Half of Dutch public debt in hands of foreign creditors

Statistics Netherlands announced today that Dutch public debt over the first quarter of 2015 amounted to 459 billion (bn) euros, i.e. 68.9 percent of GDP. Public debt increased by 9 bn euros in Q1. Half of the national debt is owed to foreign creditors. The remaining part includes Dutch banks, pension funds and insurers. In 1995, less than one-quarter of public debt was in the hands of foreign creditors, e.g. foreign pension funds or (central) banks.

Smaller share of public debt owed to domestic creditors

The share of domestic banks, pension funds and insurers in the Dutch national debt was 46 percent in the first quarter of 2015. The domestic share has shrunk from 70 percent in 1995 to over 25 percent in 2008. In the period 1995-2008, Dutch banks, pension funds and insurers sold their government bonds and invested a larger part of their capital in bonds issued by other sectors. Since 2008, the share of Dutch banks, pension funds and insurers has gradually risen to over 45 percent at the end of Q1 2015. The increase is due to the fact that government bonds are considered safe investments. During the financial crisis, Dutch banks, pension funds and insurers bought bonds issued by the Dutch government to comply with the capital requirements imposed by the Dutch Central Bank.

In 2008, the share of public debt owed to foreign creditors rose rapidly. The overall public debt grew substantially in 2008 to satisfy the extra financial needs of the government. A large share was provided by foreign investors.