Message from Holland – Corona pandemic damage

The corona pandemic has caused less economic damage in the Netherlands than in many other European countries.

This was partly due to the relatively loose lockdowns and because the tourism sector in our country is small. That is what ING said on Thursday. The bank looked at the consequences of the corona crisis on the economies in countries that use the euro as a means of payment.

Among other things, we looked at the national debt and how much it has risen as a result of the support packages that the various countries have set up to maintain their economies. In the Netherlands, that debt has increased by 95 billion euros due to the pandemic. That is 12 percent of GDP.

According to ING, there are only three countries where the public debt rose less rapidly due to the corona crisis than in the Netherlands. These are Ireland, Luxembourg and Finland.

In the other fifteen countries, government debt rose faster. This was partly because the cabinet decided not to make the lockdowns too strict. For example, the stores remained open during the first lockdown in the spring of 2020, while they had to close in many other countries.

In addition, the pandemic caused tourism to collapse completely, which had far more consequences for countries such as Spain and Italy than for the Netherlands.

Another factor was that many Dutch people were able to work from home, so that business processes could continue. The fact that house prices rose to record highs also ensured that the treasury received some extra tax revenue. As a result, the government had to borrow less money and the national debt remained smaller.