The Dutch Have Voted...So How Do They Put Together a Government?

  • Political parties are used to many months of coalition talks
  • Record is 208 days; that would take us past German election

Voting is over in perhaps the most widely watched Dutch election ever.

Prime Minister Mark Rutte’s Liberals placed first and saw off the challenge from Geert Wilders’s Freedom party, but lost seats -- and probably a coalition partner -- in the process.

Aegon Strategist: Outcome Good for the Netherlands

Source: Bloomberg

Now Rutte and some of the multiplicity of parties in the new parliament have to get together to form a new government. No Dutch political party has ever gained a majority in the lower house, so coalitions -- usually two or three parties, but sometimes as many as five -- are the norm. How does it work? And how long is it going to take?

This Is Not a Quick Process

We’re talking not days or weeks, but months. But the Dutch are used to it.

The average time taken to form a government is 72 days, averaged over 26 cabinets since 1945, according to government data. Last time, it took 54 days. The all-time record: 208 days in 1977.

Informal Talks First

It all starts Thursday, the day after the vote. The chairwoman of the lower house, Labor’s Khahija Arib, will invite to a meeting the leaders of all the political parties represented in the new parliament, based on the preliminary results that come in overnight. The aim is to appoint a so-called scout (known as the verkenner in Dutch) to hold informal talks with all parties about their ideas on a new coalition.

Official negotiations can’t take place until the final election results are declared by the national Electoral Council on Tuesday and the new parliament meets for the first time two days later.

Official Soundings

The formal process of coalition talks starts with the appointment of a so-called informateur -- literally translated, an informer -- as lead negotiator. Up until 2012, it was the Dutch monarch who named the informateur, but now it’s the lower house itself, so King Willem-Alexander, whose first election this is, won’t be directly involved.

The informateur, a senior politician usually from the biggest party, examines which parties are willing to govern with each other and what it might take to overcome any policy or other hurdles.

Often more than one informateur is appointed to make the process easier and faster. The work of the informateur focuses on finding compromises on future government plans -- tax and spending, for example, and persuading parties to step back from their electoral promises in exchange for a coalition role. The informateur writes up a plan that sets out the goals for the next prime minister and ministers to implement. If there are several parties of equal size, it’s tougher and more complicated, as no party wants to be the first to give in.

If the informateur is unable to get political parties to agree on a plan, he will tender his resignation and the whole process starts over. For Christian Democrat Prime Minister Jan-Peter Balkenende’s second coalition in 2003 with two other parties, three sets of informateurs were needed.

Final Stage

Once there is agreement on the plans for the next government, the final step can be taken: The search for the right people for the job. At this stage a “formateur” is appointed, usually the politician who will become the next prime minister. He -- the Netherlands has never had a female premier, and all the leaders of the eight largest parties are men -- will finish the talks and appoint a team of ministers and deputy ministers.

Where It Can Go Wrong

Let’s go back to that 1977 record. Incumbent Labor Prime Minister Joop den Uyl, leading the biggest party with 53 of the 150 seats in parliament, made several attempts to form a coalition with either the Christian Democrats or the progressive liberal Democrats 66. Talks failed over abortion rules and the division of ministerial posts. Eventually, a government of Christian Democrats and Liberals was sworn in, excluding Labor from power. Talks taking that long this time would mean a new government would only take power after the Sept. 24 federal elections in Germany.

By contrast, it took just 54 days in 2012 for Rutte’s government of Liberals and Labor to be installed. Both parties -- the two biggest after the elections -- set aside broad policy differences to help the Netherlands battle the economic crisis. The government was the first in 19 years to complete a full term.

Both in 1973 and in 2010, the solution was a minority coalition government that relied on support of another political party in parliament to get bills passed. Both administrations were unable to serve the full term. That 2010 government was Rutte’s first -- a Liberal-Christian Democrat coalition with the backing of Wilders’s Freedom Party. Wilders ended the arrangement after 18 months; a move that saw Rutte tell Wilders in the run-up to this year’s vote that he could never cooperate with him again because he can’t trust him.

The last time the Netherlands had a five-party coalition was the 1973 government led by den Uyl. That cabinet took 163 days to form and almost managed a full term. The one other five-party government -- led by Barend Biesheuvel -- was less successful as it collapsed in 1972 after just 13 months.

Reason for Concern

The peculiarities of the Dutch political system mean that fund managers are not too nervous about increased volatility or a negative fallout on the AAA-rated economy after the election.

“Whilst a complex coalition formation process might potentially reduce policy visibility -- a credit negative -- delays to government formation are common in the Netherlands, and tend not to disrupt policy execution unduly,” Moody’s Investors Service said on March 2. The ratings firm “would not expect this outcome to cause any substantial market reaction or to have any significant funding impact.”

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