Netherlands: Liberal Party wins elections
September 12, 2012
On 12 September, caretaker Prime Minister Mark Rutte and his Liberal Party, which advocates further austerity reforms, won the parliamentary elections, obtaining 41 out of 150 seats in the lower house. The Labour Party, which did not support the austerity measures backed by Rutte that caused the collapse of the previous government coalition in April, came in second, garnering 38 seats. The populist right-wing Freedom Party of Geert Wilders, which had campaigned for the Netherlands to leave the Eurozone, lost almost half its seats. The results eased fears that Euro-sceptic parties would gain influence in the country, thus putting further pressure on the country's political stability and threatening its financial contribution to European rescue packages. The Liberal and Labour parties have started formal negotiations in order to form a coalition government. Both groups initially are in favour of supporting Euro area peripheral economies but have, nonetheless, widely differing views on a series of key subjects, including budget cuts and health care. Therefore, it could take months before a coalition is formed. The Dutch central planning bureau forecasts the fiscal deficit to reach 3.6% of GDP this year and 2.7% next year.