Eight Reasons Why The Dutch Election Matters

Tyler Durden's picture

Submitted by Saxo Bank's Martin O'Rourke via TradingFloor.com,

  • The Netherlands' general election takes place on March 15
  • Geert Wilders far-right Party for Freedom expected to emerge first
  • Wilders path to premiership likely to be blocked by moderate coalition
  • Support for Wilders' anti-immigration, anti-EU stance fits populist narrative
  • Key lessons for Europe ahead of French and German elections
  • Brussels looking for consolidation after Brexit and Italian referendum rockets


Now what is it about that Wilders fellow that seems so familiar?

If we needed any reminders that 2016 was the year when the anti-establishment phenomena broke through the glass ceiling, then this week's Brexit-bill debate among the arch-establishment House of Lords institution was it.

The irony of the non-elected house discussing the bill that will eventually pave the way for the trigger of Article 50 before March 31 will not have been lost on many. It was, after all, the protest element of the Brexit vote that saw the UK electorate deliberately snub what their elites dictated they must do and establish the barricades between the establishment and the disaffected.

And that unleashed genie has gone on to cause havoc ever since. The victory of Donald Trump in the US and the rejection of Italian prime minister Matteo Renzi's constitutional reform referendum in December struck a powerful blow at the heart of the establishment foundations.

Yet, the traffic has not all been one way. Austrian voters rejected the far-right Freedom Party leader Heinz-Christian Strache in December in presidential elections, and Marine Le Pen's efforts to become the next president of France still look likely to be stymied at the second round in May despite a collapse in support for scandal-hit rival Francois Fillon briefly making her the race favourite.

The stage looks set, then. If 2016 was the year of the breakthrough, 2017 could see the status-quo fightback, with Europe likely to form the battleground ahead of pivotal elections. And, while next month's general election in The Netherlands may not be the biggest showdown of the year, the outcome could set the tone for 2017.

The far-right PVV party, platformed on an anti-immigration, anti-European Union ticket, looks likely to emerge as the biggest party after March 15, but controversial leader Geert Wilders is almost certain to be snubbed when it comes to either the prime minister role or a top ministerial role. Nevertheless, a moderate coalition made up of numerous parties may find itself somewhat hobbled depending on the actual outcome.

We give eight reasons why the Dutch elections matter.


Dreamy Amsterdam could be facing a nightmare.

1. Setting the template (version 2.0)

If Brexit set the template for the anti-establishment mantra in 2016, the subsequent victories of Trump and the populist anti-EU movement in Italy have subtly altered the blueprint. The outcome of this election could see the template take yet another twist with French and German elections to follow.

Like a military campaign, the domino effect of Brexit through to Italy six months later was next to impossible to stem. But with a new year and a new start, there is a different mood.

While a poll of UK voters in December said 47% would still vote leave, 45% said they would go for remain and 8% were undecided. That's a shift from the 52/48 divide of the June 23 vote and came at a time when the UK consumer was spending and the economy looked robust.

A slump in retail sales for January out of the UK may have shifted that sentiment further after a 0.3% fall dramatically undercut expectations for a 0.9% rise. Add that to a revision of the December slump revised to 2.1% and it is beginning to look like the post-Brexit party and big-ticket item splurge encouraged by the likes of Black Friday could be over.

"There is the feeling that the public brought forward a lot of spending, especially on big ticket items, in response to the weakening in sterling," said Saxo Bank's forex chief John J Hardy on the February 17 From the Floor. "I think we need to keep an eye on sterling crosses for reaction."

With housing transactions also predicted to fall 11% in 2017, according to research conducted by The Times, this could be a trying period for sterling and UK confidence.

GBPUSD plunged to below 1.24 after the retail data release for January


Source: SaxoTraderGO

Some 15 weeks have also elapsed since Trump's victory. With the president embarking on a campaign-style approach since his inauguration on January 20, that has led to a standoff with the mass media, a battle with his own judiciary, some embarrassing climb downs in foreign policy and disarray within his own hand-picked team.

The Dutch then have had some nine months to take on board the anti-establishment wave and what it potentially means. That includes the fallout.

How will they react? A reversion to the safety of the centre is a possibility. A lurch even further to the right can also not be ruled out. We'll know in less than one month.

