The Kingdom of the Netherlands was formed in 1815. In 1830 Belgium seceded and formed a separate kingdom. The Netherlands remained neutral in World War I but suffered a brutal invasion and occupation by Germany in World War II. A modern, industrialized nation, the Netherlands is also a large exporter of agricultural products. The country was a founding member of NATO and the EC, and participated in the introduction of the Economic and Monetary Union (EMU) in 1999.

HISTORY

The Dutch are primarily of Germanic stock with some Gallo-Celtic mixture. Their small homeland frequently has been threatened with destruction by the North Sea and has often been invaded by the great European powers.
Julius Caesar found the region which is now the Netherlands inhabited by Germanic tribes in the first century B.C. The western portion was inhabited by the Batavians and became part of a Roman province; the eastern portion was inhabited by the Frisians. Between the fourth and eighth centuries A.D., most of both portions were conquered by the Franks. The area later passed into the hands of the House of Burgundy and the Austrian Habsburgs. Falling under harsh Spanish rule in the 16th century, the Dutch revolted in 1558 under the leadership of Willem of Orange. By virtue of the Union of Utrecht in 1579, the seven northern Dutch provinces became the Republic of the United Netherlands.

ECONOMY

The Dutch economy is going into its sixth year of expansion, combining strong GDP growth with sharply falling unemployment and modest inflation. A tight labor market and firming inflation add to the danger of overheating of the economy. Only mildly affected by the crisis in emerging markets and a subsequent slowdown in the euro area, the Dutch economy expanded by 3.6% in 1999. Economic growth in 1999 was driven predominantly by investment and consumer spending, buoyed by sizable income gains resulting from a boom in asset prices. With job growth largely outpacing an expansion of the labor force, unemployment in 1999 fell to less than 3% of the labor force, a level last seen in the early 1970s. Consumer price inflation remained modest as the effects of higher crude oil prices and depreciation of the euro lifted the CPI in 1999 to 2.2%.

U.S. RELATIONS

The United States' partnership with the Netherlands is its oldest continuous relationship and dates back to the American Revolution. The excellent bilateral relations are based on close historical and cultural ties and a common dedication to individual freedom and human rights. An outward-looking nation, the Netherlands shares with the U.S. a commitment to an open market and free trade. The U.S. attaches great value to its strong economic and commercial ties with the Dutch. The Netherlands is the United States' eighth-largest export market. The U.S. currently runs an annual trade surplus with the Netherlands of more than $11 billion. The Netherlands is the third-largest direct investor in the U.S. ($85 billion in 1997). The U.S. is the largest direct foreign investor in the Netherlands ($65 billion in 1997).

Full country name: Kingdom of the Netherlands
Area: 41,526 sq km
Population: 16,105,000
Capital city: Amsterdam (population 735,500)
People: Over 95% of the population are Dutch (Germanic and Gallo-Celtic stock), most of the rest are Indonesian, Surinamese or Moroccan
Languages: Netherlandic (Dutch & Flemish), Friesian
Religion: 60% Christian (Roman Catholic and Protestant), 3% Muslim
Government: Constitutional monarchy
Head of state: Queen Beatrix van Oranje Nassau
Prime Minister: Jan Peter Balkenende
GDP: US$350 billion
GDP per head: US$22,000
Annual growth: 3.7%
Inflation: 2%
Major industries: Service industries, banking, electronics, digital media, horticulture, agriculture, shipping
Major trading partners: EU (esp Germany, Belgium, Luxembourg, France, UK), USA
Member of EU: Yes
Euro zone participant: Yes