% 

productivity 

water-use 

(148) Kennisportaal Klimaatadaptatie, Climate-proof cities focus 
area, Dutch National Water and Climate Knowledge and 
Innovation Programme (NKWK), Link. 

(149) The  Dutch  Climate  Law  focuses  primarily  on  climate 
mitigation measures. However, the Delta Act establishes the 
Delta  Commissioner,  the  Delta  Fund,  and  the  Delta 
Programme 
climate  adaptation 
challenges. 

to  address 

specific 

in Q3-2022, showing an increasing trend over the 
last two years, but remaining lower than five years 
ago. Between 2018 and 2022 water abstraction in 
the  manufacturing  sector  increased  by  32%  and 
the  sector  accounts  for 
the  highest  water 
consumption, at 1 563 million m3, i.e. 51% of total 
consumption  in  2022,  putting  a  significant  strain 
on  the  country’s  water  resources,  together  with 
energy  (40%).  The  challenges  remain  significant, 
particularly in regions subject to high water stress. 
Water  abstraction  pressure  is  relevant  for  some 
areas  of  the  Netherlands,  with  17%  of  surface 
water  bodies  in  the  Meuse  River  Basin  District 
(RBD) and 18% in the Rhine RBD facing significant 
abstraction pressures. 

(WFD)  and 

Water  quality  in  the  Netherlands  remains  a 
cause for concern in the case of surface and 
groundwater  bodies.  Many  Dutch  water  bodies 
generally fail to comply with the Water Framework 
the  Nitrates  Directive. 
Directive 
Compared  to  previous  reports,  the  number  of 
water  bodies 
in  good  chemical  status  has 
dramatically and steadily decreased over the three 
previous cycles from 70% to 39% and to 9%. Their 
ecologic status has, however, somewhat improved 
due to a steady reduction of surface water bodies 
in  bad  ecologic  status.  That  said,  not  a  single 
water  body  achieves  the  required  good  ecologic 
status.  In  2021 100%  of  surface  water  bodies 
were  classified  as  failing 
to  achieve  good 
ecological  status  and  90%  as  failing  to  achieve 
good  chemical  status,  while  the  percentages  are 
4% and 13% respectively for groundwater bodies. 
A study by a new Dutch advisory body shows that 
it will be almost impossible for the Netherlands to 
meet  all  the  2027  objectives  under  the  WFD 
unless efforts are stepped up (151). Main drivers for 
increased  pressures  on  water  bodies  are  the  high 
changes, 
population 
economic/agricultural  activities,  past  pollution  and 
transboundary  pollution.  Diffuse  pollution  from 
agricultural  sources  is  a  main  pressure,  affecting 
78%  of  surface  water  bodies,  followed  by 
pressures  from  dams,  barriers  and  locks  (61%). 
For  groundwater  bodies,  the  most  significant 
pressure  comes  from  point  source  discharges 
(57% affected), followed by diffuse pollution from 
agriculture (52%). 

density (152), 

land-use 

(151) Council for the Environment and Infrastructure, 2023, Extra 
maatregelen noodzakelijk voor goede waterkwaliteit, Link. 

(150) Measured as GDP in 2010 chain linked volumes over total 

(152) With 517 persons per m2 in 2022 the population density is 

fresh surface water abstracted in cubic metres. 

significantly higher than the EU average of 109. 

69 

 
 
 
in  2018  and  99.97 % 

investments  are  needed 

Wastewater management and drinking water 
quality  are  not  a  cause  for  concern,  though 
significant 
to 
maintain  this  level  of  quality.  The  quality  of 
drinking water in Netherlands does not give rise to 
concern  since  the  compliance  for  all  parameter 
groups in the Netherlands was at least 99.97 % in 
2017,  99.96 % 
in 
2019. Urban wastewater treatment covered 100% 
of 
increasing 
investment  will  be  all  the  more  important  as  the 
Directive  was 
in 
2024 (153). In 2023, out of the 746 Dutch bathing 
waters,  539  (72.3 %)  were  of  excellent  quality, 
127  (17 %)  were  of  good  quality  and  31  (4.2 %) 
were  of  sufficient  quality.  A  total  of  32  (4.3 %) 
bathing  waters  were  found  to  be  of  poor 
quality (154).  

revised  and  strengthened 

the  population 

in  2020,  but 

However,  significant  investments  are  needed  to 
ensure  high-quality  water  management.  Total 
annual  water  investment  needs  are  estimated  at 
EUR 4.6  billion,  covering  the  water 
industry, 
protection and management (155) (the Netherlands 
are exposed to high increase in riverine flood risks 
and  coastal  floods).  In  addition,  the  Netherlands 
have  explicitly  encouraged  the  development  and 
deployment  of  smart  water  systems,  either  to 
address  local  issues,  or  to  support  a  growing 
global  business  (156).  Of  the  total  annual  needs, 
EUR  1.9  billion  relates  to  the  management  of 
wastewater,  a  further  2.7  billion  is  necessary  for 
drinking water-related investments and around 80 
million  for  the  protection  and  management  of 
water  (including  marine).  Current 
investments 
(related  to  water  supply,  sanitation  and  flood 
protection)  are  estimated  around  EUR  3.7  billion, 
provided by EU MFF (0.4%), RRF (0.3%), EIB (1.4%) 
and  national  sources  (98%) (157).  Of  this,  EUR  1.3 
billion  supports  wastewater  management  (for 
managing certain emerging substances), 2.3 billion 

(153) Directive 2024/3019, of 27 November 2024. The deadline 

for transposition is 31 July 2027. 

(154) EEA, European Bathing Water Quality in 2023, briefing 

No 04/2024, Copenhagen, 2024, Link 

(155) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. 

(156) OECD (2015), Water and Cities, OECD Studies on Water, 

OECD Publishing, Paris, Link 

(water 

including 

infrastructure 

drinking  water 
including 
micropollutants,  climate  change  and  security)  and 
around  EUR  80  million  the  other  aspects  of  the 
Water  Framework  Directive  (water  management 
and  protection, 
renew  of  existing 
infrastructure  and  projected  coastal  flood  risk 
investment needs and some marine aspects). Τhus, 
the Netherlands faces an annual water investment 
gap  of  EUR 935  million  (0.1%  of  GDP),  over  the 
existing levels of financing, to meet environmental 
targets  under  the  Water  Framework  and  Floods 
Directives. The largest portion, EUR 567 million, is 
for wastewater management, including costs from 
the revised Directive, with EUR 367 million needed 
for drinking water investments. 

Biodiversity and ecosystems 

to  meet 

is  needed 

Targeted  action  on  nature  protection  and 
restoration 
the 
Netherlands'  nature  restoration  targets.  The 
three  most  significant  pressures  and  threats  to 
habitats  come  from  agriculture,  human-induced 
changes  to  water  regimes  (including  lowering 
water tables or groundwater pollution) and natural 
processes  (e.g.  vegetation  succession).  Today, 
according to the latest available information from 
Dutch official sources, a total of 131 Dutch Natura 
2000 sites out of 162 sites (81%)  are vulnerable 
to  excessive  nitrogen  deposition (158).  However, 
according to the latest available data, only 11.5% 
of the country's habitats have a good conservation 
status,  lower  than  the  EU  average  of  14.7%.  For 
there  has  been  no 
some  habitat 
improvement  to  their  bad  conservation  status 
since 1994 (i.e. the entry into force of the Habitats 
Directive 
the 
conservation  status  of  species  is  concerning,  with 
26.3%  reported  as  having  a  good  status,  lower 
than  the  EU  average  of  30%.  The  common 
farmland  bird  index  also  indicates  a  deteriorating 
conservation  status  of  species,  having  as 
decreased  from  63  in  2021  to  60.4  in  2022, 
significantly  lower  than  the  EU  average  of  68.2. 
This  situation  has  severe  implications  for  the 
Netherlands’  climate  resilience,  as  the  loss  of 
biodiversity  impairs  ecosystems’  ability  to  provide 
services  that  help  mitigate  the  effects  of  climate 

the  Netherlands).  Similarly, 

types 

in 

(157) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. 

(158) National Institute for Public Health and the Environment 
RIVM, 2023, Monitor nitrogen deposition in Natura 2000 
areas 2023, Link 

70 

 
 
 
change, 
maintaining soil health and sequestering carbon. 

regulating  water 

such  as 

cycles, 

In  2021,  27%  of  the  Netherlands'  territory 
was covered by protected land area, and this 
percentage  has  fallen  to  23%  over  the  last 
few  years (159).  This is likely  due  to  adjustments 
made  by  the  Netherlands 
in  the  nationally 
protected  areas,  where  sites  not  specifically 
created  for  nature  protection  were  removed.  Only 
sites relevant to the EU biodiversity strategy target 
–  to  legally  protect  and  effectively  manage  a 
minimum  of  30%  of  land  by  2030  –  were 
retained. Although the percentage currently stands 
at  23%,  there  is  some  uncertainty  regarding 
whether 
the 
environmental  objectives  for  biodiversity  and 
ecosystem  protection  and 
restoration.  On  a 
positive  note,  the  Netherlands  plans  to  allocate 
27.5%  of  its  CAP  budget  for  2021–2027  to 
biodiversity  investments,  along  with  an  estimated 
26.5%  of  its  RRF  funds (Nature programme).  This 
represents  the  highest  share  of  CAP  and  RRF 
investments  in  biodiversity  among  all  Member 
States for this period. However, no EU contribution 
from  the  cohesion  policy  funds  is  planned  for 
biodiversity. 

the  Netherlands  will  meet 

inter  alia  on 

(NBSAP)  under 

the  Netherlands  has 
In  March  2025 
submitted  a  national  biodiversity  strategy 
and  action  plan 
the 
Convention  on  Biological  Diversity  or 
national  targets  aligned  with  the  Kunming-
Montreal Biodiversity Framework. The previous 
government  had  developed  a  concept  NBSAP, 
the  national 
which  built  on 
programme  for  rural  areas  or  NPLG  (Nationaal 
Programma  Landelijk  Gebied)  and  the  associated 
transition fund. This programme aimed to improve 
nature,  soil  and  water  quality  and  mitigating 
climate  change.  The  current  government  has 
abandoned the NPLG and transition fund and has 
announced 
it  will  take  a  different  approach 
towards  achieving  the  environmental  targets.  In 
November  2024 
for 
Agriculture  and  Nature  was  announced  replacing 
some aspects of the previous NPLG. As part of its 
new  approach,  the  government  announced  a 
stronger  emphasis  on  generic  measures  as 
opposed  to  area-specific  ones.  The  government 
has recently updated the concept NBSAP based on 

the  approach  Space 

this new approach. The cut of the transition funds 
means  that  the  current  budgetary  resources 
reserved  for  measures  related  to  farming  and 
nature is substantially smaller than it. The analysis 
of  the  Attorney  General  (Landsadvocaat)  of  the 
intentions  expressed  in  the  letter  of  25  April 
underpins  the  need  for  the  authorities  to  further 
improve their measures (160). Among other factors, 
habitat  fragmentation,  intensive  agriculture  and 
atmospheric nitrogen deposition affect the Natura 
2000  network,  which  is  smaller  than  the  EU 
average. 

as 

the 

forestry, 

economy 

agriculture, 

Netherlands' 

Nature  degradation  creates  significant  risks 
to 
and 
competitiveness,  as  it  is  one  of  the  Member 
States  with  the  highest  dependency  on 
ecosystem  services.  The  Netherlands  is  the 
Member  State  with  the  highest  supply  chain 
dependency  on  ecosystem  services,  with  26%  of 
its  gross  value  added  having  a  high  degree  of 
dependency  compared  to  the  EU-27  average  of 
22%. The Dutch economy also shows a high direct 
dependency  on  ecosystem  services,  with  44%  of 
gross  value  added  highly  reliant.  Several  sectors, 
such 
fisheries, 
construction,  water  utilities  and  healthcare  (see 
graph  A9.1),  are  particularly  dependent  on 
ecosystem  services,  with  100%  of  these  sectors' 
gross  value  added  directly  dependent  on 
ecosystem  services.  This  means  that  failure  to 
maintain  the  capacity  of  ecosystems  to  deliver 
services could entail significant costs or even stop 
production 
these  sectors.  Protecting  and 
restoring  key  ecosystems  would  ensure  that  the 
long-term  competitiveness  of  these  economic 
sectors  is  preserved.  A  characteristic  example  is 
the building sector, where permits or constructions 
were  found  to  be  illegal  in  relation  to  nitrogen, 
following the rulings of the Council of State of 18 
December  2024  and  of  22  January  2025 (161).  As 
a result, securing permits for construction projects, 
the  climate 
including 
unless 
transition,  will 
remediation measures are taken. 

those  necessary 

challenging 

remain 

for 

in 

(160) Full text advice of State Attorney for nitrogen plans, Link. 

(161) NOS, 2025, Grote zorgen binnen kabinet over gevolgen 

(159) Eurostat, last update 12 March 2025, Protected areas, Link 

stikstofuitspraak, Link. 

71 

 
 
 
Graph A9.1: Direct dependency (1) on ecosystem 
services (2) of the gross value added generated 
by economic sector in 2022 

of CO2 equivalent (CO2eq) are needed (162). Recent 
projections show a surplus compared to the target 
of -1.2 million tonnes of CO2eq for 2030 (163). The 
Netherlands is therefore on track to meet its 2030 
target. 

Dutch  agriculture  is  still  a  major  source  of 
greenhouse  gas  emissions  and  continues  to 
have  a  significant  impact  on  air,  water  and 
soils.  In  2022,  agriculture  was  responsible  for  a 
total of 18 million tonnes of CO2eq, accounting for 
around 11% of the country’s total emissions. This 
includes  13.8  million  tonnes  of  CO2eq  from 
livestock. The Netherlands is not on track in terms 
of  reducing  agricultural  sector  emissions,  with 
projected  GHG  emissions  of  22.0 Mt CO2eq 
compared  to  the  national  sectoral  2030  emission 
reduction  target  of  17.9 Mt CO2eq,  and  additional 
efforts  are  therefore  needed  to  reduce  emissions 
in the sector. The Netherlands' utilised agricultural 
area  (UAA)  remained  around  1.8  million  hectares 
between  2013  and  2023.  The  Netherlands’  soils 
were  significantly  more  impacted  by  nutrient 
losses, with the highest rate in the EU (164), which 
is a significant environmental concern and poses a 
threat  to  human  health.  The  greatest  contributor 
to  the  Netherlands’  unhealthy  soils  is  excessive 
nutrient  concentrations,  which  impacts  roughly 
88 %  of  the  total  agricultural  area,  with  69 %  of 
the  national 
territory  containing  phosphorus 
concentrations  above  50 mg/kg  and  63 % 
containing nitrogen concentrations above 50 kg/ha. 
16%  of  the  national  territory  also  experiences 
unsustainable  soil  erosion  by  water,  wind,  tillage 
and 
the 
Netherlands’ cropland area. This is reflected in the 
country's nitrogen balance of more than 160 kg of 
nitrogen  per  hectare  of  UAA,  as  compared  to  the 
EU  average  of  40.2 kg/ha.  Furthermore,  according 
to  data  from  the  Nitrates  Directive,  14%  of 
the 
groundwater  monitoring 
Netherlands 
nitrate 
recorded 
concentrations  above  50 mg/l  between  2016  and 
2019, exceeding the healthy threshold for human 
consumption.  Despite  the  decreasing  trend,  the 
livestock density index was 3.45 in 2020, and the 

representing  63 % 

stations 
average 

harvest, 

of 

in 

(162) National LULUCF targets of the Member States in 
accordance with Regulation (EU) 2023/839. 

