NL could lose 1.2 bil. in EU subsidies over shaky road pricing, money laundering bills

The Netherlands could lose up to 1.2 billion euros in European subsidies because bills for road pricing and tackling money laundering are on shaky grounds. The Netherlands promised to implement those laws in exchange for money from the EU coronavirus fund, but the Tweede Kamer declared them too controversial for the outgoing Cabinet to handle. So the Netherlands is at risk of not meeting the deadline, RTL Nieuws reports.

The fund, officially called the Recovery and Resilience Facility, was set up during the pandemic to help Member States emerge stronger from the crisis. The Netherlands long opposed the fund but ultimately agreed to it on the condition that the European Commission imposed strict requirements on payment.

That could now cost the Netherlands dearly. The Netherlands must achieve 133 objectives to get its 5.4 billion euros from the fund or face cuts. The Tweede Kamer, the lower house of the Dutch parliament, declared two of these objectives controversial. In practice, that puts them on hold until the next Cabinet is in office. The bills in question are the Money Laundering Action Plan and Road Pricing, also called the kilometer tax for using Dutch roads.

“If decision-making is not made to achieve the linked Recovery and Resilience Facility milestones in a timely manner, this will have financial consequences through significant reductions of the fund resources to be received,” outgoing Finance Minister Sigrid Kaag wrote to parliament. According to RTL, the European Commission could deduct some 1.2 billion euros from the Netherlands 5.4 billion euros if these two bills don’t meet their deadlines.

RTL calculated the amount like this - 5.4 billion euros divided by 133 objectives, making each measure worth 40.6 million euros. If the failure to implement an objective puts a reform at stake, the EC can multiply the cut by a factor of 5. That is the case in both these bills, bringing their worth to 200 million euros each.

The EC can further triple the cut if the measure that is not implemented “touches on a country-specific recommendation” - EC recommendations for reforms that Brussels believes would be good for specific countries. That is also the case here, the Ministry of Finance confirmed to RTL, bringing the total cuts to 600 million each for the two bills.

Kaag previously warned the Kamer that the EC has implemented the maximum cuts for other countries. And the Netherlands can’t count on too much compassion from the EC in this case. “In line with the Dutch commitment to the establishment of the fund, it is expected that the Commission will be strict,” Kaag said.

The deadline to implement the anti-money laundering bill is in the first half of 2025. The deadline for road pricing is a year later. The Netherlands is holding parliamentary elections next month, after which the parties will negotiate to form a coalition for the new government. The previous formation process took around eight months.