Netherlands may wait until Christmas for new leader

Thu, Apr 26, 2012, 01:00

THERE ARE growing concerns that the Netherlands may not have a new government in place before Christmas, leaving a key country of the euro zone with a political vacuum. It also makes a cut in its triple-A credit rating almost inevitable.

Despite the political crisis, electoral regulations mean a general election is unlikely to be held before September. But in 2010 the current caretaker coalition took a pretty typical four months to put together, so a repeat could leave the country without new leaders until Christmas or even longer given the difficult climate.

As a bewildered Dutch electorate prepares to choose its fifth government in a decade, the international ratings agency, Fitch – which warned a week ago that it would consider downgrading the Netherlands if it did not take financial control – predicted that it will miss Monday’s EU deadline to show how it can reduce its budget deficit to 3 per cent of GDP.

“Early elections in September are probable,” said Fitch analysts. “In the meantime, a caretaker administration would be responsible for the day-to-day running of the country. Its caretaker status would not necessarily preclude further austerity measures being introduced during its term. However, the electoral cycle would make this outcome less likely.

“It is therefore possible that no such measures will be agreed until at least the autumn – by which point their effectiveness in reducing the current year’s fiscal deficit will be limited.”

In the face of media headlines such as, “Who’s in charge in The Hague?”, finance minister Jan Kees de Jager began talks yesterday with three of the smaller parties – the centre-left D66, the Greens and Christian Unity – to search for common ground. He was also due to meet new Labour leader Diederik Samsom.

Mr de Jager’s initiative is likely to have been prompted by indications that Labour might form a united front with the Socialists, Greens and right-wing Freedom Party (PVV), led by Geert Wilders – because all four have indicated they believe the Brussels deficit target of 3 per cent is too stringent and might be avoided by pleading “exceptional circumstances”.

If such a united front were to be formed, it would command a majority in parliament and so could block any politically unpopular measures proposed by the caretaker government, further deepening the deadlock.

The fractious climate was not helped by the irony of an announcement from Brussels yesterday that the EU wants an increase of 6.8 per cent in its budget next year – a figure instantly dismissed by Mr de Jager as “far too high, unthinkable”.

Mr de Jager’s own party, minority coalition partners the Christian Democrats, at a low in the polls, has internal difficulties.

Party leader and deputy prime minister Maxime Verhagen says he will not run for re-election, leaving confusion as to who will lead their campaign.

One contest most eagerly awaited in the election will be between Mr Wilders and former PVV MP, Hero Brinkman, who quit the party a month ago in a row over its anti-immigrant website.