European Commission
Europe 2020

Country-specific Recommendations

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 12 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Proposed recommendations for the Netherlands 2012

In 2012, the economic activity of the Netherlands is expected to contract by 0.9 %, before regaining light momentum in 2013. Unemployment is foreseen to increase from 5.7 % in 2012 to 6.2 % in 2013.

Constrained by a highly complex political context, the Netherlands has only adopted a limited number of far-reaching policy initiatives. As regards the pension system, the Netherlands has tabled a reform proposal aimed at gradually raising the statutory retirement age. The Netherlands is further taking measures to increase labour supply, especially of second-income earners. In addition, the Netherlands has implemented a strategy aimed at fostering closer science-business links through its new enterprise policy.

The Netherlands continue to face a number of serious challenges in the short to medium term. Rigorously pursuing the budgetary strategy for the year 2012 and specifying the measures necessary to ensure implementation of the 2013 budget with a view to timely correcting the excessive deficit will be of paramount importance. Important changes to the first and second pension pillar, as well as to long-term care, have been announced, which have to be assessed against the challenge of an ageing population. Furthermore, participation in the labour market, particularly of women, people with disabilities and migrants is weak and tax disincentives remain notably for second-income earners. Innovation is high on the Dutch political agenda; there is however a risk that is would come at the cost of fundamental research or of the innovative firms it does not target. Finally, structural distortions have built up in the Dutch housing market, both in the property market and rental market, leading to a gradual increase in household leverage and an inefficient allocation of capital.

Overview of recommendations

1. Ensure progress towards the timely and durable correction of the excessive deficit. To this end, fully implement the budgetary strategy for 2012 as envisaged. Specify the measures necessary to ensure implementation of the 2013 budget with a view to ensuring the structural adjustment effort specified in the Council recommendations under the Excessive Deficit Procedure. Thereafter, ensure an adequate structural adjustment effort to make sufficient progress towards the medium-term budgetary objective (MTO), including meeting the expenditure benchmark, and ensure sufficient progress towards compliance with the debt reduction benchmark whilst protecting expenditure in areas directly relevant for growth such as research and innovation, education and training. To this end, after the formation of a new government, submit an update of the 2012 stability programme with substantiated targets and measures for the period beyond 2013.
   More information on the economy of the Netherlands
2. Take measures to increase the statutory retirement age, including linking it to life expectancy, and underpin these with labour market measures, whilst improving the long-term sustainability of public finances. Adjust the second pension pillar to mirror the increase in the statutory retirement age, while ensuring an appropriate intra- and inter-generational division of costs and risks. Implement the planned reform in long-term care and complement it with further measures, in view of an ageing population.  
   More information on pensions in the EU
3. Enhance participation in the labour market, particularly of older people, women, and people with disabilities and migrants, including by further reducing tax disincentives for second-income earners, fostering labour market transitions, and addressing rigidities.
   More information on the European employment strategy
4. Promote innovation, private R&D investment and closer science-business links, as well as foster industrial renewal by providing suitable incentives in the context of the enterprise policy, while safeguarding accessibility beyond the strict definition of top sectors and preserving fundamental research.
   More information on research for growth
5. Take steps to gradually reform the housing market, including by: (i) modifying the favourable tax treatment of home ownership, including by phasing out mortgage interest deductibility and/or through the system of imputed rents, (ii) providing for a more market-oriented pricing mechanism in the rental market, and (iii) for social housing, aligning rents with household income.

See how the Netherlands compares with other EU Member States in key areas

European Semester Documents

National Reform Programme

All Member States have committed to the Europe 2020 strategy. However, each country has different economic circumstances and translates the overall EU objectives into national targets in its National Reform Programme – a document which presents the country's policies and measures to sustain growth and jobs and to reach the Europe 2020 targets. The National Reform Programme is presented in parallel with its Stability/Convergence Programme, which sets out the country's budgetary plans for the coming three or four years.

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