In July 2020, the European Union established “NextGenerationEU,” a recovery plan to ” mitigate the economic and social consequences of the COVID-19 pandemic.” To benefit from these funds, each member state had to present its National Recovery and Resilience Plan (NRRP), which then had to be approved by the European Commission. On September 8, the Commission adopted the plan submitted by the Netherlands on March 22, 2022, with a budget of 4.7 billion euros.
The Recovery and Resilience Facility (RRF), the main instrument of the NextGenerationEU plan, will provide up to €800 billion (in current prices) to support investment and reform across the EU. Each country will receive a partially predefined envelope: 70% of the sum depends on, among other things, its population, GDP per capita and unemployment rate before the start of the pandemic, from 2015 to 2019. The remaining 30 per cent will be paid between 2023 and 2026, depending on the decline in GDP and employment over 2020, to take into account the economic impact of the coronavirus epidemic.
The Dutch RRP
The Dutch plan includes investments that are expected to contribute significantly to:
- The digital transition
The plan devotes 26% of its total allocation to measures that support the digital transition. These include investments in AI, quantum technologies, digital education and digital government. It also includes information management reforms to create an open and transparent public administration.
270 million will be devoted to the development of innovative applications in the field of quantum technologies and 60 million to the development of AI solutions. The plan also includes investments in human capital and digital skills to promote digital innovation in education, prevent learning loss and support further training and retraining (€450 million).
- Decarbonization and energy transition
The plan includes investments and reforms to accelerate the deployment of renewable energy sources, as well as investments in sustainable mobility and the restoration of the natural environment.
Several of these measures will bring the Netherlands closer to the REPowerEU plan’s goal of eliminating the EU’s dependence on Russian fossil fuels by 2030 and accelerating the green transition.
These include investments in offshore wind (€690 million) and energy efficiency in buildings, as well as a new energy law, which should make it easier to make investments in the electricity grid and allow consumers to sell self-generated renewable energy. In addition, €710 million is planned to mitigate the impact of nitrogen emissions through a nature restoration program.
- Strengthening the economic and social resilience of the Netherlands
The plan proposes a set of targeted reforms to address the shortcomings of the pension system and to strengthen the labor market:
- Improve social protection for the self-employed;
- Increase opportunities for retraining and upgrading;
- Strengthen the quality of education, including by improving the digital skills of students and teachers at different levels of the education system.
The housing market reforms outlined in the plan focus on affordable housing as well as investments in residential housing construction and improving the energy efficiency of buildings.
Health care reforms aim to prevent labor shortages during times of crisis and improve e-health services.
In addition, several reforms are expected to combat tax evasion and address money laundering challenges, including the introduction of an additional withholding tax on dividends and increased financial investigation capabilities.
For the European Commission, this plan is a balanced response to the economic and social situation in the Netherlands, thus contributing appropriately to the six pillars of the FRR.
European Commission President Ursula von der Leyen said:
“I am pleased to present the European Commission’s positive assessment of the €4.7 billion Recovery and Resilience Plan for the Netherlands. This plan will further strengthen the Dutch economy by making it greener, more digital and more resilient. We approved it because it is ambitious and forward-looking and will help build a better future for the Dutch people. It also contributes significantly to our REPowerEU plan, as it includes important projects to limit dependence on Russian fossil fuels. Congratulations! “