among receivers. you can even observe this in countries where wealth is transferred between regions. take belgium and italy for example. if we also doubt the work ethic of the italians, a country where the average worker works almost 300 hours more per year than in the netherlands, you can imagine that this does not benefit relations. [ figure 5 ] figure 5 : cover elsevier magazine i would like to stay on this subject of public support, because there is another potentially dangerous trend i detect in northern europe. and that is the lagging public support for free trade in general. there is for instance a growing group of europeans who believe that globalisation has been good for their country as a whole, but not for them personally. we can see similar developments in our own country. for example, more than one in five dutch people think globalisation offers more disadvantages than advantages. people on lower incomes in particular feel they are on the receiving end of the disadvantages. unfortunately, there is some truth in that. dutch businesses have benefited greatly from free trade, the single market and the euro. for dutch households, this applies to a lesser extent. in recent decades, household disposable income growth has not kept pace with growth in the economy as a whole. just take a look at this graph. [ figure 6 ] fout! onbekende naam voor documenteigenschap. figure 6 : household income grows at a slower rate than the economy the red line represents the growth of the dutch economy as a whole since 1995. the blue line shows the available income of households. why are these two lines growing apart from each other? well, to a large extent it is because the share of our national income that workers receive ( the labour share of income ) has been steadily declining, while the share going to providers of capital has increased. incidentally, this is not a typically dutch phenomenon. we can also observe this trend in other western economies. the fact that workers in the netherlands are getting a smaller and smaller piece of the economic pie is also due to globalisation and technological progress. but there is something else going on in the netherlands. and that is the flexibilisation of the labour market, which has gone too far. that is something that all sides can agree on. the often vulnerable position of flex workers is already a cause for concern from a social perspective. but on top of that — and now i return to my argument about europe — it has also contributed

potential due to chronic under - investment. as a result, they are left lagging even further behind. if we take another look at the netherlands, what does this mean for dutch fiscal policy in the forthcoming term of government? dutch public debt is expected to increase from around 50 % to 60 % of gdp in the coming years. this is a sharp increase, but thanks to our comfortable starting position, we will end up at a level that is still manageable. that is why i see no reason to cut spending or raise taxes at this time. after all, our economic recovery could still be fragile in 2021. what we do need to do now is strengthen the growth potential of the dutch economy with structural reforms and temporary, targeted investments. this is not of course a plea for unbridled growth in government spending. after all, there will always be new, unexpected setbacks. so i think it is wise to be wary of new policy initiatives that place a structural burden on government finances. this addresses fiscal policy in europe and in the netherlands. the third point on my european to - do list for tackling growth imbalances is to improve coordination in other areas of economic policy. i have already talked about the divergent competitiveness of the euro area member states. and how this contributes to large trade surpluses in some countries, and large trade deficits in others. to effectively tackle this problem, all member states must play their part. weaker economies need to implement reforms that increase their productivity and competitiveness. this is good for exports, for economic growth, for employment, and for public debt. the point i want to make here is that these reforms are more likely to succeed if the stronger economies also do their fair share. for these countries, that means implementing reforms that give households more room to spend, so that they can boost imports and reduce their trade surpluses. this will not only help the weaker economies, but also benefit the stronger ones. behind large and persistent trade surpluses, there are often underlying problems, such as savings retained by companies for tax reasons, or stagnant wage growth. if i apply that to the netherlands for a moment, it means we also have work to do. it means we have to critically review our tax system, so that labour can be taxed less heavily and workers get to retain more of their pay. and we need to tackle the imbalances in the labour market between permanent and flex workers, by reducing tax differences between contractual employees