Coalition plans to increase purchasing power, lower deficits; Parliamentary debate today

The plans in the PVV, VVD, NSC, and BBB’s main line agreement will lead to a slight improvement in government finances and slightly higher purchasing power, the Netherlands Bureau for Economic Policy Analysis (CPB) reported after analyzing the plans. The Tweede Kamer will debate the new coalition’s agreement today.

The CPB did note that many measures from the agreement need to be further developed. It had to “make assumptions” to be able to make a calculation without all the missing information. If the new Cabinet chooses a different approach than its assumptions, the effects may differ.

In addition, the CPB did not extensively examine some measures to determine whether they are feasible and legally sustainable. That also makes it uncertain whether proposed cuts, for example, on asylum reception due to a declining influx, will become reality.

According to the CPB’s estimate, the budget deficit will be 2.7 percent of the economy's total size in 2028. If policy remains unchanged, that would be 3.2 percent. The deficit, therefore, remains below the European standard of 3 percent. That is not the case in all intervening years: the CPB predicts a deficit of 3.3 percent for 2026.

Households’ purchasing power will increase by 0.8 percent per year over the next four years. That is 0.2 percent more than would be the case if the policy remained unchanged. The number of people living in poverty will fall to 4.7 percent of the population. Childhood poverty will drop to 5.3 percent.

The opposition in the Tweede Kamer, the lower house of the Dutch parliament, had asked for this analysis. The Kamer will debate the agreement today.

Opposition parties are critical. D66 MP Hans Vijlbrief is doubtful that the right-wing parties will be able to make their planned cuts on things like EU contributions. According to Vijlbrief, this means that the coalition will have to make 1 billion euros worth of additional cuts elsewhere, for example, on healthcare and social security.

GroenLinks-PvdA parliamentarian Luc Stultiens reads in the CPB calculations that the unequal distribution of burdens between working people and the wealthy is only increasing. The new coalition “does not choose ordinary people, but shareholders and multinationals,” he said.

The intention was that the Tweede Kamer also discuss the candidate for Prime Minister today. But now that Ronald Plasterk, PVV leader Geert Wilders' preferred candidate, has withdrawn, it is still unclear who will lead the PVV, VVD, NSC, and BBB Cabinet. That topic will only be discussed further on Thursday with the intended formateur Richard van Zwol.

Last week, it was an open secret that Wilders wanted to nominate Plasterk for Prime Minister, although his candidacy never became official. The former PvdA Minister and scientist withdrew after accusations of patent tampering discredited him.