New government in The Netherlands: A historic experiment

The coming week marks the end of Mark Rutte’s tenure as Prime Minister of the Netherlands, after 12 years in government with the VVD. The new incoming prime minister will be Mr. Dick Schoof, a senior official and former head of the Dutch security service, who ultimately proved to be the most acceptable choice for all parties. Mr. Schoof, who is an independent, will lead “above the parties” an extra-parliamentary government that will consist of 50% coalition ministers and 50% experts who will come from outside politics, although most many of the non-political ministers have much other political-administrative experience

After the election results of Nov. 22, 2023, in which Geert Wilders became the largest party with 37 seats, it became evident that the voters' choice showed that the issue of immigration was key. It also quickly became clear that PVV, NSC, BBB and VVD needed to form a government with a right-wing signature. Several broad voter surveys underscored that a majority of voters trusted this combination. In particular, reducing immigration and security of existence appear to resonate with Dutch voters, even moderates.

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During the arduous negotiations, Geert Wilders’ populist and radical-right position emerged as a significant obstacle. Pieter Omtzigt (NSC), also an election winner with 20 seats out of nowhere, and liberal VVD leader Dilan Ye?ilg?z vetoed Mr. Wilders as prime minister because of his past extreme and sometimes discriminatory statements. Mr. Omtzigt, in particular, demanded several safeguards, including that Mr. Wilders explicitly conform to the Rule of Law and renounce any and all ideas which are contrary to it as long as the four parties are in a coalition.

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After a long period of negotiations, the PVV, NSC, VVD and BBB concluded a coalition agreement on May 15.? This agreement however contains a stringent immigration paragraph which experts caution almost violates European law and plans for the agriculture sector that require opt-outs in Brussels. Experience shows that both are equally impossible.

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What is most notable is the divergent forces at play. The political leaders in Parliament will be distanced from their government. The latter must implement the coalition agreement, but has room for its own plans outside of it. The NSC leader Pieter Omtzigt wishes to empower the Parliament further. Meanwhile, the new prime minister, Dick Schoof lacks the mandate of a direct electoral win. One big question is whether he will hold a position in the European Council of Heads of Government. Additionally, there is uncertainty about whether this new form of government, distanced from parliament has any real chance of success. It is a political experiment, marking a venture into uncharted political territory. Only time will tell if this will work in The Netherlands.

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Our clients have to navigate a complex political setting with shifting majorities, and outline plans whose details will only be filled in after the implementation of Gov. Schoof I’s government. There is also uncertainty about whether the proposed plans will have a chance to reach the finish line. Meanwhile, the business community in the Netherlands rightly complains about rapidly changing plans, for example in taxation, which create further uncertainty for investors.