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Europaudvalget 2025
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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}

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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,

government

spending

and

investment

spending increased significantly. However,

lagging

investments

still

contributed

negatively to economic growth as they did not

fully recover following the slump in 2023.

Economic growth is set to increase

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

to be modest due to persistent labour

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.

While inflation in the Netherlands has

receded, it remains well above the euro

area average.

Inflation in the Netherlands, as

measured by the Harmonised Index of

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.

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

target of 82.5% (see Annex 13). The

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

levels (4.5% in 2019). Unemployment is

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

kom (2025) 0219 - Ingen titel

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

longer term, costs linked to the ageing

population are expected to lead 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).

Net expenditure growth is expected to

breach the maximum rates recommended

by the Council in the coming years.

2024, net expenditure (

) in the Netherlands

grew by 6.8% (see Annex 1). This increase is

mainly driven by strong growth 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

the

maximum

growth

rate

recommended by the Council ( ). The

(

) 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.

(

) Council Recommendation of 21 January 2025 setting

the net expenditure path of the Netherlands (OJ C,

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

relating to a large current account

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 (

). It highlighted long-standing

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 (

). The high debt levels

C/2025/648,10.2.2025,ELI:

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

(

) European Commission 2025, In-Depth Review 2025 -

The Netherlands (Institutional Paper 313 2025)

(

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

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

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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

overvalued housing market, even though

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.

% change 2014-2019

EU27

With mining industry

Without minining industry

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 (

). 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

(

) Labour productivity in 2020-2023 was 0.9% (and very

volatile), slightly higher compared to the previous

decade

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points on average since 2014 (

). Excluding the

gas sector, the underlying productivity trend is

slightly better than the headline numbers,

though there is still a clear slowdown.

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 resulted 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

productivity

sectors.

From

macroeconomic perspective, this unfavourable

sectoral mix has been detrimental to Dutch

productivity growth (

), with the structural

impact being significantly worse than in peers

such as Germany, Sweden and Denmark (

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).

Graph 1.2:

Unemployed labour force minus

number of open vacancies (seasonally

adjusted)

0.8

0.7

0.6

0.5

Millions

0.4

0.3

0.2

0.1

-0.1

-0.2

14 15 16 17 18 19 20 21 22 23 24

NL (lhs)

EU excl. DK, FR, IT (rhs)

-5

(1) EU aggregate excludes Denmark, France and Italy,

who report incomplete vacancy statistics

Source:

Eurostat

(

) CPB (2025). National Productivity Board 2024 annual

report.

(

) CBS (2024). Achtergrond bij de daling van de

arbeidsproductiviteitsgroei van Nederland.

(

) ESB (2024). Lage groei productiviteit mede door

ongunstige structuur economie.

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 (

). 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

skills shortages in key sectors such as

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).

(

) CBS (2025). Conjunctuurenquête Nederland, eerste

kwartaal 2025.

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Bottlenecks in energy infrastructure and

high energy prices 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 to resolve these 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).

The Netherlands’ current situation is

therefore one of both abundance and

shortages.

It remains one of the most

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

addition, significant investments in the

electricity grid will be needed to lower energy

costs and expand grid connections, alongside

investments in education, 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.

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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

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.

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INNOVATION, BUSINESS ENVIRONMENT AND

PRODUCTIVITY

Boosting R&D investment

The

Netherlands’

strong innovation

leadership position starts to show signs

of deterioration.

The Netherlands’

leadership

in innovation is eroding, as public R&D support

has been reduced in recent years and

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 Fund, 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 (

). 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 (

). This can be

detrimental to long-term competitiveness as

R&D supports sustainable growth by driving

innovative products and services and

improving efficiency. Targeted public support

to key competitive areas (

), including by

investing in research and testing facilities (

would therefore boost the innovation

(

) 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).

(

) 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).

(

) The National Technology Strategy (2024) outlines 10

priority technologies such as quantum technology,

semiconductors, AI and data science.

(

) National Technology Strategy (2024).

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

95 97 99 01 03 05 07 09 11 13 15 17 19 21

(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 companies, especially 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.

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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

(

). 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

(

). 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.

SMEs are increasingly turning to

alternative financing methods, but the

market needs professionalisation to help

them access viable financial options.

The

importance

alternative

(non-bank)

financiers is growing. Small loans in particular

are increasingly financed in alternative ways,

such as crowdfunding or factoring (

accounting for 27% of loans under EUR 1

million and 45% under EUR 250 000 in

2022 (

). 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

(

) CBS (2025) Financieringsmonitor 2024

(

) EIF (2023) The European Small Business Finance

Outlook 2023

(

) 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.

(

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

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.

The Dutch venture capital market is one

of the deepest in the EU but does not

support

start-ups

and

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 (

). While the number

of scale-ups increased in 2024, scale-up

growth is at the low end compared to other

top EU ecosystems (

). 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 commercialisation also face

difficulties (

). 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 (

Venture capital investment relies heavily

on foreign investors for larger rounds.

Domestic participation in scale-up venture

capital (rounds above EUR 100 million)

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) (

). While

the presence of foreign investors shows the

attractiveness of the Dutch innovation

ecosystem, the weight of non-EU investors

(

) OECD (2024) Venture capital investments, OECD

Entrepreneurship Financing Database. The Netherlands

has the third largest venture capital market, behind

Germany and France.

(

) Interdepartementaal Beleidsonderzoek (2024) Kies voor

baten.

(

) Ibid.

(

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

starters.

(

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

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(around 60%) in funding rounds above EUR

100 million risks these companies leaving the

market at the time of large-scale

commercialisation. In this regard, InvestNL, the

Dutch investment institute, recently announced

EUR 250 million in blended 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 (

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 from the 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 treatment of financial

investments reduces the ability of the tax

system to act as an automatic stabiliser and

exacerbates economic inequalities.

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,

(

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

on large scale-up fund of funds.

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 (

). The reform falls short of

aligning the taxation of different types of

capital gains across the tax system.

(

)

Wet werkelijk rendement box 3. - Raad van State

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DECARBONISATION, ENERGY AFFORDABILITY AND

SUSTAINABILITY

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 (

Graph 3.1:

Capacity map of the Netherlands,

March 2025 (offtake of electricity from the

grid)

Source:

https://capaciteitskaart.netbeheernederland.nl/

(

) International Energy Agency, Energy Policy Review The

Netherlands 2024,

https://iea.blob.core.windows.net/assets/2b729152-

456e-43ed-bd9b-

ecff5ed86c13/TheNetherlands2024.pdf.

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.

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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%. To ensure further

deployment of offshore wind, it is important

that investments in the sector remain

sufficiently attractive. In this context, the

Netherlands

could

consider

exploring

measures to hedge financial risks in the

offshore wind sector, including within the

offshore wind supply chain.

Despite the Netherlands' efforts to

decarbonise

its

industrial

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 CO

-eq compared to the

national sectoral 2030 emissions reduction

target of 29.1 Mt CO

-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 CO

emissions (see Annex 7).

Belgium) (

). 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

tariffs.

Addressing

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).

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

renovations, expanding renewable district

heating

and

accelerating

transport

electrification.

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

(

) Letter No. 1372 from the ministers of economic affairs

and climate and energy,

https://zoek.officielebekendmakingen.nl/kst-32813-

1372.html#extrainformatie.

Improving energy affordability and

efficiency

Electricity and gas prices in the

Netherlands are relatively high compared

to neighbouring countries.

By way of

illustration, major industrial companies in the

Netherlands pay up to 66% more for

electricity than their counterparts in

neighbouring countries (Germany, France,

kom (2025) 0219 - Ingen titel

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.

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 CO

-eq

compared to the national sectoral 2030

emission reduction target of 17.9 Mt CO

-eq

(see Annex 9). Additional efforts to reduce the

sector’s environmental impact, including

promoting organic farming, are therefore

necessary and would help the Netherlands

reach its climate objectives.

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.

Tackling excessive nitrogen

deposition and deteriorating water

quality

Excessive levels of nitrogen deposition

continue

pose

significant

environmental concern, with an impact on

the economy as a whole.

Excessive levels of

nitrogen deposition lead to the over-

fertilisation and acidification of soil and water

bodies. A comprehensive set of measures is

needed to meet 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 (

) and the

District

Court

the

Hague

22 January 2025 ( ). 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

(

) 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/.

(

) 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.

kom (2025) 0219 - Ingen titel

SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS

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.

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

presented

outline

for

the

implementation of a broad labour market

agenda (

) 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)

and a reform of the labour market

infrastructure.

Addressing labour shortages in the

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

(

) Letter to Parliament of 13 December 2024. Uitwerking

plannen arbeidsmarktkrapte en brede

arbeidsmarktagenda.

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% (

). Even though the fast

post-pandemic recovery exacerbated the

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).

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.

(

) Business and Consumer Surveys.

kom (2025) 0219 - Ingen titel

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.

In a tight labour market, investing in

skills development and innovation is

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.

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 created considerable

financial incentives for employers to reduce

labour

costs

using

flexible

working

arrangements.

Graph 4.1:

Trends in temporary, part-time and

self-employed without employees

2009

2014

2019

2010

2011

2012

2013

2015

2016

2017

2018

2020

2021

2022

2023

Self-employment (without employees) - total

Temporary employees 20-64

Part-time employment 20-64

(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

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 (12.8% vs 9.0% of total

employment in 2024). (

) (see Graph 4.1 and

Annex 10). The prevalence of flexible types of

employment is not necessarily driven by job-

(

) 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).

The rise in precarious employment and

low-quality jobs affects vulnerable

groups in particular.

The high share of

flexible employment and resulting labour

market segmentation (

) has particularly

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

invest in training for employees with

temporary contracts. People in flexible

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

(

) 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

2024

kom (2025) 0219 - Ingen titel

hampers inclusive growth and holds back

labour productivity (

The government has put forward reforms

to reduce incentives for the use of self-

employed persons.

Whereas some level of

self-employment

can be

economically

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, in line with 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

RRP). These aim to limit bogus self-

employment and reduce the differences

between the self-employed and employees.

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 instance by abolishing 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

the different groups of workers (i.e.

(

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

(2021). De Nederlandse productiviteitspuzzel.

permanent, flexible and self-employed persons

without employees).

Reprioritising education in line

with an evolving labour market

The decline in basic skills 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 the largest differences in scores

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

disadvantaged pupils in the schools and

between regions. The lack of qualified

teachers can impact student learning

outcomes and hinder access to quality

education for all.

kom (2025) 0219 - Ingen titel

Graph 4.2:

Trends in performance in reading

and mathematics, PISA mean scores, 2003-

2022

545

535

525

515

505

495

485

475

together and making it easier to transition

between different educational tracks. The

Netherlands

could

also

reduce

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.

465

455

2003

2006

2009

2012

NL - reading

NL - mathematics

2015

2018

2021

EU - reading

EU - mathematics

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 (

). As a result,

the Dutch housing market continues to be

overvalued (

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

high costs and limited options available,

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

for

the

country’s

competitiveness.

It can hinder internal

labour mobility, make it difficult for companies

to attract foreign talent, and increase labour

(

) See the Innovation, business environment and

productivity section on tax distortions in the housing

market.

(

) See 2025 In-depth review of macroeconomic

imbalance in the Netherlands for a more

comprehensive analysis of the Dutch housing market.

Source:

OECD (2023)

The share of tertiary graduates in

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%), leading to 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).

Several measures have been taken to

improve basic skills and make the

teacher profession more attractive.

2022, the ‘Master plan for basic skills’ was

launched to promote Dutch reading and

writing skills, mathematics, 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

kom (2025) 0219 - Ingen titel

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 (

). 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 capacity among project

developers and municipalities (for example

slowness in issuing building permits), lengthy

appeal procedures and extensive building

requirements.

The government recently proposed the

Housing Management Enhancement Act

(‘Wet

versterking regie volkshuisvesting’)

address this issue, which is also partly

incorporated into the Dutch RRP. This

legislation includes parallel instead of

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.

Recent

policy

developments

may

exacerbate the existing supply shortages

in the private and social rental sectors.

(

) Economisch Instituut voor de Bouw (2025).

Verwachtingen bouwproductie en werkgelegenheid

2025.

The expansion of rent price controls, although

intended to protect tenants, may reduce the

already scarce supply of rental properties,

particularly in larger cities (

). To facilitate the

expansion of the private rental sector and

accelerate the construction of new homes, it is

essential to rebalance incentives between

home ownership and renting (

). The

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

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 (

Despite a major reform of the long-term

care system in 2015, the proportion of

expenditure and recipients in institutional

(

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

Investeerders verkochten meer woningen.

(

) See footnote 28.

(

)

IBO Ouderenzorg, 2023.

kom (2025) 0219 - Ingen titel

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

care setting would be mainly determined by

their individual care needs, instead of which

setting

minimises

their

co-payments.

Additional investments in prevention to delay

the onset of long-term care needs and a

further improvement in 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.

kom (2025) 0219 - Ingen titel

KEY FINDINGS

To boost competitiveness, sustainability and

social fairness, the Netherlands would benefit

from:

•

implementing the RRP,

including the

REPowerEU

chapter;

swiftly

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

by accelerating the deployment of

renewables

and

improving

energy

efficiency;

•

decreasing electricity grid congestion

by increasing the capacity of the

transmission

and

distribution

grid,

implementing flexibility solutions and

maximising cross-zonal electricity trading

over existing cross-border infrastructure;

•

addressing

excessive

nitrogen

deposition and deterioration of water

quality

including by promoting sustainable

practices in agriculture;

•

tackling

labour

shortages

incentivising

people

part-time

employment to work more hours, increasing

the participation of people with a migrant

background,

boosting

productivity-

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 flexible and temporary

contracts;

•

tackling

skills

shortages

strengthening up- and reskilling through

targeted and tailored active labour market

policies;

•

addressing the sharp decline in basic

skills

by continuing to implement

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

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 care settings, further

increasing investments in prevention, and

facilitating community-based services

instead of institutional care.

kom (2025) 0219 - Ingen titel

ANNEXES

kom (2025) 0219 - Ingen titel kom (2025) 0219 - Ingen titel

LIST OF ANNEXES

Fiscal

A1.

A2.

Fiscal surveillance and debt sustainability

Taxation

Productivity

A3.

A4.

A5.

A6.

Innovation to business

Making business easier

Capital markets, financial stability and access to finance

Effective institutional framework

Sustainability

A7.

A8.

A9.

Clean industry and climate mitigation

Affordable energy transition

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

A1.1.

A1.2.

A1.3.

A1.4.

A1.5.

A1.6.

A1.7.

