8 things to know about the incoming Dutch government

AMSTERDAM — New year, new Dutch government.

After 271 days of difficult negotiations, described by one political heavyweight as a “forceps delivery,” the Netherlands will seat a new government on January 10 after the centrist D66, liberal VVD, Christian Democratic CDA and the Christian Union reached a coalition deal last month. 

According to the coalition accord unveiled in December, the traditionally frugal country is set to spend big and tackle some big-ticket issues which have been gathering dust over the past year.

From confronting industrial espionage to betting on nuclear energy, POLITICO sets out the key items to know for EU officials who will work with returning Prime Minister Mark Rutte’s incoming government.

Rutte stays put — for now

Mark Rutte, who has been in power since 2010 and is the EU’s second-longest-serving head of government after Viktor Orbán, is set for some challenging years.

During the coming mandate, his government faces three parliamentary inquiries, the strongest tool parliament has in scrutinizing an incumbent government’s work and policies: one on a child benefit scandal that toppled Rutte’s previous government in 2021; another on the government’s handling of the coronavirus crisis; and a third on extraction and compensation issues around the Groningen gas fields.

Whether Rutte and his government survive the inquiries remains to be seen, but one record is within touching distance: By October 2022 he will be the country’s longest-ever serving prime minister.

Finance and foreign ministers switch seats

Incumbent ministers Wopke Hoekstra, from the CDA, and Sigrid Kaag, from D66, are doing a switcheroo in the new government, with Kaag taking the helm of the finance ministry and Hoekstra becoming foreign affairs minister.

The move is widely seen by analysts as an attempt by all parties to get their own bite of international affairs, with Rutte holding on to his seat at the European Council, Kaag joining the ranks of EU finance ministers and Hoekstra looking for something more European: “Europe is on the eve of a critical period,” he told a local newspaper.

Kaag, who will be the Netherlands’ first female finance minister, said that the role is crucial in executing on issues such as education, climate change and a “strong Europe.”

Hey, big spender

The Dutch are set to spend big with a massive €29 billion in additional expenses on the books for 2025, the incoming Cabinet’s last year in office — a huge increase in spending. With hardly any austerity measures in the accord, the expenditure is mainly paid for through loans.

The Netherlands, one of the few European countries with a negative interest rate, aims to use the economic status quo to its full advantage, increasing its expenditure cumulatively over the next four years from €8 billion next year to the aforementioned €29 billion in 2025, arriving at just over 60 percent of national debt in relation to gross domestic product by 2025.

In addition to the expenses being part of the state’s annual budget, the country will create several separate funds, including a €35 billion climate fund to be built up over the next 10 years and a €25 billion nitrogen fund, aimed at reducing the Netherlands’ nitrogen emissions.

Go nuclear to fight climate change

In a strong domestic push for using zero-carbon energy, the incoming government is betting on the nuclear option, setting out plans to build two nuclear power stations, plus a decision to extend the life of the nuclear power station in Borssele.

D66 leader in parliament Rob Jetten will join the Cabinet as minister of climate and energy. Jetten, who is only 34, made a name for himself as a loyal party man with an activist streak, especially when it came to climate policy and gay rights, leading former VVD party leader Klaas Dijkhoff to call him a “climate nagger” during the 2019 Provincial Council elections. Jetten has since worn the nickname as a badge of honor.

The government has introduced more ambitious climate goals to achieve by 2030, but the Dutch Environmental Assessment Agency poured cold water on the coalition’s calculations. Can the Netherlands hit a 60 percent emissions cut from 1990 levels by 2030? “The odds of arriving at a 60 percent decrease or over are extremely slim,” their agency said.

Cybersecurity and espionage

On cybersecurity, the government has a clear message to cyber spies and digital disruptors eyeing the country’s critical technology and intellectual property: Stop it, or else.

The justice ministry, which will oversee the response, will be led by Dilan Yeşilgöz-Zegerius from the VVD. Yeşilgöz-Zegerius’ appointment has raised some eyebrows in the Dutch legal sector as she will be the first justice minister without a background in law. She was, however, her party’s spokesperson for justice and security before she took over as caretaker state-secretary of economic affairs and climate in the previous government.

In the coalition deal, the parties said they intend to enable intelligence services to disrupt state-backed hacking attacks and authorities to prosecute espionage, a move widely seen as a continuation of an increasingly astute cybercrime program. Officials last month discussed a potential interim law that would allow Dutch intelligence services to conduct investigations into countries with offensive cyber programs.

The plans will please digital security services in the U.S. and beyond, with which the Dutch have built up strong ties in recent years. The Netherlands has long been regarded as a prime target for theft of intellectual property and its intelligence service has pointed the finger at China.

Taxes, taxes, taxes

The incoming government is backing a host of new financial levies.

“We are committed to a digital services tax, an airline tax, a CO2 border tax and a minimum rate for profit tax to prevent unfair competition between Member States,” the agreement said, pointing out, however, that the Dutch are keen on keeping the revenues: “In principle, these will be collected nationally.”

In July, the Commission unveiled plans to tax imports of steel, iron, cement, aluminum, fertilizers and power based on their carbon content, and said that the revenues would accrue to the EU’s budget. But the Dutch and others prefer the border levy and the use of revenue to be negotiated separately.

Like the new German government, the Dutch coalition will also introduce a floor price for carbon for allowances under the EU’s Emissions Trading System. It will be a rising price, with “any financial gains … returned to the climate fund for companies to make their operations more sustainable.”

Night train gain

The coalition members, pushed by D66, has jumped on the trans-European train revival, saying they “want transportation by train to become a good alternative, cost-wise and time-wise, to flying in Europe.”

In order to achieve that, the Netherlands — which currently boasts several night train connections including links to Vienna and Berlin — has been keen on expanding its international rail network in the coming years, with prospective connections to Prague and Zürich.

In the accord, the Dutch also want to tax aviation fairly by creating a “level playing field within the EU and of the EU vis-à-vis third countries.”

Dutch strategic autonomy

It’s a term usually associated with industrial powerhouses such as France or Germany, but the incoming Dutch government is set on the EU and the Netherlands becoming strategically autonomous.

With regards to industrial policy, the accord says: “We pursue strategic autonomy through the production of crucial (semi-finished) goods in Europe and by protecting vital processes and preventing unwanted control in vital companies.”

MEP Liesje Schreinemacher from the VVD will be the new minister for foreign trade and development cooperation. As a member of the Renew Europe group in the European Parliament, she lobbied hard for creating a two-way street regarding trade with China, saying, “Chinese companies should no longer be allowed to sell us things like buses as long as European companies don’t stand a chance on the Chinese market.”

Laurens Cerulus, Karl Mathiesen, Simon van Dorpe, and Paola Tamma contributed reporting.

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