Over 100 economists urge Dutch Cabinet to drop multibillion-euro Tata Steel subsidy

Over one hundred economists and academic experts have urged the Dutch Cabinet not to proceed with the planned multibillion-euro subsidy for Tata Steel. Their appeal comes in a joint letter addressed to both the Tweede Kamer, the lower house of Dutch parliament, and the government. The letter was published in the weekly magazine Economisch Statistische Berichten (ESB) and was released several weeks ahead of the parliamentary debate on the proposed agreement with the steel company.

In September 2025, the then-serving Cabinet reached a letter of intent with Tata Steel on plans to make its IJmuiden facility more sustainable. The deal included a potential government contribution of 2 billion euros. The economists argue that this public money would be better spent on investments that more directly strengthen the Netherlands’ competitive position.

The issue extends beyond the 2 billion euros in subsidies to include scarce resources such as labor, physical space, environmental capacity, including nitrogen allowances, as well as sustainable energy and electricity grid capacity. According to the economists, Tata Steel’s operations in IJmuiden place heavy demands on these resources, reducing the scope for other sectors to expand and transition to more sustainable practices.

The economists acknowledge that the goal of strategic autonomy, maintaining a European steel industry capable of operating over the long term, could be a valid consideration.

However, they argue that such a policy would need to be coordinated at the European level through joint procurement. For the Netherlands itself, they say, strategic autonomy is largely illusory: the country has no iron ore and relies entirely on imported raw materials, meaning there is little practical difference between importing those materials or importing finished steel, particularly when much of the steel produced domestically is exported.

The economists also warn that producing steel in the Netherlands will continue to be structurally more expensive than in other parts of Europe because of higher energy costs. They further note that the draft agreements do not include a binding commitment from Tata Steel India to absorb losses in IJmuiden or provide extra funding if needed.

As a result, public money would not be adequately safeguarded if the plant were to face further losses, restructuring, or even bankruptcy, creating the risk that the company could seek additional government support whenever difficulties arise.

Economists from several universities, including those in Amsterdam, Rotterdam, Tilburg, Groningen, and Maastricht, signed the letter. Among the signatories are Arnoud Boot and Roel Beetsma of the University of Amsterdam, as well as Rick van der Ploeg of the University of Oxford.