No one wants to go Dutch as The Netherlands economy reflects the performance of the nation’s football team at Euro 2012.
The Netherlands went home pointless after a series of lacklustre displays from their misfiring stars.
The economy is much the same.
The minority government toppled in April after right winger Geert Wilders withdrew his Freedom Party support for government spending cuts aimed at taming a budget deficit.
The rest of the government wanted to bring spending below 3% of GDP with a range of measures, including a civil service pay freeze, a rise in VAT, pushing back the pension age to 67 years old and increasing contributions to the health care cover.
Now, The Netherlands is gripped in what many see as the eurozone disease – weak government, a lack of decision making and an economy stuck in recession for at least the rest of 2012 as unemployment surges to 6%.
The Netherlands is happy the eurozone focus is on Spain, italy and Greece. Not because the banks are in trouble, but because the once strong economy is struggling and is likely to lose more ground.
Like most Western countries, pensions are a time bomb waiting to explode for the Dutch. Too few have saved too little for retirement and face a stark choice – spend less now and pay towards less frugal later years or keep on spending and expect an impoverished retirement.
Consumers also face a reality check for the housing market.
Historically, the government has subsidised and regulated the market, but recession and financial woes have submerged more than 500,000 households in underwater loans. This negative equity may take years to break the surface back in to the black and is another stumbling block for the economy.
The government needs to make some tough decisions and take control – but like Spain, Italy and Greece, the financial medicine for the Dutch may be too hard to swallow for voters.