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248 Economic crisis, health systems and health in Europe: country experience
in 2002–2003. Some of the downturn was attributable to the downturn in the
global economic cycle and much lower rates of export growth in 2001–2003
(exports accounted for 70% of GDP in the Netherlands in 2000). Private
consumption fell in real terms in 2003 and investment fell in both 2002 and
2003 (Economist Intelligence Unit, 2008). From 2005, the economic recovery
gathered pace until the start of the global economic crisis in 2008 (Schäfer
et al., 2010). Most of the acceleration between 2005 and 2008 resulted from
increased domestic demand (Economist Intelligence Unit, 2008). Growth in
GDP became negative in the fourth quarter of 2008 and this trend continued
until the end of 2009 (Table 8.1).
In 2009, exports declined sharply (Table 8.1) as the transport and trade services
sectors, the main pillars of Dutch exports, were harmed by the global economic
slowdown. The housing market collapsed as banks tightened their lending
criteria for new mortgages, and households postponed or cancelled buying new
homes. With falling house prices, many households found themselves with
mortgages exceeding the value of their houses and decreased their consumption
(individual savings have been negative since 2003). Almost half of the decrease
in private consumption can be attributed to the effect of falling house prices
(Social and Economic Council, 2013). It is worth noting here that since the
early 2000s, as a consequence of very lax mortgage lending since the 1990s,
Dutch households had the highest level of long-term debt in the Eurozone
(Social and Economic Council, 2013). Households were also affected by the
decline in real wages (since 2010) and an increase in unemployment (during
2009 and from mid-2011 onwards). Business investments declined not only
because of reduced (re)export volumes, but also as a consequence of political
measures, such as cuts to government spending on defence and the arts and
in the budgets of municipalities and provinces (from 2010). Later, in 2012,
measures such as the so-called crisis levy applied to incomes over €150 000 per
year and an increase in VAT suppressed economic activity further.
1.2 Government responses to the crisis
Between 2008 and 2011, the government took special measures to support
businesses and the banking sector struggling with the fallout of the financial
crisis. Almost €6 billion was provided by the central government and a further
€1.5 billion by the provinces and municipalities to enable businesses to reduce
the working hours of their employees (shift to part-time employment), avoid
lay-offs and retain skilled workers (with the idea of employing them again fulltime
when the economic situation improved). In 2008, the government took
over Fortis Bank Nederland, including parts of ABN AMRO. It also allocated
€20 billion to strengthening capital reserves in the banking and insurance
sectors, with the ING Group being the first bank to receive such a capital