How Do We Build a Dutch War Economy?

Why It Matters

A Dutch war economy would reshape European defence industrial policy, enhancing security while testing the limits of market freedom. Its success could set a precedent for coordinated resilience across the EU.

Key Takeaways

• War economy lacks single definition, requires phased measures
• Supply chain shocks expose need for strategic autonomy
• State intervention prioritizes military production over civilian sectors
• Hybrid threats blur lines between peace and conflict
• Dutch policy must balance resilience with economic freedoms

Pulse Analysis

The Russian invasion of Ukraine and the COVID‑19 pandemic exposed critical vulnerabilities in Europe’s supply chains, prompting policymakers to reconsider how economies can sustain prolonged conflict. For the Netherlands, a country heavily integrated into global trade, the prospect of a war economy raises questions about balancing openness with the need for strategic self‑sufficiency. By studying France’s push for a continent‑wide model, Dutch analysts are evaluating how to embed defence‑oriented capabilities without crippling the nation’s export‑driven growth.

A war economy is not a single policy switch but a series of calibrated measures that can be deployed before, during, and after hostilities. Early‑stage actions include stockpiling critical materials, incentivising dual‑use technology, and establishing public‑private partnerships that can pivot civilian factories to defence production. Later phases may involve direct state control of key sectors, reallocation of financing toward military R&D, and tighter export controls to protect strategic assets. The Dutch government must define clear thresholds for intervention to avoid market distortion while ensuring that defence manufacturers can meet both NATO commitments and domestic security needs.

Hybrid threats—cyber attacks, disinformation, and covert economic pressure—further complicate the calculus. These activities erode traditional distinctions between peace and war, demanding a more agile and resilient industrial base. For the Netherlands, this means investing in cybersecurity for supply‑chain nodes, fostering rapid‑response innovation ecosystems, and aligning regulatory frameworks with EU-wide defence initiatives. Successfully navigating these challenges could position the Dutch economy as a model of resilient, yet open, market dynamics in a contested geopolitical landscape.