The Netherlands is considered one of Europe’s stronger economies. But these days it’s “more akin” to a peripheral European state, says Deutsche Bank. GDP has fallen in eight of the last nine quarters and is still 4% below its 2008 peak. The main reason is a slide in household spending.
Consumption is 4% below its 2009 level. Consumers have been buffeted by slow wage growth, austerity and the highest household debt load in the eurozone – as a percentage of disposable income, this has reached 300%, compared to around 100% in France and Germany, says Capital Economics. A credit-driven housing boom has now collapsed, further undermining confidence and spending.
None of this implies a Spain-style meltdown, however. “Lender-friendly legislation” is ensuring that borrowers continue to make their mortgage payments, says Richard Barley in The Wall Street Journal. The budget deficit of 4% of GDP is “stubborn but manageable”; the overall debt pile is just 72%, well below the eurozone average. But the ongoing malaise has dented hopes that the northern Europeans can pull the south out of their slump. And “beleaguered Dutch voters”, says Capital Economics, “may harden their opposition to transfers to the periphery, making future rescues more difficult”.
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