Dutch gov't pushes more money into Defense, climate; U.S. disappointed

This year the Dutch government is allocating extra money for Defense, climate measures, youth care and education, according to the Spring Memorandum that Minister Wopke Hoekstra of Finance sent to parliament. The extra money allocated to Defense is far too little, American ambassador Peter Hoekstra said to the Volkskrant.

The Spring Memorandum - the interim budget for the current year - shows that the government is allocating an extra 460 million euros to Defense up to and including 2024, NU.nl reports. This is necessary to comply with NATO agreements, which state that the total defense expenditure must be 2 percent of a country's GDP. To the annoyance of the United States, the Netherlands has not met this standard for years, but expressed the intention to work towards it. Even with the extra 460 million euros, the Netherlands still doesn't meet the NATO standard.

The United States is disappointed by this, Hoekstra said to the Volkskrant. "I was informed by Defense about their plans and asked what it means for the spending level in 2024. And they said: in 2024 we will spend 1.3 percent of gross domestic product on defense. That is a very clear statement: we remain at 1.3 percent", the ambassador said. "You cannot claim that this is an important step towards 2 percent. The real question remains; why is the Netherlands not prepared to contribute its fair share to NATO?"

According to Hoekstra, the Netherlands is among the five to seven NATO countries that contribute least. He expects that other NATO allies who are taking steps towards spending 2 percent of their GDP on defense will also be very disappointed.

The Spring Memorandum also shows that the government is pushing money into other problem areas - the climate crisis, youth care and education, NU.nl reports.

An additional 400 million euros is set aside for climate this year. That money is intended to cover the costs of the climate agreement, with which the country's climate objectives must be achieved. As this agreement has not yet been completely finalized, it is not yet clear whether the extra 400 million euros will cover its costs. From next year, 110 million euros will be annually set aside for this purpose.

The climate agreement is intended to help the Netherlands achieve its emission reduction goals set by the Paris agreement. The reduction of greenhouse gas emissions, CO2 in particular, must limit global warming to a manageable level. Last year the Dutch government already reserved 500 million euros for CO2 reducing measures. This investment partly had to do with the so-called Urgenda case, in which the environmental organization forced the government in court to adhere to its own CO2 targets.

The CO2 target for next year is a 25 percent reduction compared to 1990 - a goal the government will not achieve with its current policy. A study by research agency CE Delft recently concluded that the Netherlands can still reach this goal if it closes its three almost new coal-fired power stations at the start of next year.

Up to and including 2021, the government will push over a billion euros into youth care. This year youth care will receive 420 million euros, and then 300 million euros annually in the next two years. Dutch municipalities took over the responsibility for youth care from the central government in 2015. Since then they've been struggling to keep up with the increasing costs, partly caused by more and more children needing aid. Some municipalities are considering drastic measures, like closing libraries or spending less on road maintenance in order to pay for youth care.

The association of Dutch municipalities VNG recently sounded the alarm. "We are drowning", the organization warned. The government now seems to be responding to this call for help with the extra investment.

From this year onwards, education will receive an additional 96 million euros per year. 55 million euros of this is intended to deal with the increase in the number of pupils, and 41 million euros for technical training. Teachers in all levels of education have been complaining about high work pressure, teacher shortages and low salaries for years. And recently a committee of inquiry warned the government that more money needs to go to technical tertiary courses to keep up with the growing demand for such skilled workers.

The public finances is in a somewhat less favorable position compared to the estimates on Budget Day last September, according to NU.nl. That is because economic growth is leveling off - in September 2.6 percent growth was expected, but the economy grew only 1.5 percent. As a result, the government debt is slightly higher and the budget surplus slightly lower, but both are still well within in the European Union standards. All extra expenditures fall within the financial framework the government set for itself. Minister Hoekstra called these extra investments "good for society". "We can pay for them without incurring additional debts", he said.