Geert Wilders Brings Down Dutch Government over EU Austerity Budget

by Jerry Gordon, The Iconoclast

Last Saturday night, Geert Wilders, populist leader of the PVV Freedom Party in the Netherlands walked out of intense negotiations with the ruling minority Center Right coalition government headed by PM Mark Rutte of the VVD Liberal Party. Thus ended the 557 days of this minority working coalition composed of the VVD, Christian Democrats and the PVV, which had finished third in the 2010 general elections. Wilders had refrained from joining the Rutte government in any cabinet posts. Wilders, who left the VVD created the PVV as a bulwark against Dutch multiculturalist policies including wholesale Muslim immigration with the overarching threat of Islamization. There are approximately 1 million Muslims out of a total population of 16.5 million in The Netherlands. Wilders and the PVV had sought in the current budget crisis to protect the pension rights of average citizens in Holland.

Wilders had also railed against the European Union, while fielding a PVV slate in 2009 that captured four positions in the Dutch delegation to the European Parliament in Strasbourg. Wilders had objected to the recent visit of Islamist President Abdullah Gul of Turkey to the Netherlands commemorating four centuries of relations between the two countries. Gul, prior to his arrival for the visit,had criticized Wilders for being an anti-Islamic extremist. Wilders had earlier campaigned to deny Turkey’s entry to the EU. Officials of the Islamist AKP government in Turkey in 2010 objected to Wilders’ inclusion in a Dutch parliamentary delegation visiting the NATO member.

Wilders is scheduled to arrive in the US next week to promote his new book, Marked for Death: Islam’s War Against the West and Me to be published by Regenery on May 1st.

PM Rutte resigned today surrendering his credentials to Queen Beatrix after holding long discussions at the royal palace. Tomorrow a debate has been scheduled in The Hague parliament about the issues that brought down the current government and scheduling snap elections to be held in June. The issue in question is the EU austerity budget guidelines and resulting budget cuts to reach fiscal targets set by the European Commission. This is a reflection of the roiling Euro Zone controversy. The Netherlands is the fifth strongest economy in the EU and has an AAA credit rating. That credit rating may now in doubt given the budget crisis and fall of PM Rutte’s coalition government.

A Reuters report,”Dutch Prime Minister resigns in budget cuts row”, notes the background for this development:

Rutte said the Queen was considering the resignation offer and had asked the cabinet to keep working for the country’s good. However, government ministers openly speculated that new elections would be needed to break the impasse.

Finance Minister Jan Kees de Jager, who has taken a tough line with euro zone “budget sinners” such as Greece, tried to reassure markets that the country was not about to ditch its commitment to good housekeeping.

“The Netherlands will retain its solid fiscal policy and will also show the market it will lower its deficit and also have a path of sustainable government finances,” he said.

Another Reuters analysis, “Dutch populist Wilders bets on anti-euro vote” portrays what may lie behind Wilders’ role in bringing down the Rutte government:

Wilders, 48, was kingmaker when the last government was formed in 2010; his Freedom Party is the third-largest in parliament and provided the coalition with a majority.

In withdrawing his support, he relinquished his position as the most influential politician outside the government and is set on going for real power in the next elections, which could be held as early as June.

The move threw a core euro zone member already struggling to deal with recession and EU demands for budget cuts into a political crisis, and is a huge gamble for Wilders given that his party has slipped in opinion polls.
[. . .]

Given Marine Le Pen’s surprisingly strong showing [18.5% of total votes cast] in the French elections at the weekend; Wilders may be hoping his anti-euro agenda will catapult him up the polls.
[. . .]

He wants to pull the Netherlands out of the single currency too and reintroduce the Dutch guilder and is seeking to turn any election into a referendum on the embattled common currency.

Prominent economists have disputed the findings of a report he commissioned arguing the costs of euro membership outweighed benefits, but public opinion is on his side when it comes to his opposition to austerity.

Surveys by Maurice de Hond showed a clear majority of Dutch people think the level of budget cuts demanded by the EU is excessive, although only 32 percent favored quitting the euro.

By walking out of the budget negotiations, Wilders triggered the collapse of the government at a time of considerable economic uncertainty.

Moody’s, the credit rating agency, commented negatively on the financial implications of the Dutch government fall over the austerity budget in this The Wall Street Journal report, “Dutch Government’s Collapse Is Bad For Netherlands’ Credit: Moody’s“:

“This development is clearly credit-negative for the Dutch sovereign given that it generates both political and policy uncertainty,” Sarah Carlson, a London-based vice president at the ratings firm, wrote in a research note.
[. . .]

The Dutch economy is considered among the euro zone’s strongest, but the Netherlands’ GDP is expected to shrink 0.6% this year, which will hit the country’s fiscal position, according to the Moody’s note. The economy should grow 1.3% in 2013 and more thereafter, Carlson wrote.

Wilders’ book tour in the US next week comes at a momentous time for this Dutch populist political figure.