“A flood of ghost figures,” is what economist Tijmen de Vos of the FNV called the much-discussed report by Peter Wennink on the earning capacity of the Netherlands in his newsletter Red Numbers. He spoke of “half-truths, distortions and misused statistics.”
Harsh language from the union? De Vos appears not to be the only one who has reservations about the report The route to future prosperity by Peter Wennink, former chairman of chip machine manufacturer ASML. In it, Wennink warns of a slumbering economy with limited competitiveness, as a result of which many facilities and achievements in the Netherlands are at stake. Wennink came up with a wide range of recommendations to prevent our quality of life from “deteriorating rapidly”.
“It is one to twelve with the Dutch economy,” the report said. “If we do nothing, the Netherlands will actually have to cut back on everything within five years,” Wennink predicted during the presentation on December 12.
There is broad agreement about the analysis and urgency that Wennink outlines – that the Netherlands must work to safeguard its earning capacity. There is also a lot of praise from the House of Representatives and there is broad consensus that choices have to be made. His advice on these choices is fodder for further social discussion and debate among economists.
But criticism is growing about the way Wennink, the former captain of industrydeals with figures in the problem analysis that precedes his recommendations. For example, the national debt he presents is very high. And he makes alarmist predictions that cannot be true at the same time.
Doubling growth of national debt
Wennink draws on a variety of studies and reports to outline impending problems in the labor market, in public finances, in competitiveness and in the wallet of the citizen. For example, he warns that government debt could rise to 234 percent of national income by 2060. He presents a graph that rises alarmingly steeply, with the Central Planning Bureau (CPB) as its source. But the CPB report says something different: if policy remains unchanged, the national debt in 2060 is estimated at around 126 percent of national income. That is more than 1,000 billion euros lower than the picture that Wennink paints.
The CPB analysis that Wennink refers to does not contain the graph he shows in his report. The former CEO of ASML appears to have added two economic scenarios together. The CPB analyzed that if policy remains unchanged, additional climate expenditure could lead to 56 percentage points of additional debt compared to gross domestic product. Under the new NATO standard, defense expenditure translates into 51 percentage points of additional debt in 2060 compared to the size of the economy.
His prediction of the national debt in 2060 is higher than that in any calculated election manifesto. Even the most indebted political party will not get further than a debt of 154 percent of GDP in 2060 – considerably lower than Wennink suggests.
“You cannot simply add up the figures from those scenarios,” says economist Tijmen de Vos of the FNV by telephone. “Otherwise the CPB would have done that.” He points out that Wennink also fails to mention all his underlying assumptions – the most dire scenarios for government debt over 35 years – in the graph he presents in his report.
The CPB agrees with this when asked. You cannot add the scenarios together because they also interact. “We have not calculated these knock-on effects,” a spokesperson said. “So we cannot say anything about the composite effects.
A spokesperson for Wennink endorses this after questions from NRC that there is a “margin of uncertainty” in his sum, but states that the “order of magnitude” – a debt in 2060 of more than 200 percent of national income – is “not in question”.
In addition, as economist Jasper Lukkezen explains, the CPB assumes for its scenarios that the government everything borrows to finance increased NATO commitments and everything borrows to pay for climate damage and climate adaptation. While it is unlikely that this actually happens. “These are purely mechanistic calculations to show what happens if you do nothing. But we have a culture of sensible budgeting. Almost all political parties are already partially covered for the new ambitions. And part of the climate costs have already been included in the budget.”
Purchasing power picture
A little later in the report, Wennink assumes an opposite movement. He emphasizes that strong economic growth is needed to be able to bear the enormous burdens, and presents the reader with a purchasing power picture with thousands of euros in decline per Dutch household.
The small print states that this calculation assumes a stable government debt. In other words: these are the costs when the state shifts the pain to the citizen. “Those two things cannot be true at the same time,” says De Vos of FNV. “The national debt cannot grow so fast and purchasing power fall so fast at the same time. But Wennink presents those figures one after the other in the same paragraph. Normally you calculate with the same figures and assumptions everywhere,” says De Vos.
