Going Dutch?

The list of politicians across Europe who have been sacked at the polls by enraged electors over the course of the credit crunch is long and (allegedly) distinguished. For some, this has been a healthy thing: people peacefully exercising their democratic rights, but for others (notably the European Commission) this has been a dangerous trend, which has encouraged volatility and fear, and reaffirmed the belief that stability can only be achieved by non-party political means.

There is some truth in both narratives: there were lots of grossly incompetent politicians worthy of the sack and, in some countries, the electoral system had repeatedly failed to generate stable governments capable of decision. However, the election this week in the Netherlands has rather gone against this grain as the incumbent party has done well and the anti-austerity factions on the right and left have been crushed.

Some commentators have suggested this reflects a more economically aware electorate or at least a realisation that it’s better the devil you know. We are not so sure. The Netherlands has always been politically different from the periphery of Europe (more stable with less corruption) and the economic situation has not been as dire, so people are not as angry. However, by the time of next year’s elections in Germany, it is highly likely that public opinion will have moved against Merkel (who is currently riding high in the polls) as the costs to the German taxpayer mount.