Saturday 03 December 2022

Government poised to extend coronavirus support for companies

Photo: DutchNews.nl

The Dutch cabinet is expected to announce an extension to the current support measures for companies caught up in the coronavirus crisis later today.

The new deadline for the measures to be phased out would be the fourth since the pandemic began.

However, economists and the government’s macro-economic think-tank CPB are calling on ministers to start winding down the aid packages now that lockdown has been eased and life is slowly getting back to normal.

‘If companies are in a position to do business again, then they should hold up their own trousers,’ Arnoud Boot, a professor of government finances at the University of Amsterdam, told broadcaster NOS.

Sandra Phlippen, chief economist with ABN Amro, said she too would like to see the support phased out, but said she expects that will happen of its own accord. ‘The NOW ruling [for help with paying fixed costs] is linked to the drop in turnover,’ she told the Financieele Dagblad.

‘And as the economy opens, the turnover of healthy companies will go up and they will no longer be eligible for support,’ she said.

Painful

The CPB has recommend the support be wound down as part of a package of recommendations for the next cabinet.

‘Some companies will not make it through the recovery period,’ the CPB said. ‘That is painful but inevitable – the economy has to adapt.’

The support funding has kept the number of bankruptcies during the crisis to a minimum, while the jobless rate is almost back at pre coronavirus levels.

Despite the doubts, sources in The Hague suggest that the support package will be extended again – a move supported by most party leaders.

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