Debt becoming serious problem in Netherlands

With the third highest inflation rate in the EU, one household in seven in the Netherlands is unable to pay its bills, while the main earners are facing health problems due to worry and sleepless nights, according to a new survey from the country's Association of Court Bailiffs.

Although the Netherlands is one of the five EU countries to retain its AAA international credit rating, a blizzard of worrying statistics this week led the Association for Debt Relief and Social Banking to warn that debt was now “a broad social problem” which had become “firmly rooted in society”.

The latest inflation figures show that although there was a drop from 3.2 per cent in March to 2.8 per cent in April, this remained well above the euro zone average of 1.2 per cent – leaving the Netherlands behind only Estonia on 3.4 per cent and Romania on 4.4 per cent.

Contributory factors
Ironically, the Central Bureau of Statistics says increases in insurance tax and value added tax – both introduced when the new Liberal-Labour coalition government came to power last October – have been significant contributory factors to the high inflation rate.

An increase in the excise duty at the same time also means that the Netherlands now has the most expensive petrol in Europe, averaging €1.78 a litre, according to the German motoring organisation, ADAC.

The cost of diesel is the third highest in Europe at €1.44 a litre.

The mood of economic gloom is not being helped either by the fact that more than one million of the country’s 4.2 million owner-occupied houses is now in negative equity – with six in 10 of the owners of those “underwater” properties under the age of 40.

The estate agents’ association, NVM, said the number of houses changing hands fell a massive 30 per cent in the first quarter of 2013, making it the worst quarter on record. The number of properties sold in April fell 26.6 per cent compared to March and 20.4 per cent compared to April 2012.

Uncertainty in the workplace is also increasing, as King Willem-Alexander acknowledged on the day of his investiture three weeks ago.

New figures last night showed that 10 per cent of the working population was now self-employed, with another 16 per cent on short-term or flexible contracts. This means that for the first time, more than a quarter of the Dutch workforce does not have a traditional permanent employment contract.

Immigration decline
Due to this faltering economy, total immigration to the Netherlands declined last year for the first time since 2006.

Despite that, the Government parties say they will begin talks in the next few days to “toughen up” the country’s asylum policy – a move immigrants’ groups say is designed to “divert attention away from the real economic issues”.