Political chaos damaging Dutch business climate
Political instability is doing a number on the Netherlands’ business climate. The country is increasingly unattractive for companies. Dutch companies are relocating, and foreign companies are settling elsewhere, the Telegraaf reports based on an annual study by the consultancy firm PwC on the business climate in the Netherlands.
“For three years in a row, the business climate in the Netherlands has deteriorated,” said Barbara Baarsma, the chief economist at PwC Netherlands and a professor at the University of Amsterdam. “We are now scoring worse than in 2013, a year in which we were still recovering from the financial crisis.”
The Netherlands recently experienced a political first when a Cabinet collapsed twice. The Schoof I Cabinet collapsed in June when the PVV pulled out. It continued in a caretaker capacity, but collapsed further last month when NSC Ministers departed. That leaves only the VVD and BBB ruling the country. The parties hold only 32 of the 150 seats in parliament. Meanwhile, the country is preparing for elections on October 29th, the sixth parliamentary elections in 15 years.
“The Netherlands has always scored well on political stability, which is an important factor for entrepreneurs,” Baarsma said. “But there is a great deal of political uncertainty, and that creates uncertainty about policy for companies. So I understand why they postpone their investments.”
Poor performance by government agencies like the Tax Authority and the benefits agency UWV also plays a role. “The Netherlands’ ability to implement policy is under enormous pressure,” Baarsma said. The country is also struggling with skilled labor shortages and structural problems relating to nitrogen emissions, housing construction, and the power grid.
She added that the Netherlands still ranks high on business climate, but its position is weakening. “The leaders are countries like Denmark, Switzerland, Luxembourg, and Singapore. And we see the leaders extending their lead, while the Netherlands is slipping.”
