Coalition talks begin on Monday morning between Dutch premier and Liberal Party leader Mark Rutte and three other pro-European centre-left and centre-right parties – helped by indications that the economy in the Netherlands is continuing to improve.
As anticipated, the talks will marginalise Geert Wilders and his far-right Freedom Party, which came second in the fractious election earlier this month, 13 seats behind the Liberals who were returned as the country's largest party, with 33 of the 150 seats in parliament.
As leader of the main party, Mr Rutte is entitled to try to put together his first choice of coalition, and that broad process began last week when the 13 parties returned by the electorate appointed outgoing health minister, Edith Schippers, as a go-between to help smooth the negotiations.
The figures suggest that the most stable combination should include the Liberals, the Christian Democrats (19), centrist D66 (19), and GreenLeft, the big winners in the election, shooting from four to 14 seats – giving Mr Rutte a comfortable majority of 10 seats.
In her first report on Thursday, Ms Schippers said she had found all four of those parties willing to talk, with no immediately insurmountable obstacles – and so Mr Rutte, Sybrand Buma of the Christian Democrats, Alexander Pechtold of D66, and Jesse Klaver of Greenleft, met briefly on Friday.
Manage expectations
In an attempt to manage expectations, Mr Rutte said at the weekend that there were “wide policy differences” between the parties, and that these had been acknowledged by all four leaders.
GreenLeft leader, Jesse Klaver – who's been widely warned that his party could suffer the same fate as Mr Rutte's last junior partners, Labour, who plunged from 38 seats in 2012 to just nine – said he believed it was worth establishing whether or not those differences could be bridged.
The Liberals and the Christian Democrats are both right of centre on the economy and this is where they are most likely to clash with D66 and GreenLeft, particularly on the cost and structure of healthcare and pensions. Other tough areas will be immigration and, potentially, climate change.
The good news as the talks begin, however, is that the economy continues to strengthen, with “robust” growth of 2.1 per cent forecast this year and 1.8 percent in 2018, according to the government’s macro-economic advisors, the Central Planning Bureau (CPB).
Budget surplus
In 2016, the Netherlands booked its first budget surplus since 2008, and the CPB says surpluses will follow in both 2017 and 2018 – with unemployment, which stood at a seasonally adjusted 5.3 per cent in January, continuing to fall.
Those figures prompted unions and employers to pile in and tell the political parties how the money should be spent: on softening the impact of a rising pension age, said the trade union federation, and cautiously, on “future-proofing” the economy, said the employers’ organisation.
However, CPB director Dr Laura van Geest admitted that despite the good news there were some economic imponderables: particularly Brexit, forthcoming elections in France and Germany, and a lack of clarity about trade policy under the new Trump government.
Interestingly for other European countries too, she warned: “Growth figures of 3, 4 and 5 per cent are a thing of the past. Lower growth is the future, not only for the Netherlands but for many other Western countries.”
This lower growth would continue “for the coming decades”, she predicted, and was “the result of an ageing population and declining growth in productivity, among other things. Stimulating potential growth is one option, but it can be difficult”.
