According to the new president of the European Central Bank, the Netherlands should make use of the continuing budget surplus to further drive economic growth. Casper de Vries, holder of the Witteveen Chair of Monetary Economics at Erasmus School of Economics, admits Christine Lagarde has a point.
Though it is not as easy as it may sound. In the Netherlands, we have a large open economy, where a part of the invested money leaks away. De Vries says a smarter approach is necessary. He proposes the re-entry of the WIR: the Investment Account Act. This law provides the possibility to deduct a percentage of investments in certain assets from the tax assessment. The Netherlands is indeed investing, but mainly in Asia. The investment agenda needs to be handled carefully with the aim of strengthening long-term growth, says Professor de Vries.
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Listen to the entire item on BNR Nieuwsradio, 4 November 2019 (in Dutch).