(163) Climate Action Progress Report 2024 COM/2024/498. 

(164) European Commission, 2023, Impact assessment report 

annexes – accompanying the proposal on Soil Monitoring and 
Resilience, Link 

. 

72 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and financial loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

Sustainable agriculture and land use 

The Netherlands’ carbon removals are in line 
with the level of ambition needed to meet its 
2030  target  for  land  use,  land  use  change 
and  forestry 
(LULUCF).  The  Netherlands’ 
LULUCF  sector  has  had  relatively  high  emissions 
compared  to  its  total  land  area  and  has  not  had 
negative  emissions  since  1990.  The  main  source 
of these emissions is agricultural land. Since 2018, 
there  has  been  a  modest  reduction  in  LULUCF 
emissions.  To  meet  its  2030  LULUCF  target, 
additional  carbon  removals  of  -0.4  million  tonnes 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
     
 
highest  in  the  EU  (EU  average  of  0.75).  Ammonia 
emissions  also  decreased  by  10%  between  2018 
and 2022. Between 2017 and 2022, pesticides at 
levels  exceeding  the  thresholds  were  detected  in 
49%  of  surface  water  bodies,  much  higher  than 
the EU average (29%). 

from 

(47% 

The  Netherlands  is  transitioning  to  a  sustainable 
food  system  by 
implementing  policies  and 
allocating  funds  to  reduce  the  environmental 
impact  of  agriculture.  In  2022,  7.2%  of  its 
agricultural  land  had  landscape  features  such  as 
woods  and  non-productive  grasslands,  above  the 
EU  average  of  5.6%.  Organic  farming,  which 
reduced  the  use  of  synthetic  fertilisers  and 
pesticides,  made  up  4.4%  of  Netherlands’ 
agricultural land, a 70% increase since 2012. The 
Dutch authorities are far behind of the objective of 
25%  of  the  EU’s  farmland  being  under  organic 
farming  by  2030  and  should  commit  to  stronger 
and  binding  efforts  to  meet  that  target.  The 
Netherlands’  national  strategic  plan  for 
the 
common  agricultural  policy  (CAP)  2023-2027 
allocates  EUR 514  million 
the 
European Agricultural Fund for Rural Development) 
to  environmental  and  climate  objectives  and 
EUR 964  million 
the  European 
Agricultural  Guarantee  Fund  for  direct  payments) 
to  eco-schemes.  The  Netherlands  makes  a 
significant  contribution  to  the  CAP  strategic  plan 
with  additional  national  financing  of  EUR 736 
million,  most  of  which 
for 
environmental  and  climate  measures.  Under  this 
plan, the Dutch government implements measures 
to  protect  biodiversity,  increase  the  share  of 
organic  farming,  promote  crop  rotation  and 
diversification  and  the  use  of  soil  covers,  reduce 
nutrient  losses,  and  encourage  other  sustainable 
agriculture  practices.  These  measures  are  crucial 
the 
to 
Netherlands’ agri-food system and its bioeconomy, 
which  play  a  significant  economic  role.  The 
bioeconomy,  encompassing  the  production  and 
processing  of  biological  products,  contributed 
EUR 34  billion  of  added  value  to  the  country’s 
gross  domestic  product 
in  2021.  Agriculture 
accounted  for  EUR 12.7  billion,  while  the  food 
billion. 
industry 

competitiveness  of 

is  earmarked 

contributed 

long-term 

EUR 13.2 

(32% 

from 

the 

73 

 
Table A9.1:  Key indicators tracking progress on climate adaptation, resilience and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action. The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, seventh Implementation Report from the Commission to the Council and the European 
Parliament on the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third 
River Basin Management Plans and Second Flood Risk Management Plans). 
(6) For this measure, the EU average includes the figure for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) 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. 
Source: Eurostat, EEA 

74 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems26.535.1516.91017.8806.772.76[area impacted by drought as % of total]Forest-fire burnt area (1)103          103          103          103          103          103          [ha, annual average 2006-2023]Economic losses from extreme events-           47            542          757          785          113          24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----0.88         1.00         [composite score between 0 and 4]Heat-related mortality (3)18            18            18            18            18            [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action28            29            29            29            29            29            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)2.72.93.02.34.0-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption2 197       2 339       2 404       2 233       3 068       -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---100%---59%Groundwater bodies---4%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)11.5-----14.7-[% of habitats having a good conservation status]Common farmland bird index58.561.1-63.060.4-72.274.42000=100Protected areas---2723--26[% of protected land areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)30 372     32 438     32 613     34 079     634 378     716 124     [EUR million]Landscape features----7              -[% of agricultural land covered with landscape features]Food waste--161148129-[kg per capita]Area under organic farming3.53.84.04.24.47.99-[% of total UAA]Nitrogen balance196.0165.8----[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)------[mgNO3/l]Net greenhouse gas removals from LULUCF (9)5 029       4 694       4 326       4 387       5 060       -           256 077-     240 984-     [Kt CO2-eq]NetherlandsEU-27NetherlandsEU-27NetherlandsEU-27NetherlandsEU-27 
 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

labour  market  continues  to 
The  Dutch 
perform  well  overall,  but  still 
faces 
persistent structural challenges. These include 
labour  market 
labour  and  skills  shortages, 
segmentation  and  weaker  employment  outcomes 
of  certain  groups,  which  may  have  a  negative 
impact  on  productivity  growth,  competitiveness 
and  the  achievement  of  the  green  and  digital 
transitions.  Addressing 
labour  market 
challenges, while enhancing job quality, will be key 
to  fostering  productivity  gains,  sustainable  and 
inclusive growth, and competitiveness. 

these 

Graph A10.1: Key rates: activity , unemployment, 
long-term unemployment, youth unemployment, 
NEET 

but 

the  Netherlands  one  of 

labour  market  continues  to 
The  Dutch 
structural 
overall, 
perform  well 
challenges  persist.  Despite  a  marked  economic 
slowdown  in  2023,  the  labour  market  remained 
tight and resilient. The employment rate remained 
stable at 83.5% in 2024, among the highest in the 
EU  and  well  above  the  EU  average  (75.8%)  and 
the  2030  employment 
target  of  82.5%. 
Unemployment  remains  low  at  3.7%  despite  a 
slight  increase  in  2024.  The  proportion  of  young 
people  not  in  employment,  education  or  training 
(NEETs)  remains  among  the  lowest  in  the  EU, 
making 
the  best 
performers, despite a further increase in 2024 (by 
to  4.9%).  The 
0.2  percentage  points 
Netherlands  has  one  of  the  highest 
labour 
participation rates in the EU. This is driven in part 
by  the  relatively  high  participation  of  women, 
whose  number  of  hours  worked  has  recently 
increased.  At 
part-time 
employment,  in  particular  for  women,  remains 
widespread  although  the  proportion  of  those 
reporting  doing  so  involuntarily  is  among  the 
lowest  in  the  EU.  Labour  productivity  growth  has 
been  stagnating  and is  structurally low  (0.4%  per 
year in 2014-2024). This is driven by factors such 
as  strong  employment  growth  in  low-productivity 
sectors,  and  sectors  with  a  high  prevalence  of 
flexible work schemes. 

same 

time, 

(pps) 

the 

(1) Activity rate and Employment rate (% of population), total, 
ages 20-64 
Unemployment rate and long-term unemployment rate (% of 
labour force), total, ages 15-74 
Youth unemployment rate (% of labour force), total, ages 15-
24 
NEET: Not in employment, education or training (% of 
population), total, ages 15-29 
Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, edat_lfse_20, 
une_ltu_a] 

across 

sectors.  While 

There  are  significant  shortages  of  workers 
across  sectors.  Before  the  COVID-19  pandemic, 
labour shortages were on the rise, and  during the 
recovery  period  such  shortages  became  more 
the 
widespread 
macroeconomic  skills  mismatch 
the 
Netherlands  is  very  low,  shortages  in  labour  and 
skills  pose  a  challenge  across  various  sectors. 
Despite the recent slight decrease, the job-vacancy 
rate remains one of the highest in EU (4.3% in Q4-
2024,  well  above  the  EU  average  of  2.3%  in  the 
same  quarter)  and  well  above  its  pre-pandemic 
level  (3.4%  in  Q4-2019).  Shortages  are  most 
acute  where  the  job-vacancy  rate  is  higher  than 
4.5%.  According  to  CEDEFOP-EURES  data  (166)  the 

(165) 

in 

(165) The macroeconomic skills mismatch indicator measures the 
dispersion of employment rates across skill groups (proxied 
by qualification levels, with ISCED 0-2 low; 3-4 medium and 
5-7 high). 

(166) EURES - Countries and occupations | CEDEFOP 

75 

7879808182838485868702468101214162009201020112012201320142015201620172018201920202021202220232024%%NLActivity rate 20-64 (rhs)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)Youth unemployment rate 15-24 (lhs)NEET rate 15-29 (lhs) 
 
 
   
 
 
 
most sought-after occupations in the country were 
office professionals, metal and machinery workers, 
accounting  clerks,  office  associate  professionals, 
researchers  and  engineers,  electro  engineering 
workers, 
ICT  professionals,  personal  service 
workers and construction workers (167). In terms of 
in  October  2024  the 
employers’  perceptions, 
proportion 
labour 
shortages to limit their production was  fairly high 
in the service sector (47.3%), among the highest in 
the EU and well above the average of 26.8%. This 
proportion was also higher than the EU average in 
industry (32.2% vs 18%) (168). 

employers 

expecting 

of 

increasing  the 

and  of 
labour  supply  useful 
include  promote  better  work-life 
measures 
balance for working parents and those with family 
and  care  responsibilities  and  increase  quality  of 
work.  To  ensure  sufficient  numbers  of  people 
employed  in  key  sectors  facing  shortages  and 
increase  productivity  and  competitiveness,  the 
following  measures  may  prove  effective:  i)  more 
targeted and tailored active labour market policies, 
reskilling 
ii) 
opportunities  for  all,  iii)  attracting  talent  and 
fostering legal migration to help reduce labour and 
skills  shortages,  iv)  encouraging  mobility  between 
sectors and v) increasing investment in innovation.  

strengthening 

upskilling 

and 

Graph A10.2: Labour shortages in the Netherlands 

(1) Job vacancy statistics by NACE Rev. 2 activity - quarterly 
data 
Source:  

Not  only  do  labour  and  skills  shortages 
hinder  business  activity,  innovation  and  the 
achievement  of  the  green  and  digital 
transitions,  they  also  pose  a  considerable 
risk  to  labour  productivity,  sustainable  and 
inclusive  growth  and  competitiveness.  The 
post-pandemic  economic  growth  has 
likely 
exacerbated  the  tightness  in  the  Dutch  labour 
market.  Structural  factors,  such  as  limited  labour 
productivity  growth  and  decreasing  labour  supply 
caused  by  demographic  change, 
remain  an 
important  driver  behind  severe  labour  shortages. 
Additionally,  expected  trends  in  workforce  growth 
and  potential  measures  to  reduce  migration  may 
exacerbate  labour  shortages  in  some  sectors.  To 
address this challenge, the Dutch government has 
introduced  targeted  measures  for  key  sectors, 
such  as  health  and  education,  and  has  presented 
an outline for a broad labour-market agenda to be 
further  developed  with  stakeholders  in  2025.  In 
terms of encouraging people to work more hours, 

(167) From January to September 2024. 

(168) Source: ECFIN European Business and Consumer Surveys. 

76 

in  particular  for  women 

Despite  a  high  participation  rate,  certain 
groups  such  as  people  with  low  skills,  those 
from  a  migrant  background  or  persons  with 
disabilities,  encounter  difficulties  in  finding 
quality  jobs.  People  on  flexible  and  temporary 
contracts  often  work  in  low-skilled  and  low-paid 
jobs  in  low-productivity  sectors.  Their  income 
levels  are  significantly 
lower  and  poverty 
significantly 
is  higher  than  for  workers  on 
permanent  contracts.  Part-time  employment  is 
widespread, 
(60.5% 
compared  to  27.9%  in  the  EU  in  2024).  Many  of 
them  report  that  family  and  care  responsibilities 
are  the  primary  reason  for  working  part-time. 
Therefore, although the gender employment gap is 
below the EU average (7.6 pps vs 10.0 pps in the 
EU  in  2024),  this  has  led  to  one  of  the  widest 
gender  gaps  in  part-time  employment  in  the  EU 
(41.9  pps  against  an  EU  average  of  20.2  pps  in 
2024)  and  a  substantial  gender  pension  gap 
(36.3%  vs  24.7%  in  the  EU  in  2024).  While  the 
employment rate of people born outside the EU is 
above the EU average (68.6% vs 65.3% in 2024), 
the  gap  between  them  and  people  born  in  the 
country is more than twice the EU average. Native-
born  people  with  a  migrant  background  are  often 
in  an  unfavourable  labour  market  situation  partly 
due  to  lower  educational  outcomes  but  also  the 
recognition  of  qualifications  and 
lack  of 
discrimination.  The  disability  employment  gap 
narrowed further in 2024 and is now below the EU 
average  (20.9  pps  vs  24.0  pps).  The  Netherlands 
has  not  set  a  target  for  employment  of  persons 
with  disabilities.  Tapping  into  the  labour  market 
potential  of  these  groups  can  help  to  alleviate 
shortages 
(which  may  otherwise  hold  back 
investment projects, including those relating to the 
green  and  digital  transitions)  and  increase  such 
people’s ability to enter work. 

