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Previewing The Dutch Elections

Tyler Durden's picture





 

Even in the face of worsening odds of re-election (no sitting government has been returned to power in EU elections since the start of the crisis) one would expect national governments to do what is necessary to maintain current stability. As Deutsche Bank notes, there has been an increase in 'extreme' parties; but the ultimate arbiter of burden sharing capacity, or whether the Euro will continue on the steady incremental path to integration is whether regular voters vote for it. Hence the importance of elections, like the Dutch election this week; and the theme is not great.

The anti-austerity Socialist Party has gained significant ground on the incumbent VVD party - focusing the market's attention on the willingness of the Dutch to meet the 3% of GDP deficit targets in 2013. The two 'extreme' parties look set to gain considerably more seats, and either a very broad coalition would be required, including a tail of small parties (Green Links, Christian Union, SGP, 50 Plus), or all four mainstream parties will have to participate in the new government: either way, government stability might be questionable.

The scenario troubling markets is the potential for a long government formation process coinciding with the euro area’s need to fight the crisis and progress communal policies - though in the last week or two, support for the SP has declined. With the 2013 budget an immediate test, a 'new' Dutch government faces decisions over Greece, Cyprus, EFSF bond buying, and a common-bank supervisory body - none of which have anything like majority support across the coalitions.

 

The most likely outcome remains a centrist, pragmatic coalition, which clearly is the preferred option in Brussels and Berlin. The Dutch elections are therefore unlikely to radically change the immediate political dynamics of the eurozone crisis in the short-term.

As Open Europe explains:

There are 150 seats in the Dutch lower chamber – the Tweede Kamer and 76 seats are needed to gain a majority. This leaves at least three main possibilities:

  1. A centrist ‘grand’ coalition The most likely outcome remains a centrist coalition, which clearly is the preferred option in Brussels and Berlin, with VVD, PvdA and CDA and could also include D66 if needed for majority. This could also feature the Christian Union – though the PvdA is likely to oppose the latter on the grounds that it would push the Coalition too far to the right.
  2. A centre-left+ coalition, with the Social Democrats, the Socialist Party, CDA, and the GreenLeft. This would, at best, narrowly obtain a majority and might in reality need the support of D66 as well. It is questionable, however, whether the CDA would go for it, and whether other parties will want to have what is perceived as a far left party in a dominant government position.
  3. A ‘purple coalition’, with VVD, PvdA and D66, could possibly muster a majority. However, in the 1990s, similar constellations were perceived as increasing the gap between voters and the government, and it is likely to be resisted by Rutte and others.

Other coalitions are, in theory, possible but remain unlikely: the gap between the VVD and Socialists looks too wide, while it's unlikely that the VVD will want to rely on Geert Wilders again, after he effectively brought down the last government in the spring by opposing proposed budget cuts. There will also be a desire to avoid another minority government.

 

Although the parties will to want to avoid drawn out negotiations, particularly in light of the decisions that needed to be taken as a result of the eurozone crisis, it could take months to agree a coalition. The last election preceded four months of negotiations before a government was formed. The record is seven months (in 1977).

As Deutsche Bank notes though:

One should not assume it will now be ‘easy’ to form a government.

While a Purple coalition works arithmetically, there is little love lost between the two main parties of the three. Diederik Samson says his PvdA party and the VVD are “miles apart”. He does not rule it out categorically, but says the PvdA would only consider it if Samson was the Prime Minister. Mark Rutte, the leader of the VVD, said power sharing with PvdA is “a long way off”. He also said the PvdA had shown its “red feathers”. But, likewise, Rutte has not categorically excluded the possibility of a coalition with PvdA.

 

2013 Budget: An immediate test for the new parliament

 

The ability of parliament to continue to function and make difficult decisions through the government formation process will be tested before the end of September with the 2013 Budget. The Dutch Constitution requires that the parliamentary year begins on the third Tuesday of September with the ‘Queen’s speech’. On the same day the Finance Minister (Jan Kees De Jager until a new government is appointed) presents the next year’s Budget. On 18 September, six days after the election, the 2013 Budget will be presented to parliament.

 

Greece, Cyprus, EFSF bond buying programmes, common bank supervision: Many tests for the new Dutch parliament

 

The 2013 Budget might be the most immediate test of what the new Dutch parliament can achieve in the absence of a new government — assuming it takes a few months to form a government — but will not be the only test. Quite likely the euro area will be asked to decide on the status of the second Greek loan programme in October. This is also probably when a full bailout programme for Cyprus will be ready. October is also in our estimation the most likely time when ECOFIN will be deciding on a Spanish MoU. We believe an Italian MoU will follow and possibly by year-end the euro area will be deciding on the banking union (common supervisory regime).

