After the record surplus of 8.7 billion euro in 2000 the government surplus dwindled to 0.6 billion euro in 2001.
This decline was a consequence of the fact that government spending rose more quickly than revenues.
Spending increases faster, revenues lag behind
Government spending rose by 22 billion euro (more than nine percent) in 2001. Higher spending for public health costs and insurance, outlays connected with the restructuring of the Dutch gas market, the foot-and-mouth crisis, higher costs of social benefits and other operational costs such as wage costs, all contributed to this.
Higher revenues from natural gas, and higher dividend payments from the Netherlands Central Bank did push up revenues in 2001 by nearly 13.5 billion euro.
Improved purchasing power
On balance, the purchasing power of the population improved substantially in 2001. In spite of this consumers were hesitant in their spending behaviour: the uncertain economic situation meant they were more inclined to keep their money in their pockets.
Government spending driving force for economic growth
The rapidly growing direct government expenditure, especially that on large infrastructure projects such as the high speed and Betuwe rails links, accounted for half of economic growth in 2001. The volume of government investment rose by more than nine percent.
The Dutch EMU debt rose slightly in absolute terms in 2001 as a consequence of a number of large financial transactions: the government bought the national grid (0.9 billon euro), participated in the KPN share issue (1.7 billion euro) and sold shares in TNT Post Group (0.9 billion euro). This pushed up the bonded government debt by more than 3 billion euro. .
In terms of a percentage of GDP the Dutch EMU debt continued to decrease steadily. In 2001 it fell to 52.8 percent of GDP.
Gerard Eding and Michiel Vergeer