A1.8.

A1.9.

General government balance and debt

Net expenditure growth

Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the recommendation

Defence expenditure

Macroeconomic developments and forecasts

General government budgetary position

Debt developments

RRF

–

Grants

Projected change in age-related expenditure in 2024-2040 and 2024-2070

kom (2025) 0219 - Ingen titel

A1.10.

A2.1.

A2.2.

A3.1.

A4.1.

A5.1.

A6.1.

A6.2.

A7.1.

A8.1.

A9.1.

A13.1.

A14.1.

A16.1.

A16.2.

A17.1.

Fiscal Governance Database Indicators

Taxation indicators

Indicators for financial activity risk, in % of GDP

Key innovation indicators

Making Business Easier: indicators.

Financial sector indicators

The Netherlands. Selected indicators on administrative burden reduction and simplification

Digital Decade targets monitored through the Digital Economy and Society Index

Key clean industry and climate mitigation indicators: Netherlands

Key Energy Indicators

Key indicators tracking progress on climate adaptation, resilience and environment

Social Scoreboard for Netherlands

Key health indicators

Selected EU funds with adopted allocations - summary data (million EUR)

Summary table on 2019-2024 CSRs

Selection of indicators at regional level in Netherlands

100

LIST OF GRAPHS

A1.1.

A2.1.

A2.2.

A4.1.

A5.1.

A5.2.

A5.3.

A5.4.

A5.5.

A6.1.

A6.2.

A6.3.

A7.1.

A7.2.

A7.3.

A8.1.

A8.2.

A8.3.

A9.1.

A10.1.

A10.2.

A10.3.

A11.1.

A12.1.

A12.2.

A14.1.

A14.2.

A15.1.

A16.1.

A16.2.

A17.1.

A17.2.

Accounting maturity by government sector (2025, 2030)

Tax wedge for single and second earners, % of total labour costs, 2024

Tax revenue shares in 2023

Making Business Easier: selected indicators*

Net savings-investment balance

International investment position

Capital markets and financial intermediaries

Composition of NFC funding as % of GDP

Composition of households’ financial assets per capita and as a % of GDP

Trust in justice, regional / local authorities and in government

Indicators of Regulatory Policy and Governance (iREG)

Participation rate of 25-64 year olds in adult learning (%) by occupation

GHG emission intensity of manufacturing and energy intensive sectors, 2022

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

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023

Retail energy price components for household and non-household consumers, 2024

Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF)

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

Key rates: activity , unemployment, long-term unemployment, youth unemployment, NEET

Labour shortages in the Netherlands

Employment by type (permanent, temporary, self-employed), year-on-year changes

At-risk-of-poverty or social exclusion rate and its components (AROP, SMSD, LWI)

Underachievement rate in mathematics by

students’ socio-economic

background, PISA 2022

Adult learning

Life expectancy at birth, years

Treatable mortality

Progress towards the SDGs in the Netherlands

Distribution of RRF funding in the Netherlands by policy field

Distribution of cohesion policy funding across policy objectives in the Netherlands

Average annual GDP per head growth vs GDP per head in 2013

Labour productivity per hour

100

Fiscal

A1.

Fiscal surveillance and debt sustainability

kom (2025) 0219 - Ingen titel

A2.

Taxation

Productivity

A3.

A4.

A5.

A6.

Innovation to business

Making business easier

Capital markets, financial stability and access to finance

Effective institutional framework

Sustainability

A7.

A8.

A9.

Clean industry and climate mitigation

Affordable energy transition

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

kom (2025) 0219 - Ingen titel

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 (

), 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 (

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 (

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(

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.

(

) 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.

(

) OJ C, C/2025/648, 10.02.2025, ELI:

http://data.europa.eu/eli/C/2025/648/oj

(

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

March 2025, C(2025) 2000 final.

(

)

European Commission (2025) ‘Debt Sustainability Monitor 2024,’

European Economy-Institutional Papers

306.

kom (2025) 0219 - Ingen titel

Table A1.1:

General government balance and debt

Variables

2024

% GDP

Outturn

-0.9

43.3

APR

-2.3

45.0

2025

COM

-2.1

45.0

APR

-2.8

47.8

2026

COM

-2.7

47.8

General government balance

General government gross debt

Source:

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

Developments in net expenditure

The net expenditure (

) growth of the Netherlands in 2025 is forecast by the Commission (

) 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

Annual

REC

2024

2025

2026

Cumulative*

COM

REC

Growth rates

6.8%

n.a.

7.0%

10.4%

3.8%

14.0%

APR

n.a.

14.2%

n.a.

COM

n.a.

14.3%

18.6%

APR

5.7%

7.9%

3.4%

n.a.

3.5%

3.3%

* 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(

). 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.

(

) 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.

(

) Commission Spring 2025 Forecast,

European Economy-Institutional paper 318,

May 2025.

(

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

kom (2025) 0219 - Ingen titel

Table A1.3:

Net expenditure (outturn and forecast), annual and cumulated deviations vis-à-vis the

recommendation

Variables

Total expenditure

Interest expenditure

Cyclical unemployment expenditure

Expenditure funded by transfers from the EU

National co-financing of EU programmes

One-off expenditure (levels, excl. EU funded)

Net nationally financed primary expenditure (before

7=1-2-3-4-5-6

discretionary revenue measures, DRM)

Change in net nationally financed primary expenditure (before DRM)

DRM (excl. one-off revenue, incremental impact)

Change in net nationally financed primary expenditure

10=8-9

(after DRM)

Outturn / forecast net expenditure growth

Recommended net expenditure growth*

13=(11-12) x 7

Annual deviation

14 (cumulated from 13)

Cumulated deviation

15=13/17

Annual balance

16=14/17

Cumulated balance

p.m. Nominal GDP

bn NAC

% change

bn NAC

% GDP

bn NAC

2023

Outturn

461.2

7.3

-0.6

2.1

0.3

0.0

452.1

2024

Outturn

497.4

7.9

0.3

1.7

0.3

5.0

482.3

30.2

-0.4

30.6

6.77%

6.9%

-0.6

-0.1

1134.1

2025

COM

527.5

8.9

1.2

1.4

0.3

0.0

515.7

33.5

-0.5

33.9

7.0%

3.5%

17.1

16.5

1.4

1191.6

2026

COM

559.5

9.8

1.8

1.4

0.3

8.5

537.8

22.1

2.5

19.5

3.8%

3.3%

2.5

18.9

0.2

1.5

1238.2

1067.6

* 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

Total defence expenditure

of which: gross fixed capital formation

% GDP

2021

1.3

0.3

2022

1.3

0.2

2023

1.3

0.2

2024

1.5

0.2

2025

1.5

0.2

2026

1.6

0.2

Source:

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

Table A1.5:

Macroeconomic developments and forecasts

Variables

1=7+8+9

2024

Outturn

1.0

1.2

3.6

-0.5

0.4

0.3

APR

1.9

2.6

1.9

2.3

2.0

2.8

2.3

0.2

-0.3

-0.8

0.3

3.8

1.6

3.0

3.6

5.9

n.a.

2025

COM

1.3

1.9

1.8

0.8

0.7

1.2

1.4

0.1

-0.3

-1.0

0.3

3.9

0.9

3.0

3.7

5.1

10.1

APR

1.5

2.4

1.3

4.0

1.8

3.2

2.4

0.2

-0.8

-1.0

0.3

4.0

1.2

2.4

2.7

5.0

n.a.

2026

COM

1.2

1.8

1.3

1.5

1.9

2.2

1.4

-0.1

0.0

-1.2

0.2

4.0

1.0

2.0

2.6

3.7

10.5

Real GDP

% change

Private consumption

% change

Government consumption expenditure

% change

Gross fixed capital formation

% change

Exports of goods and services

% change

Imports of goods and services

% change

Contributions to real GDP growth

- Final domestic demand

pps

1.3

- Change in inventories

pps

-0.5

- Net exports

pps

0.1

Output gap

% pot GDP

-0.7

Employment

% change

1.0

Unemployment rate

3.7

Labour productivity

% change

-0.1

HICP

% change

3.2

GDP deflator

% change

5.2

Compensation of employees per head

% change

6.4

Net lending/borrowing vis-à-vis the rest of the

% GDP

9.8

world

Source:

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

kom (2025) 0219 - Ingen titel

Table A1.6:

General government budgetary position

Variables (% GDP)

1=2+3+4+5

8=9+16

18=1-8

19=1-9

22=20-21

23=22+16

2024

Outturn

43.0

11.1

14.8

12.5

4.6

43.9

43.2

8.6

6.6

20.8

1.4

3.2

2.6

0.7

-0.9

-0.2

-0.5

0.0

-0.4

0.3

APR

42.0

10.9

13.9

12.9

4.3

44.4

43.7

8.7

6.4

21.3

1.5

3.2

2.6

0.7

-2.3

-1.6

n.a.

0.0

-1.9

-1.1

2025

COM

42.1

11.0

14.1

12.6

4.4

44.3

43.5

8.7

6.6

21.4

1.4

3.2

2.3

0.8

-2.1

-1.4

-1.5

0.0

-1.5

-0.8

APR

42.6

11.2

14.2

12.9

4.3

45.4

44.5

8.6

6.3

21.6

1.6

3.4

3.0

0.9

-2.8

-2.0

n.a.

-0.7

-1.6

-0.7

2026

COM

42.4

11.3

14.2

12.6

4.3

45.2

44.4

8.6

6.6

21.7

1.4

3.3

2.8

0.8

-2.7

-2.0

-0.7

-1.3

-0.5

Revenue

of which:

- Taxes on production and imports

- Current taxes on income, wealth, etc.

- Social contributions

- Other (residual)

Expenditure

of which:

- Primary expenditure

of which:

- Compensation of employees

- Intermediate consumption

- Social payments

- Subsidies

- Gross fixed capital formation

- Other

- Interest expenditure

General government balance

Primary balance

Cyclically adjusted balance

One-offs

Structural balance

Structural primary balance

Source:

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

Table A1.7:

Debt developments

Variables

2=3+4+8

4≈5+6+7

Gross debt ratio* (% of GDP)

Change in the ratio (pps. of GDP)

Contributions**

Primary balance

'Snow-ball' effect

of which:

- Interest expenditure

- Real growth effect

- Inflation effect

'Stock-flow' adjustment

2024

Outturn

43.3

-1.8

0.2

-2.0

0.7

-0.4

-2.2

-0.1

2025

APR

45.0

1.6

-1.6

0.7

-0.8

-1.5

1.6

COM

45.0

1.6

1.4

-1.3

0.8

-0.5

-1.6

1.6

APR

47.8

2.8

2.0

-1.0

0.9

-0.6

-1.2

1.8

2026

COM

47.8

2.8

2.0

-0.9

0.8

-0.5

-1.2

1.8

* 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)

kom (2025) 0219 - Ingen titel

Table A1.8:

RRF

–

Grants

Revenue from RRF grants (% of GDP)

RRF grants as included in the revenue projections

Cash disbursements of RRF grants from EU

2020

n.a.

2021

0.0

2022

0.0

2023

0.0

2024

0.1

2025

0.1

2026

0.2

0.0

Expenditure financed by RRF grants (% of GDP)

6=4+5

Total current expenditure

Gross fixed capital formation

Capital transfers

Total capital expenditure

2020

0.0

2021

0.1

0.0

2022

0.1

0.0

2023

0.1

0.0

2024

0.1

0.0

2025

0.1

0.0

2026

0.0

Other costs financed by RRF grants (% of GDP)

Reduction in tax revenue

Other costs with impact on revenue

Financial transactions

2020

0.0

2021

0.0

2022

0.0

2023

0.0

2024

0.0

2025

0.0

2026

0.0

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 (

Public expenditure on long-term care (

) 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

age-related

expenditure

2024 (% GDP)

21.0

24.3

age-related

expenditure

2024 (% GDP)

21.0

24.3

change in 2024-2040 (pps GDP) due to:

pensions

1.2

0.5

healthcare

0.4

0.3

long-term care

1.0

0.4

education

-0.4

-0.3

total

2.1

0.9

age-related

expenditure

2040 (%GDP)

23.1

25.2

age-related

expenditure

2070 (%GDP)

3.5

1.3

24.5

25.6

change in 2024-2070 (pps GDP) due to:

pensions

1.7

0.2

healthcare

0.7

0.6

long-term care

1.8

0.8

education

-0.7

-0.4

total

Source:

2024 Ageing Report (EC/EPC).

(

)

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

(

) The quality and the accessibility of the long-term

care system are covered in Annex 9 ‘Social policies’.

kom (2025) 0219 - Ingen titel

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 (

), which is, by far, the largest portfolio of investment projects (

). 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

2023

Country Fiscal Rule Strength Index (C-FRSI)

Medium-Term Budgetary Framework Index (MTBFI)

The Netherlands

19.76

0.95

EU Average

14.52

0.73

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

(

)

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

Space and Transport (Dutch). The Netherlands.

(

)

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.

kom (2025) 0219 - Ingen titel

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)

Accounting maturity by government sector in 2025

80%

70%

80%

70%

60%

50%

40%

30%

Projected accounting maturity by government sector in 2030

60%

50%

40%

30%

20%

10%

Central government

Local government

Subsectors

Social security funds General government

Total

20%

10%

Central government

Local government

Subsectors

Social security funds General government

Total

Source:

Tables 3 and 19 of

Updated accounting maturities of EU governments and EPSAS implementation cost.

kom (2025) 0219 - Ingen titel

ANNEX 2: TAXATION

This annex provides an indicator-based

overview of the Netherlands’ tax system.

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 (

). In

2023, VAT revenues amounted to EUR 75.349

million (

There is scope to align the taxation of

different types of income from wealth.

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

(

) Taxation Trends Data (TAX_TYPE for SSCs, VAT, PIT and CIT,

TAX_EC_FUNC

for Environmental taxes and Property taxes).

(

)

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)(

). 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(

Graph A2.1:

Tax wedge for single and second

earners, % of total labour costs, 2024

Tax wedge, % of total labour costs

54.8

49.4

41.7

41.2

35.1

20.4

26.9

100

150

Earnings as % of the average wage

Single earner - NL

Second earner - NL

Single earner - NL (with NTCP)

Single earner - EU average

Second earner - EU average

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

(

) 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).