 

Even if Dutch parliamentary approval for the EFSF aid is not strictly required, one might think that decisions taken by the outgoing government when a new parliament is sitting will be controversial. Seeking the support of parliament might be politically (if not strictly) necessary.

 

In this regard, we highlight here some interesting details from pollster Maurice de Hond’s recent opinion polls. Specifically, voter attitudes to Europe and European integration on the one hand and Greece and its request for more aid on the other (results published on 5 September).

 

On EU Integration, none of the parties shows anything close to majority support for outright EU integration. This highlights the challenge of the Netherlands forming either an ad hoc coalition or a new government with a strong pro-integration stance.

Similarly, the skew on Greece is to the skeptical/anti-new aid side. 53% of voters support giving Greece more time but not more money, but twice as many voters say Greece should get no more time even if that means a Greek default (29%) compared to giving Greece money one more time (15%). As with the EU questions, the breakdown by party preference is informative. The ‘no time, no money’ stance is heavily backed by the PVV. But there are five parties with majority support (>50%) for ‘time but no money’.

Elections are the ultimate arbiter of burden sharing capacity. Under duress, one might expect national governments to do what is necessary to maintain current stability, even accepting worsened odds of reelection as the price (no sitting government has been returned to power in euro area elections since the start of this crisis). There has been an increase in support for 'extreme' parties, but across the euro area all that has happened so far at the elections is one mainstream party or coalition has been voted out of power in favor of another mainstream party or coalition. The ultimate arbiter of whether the euro area will continue on the steady, incremental course towards integration is whether regular voters vote for it. Hence the importance of elections, like the Dutch election next week, the Italian election next spring or the German election in a year's time.

 


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Mon, 09/10/2012 - 11:16 | Link to Comment Rubicon
Rubicon's picture

Yeah lets all play the dumbass game of electing in another bunch of fraudsters. 

Mon, 09/10/2012 - 11:36 | Link to Comment otto skorzeny
otto skorzeny's picture

if only there were some kind of Nationalist Socialist (insert your favorite country here) Workers Party we could vote for

Mon, 09/10/2012 - 11:49 | Link to Comment magpie
magpie's picture

...no one is stopping you from founding a Chrysse Augi North America.

Mon, 09/10/2012 - 13:42 | Link to Comment AldousHuxley
AldousHuxley's picture

National Socialist Democratic Republic party of political name playing.

 

Many Americans point at Europe saying how socialism failed them....but when you visit there, you realize they are not true socialists only in name. They still have generational elites, royalties, solid upper class, and perpetual lower class, etc.

 

Political class will use whatever popular name to get elected and funding all parties is the country's elites. Americans just finding this out...how they got divided and conquered.

 

only technological breakthroughs can actually improve workers' productivity and standard of living. everything else is feel good bullshit.

 

Mon, 09/10/2012 - 11:29 | Link to Comment Troy Ounce
Troy Ounce's picture

 

 

Clueless citizens vote for more welfare for themselves.

 

gvd

Mon, 09/10/2012 - 13:38 | Link to Comment AldousHuxley
AldousHuxley's picture

clueless low income republican vote for more welfare for the super rich all based on hope just like how they pay 10% tax to church on hope of afterlife.

 

that's the whole point of voting....expression of selfishness....that's why politics is dirty whether it be national or amongst brothers splitting up inheritance.

Mon, 09/10/2012 - 11:32 | Link to Comment asteroids
asteroids's picture

Isn't it obvious that all the central banksters printing is causing massive political polarizations everywhere. Wait until it comes to the US later on this year and next.

Mon, 09/10/2012 - 11:34 | Link to Comment otto skorzeny
otto skorzeny's picture

please tell me this will not affect the production of Heineken.

Mon, 09/10/2012 - 11:36 | Link to Comment TWSceptic
TWSceptic's picture

I'm beginning to hope the socialist win everywhere, the situation is so bad all over the world that anyone in power now will get the blame for years to come. It's politically much easier to be in opposition.

Mon, 09/10/2012 - 11:38 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

Also an issue is the recently changed Dutch marijuana-purchase laws regarding the Dutch 'coffeeshops' that sell it. Pot is de-criminalised there (and in Belgium too) but in the Netherlands for many years you could buy and smoke pot as 'tolerated' in the specially licenced coffeeshops.

But a few months ago they changed the laws, so no more sales of pot to foreigners and tourists, and Dutch people were supposed to get a 'weed pass' permit, with a limit of I think 2000 weed-passes maximum for each coffee shop.

This has created a big uproar in Holland, and there is now a thriving (illegal) home-pot delivery business that sprung up, so the law is considered by some a failure.

