Dutch municipalities going into debt to cope with coronavirus crisis: report
Dozens of municipalities in the Netherlands had to borrow millions of euros to be able to pay salaries, benefits and subsidies, AD reports based on its own research. Their income plummeted and expenditure skyrocketed as a result of the coronavirus crisis. Amsterdam already announced that the crisis will burn through the municipality's reserves by the end of this year.
According to AD, the bank for Dutch municipalities BNG already issued millions of euros in loans. The municipality of Haarlemmermeer borrowed 24 million euros, Middelburg 11 million, and Terschelling 2 million to keep their heads above water. Middelburg alderman Johan Aalberts told the newspaper that the municipality had to borrow money because it faced liquidity problems. "We also have costs, we have to pay the salaries."
BNG confirmed to AD that it is seeing a growing demand for credit from municipalities. The association of Dutch municipalities VNG told the newspaper that the majority of municipalities will have to take out short-term loans.
According to consultancy firm Berenschot, which has many municipalities as clients, the local governments are counting on national government support to be able to repay these loans. "They hope. The big question is when and especially how the government will pay out."