(

) 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.

kom (2025) 0219 - Ingen titel

Table A2.1:

Taxation indicators

Median (EU-27)

Tax structure

The Netherlands

2010 2021 2022

Total taxes (including compulsory actual social contributions) (% of

GDP)

Taxes on labour (% of GDP)

of which, social security contributions (SSC, % of GDP)

Taxes on consumption (% of GDP)

of which, value added taxes (VAT, % of GDP)

Taxes on capital (% of GDP)

Personal income taxes (PIT, % of GDP)

Corporate income taxes (CIT, % of GDP)

Total property taxes (% of GDP)

Recurrent taxes on immovable property (% of GDP)

Environmental taxes (% of GDP)

Effective carbon rate in EUR per tonne of CO

equivalents

Tax wedge at 50% of average wage (single person) (*)

Tax wedge at 100% of average wage (single person) (*)

Corporate income tax - effective average tax rates (1) (*)

Difference in Gini coefficient before and after taxes and cash social

transfers (pensions excluded from social transfers) (2) (*)

Outstanding tax arrears: total year-end tax debt (including debt

VAT gap (% of VAT total tax liability, VTTL) (**)

36.1

19.6

13.7

11.3

6.5

5.1

7.1

2.4

1.3

0.6

3.8

28.3

38.1

22.8

10.0

39.2

19.0

13.1

12.0

7.3

8.2

3.8

1.8

0.8

3.4

125.9

21.7

35.0

22.8

9.7

12.5

5.3

38.1

18.2

12.5

11.2

7.1

8.7

7.7

4.8

1.6

0.7

2.9

22.9

35.8

22.8

9.6

11.8

7.9

2023

38.6

17.9

12.1

11.1

7.1

9.5

8.9

4.9

1.4

0.6

2.8

120.0

21.2

35.1

22.8

9.4

2024

2010

37.8

19.8

12.9

10.9

6.8

7.1

8.6

2.2

1.9

1.1

2.5

33.9

40.9

21.3

8.6

2021

40.2

20.5

13.0

11.2

7.3

8.5

9.6

2.9

2.2

1.1

2.4

86.0

31.8

39.9

19.3

8.2

35.5

EU-27

2022 2023

39.7

20.1

12.7

10.9

7.4

8.7

9.4

3.2

2.1

1.0

2.1

31.5

39.9

19.1

7.9

32.6

7.0

39.0

20.0

12.7

10.5

7.1

8.5

9.3

3.2

1.9

0.9

2.0

84.8

31.5

40.2

18.9

7.7

2024

By tax base

Some tax types

Progressivity &

fairness

20.4

35.1

31.8

40.3

Tax administration &

considered not collectable) / total revenue (in %) (*)

compliance

7.8

6.6

(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(

In 2025 the Netherlands implemented a

reform of the personal income tax system,

further increasing its progressivity.

The

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 compared with other EU

schemes(

(

)

Ongelijkheid in inkomen en vermogen huishoudens.

Centraal

Bureau voor de Statistiek.

(

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

Empirical Investigation. EU Tax Observatory, November 2021

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(

) but remain

among the highest in the EU.

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

(

) Taxation Trends Data (TAX_TYPE for SSCs, VAT, PIT and CIT,

TAX_EC_FUNC

for Environmental taxes and Property taxes).

kom (2025) 0219 - Ingen titel

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

Tax revenue shares in 2023, Netherlands (outer

ring) and EU (inner ring)

24.8

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 (32.6%)(

). In terms of on-time

payments, performance remained stable, with

rates higher than 95% between 2019 and 2021

(PIT, CIT, PAYE(

) and VAT)(

). 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(

) to improve compliance and

prevent accidental mistakes by taxpayers.

The tax administration in the Netherlands

performs well, although challenges remain.

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 for 23.1% of total operating

expenditure(

). Furthermore, while the IT

infrastructure needs to be modernised, significant

efforts are being made to keep existing systems

running and adjust them to new tax measures. In

this context, the Dutch Administration has

developed

three-to-five-year

digital

transformation strategy, which identifies the

necessary digital skills for a successful digital

transformation in parts of the administration. In

January 2023, the Netherlands had an opening

inventory of twenty-nine mutual agreement

procedure (MAP) cases(

). Nine cases were

initiated in 2023. The average processing time in

2022 was among the shortest in the EU.

(

) 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).

(

)

“Pay-as-you-earn” refers to a system where employers

deduct taxes from income and pay them on behalf of

employees.

(

) Source of data:

12. Derived indicators: payment, arrears,

audit, disputes and litigation - ISORA

(

) Source of data:

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

(

) Source of data:

Resource ratios: Cost, Resource Rations

(accessed on 31 January 2025).

(

)

Statistics on pending APAs and MAPs in the EU - European

Commission

21.9

51.2

26.9

46.5

28.8

Taxes on labour

Taxes on consumption

Taxes on capital

Source:

Taxation trends data, DG TAXUD

The Dutch corporate tax system applies rates

above the EU average but supports the

business

environment

through

lower

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

kom (2025) 0219 - Ingen titel

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

introduced withholding taxes on interest and

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

recommendations

made to

the

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)(

). 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(

Table A2.2:

Indicators for financial activity risk, in

% of GDP

2019

Stock of FDI

Dividends

Interest

Royalties

Inward

Outward

Received

Paid

Received

Paid

Received

Paid

480.10%

613.3%

22.40%

13.90%

5.40%

3.70%

7.50%

2023

381.80%

397.60%

22.20%

14.90%

4.20%

3.10%

3.30%

2.7%

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.

Source:

European Commission

Since enacting the reforms, the Netherlands

has moved closer to the EU average on

several

relevant

economic

indicators.

However, financial flows of foreign direct

investments (FDI), dividend, interest and royalty

payments in the Netherlands remain significantly

disproportionate and above the EU average.

(

)

Jannick Damgaard, Thomas Elkjaer and Niels Johannesen

(2019),

The rise of Phantom Investments,

IMF Finance &

Development, September 2019, Vol. 56, No. 3

(

)

National Risk Assessment Witwassen 2023, WODC

kom (2025) 0219 - Ingen titel

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) (

) 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 8

according to the 2024

Global Innovation Index (

), there is a visible

downward trend in relative terms, as it ranked 2

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.

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

development

performance

deteriorated in the last decade.

Business-

science linkages are strong, as shown for instance

by the percentage of public-private scientific co-

publications among the total number of

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 (

) 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 of 1.49%. Regarding 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).

The recently adopted national technology

strategy (NTS) (

) 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

collaboration and partnerships, aimed at

(

)

Techleap.nl

(

)

National technology strategy

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

(

) 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).

(

)

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

ranking/2024/nl.pdf

kom (2025) 0219 - Ingen titel

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%).

Innovative talent

Shortages of skilled workers risk affecting

Dutch

innovation

performance

and

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 (

), 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

Dutch

innovation

performance

and

competitiveness.

Entrepreneurship education is well developed

in the Netherlands, especially in higher

education, but there is a lack of data on

students’ entrepreneurship competencies.

According to the Global Entrepreneurship Monitor

2023 (

), 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.

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 (

), 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.

(

)

Action plan green and digital jobs

(

)

State of Dutch Tech 2024

(

)

Global Entrepreneurship Monitor 2023/2024. Global Report:

25 Years and Growing.

kom (2025) 0219 - Ingen titel

Table A3.1:

Key innovation indicators

The Netherlands

Headline indicator

R&D intensity (gross domestic expenditure on R&D as % of GDP)

Science and innovative ecosystems

Public expenditure on R&D as % of GDP

Scientific publications of the country within the top 10% most cited

publications worldwide as % of total publications of the country

Researchers (FTEs) employed by public sector (Gov+HEI) per thousand

active population

International co-publications as % of total number of publications

R&D investment & researchers employed in businesses

Business enterprise expenditure on R&D (BERD) as % of GDP

Business enterprise expenditure on R&D (BERD) performed by SMEs as %

of GDP

Researchers employed by business per thousand active population

Innovation outputs

Patent applications filed under the Patent Cooperation Treaty per billion

GDP (in PPS €)

Employment share of high-growth enterprises measured in employment

(%)

Digitalisation of businesses

SMEs with at least a basic level of digital intensity

% SMEs (EU Digital Decade target by 2030: 90%)

Data analytics adoption

% enterprises (EU Digital Decade target by 2030: 75%)

Cloud adoption

% enterprises (EU Digital Decade target by 2030: 75%)

Artificial intelligence adoption

% enterprises (EU Digital Decade target by 2030: 75%)

Academia-business collaboration

Public-private scientific co-publications as % of total number of

10.6

publications

Public expenditure on R&D financed by business enterprise (national) as %

0.091

of GDP

Public support for business innovation

Total public sector support for BERD as % of GDP

R&D tax incentives: foregone revenues as % of GDP

BERD financed by the public sector (national and abroad) as % of GDP

Financing innovation

Venture capital (market statistics) as % of GDP, total (calculated as a 3-

year moving average)

Seed funding (market statistics) as % of GDP

Start-up and early-stage funding (market statistics) as % of GDP

Later stage and scale-up funding (market statistics) as % of GDP

Innovative talent

New graduates in science and engineering per thousand population aged

25-34

Graduates in the field of computing per thousand population aged 25-34

0.023

2.2

46.8

50.9

0.035

7.8

59.2

32.9

0.068

5.3

67.3

27.2

0.1

7.7

49.8

42.6

0.113

8.1

51.7

40.2

0.116

8.4

52.6

0.078

7.3

44.0

48.7

0.164

0.133

0.031

0.261

0.16

0.101

0.279

0.154

0.125

0.278

0.158

0.116

0.251

0.131

0.120

0.128

0.204

0.102

0.100

0.251

0.141

0.110

11.5

0.06

11.4

0.06

11.7

0.059

11.8

0.052

11.8

7.7

0.05

8.9

0.02

5.9

15.78

21.81

16.95

4.8

4.4

3.2

12.51

1.08

0.45

4.7

1.42

0.51

6.9

1.51

0.49

7.6

1.46

0.48

7.8

1.49

0.48

8.3

1.56

8.5

1.49

0.4

5.6

2.7

0.3

0.83

3.3

53.6

0.72

15.3

3.1

61.4

0.76

14.5

3.4

64.9

0.75

14.5

3.5

65.2

0.68

3.4

65.7

0.67

3.4

65.9

0.72

9.6

4.1

55.9

0.64

12.3

39.3

1.9

2.14

2.27

2.22

2.18

2.23

2.24

3.45

2012

2017

2020

2021

2022

2023

2024 EU average (1)

USA

60.25

13.1

80.09

48.56

57.44

13.37

80.83

68.54

23.06

72.91

33.17

38.86

13.48

10.9

2.5

10.3

1.8

11.2

2.5

12.4

12.0

3.4

12.0

17.6

3.6

(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

kom (2025) 0219 - Ingen titel

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.

The administrative requirements to set up

new businesses seem high and may hinder

business dynamism.

There is scope 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

consent’ principle, tailor the length and complexity

of the licensing process to the risks inherent in the

licensed activities) (

Economic framework conditions

The Netherlands has a generally favourable

business environment.

The latest editions of

international rankings continue to rank the

Netherlands highly, testifying to the attractiveness

of its business environment. The OECD (

) places

the country fourth in the EU and fifth overall (out

of 40 countries). The Institute for Management

Development (

) ranks it the ninth out of 67

countries. The Economist Intelligence Unit (

) 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.

The regulatory and administrative burden on

companies appears to have increased

recently.

Dutch companies increasingly report

business regulations as a major barrier to long-

term investment (

). Over 30% of firms devote

more than 10% of staff to fulfil regulatory

requirements, one of the highest levels in the EU.

(

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

(

) IMD, World Competitiveness Index 2024.

(

) EIU, Business Environment Rankings, 2024.

(

) 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%).

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, tighter 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

special treatment for housing corporations

disincentivise investment and competition.

High energy costs negatively affect the

attractiveness of the business environment.

Energy costs are the top concern for

companies (

) (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

(

) OECD, PMR 2024. The relevant indicator puts the

Netherlands in 30th place, well above average.

(

) EIB IS 2024.

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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*

(1) Regulatory

burden

Regulation as a major

obstacle to investment

24.5

5.5

(2) Single

Market

41.6

EU Trade Integration

44.0

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 recently been increasingly

contested.

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).

(3) Shortages

Material shortages as a

factor limiting production

12.5

16.6

(4) Late payments

from public entities

9.7

47.9

from private entities

30.7

Share (%)

EU27

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.

Single Market

The Netherlands is well integrated into the

Single Market but can improve 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

directives on time) and conformity deficit

(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%).

SMEs are performing well but there is room

for improvement.

The gap between the

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.

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Professions

face

fewer

regulatory

constraints than in most OECD countries.

The

OECD restrictiveness index shows that 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 responsible for auditing. Retail

distribution could benefit from a reduction in

regulatory

barriers (

Territorial

supply

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.

(

) OECD, PMR 2024.

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Table A4.1:

Making Business Easier: indicators.

Netherlands

POLICY AREA

INDICATOR NAME

2020

Investment climate

Material shortage, firms facing constraints, %

Shortages

Labour shortage, firms facing constraints, %

Vacancy rate, vacant posts as a % of all

available ones (vacant + occupied)

Transport infrastructure as an obstacle to

investment, % of firms reporting it as a major

obstacle

Infrastructure

VHCN coverage, %

FTTP coverage, %

5G coverage, %

8.0

14.8

2.6

24.3

23.2

4.2

39.3

36.9

5.4

23.0

34.6

4.9

12.5

30.7

4.6

10.0

20.2

2.3

2021

2022

2023

2024

EU-27

average

2.9

5.2

90.6

51.9

97.0

15.2

97.8

63.4

100

4.7

98.3

77.7

100

0.9

13.4

78.8

64.0

89.3

Reduction of regulatory and administrative barriers

Impact of regulation on long-term investment,

Regulatory environment

% firms reporting business regulation as a

9.8

9.0

12.6

major obstacle

Payment gap - corporates B2B, difference in

-1.7

11.1

13.0

days between offered and actual payment

Payment gap - public sector, difference in days

-1.1

11.4

13.2

between offered and actual payment

Late payments

Share of SMEs

experiencing late

payments, %*

from public or private

entities in the last 6

months

from private entities

in the previous or

current quarter

from public entities in

the previous or

current quarter

9.7

5.5

24.5

12.5

16.2

29.6

16.8

13.7

15.6

15.1

25.0

22.7

24.6

30.7

47.9

9.7

16.6

Integration

Single Market

EU trade integration, % (Average intra-EU

41.7

imports + average intra EU exports)/GDP

EEA Services Trade Restrictiveness Index

Transposition deficit, % of all directives not

transposed

Conformity deficit, % of all directives

transposed incorrectly

SOLVIT, % resolution rate per country

Number of pending infringement proceedings

0.032

1.0

1.7

78.0

24.0

46.1

0.032

1.6

1.3

89.2

21.0

51.9

0.032

1.4

1.6

78.0

23.0

47.5

0.032

0.6

1.2

73.0

23.0

44.0

0.037

0.9

1.2

74.0

25.0

41.6

0.050

0.8

0.9

84.9

24.4

Compliance

Public procurement

Single bids, % of total contractors**

Competition and

transparency in public

procurement

Direct awards, %**

7.0

*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).

