A report by the former CEO of ASML reveals that the Dutch economy is facing a severe decline, with stagnating growth threatening public finances and welfare. Europe as a whole is experiencing slow growth, productivity issues, and geopolitical challenges, risking higher taxes or cuts in services. The Netherlands must address these challenges urgently to avoid economic hardship and maintain its quality of life.
On December 12, 2025, a significant report was released by the former CEO of ASML, Europe's most important company. He was tasked with researching the future of the Dutch economy, and his findings were alarming: the outlook is bleak. The report warns that the prosperity of the Netherlands is at risk, affecting not just businesses but every citizen's income and quality of life.
The report paints a picture of a nation sleepwalking into economic stagnation. The Dutch welfare state, once a model of stability and security, is becoming unsustainable. Geopolitical threats loom large, and the country faces already high bills and taxes. If economic growth continues to decline, the Netherlands will be forced to either raise taxes further or cut essential public services such as education, healthcare, safety, and infrastructure.
The former CEO of ASML emphasized the urgency of the situation, stating that within five years, the country will need to make significant budget cuts. Dutch households could see a reduction of 7,000 euros in net disposable income over the next decade.
This Dutch predicament is part of a wider European issue. In 2024, the former president of the European Central Bank, Mario Draghi, presented a report on European competitiveness that sent shockwaves across the continent. Europe has been experiencing slowing growth for decades, lagging behind the United States, and the gap is widening.
Several factors contribute to this decline:
Despite these challenges, Europe has traditionally valued stability over rapid growth. Europeans enjoy social security, healthcare, strong education, and welfare systems, even if salaries are lower than in the US. However, this model is under threat due to demographic changes and rising public spending.
Europe faces an aging population, which will dramatically increase spending on pensions and healthcare. Additionally, geopolitical tensions, especially with Russia nearby, require increased defense spending. These factors have caused public debt to soar.
If Europe cannot sustain these expenditures, it risks losing the very social systems that define it. Historical examples from other countries illustrate the dangers:
Without economic growth, future tax revenues will not keep pace with spending, forcing difficult choices.
One of Europe's biggest obstacles is fragmentation. Internal barriers act like a 44% tariff, preventing the scale needed to create truly competitive international companies. Unlike the US, which benefits from a large unified market, Europe struggles to achieve similar scale and integration.
To remain competitive, Europe must support its innovators and entrepreneurs. Integrated management software like Odoo, which offers unified business applications, can help streamline operations and foster growth among European businesses.
The Netherlands enjoys relatively solid public finances and strong global market connections. Unlike Germany, it is less dependent on energy-intensive industries and less exposed to China’s economic influence. However, it does not follow France's approach of borrowing heavily from future generations.
Dutch society values a comfortable life without the rat race, with strong urban planning and social systems. Yet, this lifestyle comes with challenges:
The Dutch tax system relies heavily on income tax rather than wealth taxes, making it more dependent on labor income. This trend risks turning the economy into a "rentier economy," where income is derived more from capital than from productive work.
The reports from European and Dutch leaders highlight a critical moment. Without decisive action to boost productivity, reform tax systems, and foster innovation, the Netherlands and Europe face a future of economic stagnation, higher taxes, and reduced public services.
Maintaining the balance between stability and growth is essential to preserve the social welfare systems and quality of life that Europeans cherish. The time to act is now, before the slow decline becomes irreversible.