2.32.83.33.84.34.801020304050602019-Q42020-Q12020-Q22020-Q32020-Q42021-Q12021-Q22021-Q32021-Q42022-Q12022-Q22022-Q32022-Q42023-Q12023-Q22023-Q32023-Q42024-Q12024-Q22024-Q32024-Q4Job vacancy rateLabour as a factorlimiting productionNetherlandsIndustryConstructionServicesJob Vacancy Rate 
   
 
It 

the 

labour  market. 

inclusive  growth  and 

The  highly  segmented  labour  market  poses 
another major structural challenge. The use of 
flexible  employment  -  including  self-employed 
without  employees,  -  remains  very  high  and 
represents  a  substantial  proportion  of  the  Dutch 
labour  market.  The  percentage  of  flexible  and 
temporary  contracts  remains  far  above  the  EU 
average  (22.6%  vs  11.6%  in  2024),  as  does  the 
number  of  self-employed  without  employees 
(12.8% vs 9.0% of total employment in 2024). The 
large  proportion  of  flexible  employment  and  the 
structural  risk  of  labour  market  segmentation 
holds back investment and productivity, and has a 
particularly  detrimental  impact  on  those  on  the 
margins  of 
is  also 
detrimental to i) investment in skills by employers, 
ii)  participation  in  training,  lifelong  learning  and 
skills  development,  iii)  labour  productivity,  iv) 
sustainable  and 
v) 
competitiveness.  In  addition,  it  poses  risks  to  the 
achievement of the goals set for the green, energy 
and  digital  transitions.  Furthermore,  people  in 
flexible  employment  often  are  more  vulnerable 
and  may  face  an  increased  risk  of  (in-work) 
reduce 
poverty  and/or  social  exclusion.  To 
incentives  for the  use  of self-employed  (including 
those  without  employees)  and  to  create  a  level 
playing field with employees, the Netherlands has 
included measures in their recovery and resilience 
plan.  This  includes  major  reforms,  such  as  i)  a 
gradual  reduction  in  the  tax  deduction  for  self-
introduction  of  a 
employed  people, 
mandatory  disability 
insurance  for  the  self-
employed,  iii)  measures  to  tackle  bogus  self-
employment  (including  clarification  of  what  an 
employment relationship is and the establishment 
of a (civil) legal presumption of employment)  and 
iv)  the  abolishment  of  the  tax  administration’s 
enforcement  moratorium 
(as  of  2025).  The 
government  is  also  preparing  a  (draft)  bill  aimed 
at  providing  more  job  security  for  those  working 
under 
(by 
employment 
abolishing  zero-hours  contracts,  replacing  on-call 
contracts  with  a  new  type  of  bandwidth  contract 
providing  more  income  security  for  workers).  This 
bill is also aimed  at improving the job  security of 
temporary-agency  workers  (shortening  the  most 
precarious  stages  of  temporary  agency  work  and 
preventing 
temporary 
contracts). 

revolving  doors 

contracts 

flexible 

from 

the 

ii) 

Graph A10.3: Employment by type (permanent, 
temporary, self-employed), year-on-year changes 

(1) Employment (thousand), total, ages 20-64, year-on-year 
change based on non-seasonally adjusted data 
Source: Eurostat, LFS [lfsq_egaps, lfsq_etgaed] 

Wage  growth  has  been  robust  against  a 
labour 
background  of  persistently  high 
shortages.  Nominal  wage  growth  is  projected  to 
fall  to  4.7%  in  2025,  from  6.3%  in  2023  and 
2024, while remaining above the 3.6% recorded in 
2022 (169). In turn, after a sizeable 8% decrease in 
2022, there were increases in real wage growth in 
2023  and  2024 (by  2.6%  and  2.9%  respectively), 
with  a  slight  fall  back  to  2.3%  in  2025.  The 
rebound  in  real  wages  can  be  attributed  to  both 
sustained  nominal  wage  growth  amid  high  labour 
shortages  coupled  with  decreasing  inflation  (as 
inflation rates fell from 11.6% in 2022 to 3.2% in 
2024).  At  the  same  time,  the  statutory  minimum 
wage increased even more significantly, by around 
27%  between  January  2022  and  January  2025, 
an approximate 10% rise in real terms. The growth 
rate of unit labour costs (ULCs) (170) stood at 7.9% 
in  2023,  above  the  euro-area  average  of  6.4%, 

(169) For nominal wage growth, compensation per employee is 
considered. This includes: i) Wages and salaries payable in 
cash or in kind; and ii) Social contributions payable by 
employers. For real gross wages, the deflator used is HICP. 
Real wages using this deflator then can differ from real 
wages shown in AMECO (that uses private consumption as 
deflator). Data for 2024 and 2025 are based on the 
European Commission Autumn 2024 economic forecast. 

(170) Unit labour costs are defined as the ratio of total labour 

compensation per employee to output per persons employed 
(labour productivity). 

77 

-600-400-20002004006008002007-Q12008-Q12009-Q12010-Q12011-Q12012-Q12013-Q12014-Q12015-Q12016-Q12017-Q12018-Q12019-Q12020-Q12021-Q12022-Q12023-Q12024-Q1thsNLPermanent employeesTemporary employeesSelf employmentOverall 
   
 
with  forecasts  indicating  a  reduction  to  6.3%  in 
2024 and 3.5% in 2025. 

in  the  EU 

(6.8%  vs  3.1% 

The  Dutch  economy is adapting  to  the  green 
and digital transitions against a backdrop of 
labour  shortages  in  emerging  sectors.    In 
2024,  employment 
in  the  country’s  energy-
intensive  industries  accounted  for  1.3%  of  total 
employment,  while  there  has  been  a  substantial 
increase  in  jobs  in  the  green  economy.  Between 
2016 and 2022, employment in the environmental 
goods  and  services  sector  grew  by  45.7%, 
reaching  2.2%  of  total  employment  (EU:  3.3%). 
The job-vacancy rate in construction, a key sector 
for  the  green  transition,  is  significantly  above  the 
EU  average 
in  2024).  The 
greenhouse  gas  emission  intensity  of  the  Dutch 
workforce  has  improved,  decreasing  from  20.8 
tonnes  per  worker  in  2015  to  13.3  in  2023  (EU: 
12.3),  which  represents  progress  in  the  green 
transition.  The  ICT  sector  is  also  well  developed, 
with  ICT  specialists  accounting  for  7.0%  of  total 
employment  (vs  5.0% 
in  2024).  
However,  the  reported  shortages  of  technically 
skilled staff are a major factor limiting progress in 
the  digital  transition.  In  this  context,  appropriate 
labour  market 
skills  are  vital  for  successful 
transitions,  particularly 
that  are 
transforming  (see  Annex  12).  To  promote  a  fair 
green 
range  of  policy 
instruments  have  been  adopted.  For  instance, 
measures  are  planned,  mostly  under  the  Just 
Transition  Fund,  to  upskill  potential  employees  in 
green  jobs  and  sectors,  and  to  reduce  potential 
risks  for  the  most  vulnerable,  which  may  arise 
during  the  transition  process.  The  Netherlands  is 
also  making  efforts  to  seize  the  opportunity 
provided  by  the  green  transition  to  increase  the 
labour market participation of underrepresented or 
vulnerable groups. In 2021 only 30% of all green 
jobs  were  held  by  women.  The  country  has 
introduced systematic and in-depth analytical and 
assessment 
the 
socioeconomic effects of the green transition. The 
action  plan  for  green  and  digital  jobs  addresses 
various  labour  market  challenges  –  particularly 
shortages 
in  relevant  sectors.  Gearing  these 
measures to the people most  directly affected by 
the transition would be welcome. 

transition,  a  wide 

for  monitoring 

in  sectors 

tools 

78 

 
 
ANNEX 11: SOCIAL POLICIES 

The  Netherlands  continues  to  perform  well 
overall in terms of social outcomes. However, 
the  country  faces  some  challenges  related  to 
rising  in-work  poverty  and  the  housing  cost 
overburden, 
lower-income 
households. Addressing these will be key in making 
further  progress  towards  the  national  2030 
poverty reduction target, while also contributing to 
inclusive growth and competitiveness. 

especially 

for 

Graph A11.1: At-risk-of-poverty or social exclusion 
rate and its components (AROP, SMSD, LWI) 

(1) AROPE: At-risk-of-poverty or social exclusion rate (% of 
total population). People who are at-risk-of poverty (AROP) 
and/or suffering from severe material and social deprivation 
(SMSD) and/or living in household with very low work intensity 
(LWI). 
Source: Eurostat, EU-SILC [ilc_peps01n, ilc_li02, ilc_mdsd11, 
ilc_lvhl11n] 

While  poverty  levels  remain  relatively  low, 
some  population  groups  experience  higher 
risks.  The  at-risk-of-poverty  or  social  exclusion 
(AROPE)  rate  dropped  to 15.4%  in  2024,  which  is 
the lowest level recorded since 2015 (EU: 21.0%). 
Nevertheless,  certain  groups  face  a  much  higher 
at-risk-of-poverty,  such  as  people  with  a  migrant 
background  (32.5%)  and  persons  with  disabilities 
(22%)  who  continue  to  face  challenges  linked  to 
overrepresentation 
flexible, 
contracts,  lack  of  recognition  of  qualifications, 
reduced  job  opportunities,  in-work  poverty  and 
discrimination.  The  at-risk-of-poverty  or  social 
exclusion  gap  between  non-EU-born  and  people 
born in the Netherlands is one of the highest in the 
EU  (23 pps  in  2023  vs  EU:  20.8 pps).  While  the 
share  of  children  at  risk  of  poverty  or  social 
exclusion  is  below  the  EU  average  (15.8%  vs 

precarious, 

in 

did 

not 

the  Netherlands 

24.2% in 2024), the number increased recently in 
contrast to the stable trend in the EU. Overall, the 
Netherlands  is  making  progress  towards  its  2030 
target of reducing the number of people at risk of 
poverty  or  social  exclusion  by  at  least  163  000 
people compared to 2019. After an initial increase 
in  absolute  numbers  in  the  aftermath  of  the 
COVID-19 pandemic, the number of people at-risk-
of-poverty  or  social  exclusion  went  down  by  86 
000  in  2024  compared  to  2019.  However,  taking 
into  account  the  persistent  gaps  between  groups, 
there appears to be further scope for policy action. 
a 
While 
complementary  target  on  child  poverty  reduction 
by  2030  under  the  framework  of  the  Pillar  of 
Social  Rights, 
for 
implementation  of  the  European  Child  Guarantee 
(ECG)  sets the objective of halving the number of 
children  growing  up  in  poverty  (based  on  a 
national  definition)  within  four  years.  The  2024 
ECG  implementation  report  shows  progress  made 
in  some  areas,  e.g.  expanding  accessibility  of 
childcare, 
the  Early  Childhood  Development 
Programme,  or  the  guidance  on  dealing  with 
poverty.  These  measures  are  key  to  close  access 
gaps  which  remain.  For  example,  the  Netherlands 
has  among  the  largest  early  childhood  education 
and  care  participation  gaps  between  children 
under  three  in  poverty  (31.1%)  and  those  not  in 
poverty (71.6%) in 2023. 

the  2022  action  plan 

set 

House prices increased significantly over the 
last  decade  and  household  indebtedness  is 
high.  House  prices  have  increased  by  more  than 
80%  since  2015.  They  decreased  marginally  in 
2023 (-1.9%)  but are estimated to be overvalued 
following  years  of  strong  increases  (+13.3%  in 
2022  and  +14.5%  in  2021).  In  recent  years,  the 
adjustment to the higher interest rate environment 
occurred  more  significantly  through  quantities 
than  through  prices,  with both  house transactions 
and  building  permits  falling  in  2022  and  2023. 
House  prices  have  increased  further  in  2024 
in  Q3-2024).  Looking 
(+10.3%  year-on-year 
ahead, increases in wages and a continued lack in 
housing  supply  could  add  upward  pressures  on 
house 
household 
indebtedness  is  high  with  debt  representing  95% 
of GDP and 144% of households’ gross disposable 
income  in  2023.  In  terms  of  financial  stability,  in 
February 2024, the European Systemic Risk Board 
concluded  that  the  residential  real  estate  market 
in  the  Netherlands  was  subject  to  high  risks  and 
the  macroprudential  policy  mix  was  appropriate 

Furthermore, 

prices. 

79 

0246810121416182015201620172018201920202021202220232024% of populationNLAt-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
  
 
 
but  only  partially  sufficient  to  mitigate  the 
situation. 

The  overall  housing  affordability  has 
deteriorated  due  to  booming  house  prices 
and  sluggish  dwelling  provision,  reflecting  a 
strong  mismatch  between  supply  and 
demand. Over the past decade, the pace of house 
prices  has  exceeded  that  of  household  incomes 
and  the  standardised  house  price-to-income  ratio 
has  increased  by  27%  since  2015  despite  a 
marked  easing  in  2023.  This  ratio  stands  around 
27% above its long-term average. Since 2015, the 
ratio  of  dwellings  per  capita  has  been  relatively 
stable,  showing  a  modest 
increase  of  2%. 
However,  it  continues  to  lag  approximately  10% 
behind  the  euro  area  average,  contributing  to  an 
estimated  housing  shortage  of  over  400,000 
dwellings in 2024. At the same time, although the 
ratio  of  house  completions  per  capita  has  surged 
by nearly 50% since 2015, placing it above the EU 
average,  the  actual  number  of  new  dwellings 
constructed  has  declined,  decreasing  by  5%  in 
2024 after a 6% drop in 2023. Meanwhile, despite 
a  rebound  in  2024,  residential  building  permits 
have  been  decreasing  over  the  past  years,  which 
could  imply  more  limited  supply  of  new  housing 
looking  ahead.  Taking  into  account  the  cost  of 
mortgages,  the  borrowing  capacity  of  households 
worsened  over  the  past  decade  as  an  average 
household  needs  a  higher  share  of  its  annual 
income  for  mortgage  payments.  The  ratio  of  new 
rents to incomes increased over the last decade. 

