One of the problems with the Eurozone is that Germany’s junior partners are stuck with monetary policy that is best for Germany whether they like it or not. The Netherlands is similar to Germany culturally and economically. If the German monetary policy would work anywhere, the Netherlands is the place. The Dutch seem to have more in common with Spain than Germany when it comes to monetary policy needs.
As a consequence of their eurozone membership, the Dutch have received an interest rate that was too low for their economy. This resulted in a property bubble forming. In true Dutch fashion, the bubble did not pop all at once causing a depression like in Spain but is slowly deflating with prices down about 16% since the onset of the GFC. Prices still have a ways to go before they bottom, so the Netherlands has several years of stagnancy and recession ahead of it.
Dutch unemployment has steadily increased since July of 2011,and it is set to worsen next year amid the deepening Eurozone recession.
The Netherlands is one of Europe’s four remaining AAA rated countries with the other FANG members, but for how long? Intriguingly, Italy is now running a smaller budget deficit than the Netherlands.
A necessary piece of Eurocrisis fighting efforts is the further integration of Europe. This initiative carries a large price tag. As the Eurozone recession deepens, it becomes less likely that they can afford this.