The Netherlands is in the leading group of countries that will be confronted with a sharp economic contraction and high unemployment due to the corona crisis. The Rutte 3 cabinet has responded adequately to this recession, according to friends and enemies, by quickly introducing an extensive support package for companies, employees and self-employed workers without employees. The core is to maintain as many jobs as possible.
This week, the cabinet presented a new support package of around 13 billion euros. This package, designated 2.0, will begin on June 1 and will last for three months. According to Prime Minister Mark Rutte, an extension is necessary because, despite the government subsidies, many people will lose their jobs. In April, this already involved 160,000 people. 2.0 is also about retaining as many jobs as possible. However, the conditions for aid compared to the first aid package have been tightened and rightly more emphasis is being placed on loans for companies that have to repay them over time.
In political The Hague, the new package mainly concerns the so-called termination fine. This was introduced in the first emergency package to prevent redundancies. The cabinet now wants to scrap the fine because more and more companies are forced by the recession to work with fewer staff. In addition, the number of companies that are not applying for a wage subsidy because of this fine is increasing and opting for a rapid business reorganization.
The total number of layoffs in the Netherlands may therefore be higher. The unions and the opposition deny this and demand that the fine not lapse. The cabinet is now still trying to find a compromise solution with the unions. This is indeed recommended for broad support, but a different approach is needed for the future of our economy. Entrepreneurs must get back to work as soon as possible.
New business models
As long as the world does not yet have a vaccine against Covid-19 or at least drugs that can prevent hospitalization, everyone is dealing with the one and a half meter society. Despite all the creative solutions, the conclusion is that for many companies this society is not profitable. A number of these will fall, but we also see entrepreneurs who are already quitting and are already working on a new future growth model. They no longer await the outcome of 2.0.
Within the political and trade union movement, insufficient attention is paid to the fact that we are an international trading country and thus earn a large part of our living. For example, many Dutch companies are affected by the global trend of anti-free trade and also with competing companies from other countries.
These are now fully supported by their governments to start working on the economic future. A good example is Germany, but France and the UK are also taking advantage of a billion-dollar investment package for start-ups and scale-ups. These are young and fast growing companies that are essential for a country’s economic future. There is a risk that they will not opt for the Netherlands, but especially for the aforementioned countries.
The Netherlands needs successful companies
Until recently, the Netherlands belonged to the leading group of countries with the best business climate. This position has created many hundreds of thousands of jobs and large international companies for our country. We have lost this advantage due to a deterioration of our business location climate, but also because this climate has become a top priority in other countries. Our deterioration concerns, among other things, the high tax burden, the heavy employer costs, the abolition of tax allowances for companies. But also because we have not invested enough in digitization and new technologies.
Internationally, the Netherlands also stands out because of the anti-vote against multinationals (mostly with foreign owners) who still account for about 2 million jobs here, especially in business. These companies are warmly welcomed in other countries. Prime Minister Boris Johnson has already announced that in a so-called “no deal” he will create the best business climate for luring companies to the UK worldwide. This creates a “pirate’s nest” off the coast of the Netherlands that will cost us businesses.
Because the Netherlands wants to apply strict rules within the EU for emergency aid to badly hit EU countries, we cannot count on much support from other countries that call us “miserable”. This week, a SER think tank called on the cabinet for more Dutch solidarity within Europe. It is indeed necessary, also because of our own economic interests, such as good markets in southern Europe.
In international business, it is noted that in the current crisis, the Netherlands is also notable for the fact that everyone believes that they have sufficient knowledge, experience and entrepreneurial talents to take the chair of company boards. We see this in politics, union circles, climate activists, civil servants in their notes, and people who think the crisis is the right time to make the world a better place.
This colorful company undoubtedly has countless qualities, but for successful entrepreneurship you really need specific entrepreneurial qualifications. Bad experiences worldwide, also in the Netherlands, indicate that you should not entrust these outsiders with entrepreneurship. That does not end well and playing that entrepreneur costs the taxpayers tons of money.
Boosting the economy
More and more countries are already spending many billions to boost their economies. The Netherlands is in the rear here. In addition, in the coming months, our country will spend money mainly on financing jobs that will no longer exist in part. Looking at our successful past, the current international trend and tomorrow’s economy, we need to rapidly improve our business climate and focus on retaining and recruiting successful companies that are also promising in a world of anti-free trade and trade barriers.
Public-private partnerships can help with this, as well as a package of smart government and business investments with which we can invest ourselves out of the recession. Moreover, retraining people for future growth sectors should become a spearhead.