2. Anti-immigration reinforced

However Wilders' party fares next month, the anti-immigration platform is well established in Europe and looks likely to be reinforced. The UK turned its back on an agreement to take up to 3,000 child refugees fleeing war earlier this month and, though it has faced a backlash, is sticking to its guns.

The UK government's strategy is twofold. It wants to clip the wings of Ukip (more of that later) and make inroads into the working-class defection from Labour that has alighted on the immigration issue as a rallying cause.

German chancellor Angela Merkel has also bowed to the inevitable and earlier this month set out tough new plans to repratriate asylum seekers designed to speed up the exit of those who have not earned asylum. A new Centre for the Support of Returns to be opened in Berlin is at the heart of the plan and marks a considerable contrast to the open-border policy that defined Germany's immigration stance in 2015.

With Beppe Grillo's Five Star Movement party in Italy firmly established on the back of the referendum result ten weeks ago and with the likes of Hungarian premier Viktor Orban threatening to round up asylum seekers and detain them in shipping container camps, there is a dehumanising aspect to the right-wing rhetoric that is frightening.

Wilders incendiary "Moroccan scum" comments on February 19 indicate the latitude that the far right has been granted by a lazy and complacent centre. It's going to get worse.


However you spin it, there is a reason why thousands of refugees have fled to Europe and are willing to put up with degrading conditions.

3. Le Pen's moment

Just as Trump was able to jump on the Brexit bandwagon last autumn when his campaign looked like it might be hitting the buffers, Front National leader Marine Le Pen will have her fingers crossed for a strong showing from Wilders party and a potential escalation of tensions on the streets of Amsterdam and Rotterdam.

Le Pen's chances of victory in May are not great but getting through to the final round on May 7 after the initial vote on April 23 would be success in itself and demonstrate that the far-right group is truly established as a mainstream party.

To put that in context, the party has spent almost its entire political life since its formation in 1972 on the fringes of the political spectrum. Founder Jean-Marie Le Pen may have got into a runoff off for the presidency in 2002 but it is only since his daughter became leader in 2011 that the party has really made its breakthrough.

It would be tempting to say that this is due to the new leader softening the party's stance to become more acceptable, but the reality is a corrupt and decrepit political establishment has made it easy for Le Pen to harvest voters disaffected with the ruling elites. The atrocities in Paris in November 2015 and Nice in July 2016 have bolstered her bandwagon and reportedly made her party the most popular among 18-34 year olds.

The long game remains her strategy. Brick by brick, she's demolishing the establishment wall.

4. The Merkel paradox

Of all the establishment figures under threat this year, none matter more than the German chancellor. She is the symbol of European solidity, an immigrant champion, a veteran of the international stage and she has demonstrated time and time again that she is able to go toe to toe with some of the most formidable opponents you could wish to encounter, including the likes of Russian leader Vladimir Putin.

But, unlike much of the rest of Europe, Germans rather like the current status quo and even the far-right Alternative for Germany Party has seen support slip from around 15% in the summer of 2016 to less than 10%.

The reason for that is not Merkel but rather the rise of a rival within her own coalition, the social democrats' Martin Schulz. Schulz, like Merkel, is a pro-European Union, anti-protectionist who most definitely hails from the left of the spectrum.

The 'junior' party in Merkel's Christian Democratic Union coalition moved ahead in some polls this weekend ahead of the September election. It may be that Merkel's sudden shift in position on immigration is less to do with the far right and more to do with delineating her platform from that of Schultz.

Merkel may be a politician of principle. She's also not above opportunism.

And with Schultz breathing down her neck, it is already beginning to look like the greater public-speaking skills of the latter could land him the biggest prize of all come September. In that light, a better-than-expected showing for Wilders' party at next month's election might tip the fine margins in Merkel's favour, although it is clearly a double-edged sword and a gamble to change her stance.

Merkel won't say it of course. But you can bet some of her strategists are thinking it.

5. The French/German bonds spread barometer

The spread in yields between French and German 10-year bonds has become a useful indicator of political risk in Europe.

It ran as high as 72 basis points when the Francois Fillion got himself into a terrible mess over nepotism earlier this month as it briefly threatened to propel Le Pen into the lead. That subsequently came back to the 65 mark after the immediate outcry receded but has once again jumped to 78 basis points on February 22.

