Dutch Election Shows Europe Hasn’t Lost Its Mind -- Yet

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By Marc Champion

Amid worries that Europeans are turning against Europe, each other, immigrants, established political parties and more or less anything productive as they struggle with recession, the Dutch have just bucked that narrative, which is looking premature if not false.

Results from yesterday's parliamentary election in the Netherlands offered a second glimmer of hope on Europe's bleak horizon, on a day when Germany's constitutional court had decided not to throw the euro economy into turmoil by vetoing a new rescue fund for the currency area.

Mainstream pro-European parties won far larger shares of the Dutch vote than was expected in preliminary results today, with Prime Minister Mark Rutte's Liberals gaining 10 more seats to win 41 of the 150 in the parliament, and Labor getting nine additional seats to secure 39. It's likely to take some weeks before a coalition is negotiated, but the two parties seem certain to govern together.

The good news here is that both winners favor a stronger European Union and want to do what they can to save the euro. They disagree over fiscal policy and stand at different ends over the growth-versus-austerity debate, but that's as it should be. The Netherlands is a key and solvent euro-area member, so keeping it politically sane was important. The new government is likely to be more centrist than the last, which included the extreme-right anti-immigrant party of Geert Wilders -- until he triggered this week's election by walking out of the coalition.

Before yesterday's vote, that wasn't a given. There was a lot of concern that the Freedom Party, which campaigned on pulling the Netherlands out of the euro, and the anti-euro Socialists might end up in government, or even running it. Wilders's vote collapsed, and the Socialists fell short.

The reason those concerns resonated is that the Dutch, like other Europeans and a lot of Americans, are angry about the economy and the failure of their leaders to fix it. Indeed, they may well have voted for the main parties as a tactical move, fearing that a protest vote would be wasted. But like in Greece, where neo-fascists and ex-Marxists threatened to win power in June, the worst didn't happen. The 1930s experience was not revisited.

In fact, the whole narrative of Europe's imminent political implosion looks overwrought for now. Like the German court decision, the Dutch election result doesn't guarantee a rosy future for Europe, and the worst could still come. But Europe hasn't lost its mind yet.

(Marc Champion is a member of Bloomberg View's editorial board. Follow him on Twitter.)

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-0- Sep/13/2012 13:18 GMT