Netherlands: Wilders out!

In yesterday’s general parliamentary elections in the Netherlands the liberal-conservative party VVD chalked up a surprisingly clear victory. According to current projections, the party led by the current prime minister Mark Rutte won 33 seats (21.3% of the votes) out of the 150 seats in the lower house of parliament. At the same time, the right-wing populist PVV turned in a far poorer result than the election opinion polls of the last few weeks had forecast. Nevertheless, going by the preliminary results the ruling governing coalition, consisting of the VVD and the social democratic PvdA, has as expected been voted out of office. Whether the PvdA is available for another alliance at all is uncertain after its poor performance in the poll. So, Rutte could need at least three new coalition partners to achieve an absolute majority of seats. The situation heralds difficult and possibly long coalition negotiations.

The elections in the Netherlands kicked off the super election year 2017. France and Germany are to follow. Ahead of the election there had been much concern that the triumphal march of the euro sceptics and populists would also continue in the Netherlands. But the high expectations that the head of the PVV, Wilders, had himself pinned on the elections have not been fulfilled from the point of view of his supporters. While a few weeks ago Wilders was still ahead in the opinion polls, the outcome of the election is from his point of view tantamount to a stinging defeat even though the PVV won a few seats and the VVD lost several.

At the same time, the established and pro-European parties have won a significant victory. There are probably many and varied reasons for the clear U-turn towards the political center. Many Dutch voters were undecided about who to vote for until shortly before the election. The discussion about the parliamentary elections being equivalent to a vote on Europe could have been responsible for the high election turnout of around 81%. Many citizens who are possibly less interested in day-to-day politics may have intended to use their vote to set a mark against the threat of a renationalization of the country. But the recently escalated conflict with Turkey, in which the government in Den Haag did not shy away from confrontation, could have motivated voters from the right wing to vote for Rutte after all instead of for Wilders.

The PVV’s clear defeat has probably put an end to the Nexit discussion for the time being. Admittedly, the Netherlands are facing difficult coalition negotiations that could drag on for several months and this could overshadow the PVV’s poor performance from the pan European investor’s point of view. After the Netherlands, public attention will soon be directed at France again where the presidential elections begin on 23 April. Whether the defeat of the PVV will have a direct influence on the opinion poll scores of the candidate of the Front National, Le Pen, is still unclear. But the outcome of the election could strengthen investors’ confidence that populists do not always perform better than expected in elections. While the opinion pollsters say that Fillon (Republicans) as well as Macron (independent) would clearly beat Le Pen in a run-off vote, after the Brexit and Trump experiences much doubt has been expressed in public in the past few weeks as to whether the opinion polls can be trusted.

But arguing against an analogy between den Netherlands and France is the fact that the fundamental situation in the two countries is very different. While the euro area’s most open economy has experienced a significant upturn since the crisis years, there is much frustration in France given the high unemployment rate and meagre economic growth. Ultimately, Macron and Fillon will also rely on a high election turnout among those who are concerned about the future of France and of Europe if Le Pen were to win after all.

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