By PIETER CLEPPE
It’s widely expected that Dutch right-wing populist Geert Wilders is unlikely to enter government in the Netherlands when it elects a new Lower House on Wednesday, March 15.
Mainstream political parties are simply planning to form a government with as many parties as needed just to keep him out. However, what would happen if he would somehow manage to rise to power after all?
Then, the first concern wouldn’t be Dutch membership of the European Union (EU). It would be Dutch membership of the Eurozone. Wilders said: “If I become prime minister, there will be a referendum in the Netherlands on leaving the European Union,” specifying that “we want to be in charge of our own country, our own money, our own borders, and our own immigration policy”.
As destabilising as a Dutch EU exit may be, the likely thing is that markets would focus on a possible Dutch exit from the monetary part of the EU club.
It has emerged that in early 2012, at the height of the euro crisis, both the Dutch and German governments had emergency plans for a return to their national currencies. The details have never been disclosed, but it’s obvious that a bank holiday and capital controls would be implemented during the transition stage, which may take a few years.
Who would keep their savings in Dutch banks in the run-up to the referendum? A bank run would be a real risk, which in its turn would also make it less likely that people would vote to get rid of the euro.
It may actually be a good idea for the Netherlands to exit the euro, given how taxpayers, importers, consumers and savers would gain much more than the advantage an undervalued currency represents for exporters. But due to the unstable transition stage, even a country where deposits may go up in value if it were to exit the euro may decide not to do so.