Budget may boost Dutch Liberals' election prospects

Subject The Netherlands' 2017 budget. Significance In the final budget of its four-year term presented on September 20, the Dutch government announced it would redistribute a 1.1-billion-euro (1.2-billion-dollar) financial windfall among households. This represents a clear break from four years of austerity and tight spending, a line strictly set out by Prime Minister Mark Rutte's second cabinet in 2012. Impacts An upsurge in the number of incoming migrants could fuel support for the PVV. The government may not address the 'no' vote in the April 2016 referendum on the EU-Ukraine association agreement until next year. The housing market will be boosted by incentives for first-time buyers and measures to encourage home ownership.

Subject Outlook for the Dutch government. Significance The popularity of Prime Minister Mark Rutte’s four-party government has decreased in recent months amid workers’ protests and controversy over parts of its new climate deal. Having lost its majority in both houses, the government will struggle to pass legislation in order to strengthen its track record ahead of the 2021 election unless it compromises with the opposition, which will likely alienate core supporters. Impacts The priority given to social spending will likely mean the Netherlands will not reach the NATO goal of 2% of GDP defence spending by 2025. Climate legislation is now far more likely to be contested and amended in parliament, as it cannot be passed without opposition parties. Rutte’s departure would be an important loss for the EU, given his strong support for EU cooperation and negotiating skills.


Significance The government led by the Slovenian Democratic Party (SDS) is under mounting pressure as Slovenia prepares to take over the European Council presidency. This is due mainly to hostility in parliament and society to Prime Minister Janez Jansa, who promotes a popular but divisive form of national conservatism. Impacts A successful no-confidence vote in the government followed by early elections would complicate Slovenia’s handling of its EU presidency. The fall of the current government and its replacement by the centre-left would improve Slovenia’s relations with the EU and United States. Hungarian Prime Minister Viktor Orban would lose an ally at EU level if Jansa lost office.


Significance Government formation should have been relatively straightforward but a series of political controversies have damaged VVD leader and Dutch Prime Minister Mark Rutte’s credibility with the CU and some opposition parties. Impacts The collective rise of the far-right vote means the far right will continue to worry centrist parties and thus influence government policy. Investment in nuclear energy to meet climate targets is unlikely to be a priority for the new government. Dutch influence in the EU could grow with the departure of Merkel in September, and Macron’s focus on the 2022 election.


Subject The Hungarian government's anti-immigration stance. Significance Prime Minister Viktor Orban and his government have been campaigning against the wave of migrants seeking refuge in Europe, and the EU's handling of the resulting crisis. The government hoped a referendum on October 2 would reject EU settlement of non-Hungarians in Hungary without parliament's consent. With a turnout of less than 50%, the referendum is null and void. Orban's Fidesz party nevertheless claimed victory, as 98.6% of those who cast a valid vote opposed relocation. Impacts The opposition to Fidesz will be able to frame the referendum as its first victory since 2010 and try to build unity on that basis. Fidesz will be unable to extend its popular support on the basis of these results. The EU is unlikely to react forcefully to constitutional amendments in Hungary, given Brexit and elections in France and Germany.


Subject The government's preferred timetable for the UK referendum on EU membership. Significance The EU membership referendum will be a major event in both EU and UK political and commercial life. Prime Minister David Cameron's official position is that the poll could take place any time before end-2017. He is less concerned about the likely outcome of the referendum, which he is confident will produce an 'in' result, than about achieving a margin in favour of membership that decisively settles the question and minimises the damage to the Conservative Party arising from the process. Impacts The most likely referendum date is September 15, 2016. This timetable would make the key renegotiation period the first half of 2016, when the sympathetic Dutch government chairs the EU Council. The German government would also prefer the UK referendum to be dealt with relatively quickly.


Significance The election for the House of Representatives, the lower house of parliament, will be the second since the constitution was revised in 2011. This specified that the leader of the party winning the largest number of seats should be given the first opportunity to form a government. The revision led to the moderate Islamist party, the Justice and Development Party (PJD), leading the government for the first time after its victory in the November 2011 poll. Impacts The election will focus attention on contentious reforms to pensions, subsidies and the education system. The months ahead will be dominated by speculation about party alliances and the likely shape of a future coalition government. The palace seems ready to accept a second term for Prime Minister Abdelilah Benkirane, but is also keen to see PAM within government.


Subject Borisov’s third administration. Significance The government approved by parliament on May 4 is Prime Minister Boyko Borisov’s third since 2009. It is the first time his Citizens for Bulgaria’s European Development (GERB) party has joined in formal coalition with United Patriots (OB), a bloc comprising three nationalist parties. Two OB leaders, Krasimir Karakachanov and Valery Simeonov, are deputy prime ministers, but only the former combines this position with a portfolio (defence). OB’s third and most controversial leader -- Ataka party leader Volen Siderov, noted previously for rabid anti-NATO and pro-Putin statements -- has no formal government role. Impacts GERB has reaffirmed its domination of Bulgarian politics with minimal concessions to its formal coalition partners. The spectre of increased Russian influence over Bulgarian politics that worried some EU partners has seemingly dissipated. A firmer line against migration is likely as a sop to OB, but meaningful reform of the judiciary will again be strenuously avoided. Sofia’s worries about Turkey and the Western Balkans and its forthcoming EU presidency may make it more amenable to EU influence and advice.


Significance For the first time, there is a sustained increase in support for Scottish independence. The main reasons include dislike of UK Prime Minister Boris Johnson and his cabinet north of the border, the UK government’s pursuit of a ‘hard’ Brexit and questions about its response to the COVID-19 pandemic. Impacts Soaring Scottish unemployment when the UK furlough schemes end would undermine London’s claim to be protecting Scottish jobs. Rising support for Scottish independence could prompt the UK government to seek a closer trade agreement with the EU. The UK government will be unable to conceal the economic impacts of Brexit under the economic fallout of COVID-19. A Scottish vote for independence would put huge pressure on the UK government to resign and call early elections.


Significance Months of negotiations between the government, parliament and EU member states on the Netherlands’ approval of the EU-Ukraine Association Agreement -- which Dutch voters rejected in a referendum last April -- damaged the electoral prospects of Rutte's Liberal Party (VVD). However, he reached a provisional deal in December. His success in temporarily parking this contentious issue comes amid the unfolding of a two-party race between the VVD and the PVV in the final weeks before the elections on March 15. Impacts If the VVD stays in power for another term, a referendum on EU membership is highly unlikely. The VVD’s tougher stance on immigration and integration could attract right-wing voters and make it a more tempered alternative to the PVV. The Labour Party may shift its focus from economic to social issues to differentiate itself from the VVD and attract left-wing voters.


Significance The government's reforms have failed to deliver growth and lower employment as it had hoped. This leaves it poorly placed before December's regional elections and the 2017 presidential poll. Against a background of economic weakness, Europe's migrant crisis is boosting the National Front (FN) and its leader Marine Le Pen. Impacts Sarkozy may beat former Prime Minister Alain Juppe in the main centre-right party primary. Sarkozy may then beat President Francois Hollande in the first presidential round, and Marine Le Pen in the second. Under pressure from the right, the government is unlikely to accept further refugees beyond the proposed EU quota. France's continued economic debility will weaken its voice in the EU, and exacerbate strains with Germany.


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