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ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE

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 to 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 pension funds dominate 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 relatively undeveloped,

especially

considering the high risk of flooding.

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

40 % of GDP

-10

-20

2017

2018

2019

2020

2021

2022

2023

Private investment, net

Private savings, net

Borrowing from the rest of the world

Lending to the government

Private savings, gross

Source:

AMECO.

Availability and use of domestic

savings

The Dutch economy invests the largest part

of its relatively high net savings abroad.

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% in 2015. In the 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

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

foreign exchange reserves contributed 6

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.

kom (2025) 0219 - Ingen titel

Graph A5.2:

International investment position

1500

% of GDP

1000

500

-500

-1000

-1500

2017

2018

2019

2020

2021

2022

2023

2024-Q3

Foreign Direct Investment, Assets

Other investment, Assets

Foreign Direct Investment, Liabilities

Other investment, Liabilities

Portfolio Investment, Assets

Official reserve assets

Portfolio Investment, Liabilities

NIIP

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

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 investors). 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.

Graph A5.3:

Capital markets and financial

intermediaries

MFIs

Other financials

Pension funds

300

250

200

150

100

% of GDP

Non-financial corporations

Financial corporations

Non-financial corporations

Insurance and pension funds

Listed equity

Bonds

Government

Assets by sector

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

EBA and the ECB, the severe adverse

Insurance corporations

MFIs

Investment funds

kom (2025) 0219 - Ingen titel

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.

While asset quality is strong, risks of

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

developments

could

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 low, has 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 to flooding. Despite 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.

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

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

and Australia, saw its total assets rise to

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

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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.

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 invested in collective 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

and less liquid investments, the aggregate

riskiness of their asset portfolios has increased.

Given the geographical specificity of the

Netherlands, climate change is the highest risk for

Dutch insurers. The European Insurance and

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.

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

400

350

300

% of GDP

250

200

150

100

Loans

Listed shares

Trade credit and advances

Unlisted shares

Bonds

Other equity

(1) Reference period is end-2023.

Source:

Eurostat.

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%).

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

kom (2025) 0219 - Ingen titel

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%.

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

200

150

350

300

250

200

150

100

Retail investment in capital markets

The highly developed and deep stock market

in the Netherlands offers multinationals and

domestic companies access to global

institutional

investors.

The

Amsterdam

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.

Thanks to their large and often automatic

investments in pension 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

per capita (000 EUR) (lhs)

Currency and deposits

Investment funds

Listed shares

Other equity

% of GDP GDP (rhs)

Insurance and pension funds

Bonds

Unlisted shares

HH Debt (liability)

(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

ongoing transition from defined benefits to

kom (2025) 0219 - Ingen titel

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

(32%), mortgages and loans (23%), and

government bonds (17%). The financing of the

corporate sector, through bonds (12%) or equity

(8%), was comparatively less significant.

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’ investments in funds stood at

EUR 1 124 bn.

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 (47%) and European (28%)

investors in the lead. Energy (21%), fintech (20%),

health (13%), company software (12%) and

transportation (10%) were the main investment

sectors.

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

a favourable business environment and a

trustworthy ecosystem that is attractive for

investors.

Financing the green transition

Both NFCs and financial institutions have

been active in supporting the green

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 is considered, investment funds

appear to be relatively more geared towards less

carbon-intensive industries, particularly when

compared to insurance corporations and pension

funds.

The depth of venture and growth

capital

The Netherlands is a regional leader in

venture

capital

and

private

equity

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 in the start-up ecosystem,

showcasing remarkable growth and offering a

kom (2025) 0219 - Ingen titel

Financial literacy

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 literacy is crucial to foster retail

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

financial education and responsible financial

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

financial literacy in the EU ranks the

Table A5.1:

Financial sector indicators

Total assets of MFIs (% of GDP)

Common Equity Tier 1 ratio

Total capital adequacy ratio

Overall NPL ratio (% of all loans)

NPL (% loans to NFC-Non financial corporations)

NPL (% loans to HH-Households)

NPL-Non performing loans coverage ratio

Return on Equity

Netherlands first on financial knowledge.

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.

2017

316.5

16.8

22.1

2.1

4.8

1.2

29.8

8.8

34.7

73.9

-0.8

0.1

149.1

0.29

52.5

0.63

0.05

0.3

1.6

3.7

61.9

64.8

25-27

2018

294.9

17.0

22.4

1.9

4.3

1.2

26.0

8.1

32.2

71.2

-0.8

0.1

122.0

1.09

50.9

0.83

0.05

0.3

1.5

3.3

62.3

60.3

2019

291.0

16.9

22.9

1.8

4.3

1.1

25.9

7.7

30.3

68.1

-1.8

0.2

152.0

0.00

50.8

0.84

0.06

0.2

1.6

3.3

64.4

62.8

2020

311.2

17.9

23.2

1.9

4.8

1.3

27.2

3.1

29.6

70.4

0.9

-0.9

151.8

2.14

46.3

0.96

0.09

0.2

1.6

3.0

65.0

68.1

2021

296.6

17.8

22.7

1.4

3.3

1.3

30.7

8.2

28.2

65.4

4.0

1.2

171.8

2.04

50.2

0.99

0.14

0.2

2.0

3.6

61.6

59.3

2022

288.9

16.5

21.2

1.3

3.2

1.0

26.8

7.7

26.7

60.1

2.5

1.7

120.8

0.00

48.3

1.22

0.10

0.2

1.9

3.4

55.4

44.7

2023

259.3

16.7

21.2

1.3

3.0

1.0

26.1

10.9

24.6

56.6

-1.0

1.0

127.1

0.01

47.0

0.64

0.10

53.0

0.2

1.9

3.5

56.4

42.0

168.7

2024-Q3

254.3

16.8

21.5

1.3

3.2

1.0

25.8

11.8

23.6

54.9

1.5

2.5

125.7

40.4

167.7

248.4

16.6

20.1

1.9

3.5

2.2

42.1

10.0

30.0

44.5

0.8

0.7

69.3

0.05

49.6

0.41

0.05

45.5

2.7

4.8

10.0

27.8

54.8

23.4

Banking sector

Non-banks sector

Loans to NFCs (% of GDP)

Loans to HHs (% of GDP)

NFC credit annual % growth

HH credit annual % growth

Stock market capitalisation (% of GDP)

Initial public offerings (% of GDP)

Market funding ratio

Private equity (% of GDP)

Venture capital (% of GDP)

Financial literacy (composite)

Bonds (as % of HH financial assets)

Listed shares (as % of HH financial assets)

Investment funds (as % of HH financial assets)

Insurance/pension funds (as % of HH financial assets)

Total assets of all insurers (% of GDP)

Pension funds assets (% of GDP)

11-17

1-3

4-10

18-24

209.9

235.9

222.1

170.9

Colours indicate performance ranking among 27 EU Member States.

(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.

kom (2025) 0219 - Ingen titel

ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK

The

Netherlands’

institutional framework

influences its competitiveness.

While the

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.

Quality of legislation and regulatory

simplification

Regulatory practices for developing and

evaluating legislation are above the EU

average and have improved from 2021 to

2024.

Ex-ante impact assessments, public

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 (

). 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)

4.0

3.5

3.0

Public perceptions

Graph A6.1:

Trust in justice, regional / local

authorities and in government

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

Autumn

Spring

Autumn

Summer

Autumn

Winter

Spring

Winter

Spring

2.5

2.0

2014 2015

2016

2017

2018

2019 2020 2022

2023

2024

1.5

1.0

0.5

0.0

Primary laws Subordinate Primary laws Subordinate Primary laws Subordinate

regulations

NL_Stakeholder

engagement

NL_Regulatory Impact

Assessment

NL_Ex-post evaluation of

legislation

Justice, legal system EU27

Justice, legal system NL

Regional or local public authorities EU27

Regional or local public authorities NL

Government EU27

Government NL

(1) EU-27 from 2019; EU-28 before

Source:

Standard Eurobarometer surveys

Methodology

Transparency

2021

Systematic adoption

Oversight and quality control

EU-27

Trust in public institutions remains above the

average.

Judicial

and

subnational

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%) (

The perceived quality of government has remained

broadly stable at values above the EU average (

(

)

Understanding Europeans’ views on reform needs

- April

2023 - - Eurobarometer survey,

Country Fact Sheet.

(

)

Inforegio - European Quality of Government Index

Source:

OECD (2025), Regulatory Policy Outlook 2025 and

Better Regulation across the European Union 2025

(forthcoming).

The Netherlands also has mechanisms in

place for simplifying regulation and

identifying administrative burdens

(table

A6.1). The policy preparation framework was

revised in 2022/2023. A recent evaluation found

(

)

JRC. Building capacity for evidence-informed policymaking in

governance and public administration in a post-pandemic

Europe

kom (2025) 0219 - Ingen titel

Table A6.1:

The Netherlands. Selected indicators on administrative burden reduction and simplification

Ex ante impact assessment of legislation

When developing new legislation, regulators are

required to …

Ex post evaluation of legislation

Is required to consider the consistency of regulations

and address areas of duplication.

Is required to contain an assessment of administrative

burdens.

Is required to contain an assessment of substantive

compliance costs.

Compares the impact of the existing regulation to

alternative options.

Periodic ex post evaluation of existing regulations is

mandatory.

Government uses stock-flow linkage rules when

introducing new regulations (e.g., one-in one-out).

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.

Identify and assess the impacts of the baseline or

‘do nothing’ option.

Identify and assess the impacts of alternative non-

regulatory options.

Quantify administrative burdens of new

regulations.

Quantify substantial costs of compliance of new

regulations.

Assess macroeconomic costs of new regulations.

Assess the level of compliance.

Identify and assess potential enforcement

mechanisms.

Yes / For all primary laws

For major primary laws

For some primary laws

No / Never

(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 (

). 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

(

The OECD product market regulation

indicator shows that the Netherlands’

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 the permits and licences

required/issued to businesses by public bodies (see

also Annex 6).

framework.

Clear procedures and structures are

in place for consulting social partners on the

development and implementation of national

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 trade unions on important

economic and social issues (including planned

major reforms) with a view to finding consensus

(

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

(

) 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.

Social dialogue

Social dialogue is embedded in a well-

structured and strongly institutionalised

(

)

Rijksoverheid,

2024.

(

)

Staat van de Uitvoering,

2024.

kom (2025) 0219 - Ingen titel

Table A6.2:

Digital Decade targets monitored through the Digital Economy and Society Index

Netherlands

2022

Digitalisation of public services

Digital public services for citizens

Score (0 to 100)

EU-27

2024

2023

2022

2024

2023

Digital Decade

target by 2030

EU-27

100

2030

100

2030

100

2030

2021

Digital public services for businesses

Score (0 to 100)

2021

2022

2023

Access to e-health records

Score (0 to 100)

2021

2022

2023

Source:

State of the Digital Decade report 2024

out of 100), it ranks above the EU average

(respectively 79.4 and 85.4).

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%(

). 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

the country, particularly for its potential to

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(

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

Digital Gateway, and is ready to roll out services

for citizens and business (

Graph A6.3:

Participation rate of 25-64 year olds

in adult learning (%) by occupation

EU-27

2021

2022

2023

2024

Public administration and defence; compulsory social security

High-skilled occupations

Unskilled occupations

Medium-skilled occupations

Armed forces

Total economy

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

(

) European Commission,

Once-Only Technical System

Acceleratormeter

(

) European Commission.

Digital Decade 2024: Country reports

(

) Ibid.

kom (2025) 0219 - Ingen titel

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%

expansion in the central government sector

between 2015 and 2023 (

). 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 (

), and

parity has almost been achieved at senior level,

with nearly 47% of women in senior management

positions (

or a public procurement contract in practice in the

last three years (

A National Risk Assessment on Corruption,

which commenced in April 2024, has been

commissioned and aims to identify the

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 (

A transparency register for lobbying

Members of Parliament is in place, but it is

basic and there is no register for contacts

with government (ministers and state

secretaries).

remains

the

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 (

Integrity

Business perception on corruption is below

the EU average and new anti-corruption

priorities are being implemented.

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%) (

Moreover, 45% of companies believe that people

and businesses caught for bribing a senior official

are appropriately punished (EU average 31%) (

The investigation and prosecution of corruption-

related offences continue to function properly,

including in high-level cases, but the OECD has

raised

concerns regarding

the effective

enforcement of foreign bribery cases (

Preventing infiltration of organised crime groups in

the civil service and police through corruption is a

strategic priority, including through a specific

government programme against subversive

organised crime (

). Furthermore, only 16% of

companies (EU average 27%) think that corruption

has prevented them from winning a public tender

Justice

The efficiency of the justice system

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

further

improved.

regards

judicial

(

)

Rijksoverheid, 2024

(

) Ibid.

(

) European Institute for Gender Equality, 2024.

(

) Flash Eurobarometer 543 on businesses’ attitudes towards

corruption in the EU (2024).

(

) Ibid.

(

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

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

(

) Ibid., pp. 12-13.

(

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

Rule of Law Report.

(

) Ibid., pp. 20-21.

(

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

the Rule of Law Report, p. 18.

kom (2025) 0219 - Ingen titel

independence, no systemic deficiencies have been

reported (

(

) 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.

kom (2025) 0219 - Ingen titel

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.

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.

The Netherlands is participating in 7 IPCEI

initiatives at EU level. The largest amounts of

resources are committed to hydrogen and

microelectronics. Additionally,

the national

promotional bank (InvestNL) and the National

Growth Fund provide investment and grants

supporting an innovative and resilient solar and

batteries value chain.

Strategic autonomy and technology

for the green transition

Net zero industry

The Netherlands’s manufacturing capacity,

although modest relative to other Member

States, is diversified across all net-zero

technologies(

100

)

and

has

important

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

the EU and home to significant pools of

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.

Critical raw materials

Dutch manufacturing heavily depends on

imports of critical raw materials needed for

the green and digital transitions.

The

Netherlands’ strategic dependency on raw

materials in 2023 is one of the highest in the EU,

suggesting limited diversification in its sources of

supply

. A Task Force on Strategic Dependencies

has been set up and is working to identify and

address

high-risk,

strategic

dependencies,

including in raw materials.

