Dutch Voters Buck Euro Crisis to Re-Elect Rutte as Premier
Party leaders today agreed to Rutte’s proposal to let Henk Kamp, the minister of social affairs, explore possible coalitions and next week recommend starting talks, Parliament chairwoman Gerdi Verbeet said in The Hague.
Kamp may advise parliament to explore a coalition between the Labor Party and his Liberals after voters rejected Geert Wilders’ anti-euro Freedom Party and enabled the biggest blocs to govern together without leaning on smaller political formations. The last two-party government in the Netherlands to complete its term was between 1989 and 1994.
The results “will likely inject a little more confidence into parts of the European political elite” as they step up efforts to contain the debt crisis, David Mackie, chief European economist at JPMorgan Chase & Co. in London, wrote today. “The risks of the Netherlands changing policy direction in a fundamental way appear to have receded, doubtless to private sighs of relief in Berlin and elsewhere.”
Rutte’s Liberals took 41 of the 150 seats in the vote, up from the 31 in the outgoing parliament, according to news agency ANP after 99.5 percent of votes were counted. Labor’s seats were revised to 38 from 39 earlier, up from 30. D66 rose to 12 from 10, as the Christian Democrats lost eight seats to 13. Wilders lost nine to 15.
It was the second win of the day for German Chancellor Angela Merkel after a German high court rejected efforts to block the 500 billion-euro ($645 billion) European Stability Mechanism rescue fund she championed. Her Foreign Minister, Guido Westerwelle, said the Dutch result “marks a strengthening of Europe and a weakening of populists and nationalists.”
“With the Dutch shying away from anti-European parties, the same day the German constitutional court rules in favor of the ESM, Sept. 12 seems to have been a good day for the euro,” Dimitry Fleming, an Amsterdam-based analyst at ING Groep NV (INGA), said in a note today.
Dutch bonds gained today, narrowing the risk premium above German 10-year notes to the least since January and replacing Finland as the cheapest euro-area borrower after Germany.
Even with a majority, Rutte and Labor leader Diederik Samsom may add smaller parties to govern one of only four euro countries with a top credit rating.
“The Liberals and Labor don’t have a majority in the upper house of parliament, which can be a problem for passing legislation, so they may need to add the Christian Democrats and D66,” said Andre Krouwel, an associate professor of political science at VU University in Amsterdam.
The Liberals of Rutte, 45, will take the lead in the formation of a new government, a process that took 127 days in 2010. The new parliament won’t meet until Sept. 20, two days after the caretaker administration presents the 2013 budget.
“The Netherlands needs a stable Cabinet as quickly as possible; I’ll work together with you to ensure the Netherlands emerges stronger from the crisis,” Rutte told his supporters in The Hague today. “It’s important this country is at the forefront of fighting the crisis in Europe, being strict for southern Europe but willing to help if they do what’s needed.”
Austerity measures included in a proposed budget led Wilders, who had backed the minority government of Liberals and Christian Democrats, to withdraw support in April, triggering the need for elections.
“We’ve lost heavily,” Wilders told supporters in The Hague. “But this is also a new beginning as our fight in the Netherlands is needed more than ever.”
After that Cabinet collapse, Rutte within three days won backing from D66, Green Left and the Christian Democrats for an emergency austerity package to bring next year’s budget deficit below a limit set by the European Union. Labor withheld support for the accord, saying the cuts will hurt the economy.
The Dutch economy, the fifth largest in the euro area, may shrink this year, according to the median of 11 economist forecasts gathered by Bloomberg. An unemployment rate of 6.5 percent, the highest in seven years, is still the second-lowest in the euro area after Austria.
“These two big parties have both done very well in their own way and now feel the pressure and the obligation to make the best of themselves and each other,” former Labor Prime Minister Wim Kok told NOS in Amsterdam.
Turnout was 74 percent compared with 75 percent in 2010 and 80 percent in 2006, according to ANP.
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