As Dutch voters and the wider international world begin to pay attention to the Sept. 12 election, it’s becoming clear that ‘anti-austerity’ and ‘pro-austerity’ forces are coalescing behind the party of prime minister Mark Rutte (pictured above, top) and the Socialistische Partij (SP, the Socialist Party) of Emile Roemer (pictured above, below), leaving both newer and traditional parties of the Dutch political landscape floundering.
The election, which is typically followed by months-long coalitions talks, will have a significant impact on the ongoing political and economic eurozone crisis: a Rutte victory would bolster German chancellor Angela Merkel in her cause for Europe-wide austerity, while a Roemer victory would embolden a growing ‘pro-growth’ cause that includes French president François Hollande and, to some degree, Italian premier Mario Monti.
After a relatively quiet election season, Rutte, leader of the Volkspartij voor Vrijheid en Democratie (VVD, the People’s Party for Freedom and Democracy), is back in the spotlight with a promise to increase an existing tax break for workers (arbeidskorting) by €300 in 2013 and by €1,000 in 2014. The move is designed to sweeten the otherwise harsh effect of budget cuts that would lower the 2013 budget deficit to within 3% of GDP — last year’s budget was 4.7% of Dutch GDP, a shortfall that undermined Dutch credibility on the European stage. Since Rutte came to power in a minority coalition government in 2010, he has made broad cuts across the entire spectrum of government spending, and the Dutch retirement age is set to rise from 65 to 67.
Rutte’s attempt to pass more budget cuts in the Netherlands in April led to the fall of his government, when Geert Wilders, the leader of the Partij voor de Vrijheid (PVV, the Party for Freedom) refused to support further cuts — although the PVV had not been a formal member of the coalition, it had provided crucial outside support to Rutte’s government.
Wilders, who rose to prominence and much electoral success in 2010 on his anti-Muslim, anti-immigration platform, is campaigning in 2012 on a full withdrawal from the euro and from the European Union altogether (even though the Netherlands was one of the original six members of the European Coal and Steel Community in 1951). For whatever reason, however, voters are turning away from Wilders — much to Roemer’s benefit.
The subtext to Rutte’s drive to cut the Dutch budget is simple — he wants to retain the country’s pristine ‘AAA’ rating and keep the country out of any sovereign debt crisis and the ballooning yields that follow. Above all, Rutte is determined to keep the Netherlands within the terms set by the Maastricht Treaty that establishes the 3% target. The Netherlands is just one of four eurozone countries that has maintained its ‘AAA’ rating from each of the three major credit ratings agencies (joining Germany, Luxembourg and Finland).
So far, Dutch voters seem inclined to reward Rutte and his VVD, which is tied in the polls for the lead in the Sept. 12 election: the latest Ipsos poll shows that the VVD would win 35 seats in the Tweede Kamer, the lower house of the Dutch parliament, an improvement on the 31 seats it now holds. In many ways, that’s a remarkable result — an improvement for the party most associated with austerity.
Meanwhile, the SP would win 29 seats, nearly doubling its current 15 seats. What’s more, other polls show the SP with as many as 36 seats.
Despite the fact that the SP has its roots in bona-fide marxist communist politics, it’s morphed into something vaguely social democratic over the past decade as it has gradual accumulated a larger vote share. As such, the SP is calling for the Dutch budget to fall within 3% of GDP by 2015 (not 2013). That makes Roemer’s platform more moderate by far than Wilder’s — which would, of course, pull the Netherlands out of the eurozone and the EU altogether.
Nonetheless, Roemer has been criticized as irresponsible, both on the budget and on Europe. Last week, he took heat from across the political spectrum for his lackadaisical attitude toward the 3% rule:
“It is idiotic … to focus on a maximum deficit of 3% in 2013,” he said. “The government has to get the country working again. And then paying a ridiculous fine because the deficit is bigger than 3%! Over my dead body.’
He’s also been criticized for suggesting that the eurozone might not survive the current crisis if austerity policies prevent economic growth in the eurozone. The Dutch economy, the fifth-largest in the eurozone, grew by just 1.1% in 2011 and is expected to achieve flat growth this year, or even contract by up to 0.75%. Unemployment is on the rise — to 6.5% as of July — but remains low by current European standards.
Roemer’s argument — like that of Alexis Tsipras in the Greek election and Hollande in the French election — is that cutting government budgets will only further depress struggling eurozone economies, thereby leading to further budget shortfalls.
In the latest Ipsos poll, Wilders’s PVV would win just 18 seats (down from its current 24 seats). The two traditional parties that have long defined postwar Dutch politics and that suffered huge losses in 2010 are projected to lose even more support: the center-right Christen-Democratisch Appèl (CDA, Christian Democratic Appeal) would win 14 seats (down from 21), presumably bleeding seats to Rutte’s VVD, and the social democratic Partij van de Arbeid (PvdA, Labour Party) would win 23 seats (down from 30), presumably bleeding seats to Roemer’s SP.
The poll shows that six other parties would win 31 seats — including 14 seats for the longtime progressive Democraten 66 (Democrats 66).
Because the Dutch election system award seats by proportional representation, a party needs to win just 0.67% of the total vote to hold a seat in the Tweede Kamer. Unlike in the recent Greek election, there’s no “bonus” seats awarded for a party that finishes in first place, so if polls are accurate, both the SP and the VVD will start off with roughly the same amount of seats, meaning that either party could potentially form the ultimate government.
After a Dutch election, parties typically take around three months to form a governing coalition — the longest period took 208 days, and it took 127 days to form the Rutte cabinet. With potentially 11 parties seats entering the Tweede Kamer, and with the stakes for Europe higher than ever, it seems likely that the coalition talks following the election will be even more complicated than the last ones.