28th February, 2017
The Dutch election is scheduled for March 15, 2017 and with the populist, anti-Islam politician Geert Wilders leading the polls, this election may have a profound effect on the future of the European Union. The value of the euro may suffer if the liberal trade and immigration policies, which form the basis of the benefits of the European Union, break down. The aftermath of Brexit and the unpredictability of Trump’s trade policies could further influence the value of the euro. In addition to current political activity, on Wednesday, March 15, The Netherlands will hold their general election. This election is the first in a series to come in 2017 and may also impact the value of the euro.
The Netherlands has a fragmented parliamentary system. It would allow a formerly fringe group called the Party for Freedom (PVV), a right-wing populist political party, to take control of parliament by winning 28 of the 150 seats.1
In second place with a potential stronghold of 25 seats, is the People’s Party for Freedom and Democracy (VVD) led by Mark Rutte, who has been Prime Minister since 2010.
Despite leading the Netherlands out of the financial crisis of 2008, Rutte’s more moderate position has been unable to placate the growing populist mentality prevailing from England to America. Rutte has said that people who “refuse to adapt, and criticise our values” should “behave normally or go away.”2
Still, Wilders’ more extreme rhetoric berates Rutte as being a man of open borders, mass immigration, lies and deception.
As right-wing nationalist parties gain ground all across Europe, the stability of the European Union is in question. Economic powerhouses in Europe are tired of bailing out poorer neighbours, and recent waves of immigrants have fostered Islamophobia in many nations spurring the popularity of protectionist policies. Wilders himself has promised to close all mosques in the Netherlands.3
If the PVV cinches its projected 28 seats, Rutte has said the VVD will not form a coalition with the PVV meaning Wilders may struggle to form a government. Nonetheless, if Wilders prevails, his success may bolster the chances of other far right candidates in Europe: most notably Marine Le Pen in France and Frauke Petry in Germany. This would change the European landscape and the future of the Euro would look uncertain.
To learn how to protect your money from market uncertainty as a result of the upcoming elections, Adam Smith, Chief Operating Officer, offers his view on ‘Currency Risk Management Strategies in 2017