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 raw materials to the

Netherlands. In 2022, the country was the EU’s

largest importer of critical raw materials from

non-EU sources.

kom (2025) 0219 - Ingen titel

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.

The

greenhouse

gas

intensity

manufacturing in the Netherlands has been

improving, as regards both energy-related

and

non-energy-related

emissions (

103

(

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

Between 2017 and 2022, the energy-related

greenhouse

emissions

intensity

its

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 to 1.3 GWh/€. Concerning industrial

processes and product use, the emissions intensity

from these sources of Dutch manufacturing

declined by 34%, significantly more than the EU

overall (23%), bringing the process and

product-related emissions intensity just below EU

average levels, at 97 g CO2eq per euro of GVA.

Graph A7.1:

GHG emission intensity of

manufacturing and energy intensive sectors,

2022

3.5

KG CO

eq / €

2.5

1.5

0.5

C-C19

C17

Netherlands

C20

EU-27

C23

C24

Source:

Eurostat.

Energy-intensive industries in the Nether-

lands are facing increasing competitiveness

pressure.

Energy-intensive

industries (

104

)

accounted for 15% of the Netherlands

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

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.

kom (2025) 0219 - Ingen titel

neighbouring countries and internationally (

105

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

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

investments.

Despite

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.

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

can meet its 2030 ESR obligations by

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

105

100

2017

2018

2019

2020

2021

2022

2023

Manufacturing

Manufacture of paper and paper products

Manufacture of chemicals and chemical products

Manufacture of other non-metallic mineral products

Manufacture of basic metals

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

industry

facilitate

company-specific

decarbonisation pathways, although they have run

into delays (

109

). These policies are complemented

with public funding for innovation and clean

energy projects through programs such the

(

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.

(

109

)

Klimaat- en Energieverkenning 2024.

(

110

) See:

Klimaat- en Energieverkenning 2024 | Planbureau voor

de Leefomgeving.

111

( ) PBL,

Klimaat- en Energieverkenning 2024,

24 October 2024.

kom (2025) 0219 - Ingen titel

Graph A7.3:

Greenhouse gas emissions in the

effort sharing sectors, 2005 and 2023

MtCO2e

2005

Domestic transport (excl. aviation)

Agriculture

Waste

2023

Buildings (under ESR)

Small industry

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

Zero pollution industry

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

, non-methane volatile organic compounds

(NMVOC), sulphur dioxide (SO

), ammonia (NH

)

and PM

2.5

. According to the latest projections

submitted under that Article, the Netherlands

projects to meet its emissions reduction

commitments for 2030 onwards for NO

, NMVOC,

, NH

and PM

2.5

. The Netherlands submitted its

updated national air pollution control programme

(NAPCP) to the Commission on 5 December 2023.

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

(

114

) European Commission, DG Environment,

Environmental

investment needs & gaps assessment programme,

2025

update. Expressed in 2022 prices.

Source:

European Environment Agency

Sustainable industry

Circular economy transition

The Netherlands is one of 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

equipment

(INFR(2024)2121).

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.

Current investment in the circularity

transition have been insufficient.

Circular

economy investment across the economy reaches

(

112

) Ministry of Infrastructure and Water Management, 2023,

National Circular Economy Programme 2023-2030,

Link.

( ) Ministry of Infrastructure and Water Management, 2016,

National Agreement on the Circular Economy,

Link.

113

kom (2025) 0219 - Ingen titel

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 (PM

2.5

) (

116

) in 2022; 1 900 attributable

deaths a year (or 19 300 YLL) to nitrogen dioxide

(NO

) (

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 the investment included for

sustainable energy and transport would largely

deliver this.

(

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. PM

2.5

refers to particles with a diameter of 2.5

micrometres or less. PM is emitted from many human

sources, including combustion.

(

117

) Nitrogen dioxide (NO

) 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.

kom (2025) 0219 - Ingen titel

Table A7.1:

Key clean industry and climate mitigation indicators: Netherlands

Strategic autonomy and technology for the green transition

Net zero industry

Operational manufacturing capacity 2023

- Solar PV (c: cell, w: wafer, m: module), MW

- Wind (b: blade, t: turbine, n: nacelle), MW

Automotive industry transformation

Motorisation rate (passenger cars per 1000 inhabitants), %

New zero-emission vehicles, electricity motor, %

Critical raw materials

Material import dependency, %

Climate mitigation

Industry decarbonisation

GHG emissions intensity of manufacturing production, kg/€

Share of energy-related emissions in industrial GHG emissions

Energy-related GHG emissions intensity of manufacturing

and construction, kg/€

Share of electricity and renewables in final energy consumption

in manufacturing, %

Energy intensity of manufacturing, GWh/€

Share of energy-intensive industries in manufacturing production

GHG emissions intensity of production in sector [...], kg/€

- paper and paper products (NACE C-17)

- chemicals and chemical products (NACE C20)

- other non-metallic mineral products (NACE C23)

- basic metals (NACE C24)

Reduction of effort sharing emissions

GHG emission reductions relative to base year, %

- domestic road transport

- buildings

2005

Effort sharing: GHG emissions, Mt; target, gap, %

Sustainable industry

Circular economy transition

Material footprint, tonnes per person

Circular material use rate, %

Resource productivity, €/kg

Zero pollution industry

Years of life lost due to PM2.5, per 100,000 inhabitants

Air pollution damage cost intensity, per thousand € of GVA

Water pollution intensity, kg weighted by human factors per bn € GVA

461

374

282

332

21.7

0.8

458

702

571

27.5

0.9

2018

9.0

25.8

4.1

128.1

Netherlands

2019

9.3

25.6

4.4

2020

9.3

27.1

4.8

2021

8.7

28.5

5.5

2022

8.5

27.2

5.6

2023

6.0

30.6

7.1

0.35

2.16

0.87

4.09

0.32

2.06

0.81

3.79

2018

-14.4

-11.3

0.27

2.22

0.66

3.89

2019

-15.6

-14.0

0.24

2.48

0.63

3.71

2020

-28.3

-18.4

0.32

2.12

0.62

3.40

2021

-27.5

-27.7

-11.5

2021

92.9

2017

0.45

45.2

182.9

23.9

1.83

2018

0.43

44.4

165.5

24.9

1.73

Netherlands

EU-27

350-550 (m)

300-350 (n)

2017

487

1.92

2017

2018

489

5.41

2018

80.4

2019

493

13.82

2019

80.6

- Electrolyzer, MW

- battery, MWh

2020

497

20.50

2020

81.0

2021

502

19.75

2021

82.5

2022

501

23.47

2022

82.9

300-500

2023

498

30.83

2023

82.7

Trend

2018

539

1.03

2018

24.2

2021

561

8.96

2021

22.6

Netherlands

2019

0.41

45.9

159.8

24.9

1.66

2020

0.42

44.4

161.3

24.8

1.70

2021

0.38

44.6

150.9

24.5

1.52

2022

0.32

43.4

128.9

25.6

1.34

15.2

0.27

1.91

0.53

3.48

2022

-33.8

-28.2

-29.9

2022

84.8

0.21

2.23

0.56

3.42

2023

-34.4

-25.2

-34.4

2023

84.1

2023

0.3

42.9

25.3

1.28

EU-27

2017

0.34

44.8

158.4

43.3

1.29

2022

0.27

42.5

132.9

44.2

1.09

7.3

0.73

1.25

2.53

2.79

2018

1.4

21.4

0.68

1.26

2.24

3.49

2023

5.2

32.9

WAM

-9.3

Target

-48.0

Trend

WEM

-10

EU-27

2018

14.7

11.6

2.1

2021

15.0

11.1

2.3

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.

kom (2025) 0219 - Ingen titel

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.

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.

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.

Thanks to a large share of renewables

(50.8%) in its electricity mix, 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

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

Netherlands’s retail

electricity prices for

households have significantly decreased in

2024.

In contrast to 2023, where Dutch

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.

(

120

) Fraunhofer (ENTSO-E data)

(

121

)

Yearly electricity data, Ember (consumption and

generation data throughout the paragraph)

kom (2025) 0219 - Ingen titel

Graph A8.2:

Monthly average day-ahead wholesale

electricity prices and European benchmark

natural gas prices (Dutch TTF)

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

of excessive loop flows from neighbouring

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.

Due to the existence of a high level of

interconnection

capacity,

the

Dutch

electricity market is strongly linked to

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

renewables were curtailed (0.3% of total

(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.

kom (2025) 0219 - Ingen titel

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

derived from large-scale renewable electricity

generation. As a result, national transmission

system operators and distribution system

operators have recognised the need to create a

more flexible electricity system and have

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

resources. Finally, the Netherlands allows

electricity storage systems to participate in both

the day-ahead and intraday markets.

The Netherlands is on track to facilitate

demand-side

response

and

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

( )

ACER.

(

125

) ENTSO-E.

124

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.

kom (2025) 0219 - Ingen titel

to improve the framework for granting permits for

projects on renewables. The most important

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.

Better internal coordination and planning is

ensured by the multi-year infrastructure energy

and climate programme (MIEK).

Based on available evidence, there are no

specific

developments

concerning

the

opening of support schemes, in terms of

either

legislative

requirements

implementation experience through pilot

schemes.

The Netherlands has not put forward a

good plan to indicate that deployment of

renewable energy will increase to meet the agreed

targets.

for PEC under the recast Energy Efficiency

Directive (Directive (EU) 2023/1791).

The Netherlands has notified the Commission

of its comprehensive heating and cooling

assessment

identifying potential for the

application of high-efficiency cogeneration and

efficient district heating and cooling in line with

Article 25(1) of the Energy Efficiency Directive.

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.

Heating and cooling represent 80% of the

country’s

residential

final

energy

consumption.

Approximately 167 000 heat

pumps were sold in 2023, representing an

increase of 66% compared to the previous year. In

this context, it 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.

There are several measures in place to

support energy improvements, including

support for the installation of heat pumps,

covering up to EUR 5 100 of the cost

. New

connections to the gas grid have been banned for

new buildings since 2018

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

leverage more private investment in energy

efficiency measures in support of the 2030 target.

Energy efficiency

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

residential sector, in which final energy

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

Security of supply and diversification

Although the country 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

kom (2025) 0219 - Ingen titel

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.

Regarding oil security of supply, the

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.

Despite progress in renewables, the

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

2023, it produced approximately 3% of the

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).

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

(

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

(

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

kom (2025) 0219 - Ingen titel

Table A8.1:

Key Energy Indicators

Netherlands

2021

Household consumer - Electricity retail price (EUR/KWh)

Energy & supply [%]

Network costs

Taxes and levies including VAT

VAT

Household consumer - Gas retail price

Energy & supply

Network costs

Taxes and levies including VAT

VAT

Non-household consumer - Electricity retail price

Energy & supply

Network costs

Taxes and levies excluding VAT

Non-household consumer - Gas retail price

Energy & supply

Network costs

Taxes and levies excluding VAT

Wholesale electrity price (EUR/MWh)

Dutch TTF (EUR/MWh)

0.1364

58.1%

46.1%

-4.2%

17.4%

0.1013

29.2%

9.6%

61.2%

17.4%

0.1168

43.7%

13.1%

31.3%

0.0341

63.7%

2.9%

19.4%

102.6

n/a

2023

2024

0.2433

69.7%

42.5%

-12.2%

17.3%

0.1642

36.8%

9.5%

53.7%

17.4%

0.1949

49.6%

16.2%

20.5%

0.0593

57.5%

2.5%

27.3%

77.5

n/a

2022

0.0875

229.7%

75.9%

-205.6%

10.1%

0.1481

53.7%

6.8%

39.6%

13.2%

0.1910

62.0%

9.4%

18.3%

0.0682

76.4%

1.5%

10.1%

241.2

n/a

2021

0.2314

36.6%

26.7%

36.7%

14.5%

0.0684

43.7%

22.5%

33.8%

15.5%

0.1242

43.0%

15.8%

30.4%

0.0328

66.2%

7.7%

12.5%

111.0

46.9

2022

0.2649

54.3%

25.3%

20.3%

13.4%

0.0948

61.0%

17.3%

21.7%

11.6%

0.1895

66.5%

10.7%

9.9%

0.0722

77.3%

3.8%

6.1%

233.2

123.1

2023

0.2877

55.6%

24.8%

19.6%

13.8%

0.1121

64.5%

17.1%

18.4%

10.2%

0.1971

63.0%

11.9%

11.2%

0.0672

77.3%

5.3%

7.3%

99.1

40.5

2024

0.2879

47.8%

27.2%

25.0%

14.6%

0.1128

53.9%

18.3%

27.8%

13.6%

0.1661

55.8%

15.5%

15.4%

0.0517

68.7%

7.1%

11.6%

84.7

34.4

0.3035

86.6%

27.9%

-14.5%

17.4%

0.2055

54.2%

6.1%

39.8%

17.8%

0.2404

58.5%

10.4%

16.6%

0.0731

72.6%

2.0%

9.6%

96.1

n/a

2017

Gross Electricity Production (GWh)

Combustible Fuels

Nuclear

Hydro

Wind

Solar

Geothermal

Other Sources

Gross Electricity Production [%]

Combustible Fuels

Nuclear

Hydro

Wind

Solar

Geothermal

Other Sources

Net Imports of Electricity (GWh)

As a % of electricity available for final consumption

Electricity Interconnection [%]

Share of renewable energy consumption - by sector [%]

