Noos News•
The economic misery caused by Corona would be much greater without the massive economic support packages. However, this support lasted for a very long time. The Central Planning Bureau (CPB) reached this conclusion in a study on the effects of corona subsidies.
Almost immediately, at the beginning of the first Corona wave, the Council of Ministers prepared a support package worth 30 billion euros. This allowed entrepreneurs to continue paying their employees and fixed costs. They were also allowed to pay taxes later and self-employed people could turn to the municipality for income support.
That helped. Although the Dutch economy contracted by 8% in the first three months of Corona, the government essentially bore the pain. Unemployment in particular remained low due to government support. The Netherlands also continued to perform well compared to other European countries.
bandage
CPB researcher Bastian Overfest praises the improvisational skills of the Cabinet–Ruta 3: “This package was a cushion for the economy. There was fear of a complete stop, but this created confidence that the economy could recover, even in the pandemic.”
There are also criticisms. During the Corona crisis, the Dutch government provided companies with support of about 86 billion euros, according to calculations by the Planning Agency. CPB says the government should have phased out the packages earlier. This happened, for example, with TOZO, income support for the self-employed. With the second support package, self-employed workers had to adhere to more rules to qualify.
These stricter conditions should also have been applied to the support entrepreneurs receive to pay employee wages and fixed costs. Entrepreneurs have also been allowed to defer their taxes for a very long period, the CPB says.
As a result, the economy ran too fast for a while, believes Overvest, the CPB researcher: “The labor market remained tight and the economy continued to grow. However, the subsidies continued. They could have been phased out earlier.” During the pandemic, the number of bankruptcies has remained low, and even declined briefly. The number of bankruptcies is now increasing again. For example, more entrepreneurs are asking for help with back taxes.