Half a million Dutch are trapped in negative equity

Gloom in polderland

The over-regulated and over-subsidised housing market is in a slump, trapping 500,000 households in negative equity. These two factors have led to a fall in consumption that has not been offset by exports. The budget measures include a few reforms, like removing subsidies for new interest-only mortgages. But nobody is ready to tackle tax relief on existing mortgages. The labour market needs a shake-up to cut the cost of employing older workers and encourage people to work longer hours. The need for structural reforms in Europe is not confined to the Mediterranean—and it is no easier to get voters to back them in the north than in the south.