Electricity

Heating and cooling

Transport

Overall

117,168

99,395

3,402

10,569

2,204

1,536

84.8%

2.9%

0.1%

9.0%

1.9%

0.0%

1.3%

3,506

3.1%

18.1%

13.8%

5.8%

6.5%

2018

114,380

95,965

3,515

10,549

3,708

571

83.9%

3.1%

0.1%

9.2%

3.2%

0.0%

0.5%

7,970

7.0%

18.6%

15.2%

6.2%

9.5%

7.4%

2019

121,408

99,973

3,910

11,508

5,399

544

82.3%

3.2%

0.1%

9.5%

4.4%

0.0%

0.4%

855

0.8%

22.9%

18.2%

7.2%

12.3%

8.9%

2020

123,278

94,787

4,087

15,278

8,567

512

76.9%

3.3%

0.0%

12.4%

6.9%

0.0%

0.4%

-2,660

-2.4%

25.9%

26.4%

8.1%

12.6%

14.0%

2021

122,170

88,305

3,828

18,123

11,304

522

72.3%

3.1%

0.1%

14.8%

9.3%

0.0%

0.4%

253

0.2%

16.3%

33.3%

8.1%

9.2%

13.1%

2022

121,573

78,541

4,156

21,566

16,657

602

64.6%

3.4%

0.0%

17.7%

13.7%

0.0%

0.5%

-4,266

-3.9%

13.7%

39.7%

9.1%

11.1%

15.1%

2023

121,331

67,602

3,985

29,525

19,578

571

55.7%

3.3%

0.1%

24.3%

16.1%

0.0%

0.5%

-5,660

-5.3%

12.0%

46.4%

10.2%

13.4%

17.4%

2024

10.3%

2020

Import Dependency [%]

of Solid fossil fuels

of Oil and petroleum products

of Natural Gas

Dependency from Russian Fossil Fuels [%]

of Natural Gas

of Crude Oil

of Hard Coal

68.0%

91.9%

100.4%

45.0%

37.0%

26.5%

53.6%

2021

58.4%

99.6%

85.7%

33.7%

29.7%

32.2%

38.2%

2022

80.2%

102.1%

107.4%

64.6%

10.1%

23.7%

10.4%

2023

70.4%

102.4%

92.6%

65.2%

3.4%

0.0%

2020

57.5%

35.8%

96.8%

83.6%

41.0%

25.7%

49.1%

2021

55.5%

37.2%

91.7%

83.6%

40.9%

25.2%

47.4%

2022

62.5%

45.9%

97.8%

97.6%

20.7%

18.4%

21.5%

2023

58.3%

40.8%

94.5%

90.0%

9.3%

3.0%

1.0%

2017

Gas Consumption (in bcm)

Gas Consumption year-on-year change [%]

Gas Imports - by type (in bcm)

Gas imports - pipeline

Gas imports - LNG

Gas Imports - by main source supplier [%]

United States

Norway

Belgium

Russia

43.7

3.3%

24.0

23.1

1.0

0.1%

39.8%

1.8%

31.7%

2018

42.9

-1.9%

31.1

27.8

3.3

1.0%

40.5%

3.2%

45.2%

2019

44.8

4.5%

35.6

26.2

9.4

6.5%

35.0%

6.1%

40.2%

2020

43.6

-2.7%

36.2

27.5

8.7

7.9%

32.4%

5.3%

37.0%

2021

42.1

-3.5%

30.9

22.0

8.9

14.0%

36.6%

5.5%

29.7%

2022

33.4

-20.6%

38.8

19.6

19.2

28.9%

25.7%

7.1%

10.1%

2023

31.5

-5.9%

40.3

15.0

25.3

44.4%

23.0%

6.8%

3.4%

Source:

Eurostat, ENTSO-E, S&P Platts

kom (2025) 0219 - Ingen titel

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

higher intensity and frequency of rainfall,

heatwaves and prolonged droughts.

and the stability of dikes and infrastructure due to

soil subsidence (

141

Climate

risks

have

already

caused

substantial loss of life and economic losses.

Between 1980 and 2023, the Netherlands

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 Netherlands has intensified its climate

change adaptation efforts to mitigate

potential damages.

The updated 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

strategy

(NAS)

provides

comprehensive framework for addressing climate

risks across sectors, including infrastructure,

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

promotes a green infrastructure and water-

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

(

141

) Government of the Netherlands, Climate adaptation in

agriculture,

Link.

(

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.

(

140

) EEA, 2024,

European Climate Risk Assessment.

(

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

Motor,

Link.

kom (2025) 0219 - Ingen titel

sensitive design in urban planning (

148

). Despite

these initiatives, which will also help the

Netherlands prepare for natural disasters

exacerbated by climate change, the Dutch policy

framework lacks a clear legal basis 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.

The Netherlands has established a robust

institutional

framework

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 is submitted to 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.

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 m

, 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.

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

Directive (WFD) and the Nitrates 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

population

density (

152

land-use

changes,

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%).

(

151

) Council for the Environment and Infrastructure, 2023, Extra

maatregelen noodzakelijk voor goede waterkwaliteit,

Link.

(

152

) With 517 persons per m

in 2022 the population density is

significantly higher than the EU average of 109.

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

manufacturing and electricity cooling. The

Netherlands’

water-use

productivity

considerable, standing at EUR 76 per m 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%

(

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 to address specific climate adaptation

challenges.

(

150

) Measured as GDP in 2010 chain linked volumes over total

fresh surface water abstracted in cubic metres.

kom (2025) 0219 - Ingen titel

Wastewater management and drinking water

quality are not a cause for concern, though

significant investments are needed 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 2018 and 99.97 % in

2019. Urban wastewater treatment covered 100%

of the population in 2020, but increasing

investment will be all the more important as the

Directive was revised and strengthened 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

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

(

157

) European Commission, DG Environment, Environmental

investment needs & gaps assessment programme, 2025

update.

drinking water (water infrastructure including

micropollutants, climate change and security) and

around EUR 80 million the other aspects of the

Water Framework Directive (water management

and protection, including 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

Targeted action on nature protection and

restoration is needed to meet 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

some habitat types there has been no

improvement to their bad conservation status

since 1994 (i.e. the entry into force of the Habitats

Directive in the Netherlands). Similarly, 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

(

158

) National Institute for Public Health and the Environment

RIVM, 2023,

Monitor nitrogen deposition in Natura 2000

areas 2023,

Link

kom (2025) 0219 - Ingen titel

change, such as regulating water cycles,

maintaining soil health and sequestering carbon.

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 Netherlands will meet 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.

In March 2025 the Netherlands has

submitted a national biodiversity strategy

and action plan (NBSAP) under the

Convention on Biological Diversity or

national targets aligned with the Kunming-

Montreal Biodiversity Framework.

The previous

government had developed a concept NBSAP,

which built on inter alia on the national

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 the approach Space 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

(

159

) Eurostat, last update 12 March 2025,

Protected areas,

Link

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.

Nature degradation creates significant risks

the

Netherlands'

economy

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

agriculture,

forestry,

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 in 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,

including those necessary for the climate

transition, will remain challenging unless

remediation measures are taken.

(

160

) Full text advice of State Attorney for nitrogen plans,

Link.

(

161

) NOS, 2025,

Grote zorgen binnen kabinet over gevolgen

stikstofuitspraak,

Link.

kom (2025) 0219 - Ingen titel

Graph A9.1:

Direct dependency (1) on ecosystem

services (2) of the gross value added generated

by economic sector in 2022

Agriculture

Forestry

Fishery and acquaculture

Mining and metals

Construction

Water utilities

Healthcare delivery

Aviation travel and tourism

Food beverages and tobacco

Supply chain and transport

Public services and others

Electricity

Chemical and materials industry

Electronics

Oil and gas

Real estate

Heat utilities

Automotive

Retail consumer goods and…

Information technology

Banking and capital markets

Insurance and asset…

Digital communications

High

Medium

Low

20%

40%

60%

80% 100%

of CO

equivalent (CO

eq) are needed (

162

). Recent

projections show a surplus compared to the target

of -1.2 million tonnes of CO

eq 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 CO

eq, accounting for

around 11% of the country’s total emissions. This

includes 13.8 million tonnes of CO

eq from

livestock. The Netherlands is not on track in terms

of reducing agricultural sector emissions, with

projected GHG emissions of 22.0 Mt CO

compared to the national sectoral 2030 emission

reduction target of 17.9 Mt CO

eq, 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 harvest, representing 63 % of 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

groundwater monitoring stations

in the

Netherlands

recorded

average

nitrate

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

(

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

(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

kom (2025) 0219 - Ingen titel

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%).

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 (47% from the

European Agricultural Fund for Rural Development)

to environmental and climate objectives and

EUR 964 million (32% from 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 is earmarked 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

to the long-term competitiveness of the

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

industry

contributed

EUR 13.2

billion.

kom (2025) 0219 - Ingen titel

Table A9.1:

Key indicators tracking progress on climate adaptation, resilience and environment

Climate adaptation and preparedness:

Drought impact on ecosystems

[area impacted by drought as % of total]

Forest-fire burnt area

(1)

[ha, annual average 2006-2023]

Economic losses from extreme events

[EUR million at constant 2022 prices]

Insurance protection gap

(2)

[composite score between 0 and 4]

Heat-related mortality

(3)

[number of deaths per 100 000 inhabitants in 2013-

2022]

Sub-national climate adaptation action

[% of population covered by the EU Covenant of

Mayors for Climate & Energy]

Water resilience:

Water Exploitation Index Plus, WEI+

(4)

[total water consumption as % of renewable

freshwater resources]

Water consumption

[million m

]

Ecological/quantitative status of water bodies

[% of water bodies failing to achieve good status]

Surface water bodies

Groundwater bodies

Biodiversity and ecosystems:

Conservation status of habitats

(6)

[% of habitats having a good conservation status]

Common farmland bird index

2000=100

Protected areas

[% of protected land areas]

Sustainable agriculture and land use:

Bioeconomy's added value

(7)

[EUR million]

Landscape features

[% of agricultural land covered with landscape

features]

Food waste

[kg per capita]

Area under organic farming

[% of total UAA]

Nitrogen balance

[kg of nitrogen per ha of UAA]

Nitrates in groundwater

(8)

[mgNO

/l]

Net greenhouse gas removals from LULUCF

[Kt CO

-eq]

2018

30 372

2019

32 438

2018

11.5

58.5

2019

61.1

(5)

Netherlands

2018

26.53

103

2019

5.15

103

2020

16.91

103

542

2021

103

757

2022

17.88

103

785

0.88

2023

103

113

1.00

EU-27

2018

6.77

2021

2.76

24 142

62 981

Netherlands

2018

2.7

2019

2.9

2020

3.0

2021

2.3

2022

4.0

2023

EU-27

2018

4.5

2021

4.5

2 197

2 339

2 404

2 233

3 068

100%

EU-27

59%

93%

Netherlands

2020

2021

63.0

2022

60.4

2023

2018

14.7

72.2

2021

74.4

Netherlands

2020

32 613

2021

34 079

2022

2023

EU-27

2018

634 378

2021

716 124

3.5

196.0

(9)

3.8

165.8

4 694

161

4.0

4 326

148

4.2

4 387

129

4.4

5 060

7.99

256 077 -

240 984

5 029

(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 NO

/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

kom (2025) 0219 - Ingen titel

FAIRNESS

ANNEX 10: LABOUR MARKET

The Dutch labour market continues to

perform well overall, but still faces

persistent structural challenges.

These include

labour and skills shortages, labour market

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 these labour market

challenges, while enhancing job quality, will be key

to fostering productivity gains, sustainable and

inclusive growth, and competitiveness.

The Dutch labour market continues to

perform well overall, but structural

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 Netherlands one of the best

performers, despite a further increase in 2024 (by

0.2 percentage points (pps) to 4.9%). The

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 the same time, 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.

Graph A10.1:

Key rates: activity , unemployment,

long-term unemployment, youth unemployment,

NEET

2010

2011

2020

2021

2009

2012

2013

2014

2015

2016

2017

2018

2019

2022

2023

Activity rate 20-64 (rhs)

Unemployment rate 15-74 (lhs)

Long-term unemployment rate 15-74 (lhs)

Youth unemployment rate 15-24 (lhs)

NEETrate 15-29 (lhs)

(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-

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]

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

widespread

across

sectors.

While

the

165

macroeconomic skills mismatch ( ) in 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

) 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

2024

kom (2025) 0219 - Ingen titel

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

employers’ perceptions,

in October 2024 the

proportion of employers expecting 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

Graph A10.2:

Labour shortages in the Netherlands

Netherlands

4.8

4.3

3.8

3.3

2.8

2.3

and of increasing the labour supply useful

measures include promote better work-life

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,

ii) strengthening upskilling and reskilling

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.

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, in particular for women (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

lack of recognition of qualifications and

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.

Labour as a factor

limiting production

(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.

2019-Q4

2020-Q1

2020-Q2

2020-Q3

2020-Q4

2021-Q1

2021-Q2

2021-Q3

2021-Q4

2022-Q1

2022-Q2

2022-Q3

2022-Q4

2023-Q1

2023-Q2

2023-Q3

2023-Q4

2024-Q1

2024-Q2

2024-Q3

2024-Q4

Industry

Construction

Services

Job Vacancy Rate

Job vacancy rate

kom (2025) 0219 - Ingen titel

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 the labour market. It 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 inclusive growth 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)

poverty and/or social exclusion. To reduce

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-

employed people, ii) the introduction of a

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 flexible employment contracts (by

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 revolving doors from temporary

contracts).

Graph A10.3:

Employment by type (permanent,

temporary, self-employed), year-on-year changes

800

600

400

200

ths

-200

-400

-600

(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

background of persistently high labour

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).

2007-Q1

2008-Q1

2009-Q1

2010-Q1

2011-Q1

2012-Q1

2013-Q1

2014-Q1

2015-Q1

2016-Q1

2017-Q1

2018-Q1

2019-Q1

2020-Q1

2021-Q1

2022-Q1

2023-Q1

2024-Q1

Permanent employees

Self employment

Temporary employees

Overall

kom (2025) 0219 - Ingen titel

with forecasts indicating a reduction to 6.3% in

2024 and 3.5% in 2025.

The Dutch economy is adapting to the green

and digital transitions against a backdrop of

labour shortages in emerging sectors.

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 (6.8% vs 3.1% 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 the EU in 2024).

However, the reported shortages of technically

skilled staff are a major factor limiting progress in

the digital transition. In this context, appropriate

skills are vital for successful labour market

transitions, particularly in sectors that are

transforming (see Annex 12). To promote a fair

green transition, a wide 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

tools

for

monitoring

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.

kom (2025) 0219 - Ingen titel

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,

especially

for

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.

Graph A11.1:

At-risk-of-poverty or social exclusion

rate and its components (AROP, SMSD, LWI)

% of

population

At-risk-of-poverty-or-social-exclusion rate

At-risk-of-poverty rate

Severe material and social deprivation

People living in low work intensity households

(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]

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.

While the Netherlands did not set a

complementary target on child poverty reduction

by 2030 under the framework of the Pillar of

Social Rights, the 2022 action plan 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.

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

(+10.3% year-on-year in Q3-2024). Looking

ahead, increases in wages and a continued lack in

housing supply could add upward pressures on

house

prices.

Furthermore,

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

2016

2015

2017

2018

2019

2020

2021

2022

2023

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

precarious,

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

2024

kom (2025) 0219 - Ingen titel

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.

