Dutch elections in the limelight – Danske Bank

According to the analysts at Danske Bank, an important event in the euro area this week will be the Dutch election for the lower house of parliament on Wednesday.

Key Quotes

“In line with the general populist mood in Europe, we expect the far-right Freedom Party (PVV) led by Geert Wilders to perform well and believe it could become the largest faction in the lower house. However, as other parties have ruled out forming a governing coalition with it, we do not think the PVV will be able to form a government.”

“Instead, a lengthy coalition-building process would start and it could take several months to form a new government, which, in our view, would be likely to consist of a coalition of at least five centre-right and centre-left parties. Even if the PVV were somehow able to gain sufficient seats to form a government, it would still be very difficult to hold a binding referendum on EU membership.”