Research Team at Natixis notes that on 15 March, elections for the House of Representatives will be held in the Netherlands and these elections are the first in a series in Europe, all at risk given the surge of populist movements in the opinion polls.

Key Quotes

“After the Netherlands, France will go to the polls in April-May and then Germany, normally at the end of September. The Netherlands could be the first country where general elections are won by a far right party.” 

Geert Wilders’s PVV leading opinion polls

Currently, Geert Wilders, the leader of the Euro-sceptic Party for Freedom (Partij voor de Vrijheid - PVV), is way ahead in opinion polls, having increased his lead since November 2016. If victorious, he will be the most likely candidate for the position of Prime Minister, but he will struggle to form a broad-based coalition government. According to the latest opinion polls, the PVV will win 35 seats (proportional basis, with 76 seats needed for an absolute majority), which means the party will need the support of centrists to form a government. Therefore, the party will probably have to shelve the most extreme measures in its programme if it is to have a stab at governing the country. A Portuguese-style scenario cannot be ruled out, in which the party with the second-largest number of seats, currently the Mark Rutte’s People's Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie - VVD), would end up forming a government (which would be a more positive outcome for DSL).”

Is there a Nexit risk?

One can easily imagine that, if Geert Wilders and PVV get the most votes in the upcoming elections, they may nonetheless have to drop calls for the Netherlands to exit of the European Union (Nexit) during the negotiations with the other parties, most of which are euroenthusiast. The PVV’s programme, whose constitutionality is already being challenged, would probably have to be totally overhauled.”

“Furthermore, the organisation of a referendum over an EU exit will be no mean task, as Geert Wilders would have to choose between:

1) Amending the constitution, as in its current version it does not provide for the staging of referendums at national level. Since 2015, only consultative referendums may be held, provided at least 300,000 signatures have been gathered. Amending the constitution is laborious in the Netherlands, as it must be passed twice by the two houses.

2) Table an ordinary bill, which will have to be put to a vote in the House of Representatives, upon which the latter will be dissolved and new general elections held to return new Lower House representatives. Note that the bill will have to be passed by a two-thirds majority in both houses.”

What impact on the markets?

If Geert Wilders is the next Prime Minister this will be bad news for the Eurozone and for the markets. The significant lead of the PVV candidate in the opinion polls does not appear to have been priced by the market that seems to be focused rather more on the French political risk. For this reason, our view is that DSL are currently rich against most EZ sovereign debts. At the very least, whatever the political scenario (coalition government with or without the PVV), a victory of the far-right party will see DSL underperform other Eurozone sovereigns.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds steady below 1.0800 ahead of EU data Premium

EUR/USD holds steady below 1.0800 ahead of EU data

EUR/USD is holding steady just shy of the 1.0800 mark in the early European morning. The US Dollar is consolidating the upside amid a cautious market tone, as investors assess Friday's US NFP blowout and hawkish Fed expectations. Eurozone data coming up next. 

EUR/USD News

GBP/USD attempts to cross 1.2050, downside looks likely amid US-China tensions

GBP/USD attempts to cross 1.2050, downside looks likely amid US-China tensions

The GBP/USD pair has attempted to extend its rebound move above the critical resistance of 1.2050 in the Tokyo session. The Cable gauged an intermediate cushion around 1.2000 amid subdued performance by the US Dollar Index (DXY).

GBP/USD News

Gold rebounds but not out of the woods yet Premium

Gold rebounds but not out of the woods yet

Gold price is making a tepid recovery attempt toward the $1,900 level at the start of the week on Monday. Gold buyers a breathing a sigh of relief after two back-to-back days of extreme sell-off.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Is this the beginning of the end for bulls?

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Is this the beginning of the end for bulls?

Bitcoin (BTC) price is the glue that is holding this 2023 bull run intact for Ethereum (ETH), Ripple (XRP) and other altcoins. But chinks in BTC bulls’ armor are beginning to show, therefore, investors need to be cautious of a sudden reversal. 

Read more

The Week Ahead - RBA rate meeting, UK Q4 GDP and earnings

The Week Ahead - RBA rate meeting, UK Q4 GDP and earnings

Back in November the RBA hiked rates by a less than expected 25bps, amidst concern about the effects recent rate hikes were having on the Australian economy and ergo the housing market. At the time Governor Philip Lowe said that the RBA wanted to slow the pace.

Read more

Forex MAJORS

Cryptocurrencies

Signatures