The credit crisis (explained in yip-and-janneke language) started in the summer of 2007. People often talk about 7 lean and 7 fat years. This took a little longer, from 2016 onwards cautious economic growth was visible and the Netherlands slowly climbed out of the crisis. In total, the crisis lasted nine years and the times before 2007 will most likely not return. How did this crisis start and how did it continue for so long?
Start of crisis
The crisis began in the summer of 2007. Huge spectacles on the stock markets, especially in America, where shares kept falling and falling. The news was dominated by images of desperate speculators taking loss after loss. Homeowners in America could no longer pay their mortgages and house prices fell due to the many houses that suddenly came up for sale. The many forced sales also caused problems for the banks, which were forced to sell houses for less money than the mortgage payment and had to settle for a large loss. The problems also started for the Netherlands, as many Dutch banks provided mortgages in America.
Consequences for the Netherlands
Within a short time it was suddenly over with mortgages of 100 and even 110%. Borrowing money is becoming increasingly expensive, not only for banks and for companies, but ultimately also for consumers. There are also reports from other countries that they have been affected by the crisis in America, such as Germany, Switzerland and Great Britain.
2008
The Icelandic Bank goes bankrupt. Many Dutch people and many Dutch municipalities have money in the Icelandic bank and Iceland is unable to pay it back. The Dutch bank is digging deep into its pockets to give the victims their money back up to the guaranteed 20,000 euros. Things are also not going well with Fortis and ABN-AMRO and they are being taken over by the Dutch State. And other banks are also approaching the Dutch state. Ultimately, this joke costs the Dutch State more than 200 billion. Dutch pension funds report that they have a coverage ratio of only 105%.
2009
In the Netherlands, the DSB bank goes bankrupt after much suffering with single premium policies. The American economy is in recession with a contraction of 3.8%. Dutch pension funds have to cut their pensions for the first time.
2010
The Dutch Bank is forced to extend the guarantee plan for the banks. This would end in 2010. In America, sales of new-build homes have fallen drastically, and this trend is also reflected in our Dutch housing market. The housing market is closed. Greece will receive a large financial injection from Europe to avoid bankruptcy. Countries such as Ireland and Portugal are also in bad financial shape and are calling on Europe, the credit crisis is now being called a debt crisis.
2011
Unemployment in the Netherlands is rising and the expected economic recovery is not happening. The transfer tax will be temporarily reduced from 6 to 2 percent to stimulate the housing market. This has little effect. To keep construction workers at work, the VAT rate on maintenance and renovation of homes will be temporarily reduced from 19% to 6%. Pension funds increase premiums.
2012
Rising unemployment and falling house prices are causing more and more families to get into trouble. Houses are only sold with difficulty and a quarter of Dutch people now have a registered loan with the BKR. Inflation is rising due to increases in indirect taxes and increases in gas and petrol prices. Food banks are requesting massive amounts of support from municipalities because they are finding it increasingly difficult to meet needs due to rising demand. Due to the austerity negotiations, relations in the Dutch government are on edge and the cabinet falls.
2013
On February 1, 2013, the Dutch State will become owner of SNS REAAL. This is just the beginning. More and more banks will have to be kept afloat this year with the help of state guarantees, after the Dutch State had already invested so much in keeping the banks afloat in 2008. House prices continue to fall. There are more and more households where the mortgage is higher than the value of the house. The number of people dependent on the Food Bank will increase by 30% this year.
2014
Many state aid schemes, especially those for banks in 2008, will expire in 2014. These banks will be sold in 2015, but it is now clear that the support schemes have cost the state a lot of money. Furthermore, there are slight signs of recovery. Unemployment figures stopped rising, shortages decreased and some investments were cautiously made again. Support for this is the falling oil prices and the cheap euro.
2015
Interest rates will drop even further in 2015, causing problems for pension funds and life insurers, among other things. 2015 was also a year in which many refugees came to the Netherlands (European refugee crisis). The tide seems to be slowly turning in the business world. Things seem to be going a bit better here.
2016
Things seem to be slowly getting better. The housing market is picking up again and more investments are being made. However, many houses are still under water.
Future
There will continue to be lean years due to the uneven growth in the economy. Children become financially independent later and later and parents remain financially responsible at least until the child is 23 years old. In the future, older people will also increasingly have to rely on their children to receive the necessary domestic, social and social assistance. The welfare society is coming to an end. Borrowing has become a lot more difficult and will remain so, the time of live now and pay later is definitely over. Furthermore, advancing robotization will cause further unemployment, which will have to be responded to in the future.