their 

than  40%  of 

The  housing  cost  overburden  remains  a 
persistent  challenge,  especially  for  lower-
income  households.  The  share  of  population 
living  in  households  where  total  housing  costs 
represented  more 
total 
disposable household income increased from 8.3% 
in  2020  to  10%  in  2022  (EU:  9.1%).  It  then 
decreased slightly to 9.3% in 2023 and further to 
6.9%  in  2024  (EU:  8.2%).  Inflation,  rising  energy 
prices  and  the  scarcity  of affordable  and  suitable 
housing  have  significantly  impacted  household 
disposable  incomes.  In  the  Netherlands,  20.5%  of 
households disposable income is spent on housing 
(EU:  19.2%).  This  issue  is  particularly  pronounced 
for households with an income below 60% of the 
median equivalised income, with  27.9% of people 
risks  overburdened  by 
experiencing  poverty 
housing 
Tenants  are 
(EU:  31.1%). 
disproportionately  affected:  43.9%  of  tenants 
renting at the market price and  14.3% of tenants 
renting  at  reduced  price  (for  instance  social 

costs 

in 

the 

personal 

to  simplify  and 

housing) face housing cost overburden, while only 
1.0% of homeowners with a mortgage experience 
this  overburden.  The  Dutch  government  is  taking 
measures 
increase  housing 
benefits.  Almost  all  current  recipients  of  housing 
benefits  (around  1.5  million  people  (171)),  are 
expected to see an increase in their benefit as part 
of  these  simplifications,  which  include  a  general 
reduction 
contribution, 
harmonisation  of  the  number  of  household  types 
within the housing benefits and an introduction of 
a  linear  income-dependent  reduction.  In  addition, 
the  simplification  is  expected  to  increase  the 
number  of  beneficiaries  by  170  000  people  in 
2026 compared to 2024 (172). In 2023, 7% of the 
surveyed 
experiencing 
housing  difficulties  in  the  past,  a  share  which 
almost  doubled  for  people  at-risk-of-poverty  or 
social  exclusion  (13%)  (173).  According  to  latest 
available  administrative  data  (2023),  30  600 
the 
people 
Netherlands, including people living on the streets, 
unconventional 
emergency 
dwellings 
or 
acquaintances (174). The country has put in place a 
National  Action  Plan  on  Homelessness:  Housing 
First  (2023-2030)  aiming  to  significantly  and 
structurally 
the 
Netherlands,  in  line  with  the  ambition  of  the 
Lisbon  Declaration  to  end  homelessness  by  2030 
(175), which emphasises prevention and housing. 

accommodation, 

homelessness 

homelessness 

and  with 

population, 

reported 

friends 

family, 

reduce 

facing 

are 

in 

in 

in 

the  Netherlands 

is 
Energy  poverty 
relatively  low.  In  2024,  7.1%  of  the  population 
were unable to keep their homes sufficiently warm 
(EU:  9.2%).  However,  this  represents  a  significant 
increase of 4.7 pps since 2021 and for people at-
risk-of-poverty  or  social  exclusion,  the  share  is 
19.5%.  Only  1.9%  of  individuals  faced  arrears  on 
utility bills (EU:  6.9%). To address energy poverty, 
the  Netherlands  is  implementing  various  energy 
efficiency  measures,  such  as  home  insulation 
referred  to  as  ‘energyfixers’,  and  established  a 
price  cap  during  the  winter  months.  In  recent 

(171) Ministerie van Financien.  Aantallen en bedragen | Over ons 

werk | Over Dienst Toeslagen 

(172) Ministerie van Binnenlandse Zaken. Explanatory 

memorandum 

(173) EU SILC on housing difficulties 

https://doi.org/10.2908/ILC_LVHD01. 

(174) Statistics Netherlands (CBS) (2024). 

(175) Dutch National Action Plan on Homelessnes: Housing First 

(2023-2030) 

80 

 
 
the  government  supported 

years, 
the  most 
vulnerable  households  as  low-income  households 
could apply for an energy allowance. However, the 
country  would  benefit  from  more 
targeted 
structural measures to address the root causes of 
energy poverty. 

The Netherlands has a relatively low level of 
income  inequality.  The  income  quantile  share 
ratio  (S80/S20  ratio)  fell  to  3.72  in  2024  (EU: 
4.66).  Despite  a  slight  increase  from  the  previous 
year,  growth  in  real  gross  disposable  household 
income  per  capita  remains  slightly  below  the  EU 
average,  standing  at  109.36 
(EU:  111.05). 
However,  the  Dutch  government  aims  to  make 
work  more  rewarding  by  reducing  the  income  tax 
rate.  Starting  in  2025,  income  tax  rates  will  be 
adjusted,  with  a  reduction  in  the  first  tranche.  In 
addition,  instead  the  current  system  with  two 
tranches  of  different  tax  rates  on  income,  will  be 
replaced by a system of three tranches with three 
income tax rates. 

and 

poverty 

Transport 
environmental 
inequalities  do  not  present  major  obstacles 
to  the  fair  green  transition.  The  share  of 
people  who  could  not  afford  a  car  was  5.2%  in 
2024 (EU: 5.6%) This share was higher for people 
experiencing  poverty  risks,  yet  slightly  below  the 
EU  average  (15.2%  vs  15.9%  in  2024).  This 
suggests  that,  while  the  general  population  does 
not  face  challenges  in  affording  a  car,  transport 
poverty  risks  become  more  prominent  among 
vulnerable income groups. Particularly those at risk 
of poverty  face difficulties as  the cost  of fuel for 
private  transport  is  very  high.  Recent  analysis 
shows  that  between  113 000  and  270 000 
households  in  the  Netherlands  have  low  income 
and high fuel costs. In this group, between 73 000 
and  175 000  households  are  extra  vulnerable 
because they have low financial assets and limited 
(176).  On 
access 
environmental 
consumption 
footprint  for  20%  of  the  population  with  the 
highest  income  was  1.5  times  higher  than  the 
footprint of the poorest 20% in 2022 (EU:1.9). 

to  nearby  public 
inequalities, 

transport 
the 

(176) TNO (2024). Groep huishoudens kwetsbaar in transitie naar 

duurzame mobiliteit 

81 

 
 
 
ANNEX 12: EDUCATION AND SKILLS 

in  all 

increased 

International  Student  Assessment 

The  Netherlands’  long-term  productivity  and 
competitiveness  is  threatened  by  declining 
basic skills (especially among disadvantaged 
students),  persistent  teacher  shortages,  and 
shortages of skills needed for the green and 
digital  transitions.  The  share  of  underachievers 
among  15-year-olds 
three 
competence areas tested in the OECD Programme 
(PISA). 
for 
Several measures have been launched to address 
declining  basic  skills,  but  teacher  shortages  and 
the  early  streaming  of  pupils  into  many  different 
tracks can limit their effect. The low share of STEM 
and 
ICT  graduates  further  exacerbates  skills 
shortages.  While  the  Netherlands  has  one  of  the 
highest participation rates in adult learning, certain 
in  an  unfavourable  employment  or 
groups 
vulnerable social position currently participate less 
in lifelong learning. 

hamper 

support 

Participation  in  early  childhood  education 
and  care  (ECEC)  from  age  three  is  higher 
than  the  EU  average,  but  staff  shortages 
for 
targeted 
may 
disadvantaged children. 93.2% of all children in 
the Netherlands are in ECEC, below the EU average 
(94.6%)  and  the  EU  level  target  for  2030  (96%). 
Children  at  risk  of  poverty  or  social  exclusion  are 
less  likely  to  participate  in  ECEC  than  those  who 
are  not  at  risk  (in  2023,  the  gaps  amounted  to 
35.2 percentage  points  (pps)  for  the  0-3  age 
group).  30%  of  the  facilities  offering  early 
childhood  education  for  disadvantaged  children 
aged 
shortages, 
face 
corresponding  on  average  to  25%  of  their  total 
staff (178).  At  national  level,  staff  shortages  are 
estimated  to  further  increase  to  7 700  people  by 
2031,  five times  higher  than  the  current  level.  To 
address current and future shortages, the Minister 
of  Social  Affairs  announced  several  measures, 
including  introducing  a  new  type  of  position  for 
unqualified  people  in  combination  with  career 
for 
incentives 
development,  and  providing 
qualified employees to work more hours (179). 

2.5-4 (177) 

staff 

(177) Early childhood education (Voor en vroegschoolse educatie) 
aims to help toddlers who may risk a developmental delay 
so that they can have a good start in primary school. 

(178) Bakker, A.F., Das, L., Lange, A. De, Leseman, P. & Varwijk, J.: 

Personeelstekort bij voorschoolse educatie 

Students’  basic  skills  declined  sharply  over 
the  past  decade  but  the  shares  of  top 
performers  in  mathematics  and  science  are 
among  the  highest  in  the  EU.  In  2012,  the 
share  of  underachieving  students  was  below  the 
EU  2030  target  (15%)  and  well  below  the  EU 
average in all three domains. However, by 2022, it 
had almost doubled in mathematics and in science 
and  it  was  2.5  times  higher  in  reading (180).  The 
underachievement  rate  is  below  the  EU  average 
only in mathematics, also following an increase in 
the  EU  average (181).  Almost  half  of  foreign-born 
students  underachieve  in  mathematics  (48.5%). 
foreign-born 
For  native-born  students  with 
parents, 
is 
considerably lower (37.9%). Over a 10-year period, 
average performance in reading and mathematics 
declined  more  than  on  average  in  the  EU.  The 
decline  varied  substantially  between  different 
streams  in  secondary  education,  with  students  in 
the lowest streams showing the greatest decline in 
test  scores (182).  Even 
the  share  of  top 
the 
performers  has  decreased  significantly, 
Netherlands 
top 
the  highest 
shows 
performance rate in mathematics in the EU (183). In 
terms of digital skills, most Dutch students are low 
achievers  and 
largest 
differences in the EU according to the level of their 
parents’ education (184). 

underachievement 

students 

show 

rate 

still 

the 

the 

if 

Underachievement 
increased  significantly 
among  disadvantaged  students.  In  2018,  only 
26.1% of students from the bottom quarter of the 
socio-economic  index  used  in  the  PISA  study 
lacked  basic 
in  mathematics 
compared  with  5.3%  of  advantaged  students. 
These  rates  had  increased  to  42%  and  9.9%, 
respectively,  by  2022.  Educational  inequalities 
have negative implications later in life, with lower 
participation  of  disadvantaged  young  people  in 

competencies 

(180) OECD (2023a), PISA 2022 Results (Volume I): The State of 

Learning and Equity in Education. 

(181) In PISA 2022, the underachievement rates were 34.6% in 

reading (EU: 26.2%); 27.4% in mathematics (EU: 29.5%) and 
27.3% in science (EU: 24.2%). 

(182) Meelissen, M., Maassen, N., Gubbels, J., Langen, A. Van, Valk, 
J., Dood, C., Derks, I., Zandt, In’t, M. & Wolbers, M. Resultaten 
PISA-2022 in vogelvlucht 

(183) In PISA 2022, the top performance rates were 15.4% (EU: 
7.9%) in mathematics; 10.5% (EU: 6.9%) in science and 
7.0% (EU: 6.5%) in reading. 

(179) Minister van Sociale Zaken en Werkgelegenheid: Kamerbrief 

(184) International Computer and Information Literacy Study 

voortgang aanpak personeelstekort kinderopvang 

(ICILS) in Europe – 2023. . 

82 

 
 
 
 
 
 
in  2022 

higher  education  and  of  adults  with 
low 
qualifications  in  lifelong  learning.  In  response  to 
declining  basic  skills, 
the  Dutch 
government  launched  the  ‘Master  plan  for  basic 
skills’ to promote Dutch reading and writing skills, 
mathematics,  citizenship  education  and  digital 
literacy.  The  learning  goals  in  the  curriculum  are 
also being streamlined, with a focus on basic skills 
development.  At  the  same  time,  a  number  of 
measures  addressing  disadvantaged  pupils  were 
abolished  or  had  their  financing  reduced  in  the 
2025  budget  cuts (185).  In  2021,  the  Education 
Council  recommended  abolishing  the  end-of-
primary test and postponing the time of streaming 
until after the first three years of secondary school 
to make education more accessible. 

Teacher  shortages  are  considerable  and 
impact  education  outcomes.  In  2024,  8.1%  of 
teacher  posts  and  9.8%  of  school-head  posts  in 
primary  education  were  not  filled (186).  Shortages 
differ considerably by the share of disadvantaged 
pupils in the school and between regions. The lack 
of qualified teachers can impact students’ learning 
outcomes  and  hinder  access  to  quality  education 
for  all (187).  The  largest  shortages  are  faced  by 
primary  schools  in  the  five  biggest  cities  (15.8% 
compared  with  6.6%  outside  these  cities)  and 
primary  schools  for  students  with  special  needs 
(12.1% 
regular 
schools) (188). In secondary education, the shortage 
is somewhat lower, at 5.1% on average. The 2022 
teacher  strategy  proposed a number of measures 
to improve the attractiveness of the profession. In 
the  Education  Agreement  of  April  2022,  the 
government  committed  to  a  yearly  investment  of 
EUR 1.5 billion  in  the  salaries  of  teachers  and 
other teaching staff. 

compared  with  9.4% 

in 

implementation  plan  focuses  on: 

Participation  in  vocational  education  and 
training  (VET)  remains  significantly  higher 
than  in  other  Member  States.  The  share  of 
students  at  medium-level  education  attending 
programmes  with  a  vocational  orientation  was 
significantly  higher  than  the  EU  average  in  2023 
(69.6% vs 52.4%). The exposure of VET graduates 
to  work-based  learning  was  well  above  the  EU 
average  (94.3%  vs  65.3%  in  2024).  Recent  VET 
graduates  also  have  a  high  employment  rate 
(90.5% vs the EU average of 80.0%) This indicates 
that  programmes  appear  to  be  effective 
in 
equipping  people  with  the  knowledge,  skills  and 
competencies  required  for  specific  occupations 
and  the  labour  market  in  general.  The  updated 
national 
(i) 
promoting  equal  opportunities  in  VET  and  making 
it  more  inclusive;  (ii)  strengthening  links  between 
VET  and  the  labour  market;  (iii)  ensuring  a  high-
quality,  future-ready  VET  through  research  and 
improving  flexibility  and 
innovation;  and 
promoting  a  lifelong  learning  culture  in  VET. 
Specific measures targeting VET students focus on 
numeracy,  Dutch 
citizenship 
literacy, 
competencies,  and  are  offered  as  mandatory 
courses.  Additional  measures  will  help  adapt  VET 
to  the  current  and  future  dynamics  of  the  labour 
market.  The  Netherlands  is  adapting  its  VET 
programmes  and  apprenticeships  to  meet  the 
demands  of  the  green  transition.  There  are  many 
climate,  energy  and  housing-related  secondary 
accessible 
vocational 
through 
through 
apprenticeships 
Qualifications 
levels  2,  3,  4).  There  are  also 
Framework 
installing  charging 
apprenticeship  courses  on 
stations and solar panels and on reducing the use 
of gas. 

the  school-based 

certificates 

(European 

education 

track  or 

and 

(iv) 

(185) Measures include the funding for establishing bridge classes 
in secondary education; bonuses for teachers in big cities and 
programmes to enhance transitions from lower tracks of 
vocational education training to higher tracks. See Ministerie 
van Onderwijs, Cultuur en Wetenschap: OCW-begroting 
2025: basis op orde, kwaliteit omhoog 

(186) Ministerie van Onderwijs, Cultuur en 

Wetenschap:Trendrapportage Arbeidsmarkt Leraren po, vo en 
mbo 2024 

(187) European Commission / EACEA / Eurydice: Structural 

indicators for monitoring education and training systems in 
Europe – 2023: The teaching profession 

(188) Centerdata: De toekomstige arbeidsmarkt voor 
onderwijspersoneel. Po, vo en mbo. 2023-2033 

is 

The  tertiary  attainment  rate  is  among  the 
highest in the EU but the share of graduates 
in  STEM 
low,  contributing  to  skills 
shortages. Of the population aged 25-34, 55.1% 
holds  a  tertiary  degree  (EU  average:  44.2%). 
Tertiary  attainment  is  also  high  among  the  non-
EU-born  population  (47.8%,  EU  average:  38.4%). 
However,  in  2022  the  share  of  STEM  graduates 
was  low  (20.1%  of  all  tertiary  graduates,  EU 
average: 26.6%). The share of tertiary students in 
STEM  subjects  was  17.4%  (EU  average:  27.1%). 
From  these,  only  5%  were  female  (EU  average: 
8.6%).  According  to  national  data,  girls  are  even 
more underrepresented in technical VET studies (F: 

83 

 
 
9%;  M:  46%) (189).  The  share  of  students  enrolled 
in ICT subjects (4.1%) was also lower than the EU 
average (5.2%). 