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 than 40% of their 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

experiencing poverty risks overburdened by

housing costs (EU: 31.1%). Tenants are

disproportionately affected: 43.9% of tenants

renting at the market price and 14.3% of tenants

renting at reduced price (for instance social

housing) face housing cost overburden, while only

1.0% of homeowners with a mortgage experience

this overburden. The Dutch government is taking

measures to simplify and 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

the

personal

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 population, reported 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

people are facing homelessness in the

Netherlands, including people living on the streets,

emergency

accommodation,

unconventional

dwellings and with family, friends or

acquaintances (

174

). The country has put in place a

National Action Plan on Homelessness: Housing

First (2023-2030) aiming to significantly and

structurally reduce homelessness in the

Netherlands, in line with the ambition of the

Lisbon Declaration to end homelessness by 2030

(

175

), which emphasises prevention and housing.

Energy poverty in the Netherlands is

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)

kom (2025) 0219 - Ingen titel

years, the government supported 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.

Transport

poverty

and

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

access to nearby public transport (

176

). On

environmental inequalities, the 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).

(

176

) TNO (2024).

Groep huishoudens kwetsbaar in transitie naar

duurzame mobiliteit

kom (2025) 0219 - Ingen titel

ANNEX 12: EDUCATION AND SKILLS

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 increased in all three

competence areas tested in the OECD Programme

for International Student Assessment (PISA).

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

groups in an unfavourable employment or

vulnerable social position currently participate less

in lifelong learning.

Participation in early childhood education

and care (ECEC) from age three is higher

than the EU average, but staff shortages

may

hamper

targeted

support

for

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

2.5-4 (

177

)

face

staff

shortages,

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

development, and providing incentives for

qualified employees to work more hours (

179

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%).

For native-born students with foreign-born

parents,

the

underachievement

rate

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 if the share of top

performers has decreased significantly, the

Netherlands still shows the highest top

performance rate in mathematics in the EU (

183

). In

terms of digital skills, most Dutch students are low

achievers and students show the largest

differences in the EU according to the level of their

parents’ education

(

184

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 competencies 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

(

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.

(

184

)

International Computer and Information Literacy Study

(ICILS) in Europe

–

2023.

(

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

(

179

)

Minister van Sociale Zaken en Werkgelegenheid: Kamerbrief

voortgang aanpak personeelstekort kinderopvang

kom (2025) 0219 - Ingen titel

higher education and of adults with low

qualifications in lifelong learning. In response to

declining basic skills, in 2022 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% compared with 9.4% in 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.

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 implementation plan focuses on: (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

innovation; and (iv) improving flexibility and

promoting a lifelong learning culture in VET.

Specific measures targeting VET students focus on

numeracy, Dutch literacy, and citizenship

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

vocational education certificates accessible

through the school-based track or through

apprenticeships

(European

Qualifications

Framework levels 2, 3, 4). There are also

apprenticeship courses on installing charging

stations and solar panels and on reducing the use

of gas.

The tertiary attainment rate is among the

highest in the EU but the share of graduates

in STEM is 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:

(

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

kom (2025) 0219 - Ingen titel

9%; M: 46%) (

189

). The share of students enrolled

in ICT subjects (4.1%) was also lower than the EU

average (5.2%).

There is scope to 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

part in activities related to environmental

sustainability (EU-17 average: 48%) (

190

). Dutch

students scored around the average level for

knowledge of sustainable development among the

17 EU countries surveyed.

Graph A12.1:

Underachievement rate in

mathematics by students’ socio-economic

background, PISA 2022

Graph A12.2:

Adult learning

2022

(1) Participation in learning in the last 12 months (excluding

guided on the job training)

Source:

Eurostat Adult Education Survey 2022

Total

Advantaged students

Disadvantaged students

2030 EU target

Source:

OECD (2023).

In light of persistent shortages, skills

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 exercises. Furthermore, 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.

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

workers,

electrical

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

transition towards climate neutrality, the

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

(

192

) Ibid.

(

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.

(

189

)

Platform Talent voor Technologie

(

190

) 2022 International Civic and Citizenship Education Study

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

48%.

(

191

)

Eurobarometer survey

kom (2025) 0219 - Ingen titel

skills for smart specialisation and industrial

transition. Integrated territorial development

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 from lifelong 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).

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

improving basic, technical and digital skills,

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

target of at least 62% of adults participating in

training every year by 2030, which should support

competitiveness further.

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 skills and 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 in the labour market position. This

‘Scholingsregeling

WW’

has become structural

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.

kom (2025) 0219 - Ingen titel

ANNEX 13: SOCIAL SCOREBOARD

Table A13.1:Social

Scoreboard for Netherlands

Social Scoreboard for Netherlands

Adult participation in learning (during the last 12 months, excl. guided on

the job training, % of the population aged 25-64, 2022)

Early leavers from education and training

(% of the population aged 18-24, 2024)

Equal opportunities and

access to the labour market

Share of individuals who have basic or above basic overall digital skills

(% of the population aged 16-74, 2023)

Young people not in employment, education or training

(% of the population aged 15-29, 2024)

Gender employment gap

(percentage points, population aged 20-64, 2024)

Income quintile ratio

(S80/S20, 2024)

Employment rate

(% of the population aged 20-64, 2024)

Dynamic labour markets

and fair workingconditions

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

(% of the total population, 2024)

At risk of poverty or social exclusion (AROPE) rate for children

(% of the population aged 0-17, 2024)

Impact of social transfers (other than pensions) on poverty reduction

(% reduction of AROP, 2024)

Social protection and

inclusion

Disability employment gap

(percentage points, population aged 20-64, 2024)

Housing cost overburden

(% of the total population, 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)

Critical situation

To watch

Weak but improving Good but to monitor

On average

Better than average

Best performers

56,1

7,0

82,7

4,9

7,6

3,72

83,5

3,7

0,5

109,4

15,4

15,8

41,0

20,9

6,9

78,9

0,6

(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

kom (2025) 0219 - Ingen titel

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

population and social fairness, while

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

82.2

81.4

81.3

80.4

2019

2020

80.1

2021

80.6

2022

2023

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

per 100 000 population

91.3

89.2

91.7

93.3

89.7

64.7

61.4

59.0

59.7

59.2

2018

2019

2020

2021

2022

Netherlands

Age-standardised death rate

(mortality that could be

avoided through optimal quality healthcare)

Source:

Eurostat (hlth_cd_apr)

81.4

81.7

81.9

81.4

Netherlands

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

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 increase 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

kom (2025) 0219 - Ingen titel

Table A14.1:Key

health indicators

2019

Cancer mortality per 100 000 population

Mortality due to circulatory diseases per 100 000 population

Current expenditure on health, purchasing power standards, per capita

Public share of health expenditure, % of current health expenditure

Spending on prevention, % of current health expenditure

Available hospital beds per 100 000 population**

Doctors per 1 000 population*

Nurses per 1 000 population*

Mortality at working age (20-64 years), % of total mortality

Number of patents (pharma / biotech / medical technology)

Total consumption of antibacterials for systemic use,

daily defined dose per 1 000 inhabitants****

266.6

239.0

3 932

82.8

3.3

222

3.8

10.8

13.7

682

9.5

2020

261.3

219.7

4 238

85.0

4.6

212

3.8

11.1

12.8

687

8.5

2021

256.2

219.9

4 565

84.9

8.6

183

3.9

11.4

13.2

504

8.3

2022

254.1

225.7

4 531

84.2

5.7

166

3.9

11.5

12.8

415

9.1

2023

n.a.

12.6

449

9.6

EU average*

(latest year)

234.7 (2022)

336.4 (2022)

3 684.6 (2022)

81.3 (2022)

5.5 (2022)

444 (2022)

4.2 (2022)*

7.6 (2022)*

14.3 (2023)

29 (2023)***

20.0 (2023)

*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.

high consumption of fruit and vegetables.

However, the regular use of vaping products (

194

) is

fairly high among young adults (6.8%) compared

to the EU average (2.7%). In 2023, the

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

average (20). However, this figure increased

slightly compared to 2019. The country is

participating to the joint action funded by

EU4Health on Antimicrobial Resistance and

Healthcare-Associated Infections EU-JAMRAI 2.

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

(

194

) OECD/European Commission (2024),

Health at a Glance:

Europe 2024 - State of Health in the EU Cycle,

Chapter 4.

insufficient time for patient care due to heavy

administrative burdens. The Dutch recovery and

resilience plan (RRP) 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

professionals, while the other focuses on

expanding intensive care capacities by improving

hospital infrastructure and providing intensive care

training for nurses.

The Dutch health system has the potential to

drive innovation and foster 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) instead of in-person 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

(

195

) European Patent Office,

Data to download | epo.org

kom (2025) 0219 - Ingen titel

overall technical deployment of electronic health

records (see Annex 6).

The government prioritises guidelines and

policies that enable the rapid, safe, and

responsible

deployment

artificial

intelligence

for

the

reduction

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

data availability and exchange in both the

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 innovation in life sciences and

healthcare by standardising and connecting data

through the Health Research Infrastructures

(Health RI) consortium. This would entail: (i)

developing an integrated national health data

infrastructure;

(ii)

removing

social

and

organisational barriers through agreements

between public and private stakeholders; and (iii)

setting up a central hub for data sharing, in line

with the European Health Data Space Regulation.

kom (2025) 0219 - Ingen titel

HORIZONTAL

ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS

This Annex assesses the Netherlands’

progress on the Sustainable Development

Goals (SDGs) along the dimensions of

competitiveness,

sustainability,

social

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.

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

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

average (78.8%), representing a continuous

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

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.

kom (2025) 0219 - Ingen titel

digital skills and upskill and reskill the workforce.

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.

SDG 13 (Climate action), net greenhouse gas

emissions have decreased over time (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 (SDGs 3, 4, 5 8). Historically, the

Netherlands performs very well on decent work

and economic growth (SDG 8). The employment

rate increased further between 2019 and 2024

(from 81.0% to 83.5%), which makes the

Netherlands one of the best performers in the EU

(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 (from 13.3% to 13.0% of the

population). On migration and social inclusion (SDG

10), the gap between non-EU citizens and EU

nationals in terms of people at risk of monetary

poverty 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.

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.

kom (2025) 0219 - Ingen titel

ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION

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

Netherlands

date

and

the

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).

EU funding instruments provide considerable

resources to the Netherlands by supporting

investments and structural reforms to

increase competitiveness, 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

2024 GDP (

199

). The contribution of these

instruments to different policy objectives is

outlined in Graphs A16.1 and A16.2. This

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

(

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

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

policy

programmes

advanced

and

implementation of selected projects has gained

momentum.

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 (

200

). With sustained efforts, the

Netherlands should be able to complete all RRP

measures by 31 August 2026.

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.

(

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

(

202

) Data reflect the situation on 31.12.2024.

kom (2025) 0219 - Ingen titel

Graph A16.1:

Distribution of RRF funding in the

Netherlands by policy field

Green transition

Digital transformation

Smart, sustainable and

inclusive growth

Social & territorial cohesion

Health & resilience

Next generation

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 to address labour

shortages and activate underutilised workforce

potential.

Other

funds

are

contributing

competitiveness in the Netherlands, for

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 innovations, with 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

improving and speeding up permitting for

renewable energy projects in regions.

The Dutch RRP also contains ambitious

measures

improve

the

business

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 funds are playing a significant role in

promoting environmental sustainability and

green transition in the Netherlands during

the

current

seven-year

budget

(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

Smarter Europe

Greener Europe

Connected Europe

Social Europe

Europe closer to citizens

JTF specific objective

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

partnerships

with

research

organisations,

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

kom (2025) 0219 - Ingen titel

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

Guarantee Fund (EAFG) to eco-schemes,

supporting biodiversity, organic farming and

sustainable practices. This includes incentives for

farmers to create 36 000 hectares of new

meadows with characteristics beneficial to

increasing the presence of meadow birds.

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 CO

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 investments to reduce congestion. The

government also adopted a Human Capital Agenda

to increase skills supply in the green hydrogen

sector.

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

transition.

Integrated

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 need. In

addition, the AMIF supports integration measures,

including language training, civic orientation

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.

The Dutch RRP contains several reforms and

investments related to fairness and social

policies.

Examples are career advice and skills

training for workers and the unemployed,

agreements between national and local

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

were

created

strengthen

employability of workers, and primary and

secondary schools received support to prevent

learning losses among pupils with a migrant

background.

kom (2025) 0219 - Ingen titel

Table A16.1:Selected

EU funds with adopted allocations - summary data (million EUR)

Instrument/policy

RRF grants (including the RepowerEU allocation)

RRF loans

Allocation 2021-2026

5 441.4

Disbursed since 2021 (1)

2 517.9

0.00

Disbursed since 2021 (3)

(covering total payments to the

Member State on commitments

originating from both 2014-

2020 and 2021-2027

programming periods)

1 303.5

586.4

516.7

200.4

69.2

Instrument/policy

Allocation 2014-2020 (2)

Allocation 2021-2027

Cohesion policy (total)

European Regional Development Fund (ERDF)

European Social Fund (ESF, ESF+)

Just Transition Fund (JTF)

Fisheries

European Maritime, Fisheries and Aquaculture Fund (EMFAF)

and the European Maritime and Fisheries Fund (EMFF)

Migration and home affairs

Migration, border management and internal security - AMIF,

BMVI and ISF (4)

The common agricultural policy under the CAP strategic

plan (5)

Total under the CAP strategic plan

European Agricultural Guarantee Fund (EAGF)

European Fund for Agricultural Development (EAFRD)

1 582.1

791.1

1 543.1

506.2

413.8

623.1

97.9

101.5

388.5

Allocation 2023-2027

4 694.3

3 611.3

1 083.0

394.3

197.9

Disbursements under the

CAP Strategic Plan (6)

1 408.0

1 213.4

194.6

(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

kom (2025) 0219 - Ingen titel

Table A16.2:Summary

table on 2019-2024 CSRs

Netherlands

2019 CSR 1

Reduce the debt bias for households and the distortions in the housing market, including by supporting

the development of the private rental sector.

Ensure that the second pillar of the pension system is more transparent, inter-generationally fairer and

more resilient to shocks.

Implement policies to increase household disposable income, including by strengthening the conditions

that support wage growth, while respecting the role of social partners.

Address features of the tax system that may facilitate aggressive tax planning, in particular by means of

outbound payments, notably by implementing the announced measures.

2019 CSR 2

Reduce the incentives for the self-employed without employees, while promoting adequate social

protection for the self-employed,

and tackle bogus self-employment.

Strengthen comprehensive life-long learning and upgrade skills, notably of those at the margins of the

labour market and the inactive.

2019 CSR 3

While respecting the medium-term budgetary objective, use fiscal and structural policies to support an

upward trend in investment.