This could spread yet further depending on Wilders' showing on March 15 and demonstrates that not only is Germany decoupling from the peripheral economies like Portugal, Italy and Spain but even from a Eurozone-core economy like France, as the latter's fundamental structural problems combine with political tensions to deepen the uncertainty over its future direction.

French/German 10-year yield spread out to 78 basis points


Source: Bloomberg

6. The far-right splinter

The fate of Ukip should be instructive for all the far-right groups (or indeed any of the extremist movements in vogue) that are currently enjoying their moment in the sun on a platform of anti-immigration.

On the crest of a wave on June 24, Ukip's progress since has been akin to someone wading through quicksand as the loss of a charismatic leader in the form of Nigel Farage has seen a catalogue of disasters beset the anti-EU party.

The 18-day reign of Diane James was an unmitigated disaster but replacement Paul Nutall has fared little better and has become embroiled in a false claims controversy relating to the Hillsborough disaster of 1989 when 96 football fans died that has seriously undermined his credibility.

Ukip does not yet look like a spent force but with Farage chasing the 'dream' in the US, its direction and sense of purpose has ironically been undermined by successfully seeing through the single-issue strategy that gave the party its raison d'etre. With Brexit due to be triggered next month, it's become a little bit of a rebel without a cause.

The mainstream — read May's ruling Conservative party — has also stepped into the breach to effectively dilute the Ukip message by taking over some of their policies and pushing the hard Brexit stance that defined Ukip. It's a mainstream fight back through latching on to policies (a strategy which Boris Johnson unsuccessfully tried to follow through last summer) that could help re-establish the status quo, albeit with a significant lurch to the right.

In the meantime, a key by-election on February 23 in the UK in the Brexit-supporting constituency of Stoke-on-Trent is a key test for Ukip. Nuttall's party is favourite to take the formerly safe Labour Party seat (the problems that have beset the Labour Party also owe much to the Brexit vote and a lack of direction under leader Jeremy Corbyn) but a Conservative victory would be a remarkable result in the circumstances as a signal of the status-quo rebirth. It could happen.

The lesson for Wilders, Italy's Five-Star Movement and Spain's left-wing anti-establishment Podemos are clear. A single cause can most definitely unite disparate elements. But, the achievement of goals or an inability to break important electoral thresholds will unmask tensions. And, as Ukip is discovering, that's a recipe for disaster.


Perhaps he knew it was a good time to look for something else.

7. The euro to come under pressure

Whatever the outcome of the Dutch election, the euro is likely to come into pressure as volatility stalks the continent in 2017.

The potential crisis in Greece once again, the upcoming French and German elections, the triggering of article 50 next month and the unnerving and unwavering hostility from the Trump administration to all things EU, means that EURUSD in particular is likely to feel the heat.

Trump may be pursuing a weaker dollar policy, but he might not get his wish granted in relation to the euro for some time. EURUSD has faced down the parity challenge on a couple of occasions already in the last few months but with the pair once again below 1.05 this morning, the debate looks set for some invigoration.

EURUSD breached 1.05 Wednesday morning


Source: SaxoTraderGO EURUSD was at 1.0500 exactly at 1037 GMT, February 22.

8. The Trump reaction

The Trump reaction is incendiary enough even when it turns out to be over something that is patently not true such as his ill-researched comment about Sweden at the weekend regarding a security-related terrorist incident that never happened.

It's not surprising that someone with Trump's ego then chose to go on the warpath with Stockholm instead of coming clean. Expect him likewise then to react to the Dutch election, especially if it's another significant blow to the status quo. He is unlikely to let facts get in the way of his agenda either.

If nothing else, Trump will seek endorsement for his selective immigration ban against seven mainly Muslim countries and the opportunity to twist the debate towards the border with Mexico which remains the most controversial pillar of his foreign policy (despite considerable competition).

The oxygen of publicity. Trump can't resist it — markets will be moved.


That's the size of the immigration problem in Sweden... no France...i meant Europe. Obviously.

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Youri Carma's picture
Ik ga in ieder geval FVD (Forum Voor Democratie) stemmen omdat zij tenminste de moeite nemen om over dingetjes na te denken. https://forumvoordemocratie.nl/verkiezingsprogramma
Nightjar's picture

FVD is fine too, they have announced they will cooperate with PVV. But voting PVV as one block sends a better signal in my opinion.

