New Dutch government under Mark Rutte wants to spend more

The coalition agreement of the new Dutch government under Prime Minister Mark Rutte foresees more spending on childcare, teacher salaries, and environmental issues, showing the increased influence of the centre-left, liberal party D66.

Although the coalition agreement remains cautious on EU fiscal rules, the additional spending at home marks a shift away from the frugal image of the Dutch government.

In the summer of 2020, the previous Rutte government was one of the staunchest opponents of the EU’s recovery fund, calling instead for fiscal restraint.

Stronger D66 leads to more spending

However, that government resigned over a child welfare fraud scandal in January 2021, leading to elections in March 2021. The elections were won by Rutte’s centre-right, liberal VVD party, but also saw a strong increase in parliamentary seats for the D66, which is the second-strongest party in the new coalition.

“In general, D66, which is clearly pro-European and also more in favour of public spending than Rutte’s VVD, seems to have been successful in leaving its mark in the coalition agreement”, said Theresa Kuhn, associate professor in political science at the University of Amsterdam.

The coalition agreement includes increased spending plans in housing, child care, green transition and education. For example, €60 billion are made available to fund the green transition and to deal with high nitrogen emissions.

“This is clearly a change to the previous government”, Kuhn told EURACTIV.

According to her, however, this does not mean that the Dutch government will change its position on frugality in the EU.

Unclear position on EU fiscal rules

The coalition agreement remains open on the reform of the macroeconomic governance framework, which was launched in October and is expected to be intensely discussed over the course of 2022.

“We are committed to a sound and prudent macro-economic policy and necessary reforms by member states, aimed at sustainable debt, higher economic growth and upward convergence”, the coalition agreement states.

It goes on to state that the coalition would have a constructive approach to a possible modernisation of fiscal rules when it is aimed at debt sustainability and upward economic convergence. Moreover, it demands effective enforcement.

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