Sept. 28 (Bloomberg) -- The Dutch Liberal Party and the Christian Democrats agreed to form a government with support from Geert Wilders’s anti-Islam Freedom Party, creating the Netherlands’ first minority administration since World War II.
“We have just, and I’m glad about it, completed the agreements that will shape our political cooperation,” Liberal Party Leader Mark Rutte told reporters in The Hague late today. Final details will be worked out overnight and the party leaders plan to put the agreement to their lawmakers for approval tomorrow before making it public the day after, he said.
It’s taken three attempts to form the coalition following the inconclusive June 9 election. The government, in which Rutte, 43, will be prime minister, will have 52 seats in the lower house of parliament and rely on the 24 Freedom Party lawmakers to give it the smallest possible majority in the 150-seat chamber.
“This is new for the Netherlands; it’s an experiment,” Kees Aarts, a professor of political science at the University of Twente in Enschede, said in a telephone interview.
Austerity measures were the most important issue on the political leaders’ agenda, with the Netherlands, the fifth-largest economy in the euro region, needing to narrow its budget deficit from almost 6 percent of gross domestic product this year to 3 percent by 2013 to meet European Union rules.
Outgoing Prime Minister Jan Peter Balkenende’s caretaker government presented its 2011 budget last week, including a reduction in spending. While the cuts will help narrow next year’s budget shortfall to 4 percent of GDP, a new government needs to decide on further reductions to trim the deficit, Finance Minister Jan Kees de Jager said in The Hague last week.
Wilders’s party more than doubled its representation in parliament at the election, while the Christian Democrats, who were led into the vote by Balkenende, lost half of their support. Rutte’s party is the largest in the new parliament.
The Freedom Party seeks to ban new mosques, curb immigration, cut development aid and reduce European Union influence in the Netherlands. Wilders, 47, receives police protection around the clock and faces trial next week on charges of inciting hatred in his 2008 film “Fitna,” in which he calls on Muslims to rip out “hate-preaching” verses from the Koran.
“The Freedom Party is at the center of influence,” Wilders told reporters in The Hague. “The lawmakers and the party now have a lot of influence on government policy and will keep that in the coming years. The left isn’t in control any more in the Netherlands.”
Although the Freedom Party leader won’t be a part of the government, Wilders’s involvement may hurt Dutch diplomatic and business interests abroad. “Fitna” sparked protests in majority-Muslim countries including Indonesia and Pakistan and led to calls for the boycott of Dutch products in Malaysia and Iran.
“There are certainly risks involved,” Hans Wijers, a former minister of economic affairs who now heads the world’s largest paint maker, Amsterdam-based Akzo Nobel NV, told Dutch broadcaster RTL today. “It could be that the reputation of the Netherlands abroad is damaged in an unnecessary way, which always has negative effects.”
The Christian Democratic Alliance will have to approve the government accord at a congress which it expects to schedule for Oct. 2, the party said on its website. A previous round of talks between the three parties collapsed Sept. 3 after senior Christian Democrats opposed cooperation with the Freedom Party.
The agreement in the Netherlands mirrors the way Denmark has been governed since 2001. There a minority coalition of Liberals and Conservatives relies on the support of the anti-immigrant Danish People’s Party to get legislation through parliament.
The time it’s taken to form a government in The Hague forms a contrast with the U.K., where it took Conservative leader David Cameron and the Liberal Democrats’ Nick Clegg just five days after May 6 elections to agree on a program for the country’s first coalition since World War II.
While the Dutch Liberals and Christian Democrats will count on the Freedom Party for their majority in the lower house of parliament, Wilders’s party has no seats in the upper house, an institution it is seeking to abolish, according to its program.
The Liberals and Christian Democrats currently have 35 of the 75 seats in the upper chamber, falling short of the majority needed to approve legislation.
The Freedom Party will thus have to run in March provincial elections to ensure it gains representation in provincial councils, which will elect the members of the upper house in turn in May.
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