The international media have landed in The Hague and surroundings to cover the final days of the Netherlands’ election campaign, in search of the Dutch version of disgruntled Trumpists and Brexiteers.
The country, one of the six founding members of the EU, is seen as the next battleground for pro- and anti-EU forces. After Brexit and the election of Donald Trump, it’s easy to see a victory of PVV-leader Geert Wilders (pictured) as confirming a trend of deglobalisation. After all, Wilders campaigns on a very similar platform as Trump and the UK’s Leave campaign. The title of Wilders’ 1-page election manifesto (only in Dutch) translates into English as ‘Make the Netherlands ours again’.
While the perceived political risk in Europe is probably the main reason European equities are trading on such a large discount to their US peers, markets aren’t paying as much attention to the Dutch elections as the media have in recent days. This could be due to the polls of course: the PVV had been leading them for the past year, but has been overtaken by the business-friendly VVD of incumbent prime minister Mark Rutte in recent weeks. The spread of Dutch government bonds over Bunds, which typically hovers between 5 and 30 bps, also decreased in February as the PVV’s poll lead evaporated.
A culture of compromise
But, as Rutte warned in a head-to-head debate with Wilders on Monday, there still is a chance that Wilders’ PVV will become the biggest party.
However, this would put them in control of at most 20% of the seats in the country’s Lower Chamber. Since all other major parties have excluded the PVV as a coalition partner due to the party’s hostile attitude towards the EU and immigrants, the ‘most important elections in Dutch history’ will almost certainly result in another boring, centrist coalition government.