National debt rose by EUR 42 billion last year, the largest increase since the first year of the credit crisis (2008). This is evident from figures published by Statistics Netherlands on Monday. The corona support package, in particular, resulted in many billions of euros in additional expenditure for the government.
This includes wage support (NOW scheme) and the allowance for self-employed persons (Tozo). The former scheme was the largest cost item, at 13 billion euros. About 3 billion euros was spent on the Tozo. A bonus for healthcare workers also cost another 2 billion euros.
Partly due to the extra corona spending, the total national debt rose to 379 billion euros last year, after showing a downward trend since 2016. Nevertheless, the debt is still below the level of record year 2015, when the government had outstanding debts of about 400 billion euros.
“Just as in the financial crisis of 2008, the central government financed a large part of the extra expenditure with short-term debts”, according to Statistics Netherlands. These are debts with a term of less than one year. “Since then, the government has mainly financed its deficits with long-term debts.”
While expenditures rose, tax revenues fell, by far the most important source of income for the State. Last year, 9 billion euros less came in than the year before. Revenues declined in the second quarter in particular, mainly because many companies were given a delay in paying their taxes.