The Dutch football club Ajax once ruled Europe. Graced by Johan Cruyff, the team won the European Cup three times in a row in the early 1970s. Victory over a below-par Barcelona this week aside, Ajax now struggles against football’s equivalent of core Europe, while retaining the trappings – expectant fans, huge stadium, impressive wage bill – of the elite. Given its bedraggled look, the Dutch economy is a little like that.

Friday’s loss of its triple A rating from Standard & Poor’s will be a jolt to Dutch amour propre. The Netherlands has an investor fan base that sees it as an integral part of the eurozone core. Its 10-year bond yield at about 2 per cent is half that of Italy or Spain. Yet perhaps it flatters to deceive. The Dutch economy is struggling to keep up with Germany; indeed, it has been the worst performer of the core eurozone countries for the past two years, a pattern that is likely to continue in 2014.

The problem – one that has flown mostly under the radar – is that the Netherlands is suffering the consequences of the bursting of a housing bubble. House prices have fallen 20 per cent from their peak. That is not nearly as bad as Ireland or Spain, where house prices fell 50 and 30 per cent respectively. But it has created a troublingly large burden of household debt – 110 per cent of gross domestic product, S&P estimates (the country’s sovereign debt level of 71 per cent of GDP is well below the eurozone average).

A sharp bout of deleveraging by households, coinciding with tough government austerity measures, is the reason the Dutch economy is stalling. This is not going to end soon: Deutsche Bank estimates that Dutch GDP growth will be the slowest in the eurozone in 2014 at just 0.4 per cent.

The Netherlands has many strengths, including a bulging current account surplus and social and political commitment to reform and fiscal common sense. Still, it is ironic, and a little disturbing, that the creditworthiness of the core eurozone should be called into question just as that of the periphery is starting to recover.

Now that the Netherlands has been expelled from the triple A club, only three eurozone countries – Germany, Luxembourg and Finland – retain the top S&P credit rating. And on the day it cut the Dutch, S&P raised its outlook for Spain – where things are improving – and upgraded poor, benighted Cyprus. For the Dutch, perhaps, the eurozone crisis is just beginning.

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