The European Commission has today given a positive assessment of the Netherlands’ recovery and resilience plan. This is a key step paving the way for the EU to disburse €4.7 billion in grants to the Netherlands under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in the Netherlands’ recovery and resilience plan. It will play a crucial role in enabling the Netherlands to emerge stronger from the COVID-19 pandemic.
The RRF is the key instrument at the heart of NextGenerationEU, which will provide up to €800 billion (in current prices) to support investments and reforms across the EU. The Netherlands’ plan forms part of an unprecedented, coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.
The Commission assessed the Netherlands’ plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms contained in the Netherlands’ plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.
Securing the Netherlands’ green and digital transition
The Commission’s assessment finds that the Netherlands’ plan devotes 48% of its total allocation on measures that support climate objectives. The Dutch plan includes investments that are expected to make a significant contribution to the decarbonisation and energy transition.
The plan includes investments and reforms to speed up the deployment of renewable energy sources, investments in sustainable mobility and nature restoration. Several measures in this area also contribute to the REPowerEU objectives to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition, as well as to the relevant 2022 country-specific recommendation on energy. These include investments in offshore wind and energy efficiency in housing, as well as a new Energy Law, which is expected to facilitate investments in the electricity grid and to allow consumers to sell self-produced renewable energy.
The Commission’s assessment of the Netherlands’ plan finds that it devotes 26% of its total allocation on measures that support the digital transition. This includes investments in quantum technology, artificial intelligence, digital education and digital government. The plan also covers information management reforms to create an open and transparent public administration.
Reinforcing the Netherlands’ economic and social resilience
The Commission’s assessment considers that the Netherlands’ plan effectively addresses a significant subset of the economic and social challenges outlined in the country-specific recommendations issued in the context of the European Semester.
The plan puts forward a package of targeted reforms that aims at tackling shortcomings of the pension system and strengthening the labour market. This includes increasing social protection for the self-employed. The plan also contains several investments to strengthen up- and reskilling opportunities and to enhance the quality of education, for example by increasing digital skills of students and teachers at different levels of the education system.
Social cohesion is also expected to be improved by the housing market reforms set out in the plan, with a focus on affordable housing, and investments to unlock residential construction and to improve energy efficiency of buildings.
The Netherlands’ plan also includes reforms in the areas of healthcare to avoid labour shortages during crisis times and to improve e-health services. In addition, several reforms are expected to tackle tax avoidance and address money laundering-related challenges, such as through the introduction of an additional withholding tax on dividends and a stronger financial investigation capacity.
The plan represents a balanced response to the economic and social situation of the Netherlands, thereby contributing appropriately to all six pillars of the RRF Regulation.
Supporting flagship investment and reform projects
The Netherlands’ plan proposes projects in various European flagship areas. These are specific investment projects, which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition.
For instance, the Netherlands has proposed to provide support of €690 million for offshore wind energy and €710 million for mitigating the impact of nitrogen emissions through a nature restoration scheme. To support the digital transition, the development of innovative quantum technologies applications will be promoted (€270 million), as well as artificial intelligence solutions (€60 million). The plan also includes investments in human capital and digital skills, by promoting digital innovation in education, preventing learning losses and supporting up-and reskilling activities (€450 million).
The assessment also finds that none of the measures included in the plan significantly harm the environment, in line with the requirements laid out in the Regulation.
The Commission considers that the control systems put in place by the Netherlands are adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.
Members of the College said
President of the European Commission Ursula von der Leyen said:
“I am delighted to present the European Commission’s positive assessment of the Netherlands’ €4.7 billion recovery and resilience plan. This plan will further strengthen the Dutch economy, making it greener, more digital, and more resilient. We have endorsed this plan because it is ambitious, far-sighted and will help build a better future for the Dutch people. It is also a strong contribution to our REPowerEU plan as it includes important projects to become less dependent on Russian fossil fuels. Congratulations!”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said:
“We are delighted to give a positive assessment to the Netherland’s Plan, which will put its economy on a greener and more digital path. Nearly half the plan is devoted to supporting climate goals, by accelerating the deployment of renewable energy sources and investing in offshore wind and energy efficiency in housing, as well as in sustainable mobility and nature restoration. The plan will also support the digital transition by investing in quantum technology and artificial intelligence, digital skills, education and government. We also welcome the plan’s social aspects, particularly to strengthen the Dutch labour market, provide more affordable housing and boost the resilience of the country’s healthcare system. Once put fully into practice, this plan will help to put the Netherlands on a sound footing for the future.”
