The new cabinet has to borrow tens of billions of euros for solving major problems, find VVD, D66 and CDA. This includes, for example, the climate crisis, the nitrogen crisis and the overdue maintenance of roads, bridges and other infrastructure.
The exact amount of money is not clear yet, nor has it been identified which problems are chosen, but it is clear that it is large one-off spending. Borrowing money is attractive due to the extremely low interest rates. The Netherlands can borrow virtually free of charge on the capital market.
The mindset to borrow billions is evidenced by pieces of formation in the hands of the CCeit. The pieces were inserted at the formation table last week. Nine parties discussed how the most urgent problems could be paid.
The borrowed funds should be used outside the ordinary budget rules to tackle various problems. It is about one-off money, which will not be part of the budget year in, year out.
VVD, D66 and CDA discussed these financial principles. There will be further negotiation in the coming weeks.
Money locks open
As a result, for important themes, the lock locks can open, because it is outside the ordinary budget. “So that the EMU balance is not directly taxed,” the parties write, referring to European rules on expenditure that require additional expenditure to be offset elsewhere.
Spending borrowed money through a fund has been done before, particularly through the Wopke-Wiebes fund for the renewal of the economy. A total of EUR 20 billion will be made available for that fund over the next five years. The forming parties therefore want to set up a fund for more political challenges and to draw a large amount of money for it.
“After setting up funds for occasional expenditure, we want to go back to normal budget rules,” the parties do write. Because the formers want to create financial space with the funds for certain themes, they believe that they should be more stringent and therefore more economical on other themes. After major spending, the parties are therefore more economical.
In the rest of the political agreements, they want a new cabinet to have ordinary budgetary rules. And as it stands, thats how the parties write in the document, it means that if the new cabinet wants to invest in something, it has to cut back equally on something else.
It is also new that the three parties believe that the future cabinet should agree in advance how high the taxes and contributions for citizens and businesses should be. The load pressure should not go up further in the reign than it was agreed at the beginning, no matter what happens. This could mean, for example, that an increase in healthcare salaries cannot be paid through a higher corporate profit tax.
The parties want fixed burdens frameworks. “A predictable burden for businesses and citizens by setting a burden ceiling. Interim policy changes remain within these frameworks.”
In general, as the parties write, the starting point of a new coalition agreement should be: “burdens for citizens should be limited and, where possible, turned into a burden relief.”