SNAPSHOT

NETHERLANDS ELECTIONS
13 SEPTEMBER 2012

BACK TO THE CENTRE?

A SURPRISINGLY CENTRIST ELECTION RESULT COULD SEE THE NETHERLANDS CHANGE COURSE RECENT ANTI- EU SENTIMENT IN THE NETHERLANDS, FUELLED BY THE ECONOMIC AND EURO CRISIS AND POPULIST POLITICS, COULD BE HALTED OR REVERSED FORMING A NEW COALITION GOVERNMENT MAY NOT BE EASY BUT THE ELECTION RESULT LEAVES FEW OPTIONS AGAIN?
The Dutch have gone to the voting booths again. The Netherlands had their previous elections on 9th June 2010, only just over two years ago. Over the past 10 years, six national governments have come and gone, after terms ranging from six months up to three years. Will the incoming government last a full 4-year term? The previous minority government of the Liberal Party (VVD) and the Christian Democrats (CDA), tacitly supported by the Populist Nationalist Party (PVV), fell after negotiations on stricter austeritymeasures for the 2013 budget broke down. The difference of views is centreed on the necessity of rigorously applying fiscal prudence in line with the EU policy. This debate could be considered surprising, in view of the strong and vocal position the Dutch government had taken at European level versus other Member States that had not complied with EU budgetary standards. The PVV decided to break up the negotiations and thereby let the government fall, counting on an electoral win. They seem to have made a miscalculation. Preliminary results: VVD (Liberals) PvdA (Labour) PVV (Freedom Party) SP (Socialist Party) CDA (Christian Democrats) D66 (Liberal Democrats) Others Total seats in Parliament

41 39 15 15 13 12 15 150

(+10) (+9) (- 9) ( 0) (- 8) (+2) ( 0)

NEW GOVERNMENT
With a multi-party system, coalition-building is a necessity. What coalition could be formed with this result? The outcome of the elections is both simple and complicated. Simple, because the Liberals and Labour Party have no choice but to cooperate as not many other coalitions seem realistic. The result is complicated because on many issues the two parties do not agree. A further complication is that although VVD and PvdA have a majority in Parliament, this is not the case in the Senate. To achieve a majority in the Senate, a third coalition party is needed. Considering the fact that both VVD leader Mark Rutte and PvdA leader Diederik Samsom have stressed the need for a stable government, achieving a majority in the Senate might be an important factor in the government formation. Centrist parties such as CDA and D66 could be included in the coalition, to strengthen the position of the coalition in the Senate and bridge differences of view regarding policy. Although the results are clear, a quick formation is not guaranteed.

THE RESULTS
The official final results will be announced mid next week. However, after counting nearly 99% of the votes, the outcome is clear: the Liberal and Labour parties have fared even better than the polls had predicted. The far right and far left have done worse. The results demonstrate a rejection of the anti-EU and populist stance of the far right and far left parties in the Netherlands.

About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,800 employees located in 24 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. The company generated $1.4 billion in revenues during fiscal year 2010. More information can be found at www.fticonsulting.co.uk 2011 FTI Consulting, Inc. All rights reserved.

SNAPSHOT Netherlands Elections

13 SEPTEMBER 2012

DUTCH PRAGMATISM?
The election result signals that the Dutch electorate has opted for less confrontational and polarised politics and has rejected radical anti-EU policies. This could also signal a more pragmatic and constructive approach to some of the major challenges that lie ahead, both in the Netherlands (housing market, healthcare) as well as in Europe (euro crisis). The Netherlands are still in the topfive richest European member states; one of the few AAA rated Eurozone countries. The economy showed a small growth over the past six months. To maintain this and to boost confidence nationally and internationally, a stable government is required. The leaders of the Liberal and Labour parties have acknowledged that. The Dutch are well known for pragmatism and it is possible that this pragmatism overrides the differences of view on policy between Mark Rutte and Diederik Samsom. However, both Rutte and Samsomn will need to jump over their own shadow, which might prove trying. (European) economic policy might be one of the greatest hurdles. Ahead of the vote, Rutte stated that he will not support further aid to Greece. Samsom advocated a more growth-oriented economic policy, similar to that of French President Francois Hollande. For European policy, negotiations between the two might mean that the Dutch would move away from their traditionally unwaivering support for the German position. On other policy areas, the leaders could be impacted by their past. Samsom, as a former Greenpeace activist, will have different views from Rutte on energy policy.

majority in the Senate. In short, the effectiveness of the last government was severely constrained. On the other hand, this landscape by necessity created a new and less polarised dialogue between parties on issues outside the pre-agreed programme. This resulted in a more balanced and refreshed dialogue between non-typical allies. Ad hoc coalitions were sought regarding prolonged Dutch support for missions in Afganistan and for European measures to safeguard the euro. After the government fell,, a pragmatic and hands-on coalition was formed between the caretaker government and several (smaller) opposition parties in order to agree a budget for 2013. It must be a bitter result for some of these collaborative parties, that they have not been rewarded in the election.

NEXT STEPS
In previous elections, all the party leaders would speak with the Queen after the vote. The Queen would appoint an informateur to attempt to form a government. This person would traditionally come from the winner of the election. This process has been changed. The last Parliament has insisted that the new Parliament itself should debate the results and appoint the official, thereby strongly decreasing the role of the Queen. The parliamentary debate will likely take place next week. This is an untested process which is difficult to predict both in terms of procedure and in terms of speed. The debate in the Dutch Parliament next week will give an indication of the possible duration of the length of the government formation.

FOR FURTHER INFORMATION

Hans Hack
Senior Vice President

POLITICS IN THE NETHERLANDS

In the last decade, politics in the Netherlands have shown a trend towards polarisation and more extreme standpoints. Disappointment with traditional political parties and challenging economic times, had boosted nationalists (PVV) on the far right and the Socialist Party (SP) on the outer left wing. The resulting fragmented political landscape complicated the establishment of a stable government in 2010. It took more than four months to form a minority government tacitly supported by the populist PVV, based on a detailed accord. For dossiers outside this accord, majorities had to be created through ad hoc support from other parties. In addition, even with support of the PVV, this minority government lacked a
2

FTI Consulting
Avenue Marnix 23 1000 Brussels +32 (0)2 289 0875 Hans.Hack@fticonsulting.com

Ilse van Hartevelt

Senior Vice President

FTI Consulting
Avenue Marnix 23 1000 Brussels +32 (0)2 289 0949 Ilse.vanhartevelt@fticonsulting.com

FTI Consulting