Economists see growth slowdown as labour shortage starts to bite

The shortage of labour in the Netherlands will have an impact on economic growth next year, according to a new report by Rabobank economists. Rabobank says that while growth will continue, it will be hit by both the shortage of workers and falling growth rates abroad. The Dutch economy will grow by 1.9% next year and 1.7% in 2020, the economists say. This year they put growth at 2.6%. In particular the shortage of workers is having an effect on the construction sector and fewer new homes are being built. Now the time is right for the government to invest and make a serious effort to boost sustainability, such as the introduction of a tax on carbon dioxide emissions, the economists say. 'Invest in productivity,' chief economist Menno Middeldorp told broadcaster NOS. 'Delaying decisions reduces the risk that difficult decisions will have to be taken in the future, under more difficult economic circumstances.' ABN Amro said on Monday it is also revising down its economic growth forecast next year, from 2.5% to 2%. It, too, puts economic growth this year at 2.6%. Finance minister Wopke Hoekstra said on Friday that the government is forecasting growth of 2.6% next year 'but the Rabobank figures show a lower figure'. The government's own macro-economic agency CPB will publish its growth figures next Wednesday.  More >

80% of foreign investment is moved on

A vast proportion of foreign investment in the Netherlands leaves the country again through shell firms, according to new research by the national statistics office CBS. Last year, €4,587bn was brought into the Netherlands by what it called 'special financial entities' but 80% of that left again, the CBS said. Some 14,000 shell companies, or letterbox firms, are located in the Netherlands. Four in five carry out no economic activities and are used, in the main, to avoid tax, the CBS said. Last year, €3,665bn left the Netherlands, of which just over half was invested outside the EU.  Asia and Oceania topped the list of destinations - mainly India, Hong Kong, China, Australia and New Zealand. Last year, University of Amsterdam researchers said the Netherlands is the biggest conduit to offshore tax havens in the world, with almost a quarter of fiscal constructions having a Dutch link. ‘Only five big countries act as conduit-OFCs,’ the researchers from Corpnet said in a new report. ‘Together these five conduits channel 47% of corporate offshore investment from tax havens, according to the data we analysed.’ The two biggest conduits by far are the Netherlands (23%) and the United Kingdom (14%), followed by Switzerland (6%), Singapore (2%) and Ireland (1%). Industry The cabinet is cracking down on the shell company industry in the Netherlands in line with international and EU agreements. From next year, companies applying for a ruling will have to have ‘substantial economic activities’ in the Netherlands, rather than just a letter box. In addition, the amount of money flowing through the company must be in line with its activities in the Netherlands. ‘For example, it would not be logical if a distribution centre with a workforce of 100 was busy managing billions of euros in loans,’ the finance ministry said in November. All international rulings will be checked in advance by a special panel of experts and rulings will only run for a maximum of five years.  More >

Hudson's Bay struggles in the Netherlands

The owners of the Hudson's Bay department store group are 'extremely concerned' about the major investments the company is making in the Netherlands and the disappointing earnings, the Telegraaf said on Thursday. The paper bases its claims on internal documents which show the company has lost more than €80m in the Netherlands this year. The Telegraaf says staff layoffs are one of the options being considered. At the end of last year, the company changed its strategy in the Netherlands to bring in cheaper product lines and in February plans to open a total of 20 department stores were scrapped. Hudson's Bay currently operates 13 stores in the Netherlands. Many of these are located in premises which were used by the V&D department store chain before it went bust. The first store opened in September 2017.   More >

Schiphol to stop valet parking

Schiphol's airport authority and local council Haarlemmermeer are to ban valet services from using the airport drop-off and pick-up points from next year. They say the move is necessary to combat the unregulated growth in valet companies, who arrange to pick up travellers' cars at the airport departure deck and take them somewhere else for safe keeping, until the passenger returns. 'The number of cars using the terminal roads is getting out of hand,' a council spokeswoman told the Telegraaf. 'We've had jams and a number of serious incidents, so we want to put an end to it.' Some 20 valet parking companies operate at Schiphol and they are furious about the plan. 'We are being tackled so that Schiphol can keep exclusive rights with its P6 valet parking service,' Karim Boukhidous of VIP Parking told the paper. 'This is unfair competition and an abuse of power. Furthermore, we are needed because of the shortage of parking places.' The council said that it is not banning all valet parking, just services based on the public roads. Companies are free to make agreements with Schiphol airport about operating safely, with a customer service counter in the car park, she said.  More >

Pay rise an error of judgement: ING CEO

ING chief executive Ralph Hamers told MPs on Wednesday that his proposed pay rise earlier this year was a major error of judgement. Hamers was the ‘star turn’ at a parliamentary finance committee hearing set up to look at the financial sector 10 years after the start of the financial crisis. The pay rise and the money laundering scandal should ‘never have happened,’ Hamers said in his opening address. And he said he understood that there is a negative view of the bank. ‘Advances have been made in the past 10 years and there have been setbacks. It is a slow process,’ he told MPs. In March ING's supervisory board withdrew the proposed 50% pay rise for Hamers, saying it had 'underestimated the public response in the Netherlands on this clearly sensitive matter'. Hundreds of customers are thought to have closed their accounts in protest at the pay rise and the proposal to increase Hamer's pay to €3m was condemned as 'arrogant' and 'out of touch' by politicians across the political spectrum. Money laundering ING took a second hit in September when the public prosecution department said it had reached a €775m out of court settlement with ING for failing to properly monitor money transfers for potential money laundering. The department said between 2010 and 2016, the bank's clients were effectively able to launder hundreds of millions of euros because ING was not doing its job properly. Banks are required by law to report suspicious transactions. ‘How can you rebuild trust in the financial sector if you know that you are committing fraud and accepting a million euro pay rise?’ said Labour MP Henk Nijboer.  More >

Albert Heijn to cook meals on the spot

A forecast halt to turnover growth is forcing supermarket leader Albert Heijn into a change of concept for its shops and possible closures, the Financieele Dagblad reports. Ahold Delhaize boss Wouter Kolk told the paper online shopping is partly the reason the shops are doing less well. It is time supermarkets take on ‘a different role’, the FD quotes him as saying. In practice this means that there will be less space for traditional products like pet food and cleaning products. Instead, more room will be made for food-oriented services with kitchens where takeaway meals are prepared, and home delivery services. The move means that a small number of shops could face closure, ‘I don’t think we’ll have over a thousand shops in the Netherlands in future. And we don’t need to. But the number of shops will not fall drastically because they will be needed for direct consumption and a fast delivery service’ he told the FD. The first Albert Heijn with its own kitchen will open in Amsterdam early next year.  More >

Senate backs new commercial court

Senators on Tuesday backed plans to establish an international commercial court in the Netherlands, which will specialize in complex international trade disputes. The new tribunal is being set up because of demand for a specialised, English language tribunal, legal experts say. The Netherlands Commercial Court will have two chambers, one based at Amsterdam district court and one at the court of appeal on the IJ waterfront. Justice minister Sander Dekker told senators during their debate on the plans last week that companies which currently take legal action in English only have the choice of arbitration or to go to London. 'Both options are somewhat expensive,' he said.   More >