Graph A12.2: Adult learning 

is  scope  to 

There 
improve  green  skills 
through  school,  VET  and  higher  education. 
Less  than  a  fifth  of  Dutch  schools  offered  all  or 
nearly  all  their  8th  graders  opportunities  to  take 
to  environmental 
related 
part 
sustainability  (EU-17  average:  48%) (190).  Dutch 
students  scored  around  the  average  level  for 
knowledge of sustainable development among the 
17 EU countries surveyed. 

in  activities 

Graph A12.1: Underachievement rate in 
mathematics by students’ socio-economic 
background, PISA 2022 

(1) Participation in learning in the last 12 months (excluding 
guided on the job training) 
Source: Eurostat Adult Education Survey 2022 

Source: OECD (2023). 

light  of  persistent  shortages,  skills 
In 
development 
is  essential  for  enhancing 
competitiveness  and  promoting  resilience 
and  fairness.  Nearly  7  in  10  small  and  medium 
enterprises  report  difficulties  in  finding  workers 
with  the  right  skillset (191).  The  Netherlands  has  a 
long-held  tradition  of  conducting  systematic  skills 
anticipation 
sectoral 
development  pathways  are  being  developed  to 
stimulate  the  inflow  of  qualified  workers  into 
shortage  sectors  and  occupations  (e.g.  care  and 
technology  fields).  These  pathways  are  intended 
for  both  workers  and  jobseekers,  including  people 
away from the labour market. 

Furthermore, 

exercises. 

workers, 

electrical 

The availability of a skilled workforce is key 
for  competitiveness  and  for  the  success  of 
the green transition. Nearly half of SMEs in the 
Netherlands say skill shortages are hindering their 
efforts to adopt digital technologies or green their 
business activities (192). According to the European 
Labour Authority, shortages were reported in 2024 
for several occupations that required specific skills 
or  knowledge  for  the  green  transition,  including 
insulation 
engineering 
technicians  and  building  and  related  electricians, 
and  environmental  engineers (193).  Furthermore,  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  in  skills  of  EUR 121.3-151.7 million. 
About  49 000  people  will  benefit  from  upskilling 
and  reskilling  through  the  Just  Transition  Fund 
(JTF).  In  line  with  the  objectives  of  the  Council 
Recommendation  of  2022  on  ensuring  a  fair 
the 
transition 
Netherlands is investing – mainly through the JTF - 
in the skills needed for a fair green transition. The 
JTF provides upskilling and reskilling opportunities 
to  workers  in  emission-intensive  regions  most 
affected  by  the  climate  transition  and  people  at 
the  margins  of  the  labour  market  to  ensure  that 
people have the necessary skills for the transition. 
The  JTF  will  also  support  240 SMEs  investing  in 

neutrality, 

towards 

climate 

(189) Platform Talent voor Technologie 

(190) 2022 International Civic and Citizenship Education Study 

(192) Ibid. 

(ICCS). The average in the 17 Member States surveyed was 
48%. 

(191) Eurobarometer survey 

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

84 

05101520253035404550NLEUNLEUNLEUTotalAdvantaged studentsDisadvantaged students%2030 EU target1020304050602022EUNL 
  
 
  
 
target  of  at  least  62%  of  adults  participating  in 
training every year by 2030, which should support 
competitiveness further.  

skills  and 

The  Netherlands  is  continuing  to  invest  in 
tackling  labour  shortages.  Under  the  European 
Social  Fund  Plus,  the  Netherlands  continues  to 
make  investments  to  help  people  from  groups  in 
an  unfavourable  employment  and/or  vulnerable 
social  situation  find  work  or  training  and  activate 
people’s  untapped 
employment 
potential.  The  Dutch  recovery  and  resilience  plan 
(as amended in 2024) also includes an investment 
measure  for  the  upskilling  and  reskilling  of 
temporarily  unemployed  individuals  with  a  weak 
position 
labour  market  position.  This 
‘Scholingsregeling  WW’  has  become  structural  as 
of 2023 and provides financial support for at least 
8 000  training  programmes  for  upskilling  and 
reskilling  to  facilitate  the  employment  of  the 
target group. 

in  the 

Integrated 

skills  for  smart  specialisation  and 
industrial 
territorial  development 
transition. 
projects  co-funded  by  the  European  Regional 
Development  Fund  will  reach  almost  166 000 
people. 

The  Netherlands  generally  performs  very 
well  on  adults'  basic  digital  skills.  The 
Netherlands  has  the  highest  share  of  individuals 
with  at  least  basic  digital  skills  in  the  EU  (83% 
versus  an  EU  average  of  56%).  The  already  high 
share of ICT specialists is improving, but shortages 
of technically skilled staff are reported as a major 
bottleneck to further expansion of the sector (see 
Annex 10)  The  Dutch  recovery  and  resilience  plan 
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  Netherlands  has  one  of  the  highest 
participation  rates  in  adult  learning  in  the 
EU. In 2022, 56.1% of the population aged 25-64 
participated  in  formal  or  non-formal  training 
(excluding  on  the  job  training).  Despite  showing  a 
slight decrease compared to 57.1% in 2016, this is 
still one of the highest rates in the EU and close to 
the  2030  target  of  at  least  62%  set  by  the 
Netherlands.  Nevertheless,  the  country  continues 
to face challenges in increasing participation rates, 
promoting workplace learning, expanding access to 
learning  opportunities  and  nurturing  a  culture  of 
lifelong learning. These challenges are particularly 
relevant  for  those  groups  who  would  benefit  the 
most 
learning  but  currently 
participate  less  (people  with  lower  levels  of 
education  and  skills,  those  working  on  flexible  or 
temporary contracts, and those who are out of the 
labour force). 

lifelong 

from 

More targeted or tailored support could help 
increase the effective outreach for upskilling 
and  reskilling  those  in  an  unfavourable 
labour  market  situation.  These  groups  include 
the  low-skilled,  people  with  flexible  or  temporary 
contracts,  people  with  a  migrant  background,  and 
persons with disabilities. The decentralised system 
of providing support means that vulnerable groups 
in  particular  may  not  always  be  equally  or 
adequately  supported.  Continued  investment  in 
technical  and  digital  skills, 
improving  basic, 
increasing  mobility  between  sectors,  sustainable 
employability,  and  improving  the  quality  and 
inclusiveness of education and training for all are 
essential for the Netherlands to reach its national 

85 

 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Netherlands 

(1) Update of 5 May 2025. 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 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

86 

56,17,082,74,97,63,7283,53,70,5109,415,415,841,020,96,978,90,6Critical situationTo watchWeak but improvingGood but to monitorOn averageAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketSocial Scoreboard for NetherlandsBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2024)Young people not in employment, education or training(% of the population aged 15-29, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)Employment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024) 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

The  Netherlands’  health  system  performs 
comparatively  well.  Nevertheless,  specific 
challenges  need  to  be  addressed  if  the 
country  is  to  improve  the  health  of  its 
fairness,  while 
social 
population  and 
boosting the competitiveness of its economy. 
Healthcare  spending  in  the  Netherlands  is  among 
the  highest  in  the  EU  and  primarily  focuses  on 
outpatient services. The country also has a strong 
primary care system. However, the declining focus 
on  preventive  care  may  raise  concerns  about  the 
sustainability of the healthcare system, especially 
as  rising  demands  for  healthcare  are  increasing 
the  workloads  of  health  professionals,  which  in 
turn affects retention and the attractiveness of the 
profession. Structural shortages of certain types of 
healthcare worker also pose a major challenge. 

Graph A14.1: Life expectancy at birth, years 

Source: Eurostat (demo_mlexpec) 

Life  expectancy  at  birth  in  the  Netherlands 
almost  rebounded  to  its  pre-COVID-19  level 
and  was  slightly  above  the  EU  average  in 
2023.  However,  there  is  a  gender  gap  in  the 
country,  with  women  expected  to  live  3  years 
longer than men (below the EU average gap of 5.3 
years). That said, women spend approximately 4.4 
fewer  years  in  good  health  than  men.  Treatable 
mortality is one of the lowest in the EU. However, 
while  it  saw  a  slight  increase  in  2021  and  2022 
compared to 2020, it remains below pre-pandemic 
levels.  Cancer  mortality  is  above  the  EU  average, 
with  lung  cancer  being  one  of  the  main  causes. 
This  correlates  with  tobacco  use  being  the 
country’s  leading behavioural  risk  factor.  In  2022, 
cancer was followed by cardiovascular diseases as 
the  main  cause  of  deaths.  The  national  suicide 
rate decreased by 4.8% since 2013 to reach 10.8 
% in 2022, slightly above the EU average of 10.6 
The  national  agenda  for  suicide  prevention  for 
2021-2025,  built  from  the  previous  one  (2018-
2021) 
includes  a  multi-disciplinary  approach, 
focusing  on  training  health  workers  and  those  in 

87 

contact  with  high-risk  groups.  The  pressure  on 
youth mental healthcare services has intensified in 
the  Netherlands,  with  a  23%  increase  in  use 
between 2015 and 2022, and growing costs. 

Graph A14.2: Treatable mortality 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

The  country  has  a  strong  primary  care 
system.  In  2022,  health  spending  per  inhabitant 
in  the  Netherlands  (adjusted  for  differences  in 
purchasing  power)  was  among  the  highest  in  the 
EU, with the largest part going towards outpatient 
care  (but  only  slightly  above  the  EU-average 
share).  The  country  had  more  than  40%  fewer 
hospital  beds  per  inhabitant  than  the  EU  average 
in 2022. The shortage of intensive care unit beds 
was seen as a significant challenge in light of the 
COVID-19  pandemic.  At  primary  care  level,  the 
Netherlands  has  a  high  share  of  spending  on 
dental  care,  with  voluntary  health  insurance  also 
playing  a  key  role.  Compulsory  health  insurance 
covers  more  than  three  quarters  of  all  health 
costs,  and  public  funds  cover  a  large  part  of  the 
rest, resulting in a low proportion of out-of-pocket 
payments.  

Regarding  public  health,  the  focus  the 
Netherlands  places  on  disease  prevention  is 
declining.  Spending  on  preventive  care  has  been 
decreasing  sharply in  recent  years,  reaching  5.7% 
of total health expenditure in 2022, slightly above 
the  EU  average.  The  preceding 
in 
expenditure  on  prevention  between  2019  and 
2021  was  primarily  driven  by  COVID-19  testing, 
tracing and vaccines, which accounted for over two 
thirds  of  the  annual  costs  of  preventive  care  in 
2021.  The  Netherlands  is  doing  relatively  well  in 
reducing risk factors, with one of the highest rates 
of physical activity outside of working hours and a 

increase 

82.281.481.481.781.981.380.480.180.681.420192020202120222023NetherlandsEU64.761.459.059.759.291.389.291.793.389.720182019202020212022per 100 000 populationNetherlandsEU 
 
        
        
 
 
Table A14.1:Key health indicators 

*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 based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source: Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

(2.7%). 

In  2023, 

the  EU  average 

high  consumption  of 
fruit  and  vegetables. 
However, the regular use of vaping products (194) is 
fairly  high  among  young  adults  (6.8%)  compared 
the 
to 
Netherlands had the lowest antibiotic consumption 
in the EU (9.6 defined daily doses per day and per 
1 000  inhabitants),  significantly  below  the  EU 
increased 
average  (20).  However,  this  figure 
slightly  compared 
is 
participating 
joint  action  funded  by 
EU4Health  on  Antimicrobial  Resistance  and 
Healthcare-Associated Infections EU-JAMRAI 2. 

to  2019.  The  country 

the 

to 

(RRP) 

insufficient  time  for  patient  care  due  to  heavy 
administrative  burdens.  The  Dutch  recovery  and 
resilience  plan 
includes  two  measures 
specifically  to  help  address  health  workforce 
challenges:  one  aims  to  boost  workforce  capacity 
during  crises  through  vocational  training  and  by 
setting  up  a  national  care  reserve  of  former 
focuses  on 
professionals,  while 
expanding  intensive  care  capacities  by  improving 
hospital infrastructure and providing intensive care 
training for nurses. 

the  other 

Structural  shortages  of  certain  healthcare 
workers are an ongoing challenge, especially 
in  rural  areas.  Recent  estimates  predict  a 
shortage  of  nearly  277  000  healthcare  staff  by 
2033,  including  for  long-term  care  services  (see 
Annex  10).  The  number  of  doctors  relative  to  the 
population is slightly below the EU average, while 
the  number  of  nurses  is  above  the  EU  average, 
suggesting  a  greater  reliance  on  nurses 
in 
delivering  services,  participating  in  task-sharing 
and  engaging  in  advanced  practices.  However, 
nursing  staff  are 
increasingly  overwhelmed, 
particularly in hospitals, and some choose to work 
part-time.  There  is  also  a  growing  trend  of 
healthcare  workers  opting  for  self-employment 
over salaried positions. The shortage of healthcare 
professionals  is  exacerbated  by  challenges  with 
job  strain  and  satisfaction,  work-life  balance, 
workplace aggression, prompting many to consider 
leaving  the  profession.  Healthcare  professionals 
often  raise  concerns  about  limited  autonomy  and 

foster 

innovation  and 

The Dutch health system has the potential to 
drive 
industrial 
development  in  the  EU  medical  sector.  The 
Netherlands  is  among  the  countries  with  the 
highest  public  spending  on  health  research  and 
development.  The  Netherlands  generated  449 
European  patents  in  2023  in  the  combined  areas 
of  pharmaceuticals,  biotechnologies  and  medical 
devices (vs an EU-level median of 29) (195).  