Focus investment-related economic policy on research and development, in particular in the private

sector,

on renewable energy, energy efficiency and greenhouse gas emissions reduction strategies

and on addressing transport bottlenecks.

2020 CSR 1

In 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.

Strengthen the resilience of the health system, including by tackling the existing shortages of health

workers and stepping up the deployment of relevant e

‑

Health tools.

2020 CSR 2

Mitigate the employment and social impact of the crisis and

promote adequate social protection for the self-employed.

2020 CSR 3

Front-load mature public investment projects (to foster the economic recovery)

and promote private investment to foster the economic recovery.

Focus investment on the green and digital transition, in particular on digital skills development,

sustainable infrastructure and clean and efficient production and use of energy

as well as mission-oriented research and innovation.

2020 CSR 4

Take steps to fully address features of the tax system that facilitate aggressive tax planning in

particular on outbound payments, notably by implementing the adopted measures and ensuring its

effectiveness.

Ensure effective supervision and enforcement of the anti-money laundering framework.

2021 CSR 1

In 2022, pursue a supportive fiscal stance, including the impulse provided by the Recovery and

Resilience Facility, and preserve nationally financed investment.

When economic conditions allow, pursue a fiscal policy aimed at achieving prudent medium-term fiscal

positions and ensuring fiscal sustainability in the medium term.

At the same time, enhance investment to boost growth potential. Pay particular attention to the

composition of public finances, on both the revenue and expenditure sides of the budget, and to the

quality of budgetary measures in order to ensure a sustainable and inclusive recovery. Prioritise

sustainable and growth-enhancing investment, in particular investment supporting the green and digital

transition.

Give priority to fiscal structural reforms that will help provide financing for public policy priorities and

contribute to the long-term sustainability of public finances, including, where relevant, by strengthening

the coverage, adequacy and sustainability of health and social protection systems for all.

2022 CSR 1

In 2023, ensure that the growth of nationally financed primary current expenditure is in line with an

overall neutral policy stance, taking into account continued temporary and targeted support to

households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. Stand ready

to adjust current spending to the evolving situation.

Expand public investment for the green and digital transitions, and for energy security taking into

account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and

other Union funds.

For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent medium-term fiscal

positions.

Reduce the debt bias for households and the distortions in the housing market, including by supporting

the development of the private rental sector and taking measures to increase housing supply.

Enact and implement the reform of the pension system agreed in 2019 and 2020.

Assessment in May 2024*

Some progress

Limited progress

Substantial progress

Full implementation

Limited progress

Some progress

Not relevant anymore

Some progress

Not relevant anymore

SDG 8, 16

SDG 9

SDG 7, 9, 13

SDG 11

SDG 1, 2, 8, 10

SDG 8

SDG 4

Relevant SDGs

SDG 8

SDG 8, 16

Some progress

Substantial progress

Limited progress

Some progress

Not relevant anymore

Limited progress

Some progress

Substantial progress

Full implementation

Substantial progress

Not relevant anymore

SDG 3

SDG 1, 2, 8, 10

SDG 1,2,10

SDG 8, 16

SDG 8, 9

SDG 4

SDG 7, 9, 13

SDG 9

SDG 8, 16

Not relevant anymore

SDG 8, 16

Not relevant anymore

Substantial progress

SDG 8, 16

Not relevant anymore

SDG 8, 16

Not relevant anymore

Limited progress

Substantial progress

SDG 8, 16

SDG 8

(Continued on the next page)

kom (2025) 0219 - Ingen titel

Table (continued)

2022 CSR 2

Swiftly finalise the negotiations with the Commission of the 2021-2027 cohesion policy programming

Progress on the cohesion policy programming documents

is monitored under the EU cohesion policy.

documents with a view to starting their implementation.

2022 CSR 3

Limited progress

Promote adequate social protection for the self-employed without employees,

Limited progress

SDG 1, 2, 10

tackle bogus self-employment

Limited progress

SDG 8

and reduce the incentives to use flexible or temporary contracts.

Limited progress

SDG 8

Address labour and skills shortages, in particular in healthcare, education, digital and technical jobs and

construction, including by tapping underutilised labour potential originating from the high share of part-

Some progress

SDG 8

time employment and the lower employment rate of people with a migrant background.

Strengthen up- and reskilling opportunities, in particular for those at the margins of the labour market

Some progress

SDG 4

and the inactive.

2022 CSR 4

Some progress

Reduce overall reliance on fossil fuels

Limited progress

SDG 7, 13

by accelerating the deployment of renewables, in particular by boosting complementary investments in

Some progress

SDG 7, 9, 16

network infrastructure and further streamlining permitting procedures,

improving energy efficiency, in particular in buildings,

Some progress

SDG 7

and accelerating investments in sustainable transport

Some progress

SDG 11

and sustainable agriculture.

Limited progress

SDG 11, 12, 13, 15

2023 CSR 1

Some progress

Wind down the emergency energy support measures in force, using the related savings to reduce the

government deficit, as soon as possible in 2023 and 2024. Should renewed energy price increases

Substantial progress

SDG 1, 7, 8, 10, 12

necessitate new or continued support measures, ensure that these are targeted at protecting

vulnerable households and firms, fiscally affordable, and preserve incentives for energy savings.

Ensure prudent fiscal policy, in particular by limiting the nominal increase in nationally financed net

Full implementation

SDG 8

primary expenditure in 2024 to not more than 3.5%.

Preserve nationally financed public investment and ensure the effective absorption of RRF grants and

Full implementation

SDG 8, 9, 13

other EU funds, in particular to foster the green and digital transitions.

For the period beyond 2024, continue to pursue a medium-term fiscal strategy of gradual and

sustainable consolidation, combined with investments and reforms conducive to higher sustainable

Full implementation

SDG 8

growth, to achieve a prudent medium-term fiscal position.

Reduce the household debt bias and distortions in the housing market. Support the availability and

Limited progress

SDG 8

affordability of housing on the private rental market.

Remove obstacles holding back investments, including in residential construction.

Limited progress

2023 CSR 2

RRP implementation is monitored through the assessment

Proceed with the steady implementation of its recovery and resilience plan and swiftly finalise the

of RRP payment requests and analysis of the bi-annual

reporting on the achievement of the milestones and

REPowerEU chapter with a view to rapidly starting its implementation. Proceed with the speedy

targets, to be reflected in the country reports. Progress

implementation of cohesion policy programmes, in close complementarity and synergy with the

with the cohesion policy is monitored in the context of the

recovery and resilience plan.

Cohesion Policy of the European Union.

2023 CSR 3

Reduce incentives to use flexible or temporary contracts.

Taking into account sector-specific needs, address structural labour and skills shortages, including by

tapping into underutilised labour potential

and strengthening up- and reskilling opportunities, in particular for those at the margins of the labour

market and the inactive.

2023 CSR 4

Reduce reliance on fossil fuels

by accelerating the deployment of renewables, improving framework conditions to boost investment in

the expansion of electricity transmission and distribution grids,

extending and accelerating energy efficiency measures to reduce energy consumption, in particular in

the built environment.

Support the transition towards sustainable agriculture.

Step up policy efforts aimed at the provision and acquisition of skills and competences needed for the

green transition.

2024 CSR 1

Submit the medium-term fiscal-structural plan in a timely manner.

In line with the requirements of the reformed Stability and Growth Pact, limit the growth in net

expenditure in 2025 to a rate consistent with, inter alia , maintaining the general government deficit

below the 3% of GDP Treaty reference value and keeping the general government debt at a prudent

level over the medium term.

Align the taxation of different types of income from wealth, amongst others, to reduce the household

debt bias.

Remove obstacles to the construction of new dwellings,

and ensure the affordability and availability of housing in the private rental market.

Address the expected increase in age-related expenditure by making the long-term care system more

cost-effective.

Some progress

Limited progress

Some progress

Limited progress

Some progress

Limited progress

Some progress

Limited progress

No progress

SDG 8

SDG 4, 8, 10

SDG 7, 13

SDG 7, 9, 13

SDG 12

SDG 11, 12, 13, 15

SDG 4, 13

SDG 8, 16

No progress

Limited progress

No progress

SDG 8, 10, 12

SDG 8, 9

SDG 8

SDG 3

(Continued on the next page)

kom (2025) 0219 - Ingen titel

Table (continued)

2024 CSR 2

Significantly accelerate the implementation of the recovery and resilience plan, including the

RRP implementation is monitored through the assessment

REPowerEU chapter, ensuring completion of reforms and investments by August 2026. Accelerate the

of RRP payment requests and analysis of the bi-annual

reporting on the achievement of the milestones and

implementation of cohesion policy programmes. In the context of their mid-term review, continue

targets, to be reflected in the country reports. Progress

focusing on the agreed priorities and promote testing and piloting solutions to help reduce the

with cohesion policy is monitored in the context of the

congestion of the electricity grid, while considering the opportunities provided by the Strategic

Cohesion Policy of the European Union.

Technologies for Europe Platform initiative to improve competitiveness.

2024 CSR 3

Implement measures to reduce incentives to use flexible or temporary contracts.

Address structural and sector-specific labour and skills shortages, including by tapping into

underutilised labour potential, and by encouraging mobility to high-productivity sectors and sectors

related to societal challenges.

Improve basic skills, including by addressing teacher shortages and tailored support to disadvantaged

schools.

2024 CSR 4

Improve framework conditions to boost investment in the electricity transmission and distribution grids,

in particular to accelerate the deployment of renewables and improve competitiveness.

Take further efforts for sustainable agriculture.

Limited progress

Some progress

Limited progress

SDG 7, 8, 9, 13

SDG 12, 6, 15

SDG 8

SDG 4, 10, 8

Source:

European Commission

kom (2025) 0219 - Ingen titel

ANNEX 17: COMPETITIVE REGIONS

Regional disparities have remained static

over the last decade, reflecting differences

in GDP per head, labour productivity,

innovation and R&D investments.

Congestion

in the electricity network and low labour

productivity growth are key bottlenecks,

constraining growth and competitiveness and

hampering the clean energy transition. Affordable

housing also remains a challenge in the

Netherlands, especially in urban areas, and could

negatively impact socio-economic convergence.

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,

Noord-Holland, Zeeland, Noord-Brabant and

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.

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

Capital region

Linear (National average)

GDP per head growth, 2014-2023 (%)

Other NUTS2 regions

Linear (EU27_2020)

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

-1.5

110

140

170

GDP per head, 2013 (EU27=100)

200

Drenthe

Limburg (NL)

Zuid-Holland

Gelderland

Flevoland

Zeeland

Noord-Brabant

Friesland (NL)

Overijssel

Noord-Holland

Utrecht

Groningen

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).

kom (2025) 0219 - Ingen titel

Table A17.1:Selection

of indicators at regional level in Netherlands

GDP per

head

(PPS)

Productivity

Real

Productivity

Real

Population

- GDP

productivity

- GDP

productivity aged 30-34

Real GDP per

per person

growth

per hour

growth

with high

head growth

employed

(per person

worked

(per hour educational

(PPS)

employed)

(PPS)

worked)

attainment

Average

annual

% change

2014-2023

100

133

124

101

114

113

105

159

174

127

108

137

110

1.6

1.4

-1.2

1.8

1.2

1.8

1.6

2.1

1.4

1.7

1.0

1.8

2.0

1.3

Average

annual

% change

2013-2022

100

112

125

106

114

132

109

103

110

0.7

-2.1

0.1

-0.2

0.8

0.7

0.5

1.2

-0.2

0.7

1.1

1.0

Average

annual

% change

2013-2022

100

124

140

102

100

107

109

112

131

143

124

118

120

117

0.9

0.5

-2.0

0.1

-0.3

0.7

0.6

0.5

1.1

-0.1

0.7

1.0

% of

population

aged 30-34

2024

44.8

54.8

60.5

45.2

45.8

51.4

52.0

42.3

67.2

61.1

55.0

32.2

54.3

43.3

Innovation

performance

Regional Employment

Unemploy-

Competiti-

rate

ment rate

veness Index

20-64

At-risk-of-

poverty or

social

exclusion

Index

EU-27 = 100

2023

European Union (27 MS)

Netherlands

Groningen

Friesland (NL)

Drenthe

Overijssel

Gelderland

Flevoland

Utrecht

Noord-Holland

Zuid-Holland

Zeeland

Noord-Brabant

Limburg (NL)

Index

EU-27 = 100

2022

Index

EU-27 = 100

2022

Regional

Index

performance group EU-27 = 100

2023

2022

137

120

117

119

126

136

141

151

141

143

119

141

131

% of

population

aged 20-64

2024

75.8

83.5

80.6

83.2

83.0

83.6

84.2

85.3

84.4

82.5

84.7

84.0

80.6

% of labour

force

2024

5.9

3.7

4.7

3.9

3.4

3.5

3.8

3.7

3.8

4.1

2.1

3.2

3.3

% of total

population

2024

21.0

15.4

21.0

16.0

15.7

14.6

12.9

13.0

12.9

15.8

17.7

13.7

14.4

16.2

Strong innovator +

Strong innovator -

Strong innovator +

Innovation Leader -

Strong Innovator +

Innovation Leader -

Innovation Leader

Innovation Leader -

Strong Innovator -

Innovation Leader -

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.

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%.

However, the 2022 OECD Programme for

International

Student

Assessment

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 low labour productivity

growth.

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

(110.2) and Friesland (108.8). These performance

levels offer excellent opportunities for further

improving competitiveness.

Graph A17.2:

Labour productivity per hour

2015 EUR per hour worked

2017

2012

2013

2014

2015

2016

2018

2019

2020

2021

Other NUTS2 regions

Capital region

National average

2022

EU27

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 (1.88%) to 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.

100

kom (2025) 0219 - Ingen titel

Map A17.1:

Regional Competitiveness Index 2.0,

2022 edition

average 87%) within 12 months. Practically

universal broadband coverage offers opportunities

to further improve education and innovation

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.

Source:

DG REGIO, JRC based on Eurostat

All Dutch regions ranked well above the EU

average in terms of competitiveness

(Map

A17.1), with regional differences in line with

innovation

performance.

The

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 quality of government is high in the

Netherlands.

The European

Quality

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 important enabler to further improve

innovation and competitiveness.

Uptake of information and communication

technologies was high in all Dutch regions.

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

The Netherlands had a high employment rate

(83.5%) and a low unemployment rate

(3.7%) with small regional differences.

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%.

101

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Map A17.2:

House prices relative to income, 2019

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

Source:

European Commission, Mapadomo

The proportion of the population at risk of

poverty and social exclusion in 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.

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

average (29%) in all Dutch regions except

Friesland (18%) and Groningen (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.

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

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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