Some parties favour continuing the weed pass system, others want to revoke it, others something in-between ... beautiful old Amsterdam did get trashed a bit by all the tourists getting high.

In Belgium it's not criminal in small quantities but there's no place legally selling it. Portugal, for its part, has had great success de-criminalising drug use in general, and they find that drug use is not increasing, but again they do not have places legally selling even pot.

For some of us, beer, wine or whisky is enough ...

And some Dutch people agree ... one of our local hit songs from Holland, from hip DJ Kicken,

'There Ain't No Party Like a Alcoholic Party' - No there ain't, indeed

http://www.youtube.com/watch?v=cUxWZxD3MPw

Mon, 09/10/2012 - 12:06 | Link to Comment LeisureSmith
LeisureSmith's picture

No worries, Pantherman will sort it out. http://www.youtube.com/watch?v=v97yfTNtrbg&feature=relmfu

Mon, 09/10/2012 - 11:43 | Link to Comment magpie
magpie's picture

Long gulden /sarc

Mon, 09/10/2012 - 11:50 | Link to Comment frenzic
frenzic's picture

I also got an invite to the talking heads bonanza banksta distraction fest 2012 in the mail

Mon, 09/10/2012 - 12:02 | Link to Comment frenzic
frenzic's picture

Fuck all those graphs and numbers, none of them bear any resemblance to truth. Dutch voters rejected the EU in a (might I add binding but naturally not enforced) referendum by over 70% a couple of years back.

Edit

I have not voted since and I do not intend to.

Mon, 09/10/2012 - 16:33 | Link to Comment smiler03
smiler03's picture

Close but no cigar, actually, not even a match. It doesn't bear any resemblance to the truth.

 

It was seven years ago and the referendum was not "rejecting the EU", it was "are you in favour of a constitution for Europe?"

The vote was 61.6% against.

http://en.wikipedia.org/wiki/Dutch_European_Constitution_referendum,_2005

Fri, 09/14/2012 - 17:56 | Link to Comment frenzic
frenzic's picture

Fuck wiki. I was there. It was over 70%. History is written by victors.

Mon, 09/10/2012 - 12:06 | Link to Comment debtor of last ...
debtor of last resort's picture

MSM is full of mainstream politics. No to an EU constitution together with France but signing Lisbon treason at the back door. In the polls it's mainstream indeed. 12 september will be another fools day. In favor of fascist Brussels technocrats.

We have our own Ron Paul. SOPN. But first we will need a full collapse to awake the sheeple below see level.

Mon, 09/10/2012 - 12:13 | Link to Comment A Dutch on Meth
A Dutch on Meth's picture

It was either that or go the Irish way, vote till they get the desired result.

Mon, 09/10/2012 - 12:06 | Link to Comment A Dutch on Meth
A Dutch on Meth's picture

It doesn't matter what you vote in the Netherlands, there will always be enough voters for the status quo.

VVD CDA PVDA D66 are pretty much the same party, they differ only at the details. PVV will only vote no for EU and immigration related bills.

SP wants to reform our tax treaties, no more PO box offices that transfer billions at a low tax rate.

 

Tue, 09/11/2012 - 07:10 | Link to Comment Tompooz
Tompooz's picture

Whatever the election result, unless there is some unlikely landslide victory for the PVV, the real meat this time will be in the pre-coalition negotiations.

This is where the politicians will have to show their true worth and their understanding of Dutch interests in the core EU.

This is also where the PVV will be at its most inconsequential.

Compromises forged between party leaders in Holland may well form the template of compromises between France and Germany on the ESM and the handover of souvereignty to the ECB.

 

Mon, 09/10/2012 - 12:14 | Link to Comment frenzic
frenzic's picture

Dude all of them work for the same boss. Party lines are superficial.

Mon, 09/10/2012 - 12:15 | Link to Comment frenzic
frenzic's picture

And polls are scripted for maximum effect.

Mon, 09/10/2012 - 12:56 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Said it before: how many "votes" have come and gone, since the crisis began, whose results threw a wrench into the NWO Criminal Elite's plans?   Answer:  ZERO.

Mon, 09/10/2012 - 18:06 | Link to Comment frenzic
frenzic's picture

Thanks mr -1. Don't forget to vote. Shill. NSB'er.


Tue, 09/11/2012 - 07:00 | Link to Comment Xandrino
Xandrino's picture

Elections are all rigged everywhere.

We are supposedly living a democracy, but in fact we are a monarchie where our Nazi Royal family rules all. Not the puppet politicians in The Hague.

 

PS we voted no to the EU constitution in a referendum, but "our" government dismissed it.

Tue, 09/11/2012 - 07:00 | Link to Comment Xandrino
Xandrino's picture

monarchy*

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