Paolo Gentiloni, Commissioner for Economy, said:
“Good news for the Netherlands. Our positive assessment of the recovery and resilience plan will pave the way for the disbursement of €4.7 billion over the coming years. This funding will support the implementation of an ambitious set of investments and reforms that will provide major benefits to Dutch citizens. With almost 75% of the funds earmarked for measures that support the green and digital transitions, the plan will ensure that the Netherlands emerges stronger from the pandemic. Important reforms to strengthen the labour market and increase housing affordability will also improve social cohesion. Finally, the proposed investments in offshore wind and the new Energy Law will help reduce the Netherlands’ reliance on Russian fossil fuels, in line with the priorities set out in REPowerEU. At a time of exceptionally high uncertainty, today’s proposal is a vote of confidence in the country’s future.”
The Commission has today adopted a proposal for a decision to provide €4.7 billion in grants to the Netherlands under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal.
Following an approval by Council of the plan, the Commission will authorise disbursements to the Netherlands based on the satisfactory fulfilment of the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms.
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Q&A: EU Commission endorses the Netherlands’ €4.7bn recovery and resilience plan
Brussels, 8 September 2022
How did the Commission assess the Netherlands’ recovery and resilience plan?
The Commission is assessing the recovery and resilience plans based on eleven criteria set out in the Recovery and Resilience (RRF) Regulation. The 11 criteria require an assessment of whether:
- the measures have a lasting impact;
- the measures address the challenges identified in the country specific recommendations or a significant subset of them;
- the milestones and targets which allow for monitoring the progress with the reforms and investments are clear and realistic;
- the plans meet the 37% climate expenditure target and the 20% digital expenditure target;
- the plans respect the do no significant harm principle;
- the plans provide an adequate control and audit mechanism and set out the plausibility of the costing information.
The Commission has summarised its assessment in the proposal for the Council Implementing Decision. The accompanying staff working document provides detailed documentation on the assessment.
Does the Netherlands’ recovery and resilience plan effectively support the green transition?
The plan of the Netherlands has a strong focus on climate and environmental objectives, including biodiversity. The Netherlands contributes 48% of its total €4.7 billion allocation to the green transition. This substantially exceeds the minimum of 37% required by the RRF Regulation.
The Dutch plan includes investments that are expected to make a significant contribution to the decarbonisation and energy transition objectives as set out in the Netherlands’ National Energy and Climate Plan, thereby contributing to the Union’s 2030 climate target.
The plan contains several investments to reduce greenhouse gas emissions, such as investments in sustainable mobility and energy-efficient housing renovations. The plan also supports research in green hydrogen and sustainable fuels for aviation, with the aim to reduce CO2 emissions. Investments in offshore wind, reforms in permitting procedures for renewables and adjustments to the industrial CO2 and aviation taxation schemes are also expected to contribute to this goal. Several of these measures also contribute to the REPowerEU objectives to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition, as well as to the 2022 country-specific recommendation to the Netherlands on energy.
The Dutch recovery and resilience plan also supports efforts to reduce nitrogen pollution and restore biodiversity to achieve improved conservation status conditions for all species and habitats.
Does the Netherlands’ recovery and resilience plan effectively contribute to the digital transition?
The Netherlands’ plan’s contribution to the digital transition amounts to 26% of its total allocation of €4.7 billion. This exceeds the minimum of 20% required by the RRF Regulation.
The plan includes measures covering various aspects of the digital transformation. The Netherlands’ plan contributes to the further digitalisation of public administration through a reform to enhance the transparency of central government and other public services, as well as investments in the digitalisation of the justice system and in upgrading the IT systems of central government. In addition, measures on digital education and e-health are expected to make notable contributions to the digital transition.
Further measures supporting innovative technologies include investments in the more wide-spread use of artificial intelligence systems.
Does the recovery and resilience plan represent a balanced response to the economic and social situation of the Netherlands?
The Netherlands’ plan represents a comprehensive and adequately balanced response to the economic and social situation of the Netherlands thereby contributing appropriately to all six pillars referred to in the RRF Regulation.
The plan includes measures supporting smart, sustainable and inclusive growth. Social and territorial cohesion is supported by measures reforming the pension system, making it fairer and more transparent, allowing for intergenerational risk sharing and mitigating the effects of adverse economic shocks. Investments in upskilling and reskilling activities and digitalisation of education will contribute to reducing social imbalances. Reforms in the labour market are expected to contribute to decrease institutional differences between categories of workers on the Dutch labour market, such as reforms to increase social protection coverage for the self-employed.
The plan supports health, economic, social and institutional resilience with measures such as the creation of a national reserve of healthcare professionals to be deployed in crisis times and increased e-health services for patients. Measures on education are expected to improve the digital skills of pupils and help recover lost learning opportunities due to the lockdowns.
Do the reforms presented by the Netherlands effectively address a significant part of the country-specific recommendations issued to it in the context of the European Semester?
The Netherlands’ plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to the Netherlands in 2019, 2020 and 2022. These concern notably the areas of the green, digital and energy transitions, the pension system, the labour market, the housing market, aggressive tax planning and healthcare.
The Dutch plan also addresses the 2022 country-specific recommendation to the Netherlands on energy linked to REPowerEU. Measures such as energy-efficient housing renovations, investments in offshore wind and reforms in permitting procedures for renewables will help reduce dependency on Russian fossil fuels.
