Dutch economy shrinks by ‘unprecedented’ 8.5% as virus hits

Windmills line a canal in Kinderdiijk, Netherlands, Saturday, Aug. 1, 2020. The five windmills are part of 19 mills built in the 18th century some 15 kms. (9.3 miles) south of Rotterdam. (AP Photo/Michael Probst) (Michael Probst, Copyright 2020 The Associated Press. All rights reserved)

THE HAGUE – The Dutch economy suffered an unprecedented 8.5% contraction in the second quarter as the coronavirus pandemic slammed the brakes on spending, exports and investments, the country's Central Bureau for Statistics said Friday.

While the Dutch contraction compared to the first quarter was bad, it was not as severe as other major European countries like France and Germany. The 19-country eurozone, which the Netherlands is a part of, dropped by a quarterly 12.1% while the U.K. reported a 20.4% decline.

"Corona has caused unprecedented economic damage. It is an economic catastrophe of exceptional proportions," said Peter Hein van Mulligen, chief economist at the Dutch statistics office.

It said consumer spending slumped by 11.8% compared with the same three months last year as lockdown measures hit sales at bars, restaurants, clothes stores and gas stations.

The report on the economic malaise capped a tumultuous week for the government of Prime Minister Mark Rutte, whose recent handling of the pandemic was labeled “chaos” by opposition lawmakers in a heated parliamentary debate Wednesday.

Government lawmakers also faced harsh criticism for leaving the debate before it was finished, meaning that a vote could not be held on an opposition proposal to award healthcare workers a pay rise.

“That wasn't a pretty picture,” Rutte said Friday at his weekly press conference.

A vote on the motion could be held next week. Rutte would not commit to supporting a pay rise for health workers, saying he wanted to await the result of the vote.

Rising confirmed COVID-19 infections in the Netherlands, with Amsterdam and Rotterdam among the hardest hit, led the U.K. to reimpose quarantine restrictions on returning travelers, a move likely to further damage the Dutch tourism industry that is already reeling after months of coronavirus travel bans around the world.