- The Euroskeptic Party of Freedom is polling strongly ahead of the Dutch general election in March, but the Netherlands is unlikely to unilaterally decide to leave the European Union or the eurozone.
- In the coming months, the Netherlands will face multiple challenges, from Brexit negotiations to the reform of the European Union and limiting the influence of its southern members.
- The Netherlands is unlikely to act alone and will coordinate its decisions with its main allies in Northern Europe.
A series of national elections over the next few months will help decide the future of the European Union. The bloc's two largest economies, Germany and France, will hold elections and, depending on the status of its fragile government, its third-largest, Italy, may join them. Kicking it all off, however, is the Netherlands, whose voters will go to the polls on March 15. In the Netherlands, as in many other EU countries, nationalist and Euroskeptic parties are performing well in opinion polls. Even still, a Dutch withdrawal from the European Union or the eurozone is unlikely.
In recent years, elections in many European countries have shown that popular support for mainstream political parties is waning as anti-system and Euroskeptic forces are gaining popularity. The Netherlands, one of the wealthiest countries in Europe, is following this trend.
Its parliament is composed of numerous parties, and coalitions are often needed to form governments. According to opinion polls, in the coming election, the ruling People's Party for Freedom and Democracy of Prime Minister Mark Rutte would win from 23 to 28 of the 150 seats in the Dutch parliament. This would be a significant decline from the 41 seats it won in the general election of 2012. Similarly, the Labor Party would win 10 to 12 seats, well below the 38 seats it obtained in the last election.
In the meantime, polls suggest that the parliamentary representation of the Euroskeptic Party of Freedom would double, reaching between 29 and 35 seats (in 2012, it won only 15 seats). That party and its leader, Geert Wilders, want the Netherlands to leave the European Union (a so-called Nexit) and to reintroduce the guilder as its national currency. The party has a strong anti-immigration and anti-Muslim agenda, presenting itself as a protector of Dutch culture and identity.
But even if the Party of Freedom performs strongly in the election, it would struggle to enter the government. Most mainstream Dutch political parties refuse to cooperate with Wilders and have said they will exclude the Party of Freedom from the negotiations to form a government. The Party of Freedom is the only major party advocating a Nexit; the rest of the political establishment remains committed to the Netherlands' EU membership and its role as the heart of the process of European integration.
The Dutch and the EU
In 1957, the Netherlands joined West Germany, France, Italy, Belgium and Luxembourg to help create the European Economic Community, the European Union's forerunner. In the early 2000s, it was a part of the first group of countries that adopted the euro as their currency. One of the European Union's most important treaties, the Treaty of Maastricht, takes its name after the Dutch city where it was signed in 1992.
This is connected to the Netherlands' geopolitical strategy. Its location in Northern Europe and access to multiple waterways made it immensely rich but also left it vulnerable to militarily powerful neighbors such as Germany, France and the United Kingdom. Because it lacked significant protective geographic barriers, invasion has been a constant threat. So the Dutch turned to diplomacy and trade to protect their small country, which became the center of a balance of power in Europe that would keep its enemies at bay. After World War II, this strategy led it to support European integration.
But the Dutch have doubts about the current state of Continental integration. According to a recent survey by the Pew Research Center, 46 percent of the Dutch population has an unfavorable view of the Continental bloc, with 49 percent disapproving of the way it is dealing with European economic issues. The survey also shows that only one in four Dutch voters want their country to transfer additional powers to Brussels. The bloc's political crisis certainly influences Dutch views of it, but Dutch voters have a history of skepticism when it comes to deepening the process of integration. In a 2005 referendum, the Dutch voted against a plan to introduce an EU Constitution.
But dissatisfaction with aspects of the European Union does not necessarily mean wanting to leave it. For most Dutch voters, the idea of making the bloc more efficient, more accountable and more democratic is still more attractive than the idea of leaving it altogether. Another important factor is that the Netherlands' economy depends heavily on foreign trade. The Dutch economy is deeply intertwined with that of Europe. Germany alone receives almost a quarter of Dutch exports, with fellow EU and eurozone members Belgium and France as large trade partners. In other words, the Netherlands is unlikely to decide to leave the European Union unilaterally, because its economy and security depend on preserving free trade in Europe and keeping close ties with its immediate neighbors.
The Netherlands Post-Election
The coming Dutch election will most likely result in a government that calls for EU reform instead of the abolishment of the bloc. The Netherlands is likely to side with other Northern European countries and push for reforms to reduce red tape in Europe, limit the power of the central institutions in Brussels, defend free trade within the Continent, push for better protection of the bloc's external borders to reduce immigration, and pressure countries in Southern Europe to comply with the bloc's deficit and debt targets.
But even though a Nexit seems improbable, election results will still present significant challenges for the Netherlands. First, a stronger-than-expected performance by the Party of Freedom would increase its leverage during the negotiations to form a government. Even if Wilders does not become prime minister, his party could become indispensable in providing parliamentary support to a minority government led by moderate forces. This was the case between 2010 and 2012, when the Party of Freedom provided external support to a minority center-right government. Should Wilders increase his influence over the political process, the Netherlands would move to increasingly Euroskeptic positions.
In addition, Britain's departure from the European Union will deprive the Dutch government of a key ally when it comes to defending free trade and pushing for institutional reform within the bloc. Northern European countries fear that Britain's departure could shift the balance of power in the European Union from the north to the south, increasing the influence of countries such as France, Italy and Spain. The perception that a "Mediterranean bloc" has taken control of the European Union could lead to increased Euroskepticism not only in the Netherlands but also in countries such as Germany or Finland.
The Brexit will also create economic challenges for the Netherlands. The United Kingdom is one of the Netherlands' main trading partners, and the Dutch will support London when it comes to negotiating the broadest and deepest possible access for Britain to EU markets. Should the United Kingdom leave without striking an agreement on tariff-free trade, Dutch exports would take a hit. But Brexit negotiations will also put the Dutch government in a dilemma: If the United Kingdom gets a beneficial exit package significantly reducing the pain of its departure, Euroskeptic forces in the Netherlands will use it as a success story that proves leaving the bloc does not lead to much economic distress. The Brexit also offers opportunities to the Netherlands, as some financial companies that currently operate in London could transfer some activities to attractive financial centers elsewhere in Europe, such as Amsterdam. This would, however, probably require changes to Dutch laws that limit bankers' remuneration.
Finally, the Dutch government could also be forced to react to events outside its borders. Should a victory in coming months by Euroskeptic forces in France or Italy precipitate the collapse of the eurozone, the Netherlands would seek cooperation with its closest allies (including Germany, Belgium and Luxembourg) to plan for a post-eurozone world. In late 2015, Dutch media revealed that the government discussed a proposal to create a "mini Schengen zone" of visa-free travel that would include only a handful of countries in Northern Europe. This is illustrative of the kind of thinking that pervades in the Netherlands, whose leaders are aware of the country's limited strategic options. A midsize European country like the Netherlands is more likely to seek cooperation with its main economic and political partners than to take dramatic unilateral actions.