The  Netherlands  has  among  the  highest 
uptakes  of  e-health  and  overall  rates  of 
health  system  digitalisation 
in  the  EU, 
including data storage and sharing. The share 
of  people  using  online  health  services  (excluding 
phone) 
consultations 
increased significantly in 2024 compared to 2022 
and is well above the EU average (42.6 vs 20.8%). 
The  share  of  patients  accessing  their  personal 
health  records  online  is  also  significantly  above 
the  EU  average  (47.7%  vs  27.7%).  Despite  these 
positive  trends,  there  is  still  room  to  improve  the 

instead  of 

in-person 

(194) OECD/European Commission (2024), Health at a Glance: 

Europe 2024 - State of Health in the EU Cycle, Chapter 4. 

(195) European Patent Office, Data to download | epo.org 

88 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population266.6261.3256.2254.1n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 239.0 219.7 219.9 225.7n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 9324 2384 5654 531n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 82.8 85.0 84.9 84.2n.a.81.3 (2022)Spending on prevention, % of current health expenditure 3.34.68.65.7n.a.5.5 (2022)Available hospital beds per 100 000 population** 222 212 183 166n.a.444 (2022)Doctors per 1 000 population*3.83.83.93.9n.a.4.2 (2022)*Nurses per 1 000 population* 10.8 11.1 11.4 11.5n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality13.712.813.212.812.614.3 (2023)Number of patents (pharma / biotech / medical technology)68268750441544929 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****9.58.58.39.19.620.0 (2023) 
 
 
 
       
 
overall  technical  deployment  of  electronic  health 
records (see Annex 6).  

of 
reduction 

deployment 
the 
for 

The  government  prioritises  guidelines  and 
policies  that  enable  the  rapid,  safe,  and 
artificial 
responsible 
intelligence 
of 
administrative  burdens.  This  contributes  to  the 
broader  goal  of  reducing  the  time  healthcare 
professionals  spend  on  administrative  tasks  from 
40%  to  20%  of  the  working  hours,  while 
simultaneously      speeding  up  improvements  in 
in  both  the 
data  availability  and  exchange 
healthcare and welfare sectors. 

The Dutch RRP includes two measures out of 
the  four  within  the  healthcare  component 
specifically  aimed  at  supporting  the  digital 
transformation of the healthcare sector. One 
measure aims to support care for people living at 
home,  particularly  older  adults  and  those  with 
vulnerable health, by using e-health solutions that 
were  developed  during  the  COVID-19  pandemic. 
This  would  also  help  address  shortages  in  the 
health workforce. A second measure is designed to 
stimulate 
sciences  and 
in 
healthcare  by  standardising  and  connecting  data 
Infrastructures 
through 
(Health  RI)  consortium.  This  would  entail:  (i) 
developing  an  integrated  national  health  data 
infrastructure; 
and 
agreements 
organisational 
between  public  and  private  stakeholders;  and  (iii) 
setting  up  a  central  hub  for  data  sharing,  in  line 
with the European Health Data Space Regulation. 

the  Health  Research 

(ii) 
barriers 

innovation 

removing 

through 

social 

life 

89 

 
 
 
 
 
 
 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

sustainability, 

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

related 

The  Netherlands  performs  very  well  on  SDG 
indicators 
competitiveness 
(SDGs 4,  8  and  9).  When  it  comes  to  quality 
education (SDG 4), the Netherlands has one of the 
highest share of people with at least basic digital 

to 

skills  (82.7%  in  2023;  EU  average:  55.6%),  and 
one of the highest shares of adult participation in 
learning  (26.5%  in  2024;  EU  average:  13.3%).  In 
addition, the level of tertiary education attainment 
increased  further  (from  49.1%  in  2019  to  55.1% 
in  2024)  and  is  substantially  above  the  EU 
average  of  44.2%  in  2024.  On  SDG 9  (Industry, 
innovation  and  infrastructure),  the  Netherlands 
outperforms  the  EU  average  in  some  indicators. 
The  share  of  households with  high-speed internet 
connection in 2023 (98.3%) was well above the EU 
representing  a  continuous 
average 
positive  progress  on  this  indicator  since  2019 
(88.6%). The share of R&D investments as a share 
of GDP in the Netherlands slightly increased (from 
2.1%  in  2018  to  2.2%  in  2023),  although  it 
remained  just  below  the  EU  average  (2.24%  in 
2023).  The  share  of  R&D  personnel  among  the 
active  population  rose  from  1.7%  in  2018  to 
around 2% in 2023 (EU average: 1.56% in 2023). 
The  Dutch  Recovery  and  Resilience  Plan  (RRP) 
includes  several  measures  to  further  improve 

(78.8%), 

Graph A15.1: 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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

90 

 
 
 
 
 
 
 
digital skills and upskill and reskill the workforce. 

time 

The  Netherlands  performs  well  on  several 
SDGs related to sustainability (SDGs 2, 9 and 
12).  However,  it  still  needs  to  catch  up  with 
the EU average on SDGs 7, 11, 14 and 15. On 
SDG 13  (Climate  action),  net  greenhouse  gas 
emissions  have  decreased  over 
(from 
11.1 tonnes  per  capita  in  2018  to  8.2 tonnes  per 
capita in 2023) but are still above the EU average 
(6.8 tonnes per capita in 2023). As regards SDG 7 
(Affordable and clean energy), the Netherlands has 
made  considerable  progress  on  increasing  the 
share  of  renewable  energy  in  gross  final  energy 
consumption  (from  7.4%  in  2018  to  17.4%  in 
2023)  but  remains  below  the  EU  average  (24.6% 
in  2023).  The  Netherlands  also  improved  on 
indicators  such  as  primary  energy  consumption 
(3 tonnes  of  oil  equivalent  per  capita  in  2023 
compared  to  3.8  in  2018)  and  final  energy 
consumption (2.3 tonnes in 2023 compared to 2.8 
in  2018),  but  consumption  remains  above  the  EU 
average  (2.7  and  2 tonnes,  respectively,  in  2023). 
Energy import dependency increased further (from 
59.5%  in  2018  to  70.4%  in  2023)  and  is  thus 
considerably  above  the  EU  average  (58.3%  in 
2023).  Under  SDG 12  (Responsible  consumption 
and  production),  the  Netherlands  increased  its 
energy  productivity  from  8.1  EUR  per  kilogram  of 
oil equivalent (kgoe) in 2018 to 10.5 EUR per kgoe 
in  2023,  scoring  a  high  energy  productivity  level 
compared to the EU average in 2023 (9.8 EUR per 
kgoe). The Netherlands scores well on SDG 2 (Zero 
hunger),  but  when  it  comes  to  the  environmental 
impacts  of  agricultural  production,  ammonia 
emissions  from  agriculture  –  although  they  have 
decreased  between  2017  (65.3 kg)  and  2022 
(58.3 kg) – are still very high compared to the EU 
average (18.3 kg in 2022). The Dutch RRP includes 
investments to boost the deployment of renewable 
energy  and  support  the  transition  to  sustainable 
agriculture. 

The Netherlands performs well on most SDGs 
related to social fairness (SDGs 3, 4, 5 and 8) 
and  is  improving  on  the  targets  for  SDGs 1 
and  10.  The  Netherlands  outperforms  the  EU 
average  in  most  indicators  related  to  health, 
education,  gender  equality,  and  decent  work  and 
growth 
the 
Netherlands  performs  very  well  on  decent  work 
and  economic  growth  (SDG  8).  The  employment 
rate  increased  further  between  2019  and  2024 
(from  81.0% 
the 
Netherlands one of the best performers in  the EU 

(SDGs 3,  4,  5  8).  Historically, 

to  83.5%),  which  makes 

(from  13.3% 

(EU average: 75.8% in 2024). In addition, the long-
term  unemployment  rate further  decreased  (from 
0.9% in 2019 to 0.5% in 2024) and is well below 
the  EU  average  (1.9%  in  2024).  A  few  indicators 
for  SDG 1  (No  poverty)  have  slightly  improved  in 
recent  years  in  the  Netherlands.  The  housing  cost 
overburden  rate impacted  9.3%  of  the  population 
in  2023  (in  contrast  to  9.4%  in  2018),  and  the 
number  of  people  at  risk  of  monetary  poverty 
after  social  transfers  decreased  between  2018 
and  2023 
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  after  social  transfers  increased  between 
2018  and  2023  (from  21.0%  to  24.7%)  and  is 
now  above  the  EU  average  of  22.5%  in  2023.  At 
the  same  time,  the  gap  between  those  two 
categories  in  terms  of  employment  rates  slightly 
decreased  (from  20.8%  in  2019  to  20.1%  in 
2024), remaining above the EU average (12.5% in 
2024).  The  Dutch  RRP  includes  reforms  and 
investments aimed at fair education and a resilient 
health system. 

to  13.0%  of 

The  Netherlands  performs  well  on  SDGs 
related  to  macroeconomic  stability  (SDGs 8 
and 17). However, on SDG 16 (Peace, justice and 
strong  institutions),  the  population  reporting  on 
crime, violence or vandalism (16.7% of population 
in  2023)  remains  higher  than  the  EU  average 
(10% in 2023) and the perceived independence of 
the  justice  system  remained  stable  from  71%  in 
2019 to 70% in 2024 (still above the EU average 
of 52% in 2024). The corruption perceptions index 
decreased from 82% in 2019 to 78% in 2024 but 
remains  above  the  EU  average  of  62%  in  2024. 
The  Netherlands  performs  better  than  the  EU 
average on most 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. 

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

91 

 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

programmes 

policy 
and 
implementation  of  selected  projects  has  gained 
momentum.  

advanced 

is 

The  Dutch  RRP  contains  28  investments  and 
22  reforms  to  stimulate  sustainable  growth 
and  accelerate 
the  green  and  digital 
transitions.  A  year  before  the  end  of  the  RRF 
timespan,  implementation  is  delayed,  with  45.9% 
of the funds disbursed. At present, the Netherlands 
has fulfilled 40% of the milestones and targets in 
its  RRP 
the 
Netherlands  should  be  able  to  complete  all  RRP 
measures by 31 August 2026.  

(200).  With  sustained  efforts, 

The  Netherlands  also  receives  funding  from 
several  other  EU  instruments,  including  those 
listed  in  Table  A16.1.  Most  notably,  the  common 
agricultural  policy  (CAP)  provides  the  Netherlands 
with  an  EU  contribution  of  EUR 4.7  billion  under 
the  CAP  strategic  plan  2023-2027  (201).  A  further 
EUR 394.3 million are available under the Asylum, 
Migration  and  Integration  Fund  (AMIF),  together 
with the border management and visa instrument 
(BMVI)  and  internal  security  funds.  Operations 
amounting to EUR 1.1 billion (202) have been signed 
under  the  InvestEU  instrument  backed  by  the  EU 
guarantee,  improving  access  to  financing  for 
riskier operations in the Netherlands. 

The  Netherlands  faces  structural  challenges 
in a wide range of policy areas, as identified 
in  the  country-specific  recommendations 
(CSRs)  addressed  to  the  country  as  part  of 
the  European  Semester.  They  refer,  among 
other  things,  to  the  functioning  of  the  labour 
market,  skills,  vocational  education  and  training, 
renewable  energy,  energy 
infrastructure  and 
networks, and housing. 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
the 
to 
the  Netherlands 
commitments  in  its  recovery  and  resilience 
plan  (RRP).  At  this  stage,  the  Netherlands  has 
made at least ‘some progress’ on 54% of the CSRs 
(196), and ‘limited progress’ on 40% (Table A16.2). 

date 

and 

competitiveness, 

EU funding instruments provide considerable 
resources  to  the  Netherlands  by  supporting 
investments  and  structural  reforms  to 
increase 
environmental 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 5.4  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (197) 
are  providing  EUR 1.5  billion  to  the  Netherlands 
(amounting  to  EUR 3.5  billion  with  national  co-
financing)  for  2021-2027  (198)  to  boost  regional 
competitiveness  and  growth.  Support  from  these 
instruments combined represents around 0.65% of 
these 
2024  GDP 
instruments  to  different  policy  objectives 
is 
in  Graphs  A16.1  and  A16.2.  This 
outlined 
substantial  support  comes  on  top  of  financing 
provided to the Netherlands under the 2014-2020 
multiannual  financial  framework,  which  financed 
projects  until  2023  and  has  had  significant 
benefits  for  the  economy  and  Dutch  society. 
Project  selection  under  the  2021-2027  cohesion 

(199).  The  contribution  of 

(196) 9% of the 2019-2024 CSRs have been fully implemented, 
11% substantially implemented, and some progress has 
been made on 35%. 

(197) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025. 

(198) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

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

(200) As of mid-May 2025, the Netherlands has 

submitted 2 payment requests. 

(201) An overview of the Netherlands’ formally approved strategy 
to implement the EU’s common agricultural policy nationally 
can be found at: https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/netherlands_en   

applicable. GDP figures are based on Eurostat data for 2024. 

(202) Data reflect the situation on 31.12.2024. 

92 

 
 
 
 
 
 
Graph A16.1: Distribution of RRF funding in the 
Netherlands by policy field 

Plus  (ESF+)  is  allocating  EUR 413  million  through  
a  single  national  programme  primarily  targeting 
vulnerable  workers.  The  measures  focus  on 
increasing  participation  through  lifelong  learning 
and  skills  development 
labour 
shortages  and  activate  underutilised  workforce 
potential. 

to  address 

are 

contributing 

Other 
funds 
to 
in  the  Netherlands,  for 
competitiveness 
instance  through  open  calls.  The  Connecting 
Europe Facility has financed strategic investments 
in  railway  infrastructure  and  the  development  of 
alternative fuels, integration of the energy market, 
and  the  deployment  and  take  up  of  5G  in  smart 
communities.  Horizon  Europe  supported  research 
and  innovation  from  scientific  breakthroughs  to 
scaling  up 
the  European 
Research Council and Climate, Energy and Mobility 
as  top  priorities  in the  Netherlands.  The  Technical 
Support  Instrument  (TSI)  supports  actions  in  the 
Netherlands  in  areas  such  as  the  preparation  of 
national  biodiversity  finance  plans,  integrating 
sustainability  goals  into  local  public  finance,  and 
for 
improving  and  speeding  up  permitting 
renewable energy projects in regions. 

innovations,  with 

to 

the 

The  Dutch  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  Examples 
of  such  measures  covered  by  payment  requests 
submitted  over  the  past  year  are  accelerated 
residential construction procedures, skills trainings 
for workers and unemployed  persons, flexible use 
for operators of the electricity grid during times of 
congestion,  the  completion  of  an  ERTMS  planning 
study  for  the  northern  part  of  the  Netherlands  to 
enhance  railway  safety  and  interoperability,  and 
investments supporting the development of green 
hydrogen.  