Free Man's picture

Hungarian Prime Minister Viktor Orban commenting on the EU:
“They have declared that the people constitute a danger to democracy.”

A poll of ten European nations with over 10,000 respondents finds overwhelming support for a Muslim immigration ban within the EU.  In total 55% agree Muslim immigration should be stopped, only 20% disagree.

Joe A's picture

It hangs in the balance. Perhaps he wins the election and his party becomes the biggest party or he will come in second. He would need coalition parties to form a government and several already indicated that they won't govern with him. It would be quite something if he would win the elections but can't form a government. Everybody's fed up with the liberal (as in the traditional meaning of the word)-socialist government and with the whole political establishment. This government has been lying and breaking election promises from week 1. They are lying regarding MH17 and they ignored the outcome of a referendum on Ukraine's EU association treaty (which today the Dutch parliament will most likely adopt, against the outcome of the referendum). But I think nothing will change. There will be a right wing government I think but the old political establishment will keep their cushy seats. Wilder is not my cup of tea but I understand why people will vote for him. His supporters are the ones that the labour party abandoned. But also people with higher educations are flocking to his party.

And as for PM Mark Rutte, well he might well be on his way to a nice cushy job at the EU as a reward for services rendered.

Oh, and this week it emerged that a security guard assigned to the team to protect Wilders was caught handing secrets regarding the agency over to a Maroccan criminal gang. The guard himself being from Maroccan desent.

Vegetius's picture

Facts and Agenda's So Trump makes things up to suit his position. Perhaps, but he did not generate the huge debts the EU have, the falling levels of social and personal security. Trump did not burn the MENA region down and threaten war with Russia, The reality of migrants in Europe can be summed up in the Turkish model in Germany, brought in since the 1950's this group has close to 80% unemployed permanently draining social housing and social services with no return.

So to the Saxo Bank stooge (receiver of EU support money and one of the failed banks of Europe) It is you and those like you that have landed us all in the mire and of course you want it to continue, because if it does not you are out of a job.


IntTheLight's picture

I was robbed by a Turk in Berlin. Vile vile people.

Sooner's picture

Kind of interesting that all of a sudden all the reports and articles pop up recently screeching that Gold and Silver prices have moved up, but completely fail to mention they are still lower than when Trump was elected!!!...

That's a pretty glaring omission...#GOLD #SILVER #GLD #SIL

pine_marten's picture

There will be blood.  The globalists will assasinate politicians who threaten their schemes.

ShakenNotStirred's picture

It also will be the other way around, when people get truly fed-up. Few of the politicians will manage to save their asses does not matter how much money they have.

Batman11's picture

Neo-liberalism is being hoisted with its own petard.

A new scientific economics had been developed that could ensure the economy ran smoothly and efficiently.

2008 – “How did that happen?”

Everything must be run for the benefit of the economy.

Today we have the new normal of secular stagnation.

We must have a technocrat elite to ensure the interests of the economy come first.

The Central Bankers entered into an infinite loop of lower interest rates and QE after 2008 and seem to be going nowhere fast.

The EU and Euro were designed to keep economics matters out of democratic hands to ensure the economy was always put first.

It is the worst performing economic area since 2008.

Everyone must be subject to market discipline.

The bankers mess up and are given unconditional bailouts in 2008.

We should be guided by the signals from the markets.

The bankers rig every market that they can and the Central Bankers inflate the markets with loose monetary policy to create a “wealth effect”. The signals coming from the markets are totally distorted from banker interference and have almost no bearing on any economic reality.

The markets are high and we have the new normal of secular stagnation.

The markets are signaling that they have become corrupted.

The mainstream want to maintain the status quo but the populists recognize failure when they see it.

The mainstream refuses to acknowledge the problem and desperately tries to place the blame elsewhere, e.g. Russian hacking, fake news, populists, the deplorables, xenophobes, misogynists, racists, homophobes .........

How badly do you have to fail before you recognise the problem?

Batman11's picture

The signs are this version of capitalism has failed and not acknowledging it is causing a lot of problems.

The people expect elites to deliver the goods for the majority. This is their job and if they don’t do it they will be replaced.

Keynesian capitalism had ended in the stagflation of the 1970s and new market led capitalism came online to get things going again. Capitalism had reached another dead end in the Great Depression of the 1930s this isn’t a new phenomenon.

