Rutte Looks to Wield Dutch Budget to Blunt Populist Wilders

  • Premier’s Liberals have biggest lead over Wilders this year
  • Budget may allow for increased security, health-care spending

The Dutch government is about to unleash its last best shot to halt the march of Geert Wilders.

With the presentation of the 2017 budget on Tuesday, Prime Minister Mark Rutte’s coalition of the Liberal and Labor parties has its final opportunity to win fiscal favor with voters before next year’s parliamentary elections. In the cabinet’s sights is Wilders’s populist Freedom Party, with its constant refrain that ordinary Dutch people are badly off.

Mark Rutte
Mark Rutte
Photographer: Jasper Juinen/Bloomberg

Elections in the Netherlands are being closely watched in a post-Brexit Europe, where a wave of populist politicians have gained traction from the refugee crisis and years of a stumbling economy. The Netherlands is the first of a group of countries representing about 40 percent of the European Union’s gross domestic product to hold national polls next year, and the Freedom Party may be best placed of any of the populist movements to actually win an election.

As a counter-attack, Rutte’s government is expected to increase spending on health care and security, according to Dutch media reports based on leaked copies of the document. The issues are high on voters’ lists of concerns after terrorist attacks in neighboring Belgium and in France increased feelings of insecurity in the Netherlands and as the population ages.

“Prime Minister Mark Rutte has the economic wind in his back -- purchasing power is increasing, unemployment is dropping, the economy is growing, the budget deficit is falling,” said Willem Vermeend, a professor of European fiscal economics at the University of Maastricht and a former Labor minister of social affairs. “These are facts. Wilders is not credible anymore if he continues to say it’s not going well in the Netherlands.”

Wilders, who has advocated closing the borders to new immigrants and pulling the Netherlands out of the European Union, has surged in popularity in past years with anti-Islamic rhetoric and by arguing that the political elite is ignoring the interests of Dutch people who pay too much tax and don’t get enough back from the government.

The Freedom Party has enough support to win 24 out of 150 parliamentary seats, the second-largest tally, if elections were held today, according to an Ipsos poll on Sept. 16, four fewer than Rutte’s Liberals. That was the biggest advantage for the Liberals this year, according to Ipsos, but the two governing parties are now much less popular than when they came to power four years ago.

On many indicators, the economy is in the best shape that it’s been in since Rutte’s current cabinet took office -- unemployment is at its lowest rate since then, house prices are soaring and the budget deficit is forecast to narrow to 1.2 percent this year, well within EU guidelines.

That may allow the cabinet to unwind more of the 22 billion euros ($25 billion) of austerity measures it announced in the first two years of its term, when it had to cut expenditure in areas ranging from social security to health to limit the deficit. Spending on health care has risen 6.7 percent per capita since Rutte first took office in 2010, while university scholarships awarded to students have been reined in, increasing the burden on parents.

The government is likely to announce a 1.5 billion-euro increase in government spending on Tuesday, broadcaster RTL reported earlier this month, citing the draft budget plan. Both coalition parties will get an equal share to spend on the matters their voters care most about, RTL said. Finance Minister Jeroen Dijsselbloem, who’s from Labor, declined to comment on the numbers when speaking to reporters in The Hague on Friday.

There are other challenges for Rutte and Dijsselbloem to deal with in the six months ahead of the election.

The U.K.’s decision to leave the EU is likely to have a negative impact on the Dutch economic outlook, as the uncertainty will hit world trade and consumption, the government’s planning agency said in August.

The administration is also having to deal with a revenue shortfall as a result of a decision to restrict production at Europe’s biggest gas field in Groningen, in the northeast of the country, because of earthquakes in the area. It has earned about 11.6 billion euros less per year between 2013 and 2016 as a result of that decision.

Whatever the official data show about an improved economy, some of Wilders’s supporters will still not be convinced, said Andre Krouwel, a professor of political science at Amsterdam’s VU University. A poll for Dutch television published Monday found 70 percent of respondents have a pessimistic view of the country’s future.

“It’s not about what you actually have, but about what you think you are entitled to have. Claiming that in general people are objectively a bit better off after four years of Rutte in office will not help the current coalition electorally," Krouwel said. “Many people simply have the feeling there is a huge gap between what they actually have and what they think they’re entitled to. They simply feel deprived.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE