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What Do the Dutch Elections Mean for the Euro?


A look at the parties and candidates involved.

MINYANVILLE ORIGINAL On Wednesday, September 12, the Dutch electorate will decide what sort of state they want. But their choice will redound on more than just The Netherlands and its own sovereign problems; the results will signify something bigger for the euro (FXE).

In April, Geert Wilders brashly broke away from austerity talks between his far-right and anti-Islamic (now anti-Brussels) Party for Freedom and the minority coalition, prompting the demoralized cabinet to resign and Queen Beatrix to call for new elections.

Wednesday's elections will almost certainly act as a measure of the euro's vitality and a calculus of the people's political will in a country relatively untroubled compared to, for instance, Greece and Spain.

Indeed, critical issues in The Netherlands include bailouts for other countries in crisis and austerity measures taken to reach the 3%-of-GDP deficit target demanded by the EU commission, such as pension cuts and a rise in the retirement age. So let's take a look at the competing parties and what their presence on the ruling end of parliament might mean for the euro.

Labor Party

Labor's (or PVDA) Diederik Samson has debated his way to a tie for leader in the polls with his opponent, the incumbent Prime Minister, Mark Rutte of the center-right People's Party for Freedom and Democracy (or VVD). The rhetorically gifted leftist supports allotting Greece more time to meet its deficit requirements and wants to (even if he's not anti-euro) lessen Dutch attention to spending cuts, favoring social welfare and surplus as solutions. Samson wants to balance the budget by 2017.

According to Netherlands expert Ernst Labruyere, "some of the most successful cabinets of the last 40 years had a PVDA PM" - the question is, of course, whether Labor's left-social-democrat bravado is right for the euro. Rutte insists that it isn't. The upshot, naturally, is that they'll end up cooperating in a coalition.

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