In the area of housing reform, the plan contains ambitious measures on the supply side of the housing market. This is expected to help address housing shortages while also having the potential of increasing housing affordability. In addition, phasing out the possibility for households to receive tax-exempt monetary gifts for house purchases is expected to reduce inequality on the housing market.
Important labour market reforms are included in the plan, such as the introduction of mandatory disability insurance for the self-employed and clarifying the definition of what qualifies as an employment relationship. The combined effect of these labour market reforms is expected to contribute to level the playing field between employees and self-employed and contribute to tackling bogus self-employment.In the area of skills development, the plan includes measures that foster digital skills and contribute to alleviating the shortage of ICT professionals by investing in the digital capacity of teachers and students. The plan also includes some investments contributing to up- and reskilling opportunities.
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Source – EU Commission
Statement by President von der Leyen on the Netherlands’ recovery and resilience plan
Brussels, 8 September 2022
Thank you very much Prime Minister, dear Mark,
Deputy Prime Minister, dear Sigrid,
Thank you very much for having me here, dear Mayor,
Thank you very much for having me here in Rotterdam,
Indeed, Rotterdam is the home of Europe’s biggest harbour. You said that it is the heart of the Dutch economy. Well, I would say that as such, the heart of the Dutch economy, it is also a bellwether for the health not only of the Dutch economy, but also of the European economy. So, if the port is doing well, our economy is also doing well.
This port really is Europe’s gateway for trade with the rest of the world. To be the gateway for trade with the rest of the world, you need the capacity and you need to innovate. And I know that this is very dear to your heart. So, Rotterdam is a model for both. The project we visited this afternoon illustrates this perfectly. I must say that I was fascinated to visit the Alphenaar. It is amazing to see that battery-powered ship, which is demonstrating the zero-emission inland waterway project that has been developed here. As we all know, transport is one of the sectors where the carbon emissions, at the moment being, are rising, going thus against the trend that we have in all the other sectors, that the CO2 emissions are decreasing. So it is of utmost importance that we innovate and that we have solutions, for example also in the maritime transport. And we all know that maritime transport uses normally heavy fuels that not only emit, but also pollute. Therefore, this project is more than welcome, precisely because it will help tackle the environmental challenges in a coherent way. It is clean. It is circular, as we could see. And it helps obviously also stabilising the grid. So there are a lot of good points in that. Therefore, I hope that the Alphenaar will soon be joined by many, many sister ships that will criss-cross the famous canals you have here in the Netherlands, without any emissions and pollution. I think that the Alphenaar is typical for the type of project we support with NextGenerationEU. Indeed, we want to speed up the twin transition – the European Green Deal and the digitalisation – through intelligent investments and through reforms, and thereby ensure a broad-based economic recovery, initially after the pandemic, but now we also see that it is more needed than ever.
The Netherlands’ NextGenerationEU plan does just that. You have a share of almost 50% devoted to climate measures, to the European Green Deal, and 26% for digital projects – thus is by far overshooting the requirements of NextGenerationEU. So, congratulations for that. The focus is particularly on the development of renewables, both from the climate perspective and in view of the need to get rid of the Russian fossil fuels’ dependency. This is of utmost importance now. The Dutch plan devotes over EUR 2 billion in green investments. It is coupled with fiscal reforms to further incentivise investments in this area. But the plan also has, as we have seen, a strong focus on sustainable mobility for maritime, but also for rail and air transport. And it includes the other dimensions of the environmental protection, for example through an ambitious nature restoration scheme. This is the green part, almost 50% of the plan, and much more is in it.
But if we look at the digital side, the Netherlands, of course, we know, is home to world champions, like ASML, we have visited it together – amazing, fascinating. And therefore, of course, the plan focuses on boosting innovation through the development of applications of quantum technology and artificial intelligence solutions. Beyond the climate and beyond the digital priorities, the Dutch plan also focuses on other challenges facing society and the economy. This is notably the case for the housing market. With almost EUR 1.4 billion in investment for the construction of housing, this is in fact the largest component of the plan. And of course, this aims to combine both the environmental protection – insulating, for example houses, is the way to go – and of course also social fairness. The plan includes a series of reforms to continue improving one of the Netherlands’ traditional strong points: that is your people and their skills – so, a lot of investment in upskilling and reskilling. And the plan includes reforms to strengthen the public health sector, the pandemic preparedness – we have learnt our lesson from the pandemic. And finally, the plan addresses aggressive tax planning and money laundering, two issues that are important for the good functioning of our Single Market.
I could go on forever, but I will stop here. This is not the end of the journey, it is the beginning because, of course, now it is about implementing. But you were right, there is a rumour out there that we now approve, by giving you the famous yellow booklet, your recovery and resilience plan. So, congratulations for that.
Source – EU Commission