EU 

current 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
green  transition  in  the  Netherlands  during 
the 
budget 
seven-year 
(multiannual  financial  framework).  Through 
ERDF  and  JTF  investments,  innovative  renewable 
energy  projects  are  expected  to  create  around 
100 MW in additional production capacity. The Just 
Transition  Fund  (JTF)  is  helping  six  regions  with 
emission-intensive  industries  to  decarbonise  by 
investing  in  innovation,  economic  diversification, 
energy infrastructure and workforce upskilling and 
reskilling. The fund will support 1 500 businesses, 
of  which  380  will  cooperate  with  research 

(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 circle 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. 
Source: European Commission 

Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in the 
Netherlands 

Source: European Commission 

Cohesion  policy  funds  aim  to  increase  the 
productivity  and  competitiveness  of  Dutch 
firms and improve the business environment. 
The  EUR  506  million  European  Regional 
Development  Fund  (ERDF)  supports  innovation  in 
small  and  medium-sized  enterprises  (SMEs)  and 
fosters  collaboration  between  SMEs  and  research 
organisations,  in  accordance  with  regional  smart 
specialisation  strategies.  Nearly  6 000  businesses 
will  receive  support,  with  900  engaging 
in 
organisations, 
partnerships  with 
leveraging an estimated EUR 390 million in private 
investment. The Netherlands is making use of the 
Strategic Technologies for Europe Platform (STEP) 
to strengthen its competitiveness, allocating ERDF 
and  Just  Transition  Fund  (JTF)  financing  to  STEP 
priorities  covering  clean  and  resource  efficient 
technologies. Meanwhile, the European Social Fund 

research 

93 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
        
 
       
courses,  and  other  support  services.  Special 
emphasis  is  placed  on  language  training  and 
addressing  (mental)  health  barriers  for  labour 
market  participation.  To  help  the  Netherlands 
implement  its  RRP,  the  TSI  provides  support  for 
instance  to  the  upskilling  of  educational  staff, 
especially on digital skills and technologies. 

national 

for  workers  and 
between 

The Dutch RRP contains several reforms and 
investments  related  to  fairness  and  social 
policies.  Examples  are  career  advice  and  skills 
the  unemployed, 
training 
agreements 
local 
and 
government  on 
the  construction  of  quality 
affordable  housing,  as  well  as  the  increase  of 
intensive care capacity of hospitals and training of 
hospital  staff.  In  addition,  tailor-made  sectoral 
pathways 
strengthen 
created 
employability  of  workers,  and  primary  and 
secondary  schools  received  support  to  prevent 
learning  losses  among  pupils  with  a  migrant 
background. 

were 

to 

organisations. The Netherlands’ CAP strategic plan 
allocates  EUR 514  million  of 
the  European 
Agricultural  Fund  for  Rural  Development  (EAFRD) 
for  environmental  and  climate  objectives  and 
EUR 964  million  of  the  European  Agricultural 
eco-schemes, 
Guarantee 
to 
(EAFG) 
Fund 
supporting  biodiversity,  organic 
farming  and 
sustainable  practices.  This  includes  incentives  for 
farmers  to  create  36 000  hectares  of  new 
meadows  with 
to 
increasing the presence of meadow birds. 

characteristics  beneficial 

The  Netherlands’  RRP  has  a  comprehensive 
set of reforms and investments for the green 
transition. This concerns amongst others a nature 
programme  to  reduce  the  negative  effects  of 
nitrogen  emissions,  the  lowering  the  negative 
externalities  associated  with  the  deployment  of 
additional  offshore  wind  power  capacity,  the 
introduction  of  a  CO2  levy  for  industry  and 
subsidies  for  households  for  energy  saving 
measures. Important taxation measures were also 
undertaken to reduce fossil fuels in transport, e.g. 
through  phasing  out  the  motor  vehicle  and 
motorcycle  purchase  tax  exemption;  a  voluntary 
compensation  scheme  was  launched  in  order  to 
reduce  ammonia  emissions  by  pig  farms;  and  a 
priority framework has been created for electricity 
grid 
reduce  congestion.  The 
government also adopted a Human Capital Agenda 
to  increase  skills  supply  in  the  green  hydrogen 
sector. 

investments 

to 

transition. 

Integrated 

Promoting  fairness  and  social  cohesion  are 
among the key priorities of EU funding in the 
Netherlands. Through EUR 623 million from JTF, 
about  49 000  people  will  benefit  from  upskilling 
and reskilling. The JTF will also support 240 SMEs 
investing  in  skills  for  smart  specialisation  and 
industrial 
territorial 
development  projects  co-funded  by  the  ERDF  will 
reach  almost  166 000  people.  The  Netherlands 
allocates  EUR 146  million  (35%)  of  its  ESF+ 
budget to social inclusion, including EUR 35 million 
for  vulnerable  workers’  social  participation.  Under 
the investment, by 2029 82 000 people will have 
received  help  to become more  ready  to  work  and 
less  likely  to  drop  out.  The  Netherlands  is  also 
investing  EUR 20.5  million  in  social  innovation  for 
equal  opportunities  and  work-life  balance,  plus 
EUR 15.8 million for material assistance, of which 
EUR 2.5  million  targets  children 
In 
addition,  the  AMIF  supports  integration  measures, 
training,  civic  orientation 
including 

language 

in  need. 

94 

 
 
 
 
 
 
 
 
 
 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the Member 
State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-2020 allocation. The 
cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off date for data on disbursements 
under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI - Border Management and Visa Instrument; ISF - Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is based on the 
Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started in 2024. 
Source: European Commission 

95 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)2 517.9RRF loans0.00 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)1 582.11 543.11 303.5European Regional Development Fund (ERDF) 791.1 506.2 586.4European Social Fund (ESF, ESF+) 791.1 413.8 516.7Just Transition Fund (JTF) 623.1 200.4European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 101.5 97.969.2Migration, border management and internal security - AMIF, BMVI and ISF (4) 388.5 394.3197.9The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan1 408.0European Agricultural Guarantee Fund (EAGF)1 213.4European Fund for Agricultural Development (EAFRD) 194.6Allocation 2023-20274 694.33 611.31 083.0Allocation 2021-2026 5 441.40FisheriesMigration and home affairs 
 
 
        
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

96 

NetherlandsAssessment in May 2024*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 progressSDG 8Ensure that the second pillar of the pension system is more transparent, inter-generationally fairer and more resilient to shocks.Substantial progressSDG 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.Full implementationSDG 8, 162019 CSR 2Limited progressReduce the incentives for the self-employed without employees, while promoting adequate social protection for the self-employed,Limited progressSDG 1, 2, 8, 10and tackle bogus self-employment.Limited progressSDG 8Strengthen comprehensive life-long learning and upgrade skills, notably of those at the margins of the labour market and the inactive.Some progressSDG 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 progressSDG 9on renewable energy, energy efficiency and greenhouse gas emissions reduction strategiesSome progressSDG 7, 9, 13and on addressing transport bottlenecks.Some progressSDG 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 progressSDG 32020 CSR 2Some progressMitigate the employment and social impact of the crisis andSubstantial progressSDG 1, 2, 8, 10promote adequate social protection for the self-employed.Limited progressSDG 1,2,102020 CSR 3Some progressFront-load mature public investment projects (to foster the economic recovery)Not relevant anymoreSDG 8, 16and promote private investment to foster the economic recovery. Limited progressSDG 8, 9Focus investment on the green and digital transition, in particular on digital skills development,Some progressSDG 4sustainable infrastructure and clean and efficient production and use of energy Some progressSDG 7, 9, 13as well as mission-oriented research and innovation.Some progressSDG 92020 CSR 4Substantial progressTakestepstofullyaddressfeaturesofthetaxsystemthatfacilitateaggressivetaxplanninginparticularonoutboundpayments,notablybyimplementingtheadoptedmeasuresandensuringitseffectiveness. Full implementationSDG 8, 16Ensure effective supervision and enforcement of the anti-money laundering framework.Substantial progressSDG 8, 162021 CSR 1Not relevant anymoreIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilience Facility, and preserve nationally financed investment.Not relevant anymoreSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions and ensuring fiscal sustainability in the medium term.Not relevant anymoreSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Not relevant anymoreSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthe coverage, adequacy and sustainability of health and social protection systems for all.Not relevant anymoreSDG 8, 162022 CSR 1Substantial progressIn2023,ensurethatthegrowthofnationallyfinancedprimarycurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadyto adjust current spending to the evolving situation.Not relevant anymoreSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Not relevant anymoreSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositions.Not relevant anymoreSDG 8, 16Reducethedebtbiasforhouseholdsandthedistortionsinthehousingmarket,includingbysupportingthe development of the private rental sector and taking measures to increase housing supply.Limited progressSDG 8Enact and implement the reform of the pension system agreed in 2019 and 2020.Substantial progressSDG 8 
 
 
  
 
Table (continued) 

(Continued on the next page) 

97 

2022 CSR 2SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocuments with a view to starting their implementation.2022 CSR 3Limited progressPromote adequate social protection for the self-employed without employees,Limited progressSDG 1, 2, 10tackle bogus self-employmentLimited progressSDG 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 progressSDG 8Strengthenup-andreskillingopportunities,inparticularforthoseatthemarginsofthelabourmarketand the inactive.Some progressSDG 42022 CSR 4Some progressReduce overall reliance on fossil fuelsLimited progressSDG 7, 13byacceleratingthedeploymentofrenewables,inparticularbyboostingcomplementaryinvestmentsinnetwork infrastructure and further streamlining permitting procedures,Some progressSDG 7, 9, 16improving energy efficiency, in particular in buildings,Some progressSDG 7and accelerating investments in sustainable transport Some progressSDG 11and sustainable agriculture.Limited progressSDG 11, 12, 13, 152023 CSR 1Some progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerable households and firms, fiscally affordable, and preserve incentives for energy savings.Substantial progressSDG 1, 7, 8, 10, 12Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimary expenditure in 2024 to not more than 3.5%.Full implementationSDG 8PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandother EU funds, in particular to foster the green and digital transitions.Full implementationSDG 8, 9, 13Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.Full implementationSDG 8Reducethehouseholddebtbiasanddistortionsinthehousingmarket.Supporttheavailabilityandaffordability of housing on the private rental market.Limited progressSDG 8Remove obstacles holding back investments, including in residential construction.Limited progress2023 CSR 2ProceedwiththesteadyimplementationofitsrecoveryandresilienceplanandswiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecovery and resilience plan.2023 CSR 3Some progressReduce incentives to use flexible or temporary contracts.Limited progressSDG 8Takingintoaccountsector-specificneeds,addressstructurallabourandskillsshortages,includingbytapping into underutilised labour potentialSome progressSDG 8andstrengtheningup-andreskillingopportunities,inparticularforthoseatthemarginsofthelabourmarket and the inactive.Some progressSDG 4, 8, 102023 CSR 4Some progressReduce reliance on fossil fuelsLimited progressSDG 7, 13byacceleratingthedeploymentofrenewables,improvingframeworkconditionstoboostinvestmentinthe expansion of electricity transmission and distribution grids,Some progressSDG 7, 9, 13extendingandacceleratingenergyefficiencymeasurestoreduceenergyconsumption,inparticularinthe built environment.Some progressSDG 12Support the transition towards sustainable agriculture.Limited progressSDG 11, 12, 13, 15Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetencesneededforthegreen transition.Some progressSDG 4, 132024 CSR 1Limited progressSubmit the medium-term fiscal-structural plan in a timely manner. Limited progressSDG 8, 16InlinewiththerequirementsofthereformedStabilityandGrowthPact,limitthegrowthinnetexpenditurein2025toarateconsistentwith,interalia,maintainingthegeneralgovernmentdeficitbelowthe3%ofGDPTreatyreferencevalueandkeepingthegeneralgovernmentdebtataprudentlevel over the medium term. No progressSDG 8, 16Alignthetaxationofdifferenttypesofincomefromwealth,amongstothers,toreducethehouseholddebt bias. No progressSDG 8, 10, 12Remove obstacles to the construction of new dwellings, Limited progressSDG 8, 9and ensure the affordability and availability of housing in the private rental market. Limited progressSDG 8Addresstheexpectedincreaseinage-relatedexpenditurebymakingthelong-termcaresystemmorecost-effective.No progressSDG 3Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.RRP 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. 
 
 
  
 
Table (continued) 

Source: European Commission 

98 

2024 CSR 2Significantlyacceleratetheimplementationoftherecoveryandresilienceplan,includingtheREPowerEUchapter,ensuringcompletionofreformsandinvestmentsbyAugust2026.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreview,continuefocusingontheagreedprioritiesandpromotetestingandpilotingsolutionstohelpreducethecongestionoftheelectricitygrid,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologies for Europe Platform initiative to improve competitiveness.2024 CSR 3Limited progressImplement measures to reduce incentives to use flexible or temporary contracts. Limited progressSDG 8Addressstructuralandsector-specificlabourandskillsshortages,includingbytappingintounderutilisedlabourpotential,andbyencouragingmobilitytohigh-productivitysectorsandsectorsrelated to societal challenges. Limited progressSDG 8Improvebasicskills,includingbyaddressingteachershortagesandtailoredsupporttodisadvantagedschools.Some progressSDG 4, 10, 82024 CSR 4Some progressImproveframeworkconditionstoboostinvestmentintheelectricitytransmissionanddistributiongrids,in particular to accelerate the deployment of renewables and improve competitiveness. Some progressSDG 7, 8, 9, 13Take further efforts for sustainable agriculture.Limited progressSDG 12, 6, 15RRP 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 cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

the  electricity  network  and 
key 

Regional  disparities  have  remained  static 
over  the  last  decade,  reflecting  differences 
in  GDP  per  head, 
labour  productivity, 
innovation  and  R&D  investments.  Congestion 
labour 
in 
low 
productivity 
bottlenecks, 
constraining  growth  and  competitiveness  and 
hampering  the  clean  energy  transition.  Affordable 
the 
housing  also 
Netherlands,  especially  in  urban  areas,  and  could 
negatively impact socio-economic convergence. 

remains  a  challenge 

growth 

are 

in 

Through  innovation  ecosystems  with  strong 
business-science links and proactive policies, 
Dutch  regions  could  leverage  competitive 
advantages in future areas of the green and 
digital  transition.  Such  future  areas  include 
ICT/semiconductors; clean industry such as battery, 
solar  and  green  hydrogen;  and  smart  energy 
systems  to  optimise  energy  usage.  High  levels  of 
innovation  and  human  capital  offer  the  potential 
to improve labour productivity. 

