Weekly Selection: Companies Exit the Netherlands & Interest Payments Rise – Political Idealism vs. Economic Reality

This article has been automatically translated from Dutch. Click here to see the orginal article including all links to sources.

The cost of climate ambitions is becoming increasingly visible. More and more companies are ceasing production in the Netherlands or threatening to leave. Do Dutch politicians see the urgency—or not at all? Meanwhile, a new OECD report shows that interest payments on government debt have reached their highest level since at least 2007. Global money supply is also nearing record highs again. Read on for this week’s developments!

Companies Exit the Netherlands: Do Politicians See the Urgency—or Not at All?

This week, we saw chemical companies LyondellBasell and Tronox choose to close factories in Rotterdam. Due to high costs, it has become increasingly difficult for them to remain competitive in the Netherlands. The business sector is burdened by unprecedented regulatory pressure, sky-high energy prices, and CO₂ levies.

The Netherlands Has the Highest Energy Costs in Europe, Also for Smaller Companies (source: Martien Visser)

The CEO of the Port of Rotterdam, Boudewijn Siemons, called it a tough day for the port. These chemical companies produce basic materials for insulation, mattresses, furniture, paint, electronics, medicine, food packaging, and wind turbines. The Netherlands will now become more dependent on foreign countries for these products, while Europe aims for more self-sufficiency.

“This is one of our most modern plants, but we can’t keep it going in the Netherlands,” said Ronald van Klaveren of LyondellBasell in De Telegraaf. “It’s frustrating because it’s one of the best technologies, also in terms of CO₂ efficiency, and yet we can’t keep it running due to economic conditions.”

The end is not in sight: more chemical companies are expected to follow. Competition from countries like the U.S. and China is fierce, partly due to much lower production costs—especially thanks to lower energy prices. Electricity costs for these companies are around €95 per megawatt-hour, compared to €32 in France. In addition, the Netherlands wants to lead in climate policy and therefore enforces stricter environmental and climate regulations than the EU. The Netherlands even imposes a national CO₂ levy on top of the European price, making domestic production financially unsustainable.

This problem is not limited to the chemical sector. Last Saturday, Boskalis CEO Peter Berdowski said he sees no future for the maritime company in the Netherlands. “We must not be weakened by excessive environmental demands.” This is not the first time Berdowski has spoken out against climate regulations. Boskalis has already opened a satellite headquarters in Abu Dhabi. “Politicians are obsessed with saving the world, leading to a disconnect between political goals and economic reality,” said Berdowski.

VVD Leader Dilan Yesilgöz-Zegerius Reacts to Plant Closure (source: @DilanYesilgoz)

Dutch politicians reacted with outrage to the news that LyondellBasell is closing a plant in Rotterdam. VVD party leader Dilan Yesilgöz wrote on X: “This really hurts… Our security and prosperity are at stake.” CDA leader Henri Bontenbal also expressed deep concern and warned in AD: “If nothing changes, this will become a death spiral.”

This is noteworthy, as these parties have been responsible for the policies that led to the current situation. They supported ambitious climate policies. “The CDA is warning? The Green Deal is an initiative of the European Christian Democrats, of which the CDA is part. This collapse is the result of your own panic policies,” said Arno Wellens.

Even VNO-NCW, which previously championed climate ambitions for promising growth and jobs, now claims “there is real panic” and calls for lower energy costs. In 2023, chairwoman Ingrid Thijssen still wrote that growth could be very green.

The tide is turning. Henri Bontenbal now proposes abolishing the national CO₂ levy, which comes on top of the European price. But if a national levy is harmful, shouldn’t the European CO₂ price also be reconsidered? The CDA finds support from coalition partner BBB. Henk Vermeer told De Telegraaf: “Dutch industry is on the brink and The Hague watches idly. We need action now, or we’ll lose hundreds of thousands of jobs and a quarter of our prosperity.”

Minister of Climate & Green Growth, Sophie Hermans (source: rijksoverheid.nl)

The products we’ll soon need to import—currently made in the Netherlands—are likely to be produced in less “green” ways. That would not only make us economically poorer but also contradict climate ambitions. Minister Hermans of Green Growth told WNL that she senses the urgency everywhere.

Yet Hermans seems not to feel that urgency, despite claiming she does. She argues that the CO₂ levy is not an unreasonable burden on industry—while that same industry is closing factories. The VVD minister wants to maintain the controversial extra tax. Martien Visser, an energy transition expert featured in our podcast, responded clearly on X.

He wrote: “This reminds me of the man who fed his dog 1% less each week. Such a small, almost invisible change surely couldn’t make a difference! One winter day, the poor animal died. The man was stunned. Where had he gone wrong?”

In this week’s podcast, we spoke with former senator René Dercksen and discussed this topic in depth. What is the future of the Netherlands within von der Leyen’s EU? Listen to it here!

Interest Payments on Government Debt Reach Highest Level Since 2007

Interest payments on government debt in the 38 developed economies of the OECD have risen sharply. In 2024, interest costs will average 3.3% of GDP—a sharp increase from 2.4% in 2021. According to the Financial Times, this is the highest level since at least 2007.

Interest Rates Are Rising (source: Financial Times)

Interest payments now exceed spending on defense and housing. And that’s while Europe plans to increase debt further—even as rates continue to rise. You can read more about this in last week’s weekly selection. The OECD warns that the combination of rising rates and increasing debt could reduce future borrowing capacity. The Global Debt Report 2025 states: “Global debt markets face a difficult outlook.”

Interest Payments Now Exceed Defense Spending (source: OECD)

The amount of government borrowing in high-income countries is expected to hit a new record of $17 trillion in 2025—up from $14 trillion in 2023. This is fueling concerns about debt sustainability in countries like France, where debt equals 111% of GDP. The Netherlands is performing relatively well, with a debt ratio under 50%.

Global Money Supply Is Again Nearing Record Levels (source: Daniel Lacalle)

This week we also saw that the global money supply is once again approaching the record levels of last September. Economist Daniel Lacalle asked on X: “Got gold?” This trend is generally favorable for gold prices. Inflation expectations are rising, currencies are losing relative value compared to scarce assets like gold, and real interest rates fall as inflation rises. It is therefore unsurprising that the Financial Times now features quotes like: “Gold has been the best-performing asset class of the 21st century so far.” Next week, we’ll discuss gold price developments in a new monthly update on our YouTube channel.