Looking back with two assumptions:

1) Money at the top is mainly investment capital as those at the top can already meet every need, want or whim. It is supply side capital.

2) Money at bottom is mainly consumption capital and it will be spent on goods and services. It is demand side capital.

Pre-1930s - Supply side economics leading to:

Too much investment capital leading to rampant speculation and a Wall Street crash

Too little consumption capital and demand is maintained with debt.

Leads to Great Depression and the debt deflation of an economy mired in debt

Post-1930s – Demand side economics:

Too little investment capital compared to demand, supply constrained.

Too much consumption capital, leading to very high inflation.

Imbalance causes stagflation.

Post-1980s - Supply side economics leads to:

Too much investment capital leading to rampant speculation and a Wall Street crash, asset bubbles all over the place.

Too little consumption capital and demand is maintained with debt. Global aggregate demand is suffering and with such subdued demand there are few places for real investment leading to more speculation.

Leads to the secular stagnation of the new normal, the assert bubbles have yet to burst.

Maybe capitalism just a balance between supply and demand necessary to achieve that happy medium.

It is a balance between investment capital at the top and consumption capital at the bottom.

2017 – Richest 8 people as wealthy as half of world's population

No wonder capitalism isn’t working very well.

It’s totally out of whack.

Madcow Kaczynski's picture

Looks like the blond toupee look is the new Gadsden flag. Don't tread on me!!

I Feel a little Qeasy's picture

"Merkel may be a politician of principle."

What a fucking idiot! THERE IS NO SUCH THING!

This writer is a brainwashed buffoon.

androkles's picture

Merkel is from the old communist sattelite state of the USSR formerly known as DDR (east germany). I guess she has not lost her ways. Anyway, her days are numbered, but the successor is even worse.

IProtectYou's picture

Lots of disinformation and wishful thinking. Are the f@cking banksters scared?

miketv's picture

good idea, vote in Zionist political parties to save you from the (((globalists)))


Nightjar's picture

Zionists are the least worst jews, the worst are the lefty wandering jews that populate USA, and european cities.

androkles's picture

I'm resident in The Netherlands. I expect Geert Wilders and new parties on the right to get maybe 30% and that will not be enough to operate effectively against leftish christian blocks. I expect more change from elections in France. I cannot really predict, but right has a better chance in France. In France the situation with followers of Mohammed has gotten more out of hand.

I'll will vote a new right party of which the second candidate is a very good speaker who is less irrittating and more persuasive than Wilders and who is more likely to be able to change christian and leftish minds.

I'm not too excited about it. The Netherlands is small and the fate of the EU and EMU will be decided between France and Germany anyway.

* goes back to studying Triffin's paradox *

IntTheLight's picture

Leftist Christians. I'm sick of stupid white people who think they are Jesus Christ Superstar. They advocate suicide of white people.

androkles's picture

Yup, and I'm trying to be practical. How can you persuade these minds to be more sensible?

AntiSocialLoser's picture

if you vote, you support the system... wake up !

Grumpy_nl's picture

Mark my words, the bullet will come from the left. Remember Pim?

IntTheLight's picture

Yes. I remember Pim Fortuyn. And Van Goghs great great grandson who was murdered by a third world loser. A sane people would have reacted differently. The Dutch shrugged their shoulders and moved on. Insane, suicidal white people.

AntiSocialLoser's picture

I am from the Netherlands. The Dutch are brainwashed and ignorant... It is sickening, most definitely sickening.


There was a tv program about the killing of Fortuyn, the facts dont lie, but nobody gives a fuck.

JailBanksters's picture

The Russians did it.

So now when it happens, you'll know who to blame.

We know the Russians are going to hack the election, because that's what Russians do.

It's NOT Langley Okay !!! it's the Russians, they're probably hiding in Postal Boxes right NOW waiting to hijack the Postal Votes.


AntiSocialLoser's picture

I live in the netherlands. Wilders is a zionist puppet. The Netherlands and Sweden are , like no other country, pioneers for the NWO.


keep on voting and nothing will change.


Fuck the system, do not vote!

AntiSocialLoser's picture

the Dutch people said no to the Euro, no to the EU constitution, no to the iraq war and no to the Ukraine deal. The Hague did not listen. Dumbed down sheeps now gonna vote for Wilders and SP. They still think there vote counts.....