Political chaos is making NL less attractive to business: PWC

Some chemicals firms have already closed their plants in the Port of Rotterdam. Photo: DutchNews.nl

The Netherlands is becoming a less attractive place for companies to invest, with political instability and weak government performance hurting the country’s long-term earning capacity, consultancy firm PwC said in its annual survey of the Dutch economy.

Chief economist Barbara Baarsma told the Telegraaf the Dutch business climate has deteriorated for three years in a row and has now fallen below 2013 levels, when the country was still recovering from the financial crisis.

“The Netherlands always scored well on political stability, which is an important factor for entrepreneurs,” she said. “But there is now great political uncertainty, which creates policy uncertainty for companies. Then it is understandable that businesses postpone their investments.”

PwC’s study looks at 65 indicators covering the labour market, infrastructure, economy and political situation between 2013 and 2024. When compared to nine other countries, the Netherlands performs reasonably well, but “we must be cautious that the gap with the frontrunners doesn’t widen further,” the report said.

Baarsma said the problem goes beyond parliament. “The executive capacity of the Netherlands is under huge pressure,” she told the paper. “Take the tax office, benefits agency UWV and customs – all institutions companies deal with. The research shows that the effectiveness of government policy and execution is under strain.”

Business groups have also raised the alarm. VNO-NCW chairwoman Ingrid Thijssen said earlier this year that one in five entrepreneurs were considering leaving, accusing politicians of making the country unreliable and unstable.

Although the Netherlands still ranks highly among attractive destinations, it is losing ground to leaders such as Denmark, Switzerland, Luxembourg and Singapore, PwC said.

Besides political instability, the shortage of skilled workers, restrictions due to nitrogen pollution, housing bottlenecks and grid capacity problems are all hurting investment.

The report comes as the Netherlands is about to hold its third general election in 4.5 years following the early collapse of the two previous administrations.

Thank you for donating to DutchNews.nl.

We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.

Make a donation