Lee Sue Ann [email protected] Global Economics & Markets Research Email: [email protected] URL: www.uob.com.sg/research Wednesday, 08 March 2017 Flash Notes Dutch General Elections: A Quick Background The Dutch will head to the polls in a week’s time for a general election that has raised concerns that the Netherlands could be the next domino to fall to an anti-establishment movement, ahead of votes in France and Germany later this year. ELECTION DATE 15 March 2017 Wednesday Polls close by 9pm local time (4am SGT on 16 March 2017, Thursday) Who Can Vote? The Electoral System Every Dutch citizen aged 18 years and There are 150 MPs in the Dutch parliament, meaning a government older is eligible to vote. Note that out of a needs 76 seats to form a majority. Parliament is elected by proportional total Dutch population of around 17 million, representation in a single, nationwide constituency – which means that any 12.9 million people are eligible to vote. party that wins 0.67% of the national vote is assured of a seat. Since 1918, no party in Holland has ever won enough seats to gain an outright majority. As such, coalitions are the norm in the Netherlands. The current Dutch government is ruled by a coalition of the VVD and the PvDA. The Participating Parties 1. People’s Party for Freedom and Democracy VVD Mark Rutte 2. Labour Party PvdA Lodewijk Asscher 3. Party for Freedom PVV Geert Wilders 4. Socialist Party SP Emile Roemer 5. Christian Democratic Appeal CDA Sybrand van Haersma Buma 6. Democrats 66 D66 Alexander Pechtold 7. Christian Union CU Gert-Jan Segers 8. GroenLinks GL Jesse Klaver 9. Reformed Political Party SGP Kees van der Staaij 10. Party for the Animals PvdD Marianne Thieme 11. 50Plus 50+ Henk Krol 12. Entrepreneurs Party OP Hero Brinkman 13. VoorNederland VNL Jan Roos 14. Denk DENK Tunahan Kuzu 15. Nieuwe Wegen NW Jacques Monasch 16. Forum voor Democratie FvD Thierry Baudet 17. The Civil Movement DBB Ad Vlems 18. Free Thinking Party VZP Norbert Klein 19. GeenPeil GP Jan Dijkgraaf 20. Pirate Party PPNL Ancilla van de Leest 21. Artikel 1 AR1 Sylvana Simons 22. Niet Stemmers NS Peter Plasman 23. Libertarian Party LP Robert Valentine 24. Lokaal in de Kamer LidK Jan Heijman 25. Jezus Leeft JL Florens van der Spek 26. StemNL SNL Mario van den Eijnde 27. Party for Human and Spirit / Basisinkomen Partij / V-R MenS Tara-Joëlle Fonk 28. Vrije Democratische Partij VDP Burhan Gökalp Flash Notes Wednesday, 08 March 2017 1 Page The Front Runners After enjoying a healthy lead for two years, far-right politician Geert Wilders from the Party of Freedom (PVV) is now polling neck and neck with Prime Minister Mark Rutte’s center-right People’s Party for Freedom and Democracy (VVD), which is in a governing coalition with the Labor Party (PvdA). Wilders is known for his anti-immigration views and isolationist manifesto, including calls for the Netherlands to leave the EU. Even though Wilders is a serious contender to win the popular vote, his party will battle to find coalition partners among the mainstream parties. Meanwhile, Rutte is attempting to claw back popularity lost during years of austerity by highlighting economic recovery in the country. He has reiterated in the press that the VVD will not form a coalition with the PVV. Source: Piel (weekly polls as of 28 February 2017) The Likely Outcome The 2017 election is marked not only by a proliferation of parties, but also by a split electorate. In addition to the main contenders (VVD and PVV), there are five other parties polling around 10 percent. As many as 14 parties could be represented in parliament. This means it is likely we could see a complicated and drawn-out coalition formation process. The SP has said it will not work with the VVD, which complicates matters. But probable permutations revolve around the mainstream VVD, PvdA, CDA and D66 parties, with the addition of one or more smaller parties. The fast-advancing GL could also prove to be a key player. Although the results should be known a few hours after the polls have closed, it is the coalition-forming process that could take a long time. Note that it took 127 days in 2010 and a record 207 days in 1977. Flash Notes Wednesday, 08 March 2017 2 Page The Dutch elections appear to have had little sway over the EUR. Instead, it is the French elections that seem to be the political fo- cal point as far as the EUR is concerned. We previously mentioned that the French elections – French Presidential Election: A Quick Background – will be a source of market stress. Despite being down for the majority of last week, EUR/USD ended Friday (3 March) on a very strong note, closing up against all of its major counterparts. The brief interlude EUR/USD had below 1.0500 on Thursday (2 March) was quickly negated by a significant development in the French election sage, which remains the key driver for all EUR- crosses. In a nutshell, we think the Dutch results could impact the EUR more on the Euro-skepticism front ahead of the French elec- tions (April/May), rather than having a direct impact on the currency itself. Some Key Facts On The Dutch Economy Eurozone’s 5th-largest economy A founding member of the EU and 1 of only 3 Euro area countries (along with Germany and Luxembourg) to enjoy AAA rating Economic growth is at 2.3%, and unemployment at a five-year low of 7.2% Refugees remain a concern, but less so than during the peak of Europe’s crisis in 2015 (about 31k asylum seekers registered in the Netherlands last year, far fewer than the 90k the government predicted) Immigration is a big issue (out of 17 million, there are about 3.8 million people in the Netherlands with a migrant background; about 2.1 million people are migrants with a non-Western background, whilst 1.7 million are migrants with a Western background) Disclaimer: This analysis is based on information available to the public. Although the information contained herein is believed to be reliable, UOB Group makes no representation as to the accuracy or completeness. 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