Regional  variations  in  GDP  have  remained 
stable  over  the  last  decade.  In  2023,  Noord-
Holland  led  with  the  highest  GDP  in  purchasing 
power  standard  (PPS)  (203)  per  head  (174% 
compared  to  the  EU  average  of  100).  However, 
Flevoland  had  the  highest  real  GDP  per  capita 
growth  (2.1%)  between  2014  and  2023  (Graph 
A17.1).  Six  other  regions  (Friesland,  Gelderland, 
Zeeland,  Noord-Brabant  and 
Noord-Holland, 
Overijssel)  also  recorded a  growth  rate  above  the 
EU average of 1.5%. Drenthe was the only region 
with  a  GDP  per  capita  below  the  EU  average,  at 
95% of that average. In Groningen, GDP per head 
declined  by  1.2%,  primarily  due  to  reduced  gas 
extraction. 

Population  growth  during  2014-2023  was 
positive  in  all  Dutch  regions,  but  the  ageing 
population  could  increase  labour  shortages. 
The  highest  annual  average  growth  per  1 000 
residents  was  recorded  in  Flevoland  (12)  and 
Utrecht (11) and Noord-Holland (8.2) compared to 
Friesland  (2.4)  and  Limburg  (1.2).  Population 
growth was mainly driven by net migration, which 
was  positive  in  all  regions.  Natural  growth  was 

(203) For contemporaneous comparison of GDP levels in different 
regions (or countries) we use ‘GDP in PPS terms’, to account 
for difference in price levels between regions. GDP growth in 
a specific region is measured in ‘constant prices’ terms to 
correct for inflation in that region. 

99 

smaller  but  still  positive  in  most  regions,  except 
for  the  three  northern  regions  and  two  southern 
regions  Limburg  and  Zeeland.  Future  regional 
growth  and  productivity  could  be  negatively 
affected  by  an  ageing  population,  also  in  the 
context of a tight labour market, notably in regions 
with a projected population decline. 

Graph A17.1: Average annual GDP per head growth  
vs GDP per head in 2013 

X axis: GDP per head, 2013 (PPS, index EU-27 = 100).  
Y axis: Annual average real growth of GDP per head, 2014-2023 (EUR, 
2015 prices, %). Bubble size: Population, 2023. 
Source: ARDECO (JRC) 

Competitiveness 

Labour  and  skills  shortages  remained  acute 
in  all  regions.  The  ratio  of  job  vacancies  to 
unemployed people was the second highest in the 
eurozone after Germany. The number of vacancies 
declined slightly in most provinces in 2024. Labour 
market  tightness  was  highest  in  Zuid-Holland, 
Noord-Holland, Noord-Brabant and Gelderland. 

Labour  productivity  growth  was  low,  with 
regional variations in line with differences in 
GDP  per  capita.  In  terms  of  GDP  (PPS)  per  hour 
worked,  Noord-Holland  and  Groningen  were  the 
most  productive  in  2022  (respectively  143%  and 
140%  of  the  EU  average),  while  Drenthe  and 
Friesland  were  the  least  productive  (100%  and 
102%).  

The  gap  between  the  capital  and  other 
regions increased (Graph A17.2).  

Noord-HollandGroningenFriesland (NL)DrentheOverijsselGelderlandFlevolandUtrechtZuid-HollandZeelandNoord-BrabantLimburg (NL)-1.5-1.0-0.50.00.51.01.52.02.53.03.580110140170200GDP per head growth, 2014-2023 (%)GDP per head, 2013 (EU27=100)Capital regionOther NUTS2 regionsLinear (National average)Linear (EU27_2020) 
 
 
     
 
 
Table A17.1:Selection of indicators at regional level in Netherlands 

Source: Eurostat and ARDECO (JRC) 

Average real productivity per hour growth between 
2013  and  2022  ranged  from  1.1%  in  Noord-
Holland  to  -0.3%  in  Drenthe,  and  to  -2.0%  in 
Groningen.  Productivity  growth  in  the  Netherlands 
(0.5%)  was  below  the  EU  average  (0.9%).  Growth 
in  all  regions  was  below  the  EU  average,  except 
Noord-Holland, Noord-Brabant and Limburg. 

(110.2)  and  Friesland  (108.8).  These  performance 
levels  offer  excellent  opportunities  for  further 
improving competitiveness. 

Graph A17.2: Labour productivity per hour 

Dutch regions tended to have a high level of 
human  capital,  with  regional  differences 
correlating  with  GDP  per  capita.  In  2024,  the 
percentage  of  the  Dutch  population  aged  30-34 
with a high level of education was high at 54.8%, 
reaching  67.2%  in  Utrecht,  61.1%  in  Noord-
Holland  and  60.5%  in  Groningen.  Only  Flevoland 
(42.3%),  Limburg  (43.3%)  and  Zeeland  (32.2%) 
had  a  rate  below  the  EU  average  of  44.8%. 
for 
However, 
International 
survey 
highlighted a trend of declining basic skills among 
Dutch students, especially disadvantaged students. 
This  could  affect  competitiveness  in  a  context  of 
skills  shortages  and 
labour  productivity 
growth. 

the  2022  OECD  Programme 

Assessment 

Student 

low 

Innovation  performance  was  high  with 
moderate  regional  variations.  At  125.7%  of 
the  EU  average,  the  Netherlands  was  one  of  the 
EU’s  four  innovation  leaders  (2024  European 
Innovation  Scoreboard).  According  to  the  2023 
Regional  Innovation  Scoreboard,  all  Dutch  regions 
were  strong  innovators  or  innovation  leaders, 
above  the  EU  average  of  100,  from  innovation 
leaders Noord-Holland (148.7) and Utrecht (145.3) 
to  strong  innovators  Zeeland  (114.6),  Drenthe 

Unit: Real GDP per hour worked (EUR, 2015 prices) 
Source: Eurostat, DG REGIO elaboration 

While R&D intensity (2.18% of GDP) was just 
below  the  EU  average  (2.21%  of  GDP)  in 
2022, there were notable variations between 
regions.  These  ranged  from  high 
levels  of 
investment  in  Noord-Brabant  (2.64%),  Gelderland 
(2.32%),  and  Limburg 
low  R&D 
intensity  in  Friesland  (0.86%),  Drenthe  (0.72%) 
and  Zeeland  (0.53%).  The  presence  of  economic 
clusters and multinationals (for example Brainport 
in  Eindhoven,  which  includes  companies  such  as 
ASML)  also  explains  the  disparities  in  R&D.  These 
patterns  aligned  with  regional  competitiveness 
rankings and point to scope for action in the more 
peripheral regions. 

(1.88%)  to 

100 

30354045505560657075201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS2 regionsCapital regionNational averageEU27GDP per head (PPS)Real GDP per head growthProductivity - GDP per person employed (PPS)Real productivity growth (per person employed)Productivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)Population aged 30-34 with high educational attainmentInnovation performanceRegional Competiti-veness IndexEmployment rate 20-64Unemploy-ment rateAt-risk-of-poverty or social exclusionIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % change% of population aged 30-34Regional performance groupIndex EU-27 = 100% of population aged 20-64% of labour force% of total population20232014-202320222013-202220222013-2022202420232022202420242024European Union (27 MS)1001.610011000.944.875.85.921.0Netherlands1331.41120.71240.554.813783.53.715.4Groningen124-1.2125-2.1140-2.060.5Strong innovator +12080.64.721.0Friesland (NL)1011.8940.11020.145.2Strong innovator -11783.23.916.0Drenthe951.290-0.2100-0.345.8Strong innovator -11983.03.415.7Overijssel1141.8960.81070.751.4Strong innovator +12683.63.414.6Gelderland1131.6980.71090.652.0Innovation Leader - 13684.23.512.9Flevoland1052.11060.71120.642.3Strong Innovator +14184.23.813.0Utrecht1591.41140.51310.567.2Innovation Leader - 15185.33.712.9Noord-Holland1741.71321.21431.161.1Innovation Leader 14184.43.815.8Zuid-Holland1271.0109-0.2124-0.155.0Innovation Leader - 14382.54.117.7Zeeland1081.81030.71180.732.2Strong Innovator - 11984.72.113.7Noord-Brabant1372.01101.11201.054.3Innovation Leader - 14184.03.214.4Limburg (NL)1101.3981.01171.043.3Innovation Leader - 13180.63.316.2 
       
 
   
 
Map A17.1:  Regional Competitiveness Index 2.0, 
2022 edition 

average  87%)  within  12  months.  Practically 
universal broadband coverage offers opportunities 
to  further 
innovation 
improve  education  and 
performance. 

Social fairness 

The  housing  cost  overburden  rate  in  Dutch 
regions  has  declined  since  2022,  while 
regional  disparities  increased.  In  2024,  the 
rate ranged from 5.1% in the southern regions to 
8.3% in the western regions in 2023. House prices 
in  the  Netherlands  increased  by  83%  between 
2010  and  2023,  almost  double  the  EU  average 
(48.1%).  The  affordability  of  housing  could  affect 
the attractiveness of regions and aggravate labour 
shortages. 

The Netherlands had a high employment rate 
(83.5%)  and  a 
low  unemployment  rate 
(3.7%)  with  small  regional  differences.  In 
2024,  employment  rates  ranged  from  81%  in 
Limburg  and  Groningen  to  85%  in  Utrecht  and 
Zeeland. The unemployment rate in Groningen was 
the  highest  at  4.7%,  albeit  well  below  the  EU 
average. The lowest rate was in Zeeland at 2.1%. 

Source:  DG REGIO, JRC based on Eurostat 

performance. 

All  Dutch  regions  ranked  well  above  the  EU 
average  in  terms  of  competitiveness  (Map 
A17.1),  with  regional  differences  in  line  with 
innovation 
Regional 
Competitiveness  Index  tended  to  be  lower  in  the 
northern  regions  and  Zeeland  and  higher  in  the 
regions in the western Randstad area, mainly due 
to differences in innovation and efficiency aspects. 
The  index  value  varied  from  117  in  Friesland  to 
151  in  Utrecht,  the  highest-ranking  region  in  the 
EU. 

The 

The 

European  Quality 

The  quality  of  government  is  high  in  the 
Netherlands. 
of 
Government  Index  (204)  was  significantly  higher 
than the EU average in all Dutch regions. This also 
held  true  for  each  of  the  sub-pillars  ‘corruption’, 
‘quality  and  accountability’  and  ‘impartiality’.  This 
is  an 
improve 
important  enabler  to  further 
innovation and competitiveness. 

Uptake  of  information  and  communication 
technologies was high in all Dutch regions. In 
2021, there was a high level  of online interaction 
between Dutch people and the public authorities in 
all  regions.  In  2021,  between  84%  (Limburg, 
Friesland)  and  91% 
(Utrecht,  Zeeland)  of 
individuals had such contact (EU average 58%; NL 

(204) European Quality of Government Index 2024| University of 

Gothenburg 

101 

 
 
 
 
 
Map A17.2:  House prices relative to income, 2019 

Source: European Commission, Mapadomo 

social  exclusion 

The  proportion  of  the  population  at  risk  of 
poverty  and 
the 
Netherlands  (15.4%)  was  below  the  EU 
average  (21.0%)  in  2024,  but  with  some 
regional variations. This rate stood at 21.0% in 
Groningen and ranged between 12.9% and 17.7% 
in other regions. 

in 

than  twice  as  rapidly  as  the  EU  average  over  the 
last  five  years.  Still,  variations  across  regions 
remain  substantial,  ranging  from  2.3  tonnes  per 
year in Zuid-Holland to 78.5 in Zeeland, reflecting 
the  distribution  of  population,  agriculture  and 
heavy industry across the country. 

Net  congestion  has  become  a  bottleneck 
across  the  Netherlands,  slowing  the  clean 
energy  transition  and  negatively  affecting 
regional  growth.  The  capacity  of  the  electricity 
grid, influenced by the high volatility of supply and 
demand,  was  constrained  in  all  provinces  but 
particularly  acute  in  the  centre  of  the  country 
(Utrecht,  Gelderland,  parts  of  Flevoland). 
In 
response,  Dutch  regions,  companies  and  research 
institutes  turned  to  innovation  to  reduce  grid 
congestion  and  optimise  energy  consumption 
through smart energy systems. 

As  a  small,  urbanised  country  with  a  large 
agricultural  sector,  high  levels  of  nitrogen 
dioxide levels remained of particular concern 
in the Netherlands. Zuid-Holland, Noord-Brabant, 
and  Noord-Holland  recorded  the  highest  annual 
average  nitrogen  concentration  and  the  northern 
provinces 
(Friesland,  Groningen,  Drenthe)  the 
lowest. 

Map A17.3:  Capacity of electricity network 

Access  to  essential  services  was  generally 
good  in  the  Netherlands.  The  proportion  of 
people  in  rural  areas  with  access  to  healthcare 
within  10  minutes'  drive  was  above  the  EU 
in  all  Dutch  regions  except 
average 
Friesland 
(19%).  The 
percentage  of  children  with  a  primary  school  less 
than  15  minutes'  walk  away  was  above  the  EU 
average of 31% for all regions. 

(29%) 
(18%)  and  Groningen 

Sustainability 

Greenhouse  gas  emissions  per  capita  in  the 
Netherlands  were  8.4 
tonnes  of  CO2 
equivalent  per  year,  which  is  above  the  EU 
average of  7.1.  Emissions  have  decreased  more 

Red: shortage of transport capacity with waiting list. Orange: under 
investigation with waiting list. Yellow: limited transport capacity 
available without waiting list. 
Source: Netbeheernederland.nl (January, 2025) 

102 

 
 
 
 
 
 
 
In  terms  of  access  to  alternative  fuel 
infrastructure  and  green  employment,  the 
Netherlands  performed  well.  The  Netherlands 
has  about  a  quarter  of  all  the  charging  electric 
stations  in  Europe  (205).  In  2022,  the  average 
number  of  electric  vehicle  charging  points  within 
10 km  was  almost  four  times  higher  than  the  EU 
average  of  539,  in  particular  in  the  Randstad 
region  (>3,000)  (206).  This  infrastructure  forms  a 
solid  basis  for  further  electrification  of  the 
transport  sector. Green  employment,  with  22%  of 
jobs classified as sustainable and competitive (207), 
was above the EU average of 15%. Green jobs are 
strongly  concentrated  in  the  western  Netherlands 
(Utrecht  48%)  with  the  northern,  eastern  and 
southern provinces ranging between 6-9%. 

(205) IMF, April 2024 Article IV Staff Report. 

(206) Indicators of access to alternative fuel infrastructure are 

based on calculations by DG REGIO and the JRC, using data 
from the European Alternative Fuels Observatory (EAFO), 
Eurostat, TomTom and Eco-Movement. 

(207) Regional Competitive Environmental Sustainability (RCES) 

indicator; 
https://publications.jrc.ec.europa.eu/repository/handle/JRC136
629.  

103