The National Growth Fund is making an emergency stop. The fund, established to support innovative companies in the Netherlands with a total of 20 billion euros from 2021 to 2025, is “unfortunately on pause”, says outgoing minister Micky Adriaansens (Economic Affairs and Climate, VVD). The fourth round for subsidy applications, which was to start on June 1, will not take place yet, her spokesperson confirms NRC. That round involved 3.4 billion euros,
Adriaansens' announcement came on Tuesday after a large majority of the House of Representatives rejected two motions from D66 MP Joost Sneller. Both motions actually called for support for the Growth Fund. After its rejection, Adriaansens decided to pull the handbrake completely on the Growth Fund.
It was known that the forming parties PVV, NSC, VVD and BBB had reservations about the Growth Fund and would prefer to spend the remaining 7.4 billion euros differently. Already at the General Considerations last autumn, some parties appeared to see the billions in the fund, intended to stimulate innovative projects, mainly as a large pot of money for other purposes. For example, the House, led by the VVD faction, withdrew hundreds of millions from the fund to undo an increase in taxes through petrol excise duties. Supporters of the Growth Fund scorned that the VVD used the fund as a Grabbing Fund.
Nevertheless, Adriaansens' announcement came on Tuesday evening for the entire fund on hold to come as a surprise to many. Also because of the way it happened: her ministry did not report, as usual, in a letter to the House that the fund will be on pause for the time being, but it shared a statement about this with some media. “For all companies and organizations that have invested a lot of time and effort in developing a proposal [voor subsidie uit het fonds] this is a disappointment,” Adriaansens wrote. “In the near future I will look at how we can strengthen the business climate, taking this ruling from the House of Representatives into account.”
Quick scan
To make it possible to submit new applications as of June 1, Economic Affairs should publish the so-called opening regulations on April 1. Companies can then submit a preliminary registration. That will no longer happen, a ministry spokesperson confirms. So far, 65 companies had one quick scan applied to see whether they are eligible for a subsidy from the fund. So that work was for nothing.
How sudden Adriaansens' decision was is evident from the fact that on the official government websites was still standing on Wednesday afternoon that companies can submit a pre-registration from April 1. The cabinet itself announced last Friday that it more than 770 million euros for ten companies that had applied in the previous subsidy round.
René Corbijn of NLDigital, a collective of companies in the digital sector, calls Adriaansens' step “incredibly surprising”. Corbijn: “Also because we have still not seen any official communication from the ministry. The ball is in the ministry's court to quickly provide clarity to all parties involved in this.”
Employers' organizations VNO-NCW and MKB-Nederland are displeased. “This is a hard blow for all those parties who were working very hard on their innovation plans and the application to the Growth Fund for the next round in June,” said a spokesperson. “The Netherlands and Europe are increasingly lagging behind technologically. Maintaining the resources from the Growth Fund is crucial for strengthening innovation in the Netherlands.”
The fund's pause comes at a notable time. This month, a group of more than thirty companies and knowledge institutions sent a fire letter to the House of Representatives, in which they called for the Growth Fund to be left intact and for clarity about the fourth tranche to be provided quickly. The twelve regional ones economic boards – networks of companies, governments and knowledge institutions – also sent an urgent letter. In it, these networks of companies, governments and knowledge institutions mentioned the billions from the Growth Fund “crucial for the business climate” in the Netherlands.
Business climate
Companies such as ASML and Boskalis have announced in recent weeks that they may (partly) leave the Netherlands due to the deteriorated business climate here. Not only tightened rules, but also political uncertainty about the future played a role. The sudden discontinuation of the fund may confirm the companies' perception that the government is not always reliable.
Closure of the Growth Fund could have major consequences for ongoing projects. The D66 faction in the Provincial Council of Limburg immediately sent a list of questions to the provincial government on Wednesday about the possible consequences for the reserved 870 million euros for the prestigious Einstein Telescope and other projects. According to the provincial Democrats, postponement or cancellation of the Growth Fund “poses a serious and major risk for our (knowledge) economy and our business climate.” In addition, D66 believes, the central government is far from being a reliable partner for both the business community and for the provinces that considered themselves assured of co-financing by the fund.
Adriaansens has formally taken a break and there is a chance that the fund will be reopened – whether or not after formation. There is a difference of opinion about this among the forming parties. The NSC faction proposed on Tuesday to reopen the fund on June 1, regardless of whether the formation would have been successful. In that case, companies will certainly still have a demand for money for innovation, although the motivation to submit another application to the government has now become a lot smaller, it can be heard.
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