A spokesperson for Wennink writes in response that this would not be a combination of both effects, but alternative scenarios: “This is therefore not a both-and scenario, but an either-or scenario.”
Lukkezen emphasizes that the importance of Wennink’s report lies mainly in the recommendations and that they remain as the preliminary problem analysis. At the same time, he shares De Vos’s criticism. If all spending directly increases the national debt, you do not have such a strong purchasing power effect. You only get that if you increase taxes significantly. “But then the government debt falls again. The presentation misleads the reader.”
Even more opposing starting points
Wennink writes that De Nederlandsche Bank (DNB) expects growth of 0.5 percent in the medium term, but the central bank never makes forecasts for growth for a period longer than two years. The source of this is unclear, even for DNB, which was not involved in the preparation of the report.
A spokesperson for the bank points to a 2024 DNB study with “a stylized calculation” that assumed annual growth in labor productivity of 0.5 percent and economic growth of 0.6 percent.
A spokesperson for Wennink said in a response that the number comes from a sentence in a DNB report from February 2024. In it, the authors write in the introduction that it is “not inconceivable” that economic growth will “decline to around half a percent per year” in the coming decades.
The varying starting points are reflected in figures about the labor market and the purchasing power of Dutch households. Moderate economic growth of 0.5 percent per year would mean that an average household would have a net 7,000 euros less to spend in 2035, Wennink calculates.
But the prediction of future problems in the labor market is based on an annual economic growth of 1.6 percent – A shortage of personnel mainly occurs during high growth, while citizens become poorer when growth is too low. Source is a report from McKinsey. The board roomconsultants expect the shortage of IT jobs to quadruple by 2030.
A spokesperson for Wennink said in a response that the study was mainly used to “illustrate that personnel shortages in key professions form a structural bottleneck for the flourishing of the Dutch economy.”
CPB director Pieter Hasekamp previously criticized this kind of “exaggerated “It sounds logical, but ignores the fact that the labor market always adapts in practice,” he wrote in an opinion piece in the F.D.
In other words: if there is a shortage of certain personnel, wages will rise, which will cause people from other professions to retrain and thus solve specific shortages.
Time pressure
Wennink’s report is considered the long-awaited Dutch translation of the recommendations that former ECB President Mario Draghi formulated for Europe in September 2024. To arrive at his advice, Wennink held 32 round table discussions and spoke to more than a thousand stakeholders from business, science and government. Both Pieter Hasekamp and one of the McKinsey authors are in the club of advisors that Wennink described in his presentation.
The former CEO of ASML was only given the assignment by Minister Vincent Karremans (Economic Affairs, VVD) three months ago. Wennink quickly delivered a comprehensive report.
Sometimes there are no footnotes to statements, making it difficult for the outside world to verify statements. “Reorganizations in the Netherlands are therefore more than five times as expensive as in other countries with more flexible systems,” it says on page 57. Anyone who wants to know which countries these are, how this has been calculated or where the figures come from, is initially unable to find out. A footnote is initially missing, just like any other source reference.
Wennink’s spokesperson said in a response that in the design of the report, footnotes in the text were omitted “in a few places”. After questions from NRC, the notes were “correctly linked to the text and restored in the online version of the report on the website.” The spokesperson writes: “The report has been compiled with the utmost care. Time pressure has had no influence on that care.”
Arnoud Boot, professor of corporate finance and financial markets at the UvA, suggests another explanation for the carelessness. He suspects that the frustration at VNO-NCW about the business climate is so great that they decided via Wennink to “play their gramophone record at ‘super speed’.”
According to the economist, it was mainly the employers’ lobby that did not want a broader socially embedded composition of the group of people that helped Wennink with his report – for example, the trade unions and think tanks such as the Scientific Council for Government Policy were not represented.
Boot regrets that it undermines the message of the report. “The fear that the Netherlands will fade away as a rentier nation is justified. It is absolutely legitimate to argue for a change in society. But then you should not go too far in boosting the sense of urgency. This is damaging to the message.”
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