Later this morning, the government will present the 'National Growth Fund', for which a total of 20 billion euros can be borrowed over the next five years. That money must be used for long-term investments, such as projects in knowledge development, infrastructure, research and innovation.
Initially, the idea was that the government would release a much larger amount for the so-called Wopke-Wiebes Fund, named after the two initiators: ministers (Wopke) Hoekstra and Wiebes. There was talk of 50 to 100 billion euros. As far as Minister Hoekstra of Finance was concerned, the government would borrow that money in one go and put it in a state investment fund. Because interest rates are so low now, that would be beneficial.
But his officials protested against this. They warned him that “taking on debt to invest is risky,” it became clear last summer internal documents (.pdf). “The scenario of negative returns is realistic and creates a political risk of failure.” If such a large amount had been borrowed, not everything could have been invested immediately, but the largest part would have had to be invested first, which is why the officials warned against such an investment fund.
That is why the government does not choose to borrow a huge sum of money at once, but wants to increase the national debt by an additional 4 billion euros annually to fill the fund.
Wishes vary widely
The idea behind the fund is that investments are made outside the political agenda in developments that contribute to economic growth and achieving the Paris climate goals. That is why an independent committee will assess who gets the money.
Projects receive a one-off amount, not on a structural basis. However, the committee will ultimately only provide advice that the cabinet can adopt. The House of Representatives can also still block investments. This fund is therefore not completely separate from politics.
Wishes already vary widely. For example, there is a call in the House of Representatives to use the money to extend the North-South line in Amsterdam, widen the track in South Holland and build a fast train connection to Groningen. But there are also calls for investing in preschool education, hydrogen infrastructure or biotech companies.
No concrete projects yet
According to Prime Minister Rutte, such a fund is a good idea right now. “Because if people, companies and the government are resilient and agile, we can better absorb unexpected blows in the future.”
The government will not announce any concrete projects today. In the near future, people and organizations will be able to register if they think the money should go to their plan.
Whether the fund will actually increase to 20 billion euros also depends on subsequent cabinets and whether they see the need for it. The first 1 billion euros must be in the fund on January 4.
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