What comes after the far right’s surprise victory?

Far-right politician Geert Wilders sent shockwaves across the European political landscape when he led his party to a decisive victory in the Netherlands’ general election.

Only late in the election campaign did opinion polls begin to suggest that the controversial Wilders, who opposes immigration and has adopted a series of anti-Islamic policies, could come to power after 25 years in politics.

The outcome of Wednesday’s election will be worrying for both Brussels, as Wilders’ Euroscepticism extends even further. calls for “Next,” or the Netherlands’ exit from the European Union — and to Ukraine, as Wilders pledged to cut off military aid.

The Netherlands is the fifth largest economy in the European Union and has demonstrated its influence, with significant influence in policy making. For 13 years, the country has been led by center-right Mark Rutte, who gained a reputation as a “Teflon prime minister” for his ability to navigate scandals while being a hands-on deal-maker.

The Netherlands is also a key US ally in the increasingly important areas of trade and technology, having imposed export restrictions on advanced semiconductor equipment amid US efforts to limit supplies to China. Its role here is vital thanks to its local company ASML, one of the most important semiconductor companies in the world.

Forming a coalition in the 150-seat Dutch parliament is usually a long and difficult process, even when the victor is not a political pariah.

There is no guarantee yet that Wilders will become the new prime minister, even with his Freedom Party winning 37 seats. Much depends on whether other parties will back away from their previous pledges not to work with the Freedom Party, especially in light of the scale of their victory.

Sarah de Lange, a professor at the Department of Political Science at the University of Amsterdam, said the most likely outcome is a right-wing government consisting of the Party for Freedom, Rutte’s conservative party, and Peter Umtsigt’s New Social Contract Party. It was formed in August with a pledge to “do politics differently”.

De Lange told CNBC’s “Squawk Box Europe” that this would likely require Wilders to abandon the most extreme elements of his manifesto, which include proposals to cut immigration to zero, ban the Qur’an and close mosques, many of which are unconstitutional.

On fiscal policy, Wilders’ party has a “clear populist” bent, says Esther Barendregt, chief economist at Rabobank.

He added: “So, there are a lot of wishes for more public spending, for example, pensions, increasing the minimum wage and a lot of other things, but there are less clear ideas about how to finance that. Certainly one of Geert Wilders’ wishes is to pay Less for Europe. Of course, it remains to be seen how much room he has to manoeuvre.”

Barendregt added that the formation of the government may include a coalition with parties “keen to keep government finances under control”, meaning spending was balanced by cuts.

“I expect the markets to understand the political landscape in the Netherlands, which means coalition formation and compromises on all sides… And in fact, Geert Wilders was able to win this election, I think, also because of his more moderate tone recently,” she said. weeks, which attracted a larger number of voters than previously expected.”

Lisa Moje, associate professor at the University of Amsterdam, pointed out that the Freedom Party did not follow the tradition of submitting its economic plan to the Planning Board for analysis of its feasibility.

Moje said by phone that the decisive issues in a Wilders victory were likely to be immigration and the Dutch housing crisis, with the European Union and foreign policy discussed less frequently.

Overall, analysts say, a Wilders-led government is likely to be more aggressive within the EU, but the extent of that may be curbed by coalition partners.

This may not ease tensions in Brussels over the future of unity in the bloc and agreement on topics such as aid to Ukraine, migration and refugees.

Wilders will join fellow EU leaders who are strongly critical of his policies – as in Slovakia and Hungary – and those who push their countries’ policies to the right, as in Sweden and Italy.

The EU will now closely monitor the composition of the Dutch government, Alexandra Kellert, associate director at consultancy Control Risks, said via email.

She added that in order to court allies, Wilders may need to rule out any vote to leave the European Union.

There is no indication that such a vote would gain much momentum anyway Ballot this year Which indicates that about 67% of people have a positive view of the European Union.

“In the unlikely event that Wilders becomes prime minister, his greatest influence will be in the European Council. Here there is the possibility that Wilders could collaborate with other Eurosceptic leaders such as [Hungary’s] “Viktor Orbán must disrupt the policy-making process, especially on foreign policy issues such as sanctions, which require consensus and support for Ukraine,” Kellert said.

“The EU will also consider what the results of the upcoming European Parliament elections next June mean. Repeating the success of the Freedom Party and other populist parties across the EU would make it more difficult for the EU to pass legislation in some areas, particularly relating to With climate change.”