Can you see the light?

For ten months, the inhabitants of the Netherlands were overwhelmed with one negative economic forecast after another, leading to an all-time low of the government’s popularity. But, almost out of the blue, the economy seems to be picking up. Joep Derksen reports.

What a difference a year makes. In the first quarter, we were flooded with news about how the money lent to Greece will not be paid back. Other countries too needed a bailout and the Dutch economy was spiraling downhill. Exports declined, consumer spending spiraled and both light and heavy production went down. An overall negative gloom attached itself to citizens, and this was exacerbated by many politicians.

The country had just recovered from the shock announcement that a total of 30 billion euro in cutbacks had to be achieved in order – among other reasons – to bail out the Dutch banks who had endangered the Dutch and global economy with their gambling tactics. At the end of 2012, Prime Minister Mark Rutte (VVD) announced other measures needed to achieve another 16 billion euro in cutbacks.

And if it remained with this message alone, things would not have been so bad. But it seemed that the Dutch politicians had come to an agreement to only announce bad news, as if to prepare the country for worse times to come and get more support for the introduction of unpopular measures. Symptomatic of this was a case that happened on the very first beautiful and sunny day. It was a warm spring day in March and everybody seemed to be excited to go out, do some work or just enjoy a day off. Alas, the fun only lasted a short while. Deputy Prime Minister Lodewijk Asscher (PvdA) announced that more economic hardship was to be expected. As a result of these kind of messages, people stopped spending their money and started saving for worse times. The result was that the economy dipped even further.

Nobody was spared, not even the weak and financially challenged. The elderly have had to start paying extra for using health benefits and home renters in the social sector will see their rents increase by up to six percent per year. These were some of the outcomes of an economic crisis that had lasted for five years in a row, leading to to rising unemployment, decreasing value of houses, an increase in bankruptcies and a cutting down of pensions. On top of this, King Willem-Alexander announced an extra six billion euro in cutbacks in his first “Troonrede;” the speech of the head of state on every third Tuesday in September.

Statistics of the Central Bureau for Statistics (Centraal Bureau voor de Statistiek, CBS) show that overall confidence in the economy went down from 0 (neutral) in 2011 to minus 45 in March 2013. After that, the confidence level crept up inch by inch and in November it was as high as minus 16. However, unemployment is still high: four years ago, a little more than 300,000 people were out of a job, but nowadays, the total number of people living on welfare has more than doubled to just about 700,000 citizens who are in between jobs.

But starting from October, almost out of the blue, the statistics suddenly started looking more positive. Unemployment went down by 11,000 people to a total of 674,000. This is in sharp contrast to the beginning of this year, when on average 600 people a day lost their jobs. Asscher stated, “There still are too many unemployed. I will do my utmost to fight this.”

Also the Dutch economy as a whole started growing again. This growth was just 0.1 percent in the third quarter, but what a difference it made. Suddenly we were out of the recession. Minister of Economic Affairs Henk Kamp (VVD) was pleased with this result. “Investments increase and that gives us hope,” he said. Investments in machines and installations indeed rose, but other investments still declined, not as much as before, however. But since export is picking up and it is just a matter of time before we start purchasing more products, food and gadgets, for The Netherlands 2014 must be the year that can be compared to the Phoenix. The country will hopefully rise from its ashes of economic downturn and will move toward solid economic growth.

 

(Published in The Holland Times, January 2014 edition).