The European reverberations of the Netherlands’ political implosion

As Spain digests the results from a ballot box that may leave it in political deadlock, the Netherlands gears up for an election campaign of its own. The collapse of the four-party alliance of centre-right and liberal parties earlier this month has triggered new elections slated for November and sets an end to Mark Rutte’s 13 years as prime minister. 

The Dutch government fell in a spat over migration, but the coalition was already locked in an intractable stalemate with protesting farmers about how to reduce nitrogen emissions from intensive farming that makes the tiny Netherlands the second-largest agricultural exporter in the world by value. The coalition was also limping politically after losing further seats in the Dutch Senate to the farmers’ surging political party (BoerenBurgerBeweging).

Prime Minister Mark Rutte bet that he could emerge stronger from an election if he let his government collapse, but his gamble backfired because a large swath of parliament would not support him for another term. With finance minister Sigrid Kaag and foreign minister Wopke Hoekstra also bowing out, a wave of senior party leaders with experience at the EU stage is retiring from national politics. The opening created by their departure has enticed European Commission Vice-President and green czar Timmermans to return home to head up a newly created joint social democratic-green list in the Dutch elections. 

Even if the demise of the Dutch government is mainly a national affair, the consequences will also be felt elsewhere. As the largest of Europe’s small economies, the Netherlands is often a pivotal player in the EU arena, and more so recently. 

In the pre-pandemic era, the Netherlands led the so-called Hanseatic League, a coalition of small ‘frugal’ countries that vocally opposed further EU fiscal integration. Merkel’s Germany provided tacit support to the Hanseatics, whose hardline positions freed Berlin to paint itself as a moderate broker with France and southern Europe. The result was a 2019 deal that saw French President’s Macron much-vaunted eurozone budget whittled down to a mickey-mouse budget (0.14% of eurozone GDP spread over 19 countries and 7 years). The subsequent pandemic recession, however, compelled Merkel to sign onto a much more sizeable recovery fund, which is boosting investment and sparking newfound hope for southern Europe’s economies.  

After 2021, the Netherlands became an honest broker in the EU. Rutte had already toned down the periodic eurosceptic notes that marked his early years in office. After the solidarity he felt in 2014 following the loss of many Dutch lives in the downing of the MH17 jet, he saw he could solve problems in the EU. In post-Brexit Europe, he even grew into a bridge builder between traditional ally Germany and France through his warm ties with President Macron. His latest coalition government completed the transformation. Rutte definitively ditched the Netherlands as a ‘party of no’ in the EU and sought ad-hoc partners all over the Union, issue-by-issue, for example by pushing with eastern member-states for faster and more advanced arms deliveries to Ukraine. 

As a striking testimony to this new approach, the frugal Dutch teamed up with Spain, a high-debt country, to lay the blueprint for the ongoing reform of the EU’s rules governing public debt and deficits. The newfound role of the Netherlands as the EU’s frugal deal broker has stabilized the Union at a time when the Franco-German engine that often powers EU initiatives has been stalling. Paris and Berlin have had had serious spats over energy policy and German weapons purchases from the US while tensions in Berlin’s traffic light coalition repeatedly threaten to scupper EU deals at the eleventh hour. 

The EU is weaker without a strong role for the Dutch, and as a soul-searching Spain takes over the 6-month rotating EU Presidency. 

The Hague’s positions on EU issues will not change but its caretaker government will be much more hesitant to sign up to - let alone push - EU initiatives, without a fresh electoral mandate. Coalition negotiations are expected to be tedious and long because four or more parties might be necessary for a majority. As a result, the Netherlands might be missing in action possibly for most of this EU legislature ending in June 2024. That is a headache for the EU, as it confronts pressing challenges like replenishing its depleted budget and preparing the ground for Ukraine, Moldova and seven other candidate countries to become EU members. 

The November Dutch election may see a pro-European government voted into power. The Dutch electoral landscape is volatile, and the race is open. But the odds are that we will see a diminished and possibly more eurosceptic Netherlands in the EU arena.

For one thing, the current government stretched Dutch political tolerance of European engagement to breaking point. Many in the Dutch parliament were sceptical of its strategy, stressing that they did not want to give the EU new resources or competences while they have expressed doubts about EU enlargement in the past. Elections may reshuffle votes, but they are unlikely to change that sentiment and may even strengthen it.

What’s more, Rutte’s successor as VVD leader will need to rebuild the stature, and relationships required to steer the centre-right towards a constructive EU course. Timmermans will fill the vacuum if he wins the election and becomes prime minister. But he will need coalition partners, including possibly Rutte’s VVD. The VVD will sing a different tune until its new leaders have re-learned Rutte’s lesson that the Netherlands’ needs to help shape the EU for its small, open economy to flourish in a global economy beset by geopolitical strife. The wrangling over the post-Rutte era has already begun and some signs do not look promising, with a VVD parliamentarian floating collaboration with the extreme right and anti-EU PVV to curb migration. 

Timmermans leaving Brussels will also alter EU policymaking in the interim. Coupled with the looming departure of Denmark’s Margrethe Vestager, as EU competition commissioner, two of the most senior voices who pushed back on Europe’s increasingly economically interventionist turn prompted by China and the US – and urged rethinks to protect the EU single market from a subsidies race - are leaving the scene. Now Germany and France can quicken the pace with which they throw industrial subsidies around. Timmermans leaving the helm of the EU’s green deal may also strengthen the hand of those who want a pause in EU efforts to legislate on combating climate change and protecting biodiversity.

EU governments on average collapse every two years, so electoral cycles that are ill-aligned with EU’s own are a fact of European democratic life. But they upset the fragile equilibrium between member-states and complicate consensus-building. Both the Netherlands and Spain are, for now, a diminished force in the EU. Paris and Berlin should take note and work in earnest on restoring their marriage, to avoid the EU coming to a standstill over the next year. 

Sander Tordoir is senior economist at the Centre for European Reform.