February 20, 2026

The Coalition Agreement 2026-2030 of D66, VVD and CDA improves the government balance in the short term, but especially in the long term the government debt increases. The average purchasing power decreases slightly. Emissions of both greenhouse gases and nitrogen decrease, although not enough to meet the nitrogen targets of the coalition agreement. This is evident from the analysis of the coalition agreement published today by the Central Planning Bureau (CPB) and the Netherlands Environmental Assessment Agency (PBL).

Budget Effects

The coalition agreement increases defense spending to meet the new NATO standard and limits the growth of expenditures on healthcare and social security. This is done through a higher deductible, cutbacks in long-term care, and reductions in unemployment and disability benefits. At the same time, taxes on income and labor increase due to only partial inflation adjustment of tax brackets and higher premiums. During the cabinet period, the EMU balance improves by 0.2% of GDP, but in the long term government debt rises to 137% of GDP by 2060, partly due to further increases in defense spending and additional investments in housing, climate, and nitrogen.

Economic Effects

The coalition agreement leads to a decrease in average purchasing power by 0.4% per year, mainly due to higher taxes. Lower incomes are affected slightly more than higher incomes because they suffer more from the higher deductible and benefit less from the new child scheme. Income security decreases due to adjustments in unemployment and disability benefits. At the same time, the agreement strengthens human capital through higher education spending and improves public infrastructure and additional financing for scale-ups, enhancing the investment climate. Measures for the housing market slightly increase housing supply in the long term.

Climate, Nature and Nitrogen

With the package of measures, the cabinet takes a step towards its own nitrogen targets, but these are not yet within reach. Subsidies reduce the livestock population and farmers adopt new techniques. Measures for extensive agriculture in areas around nature contribute to nature restoration. Much of the proposed legislation in the coalition agreement still needs to be elaborated, making effects uncertain. The reduction of greenhouse gas emissions mainly occurs in industry through subsidies from the SDE++ and in the electricity sector through more offshore wind energy. Additional policy is needed to achieve climate goals by 2050.

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