The minority government depends on the backing of Wilders’ to remain in office. The controversy concerns 1.6% of GDP deficit reduction mandated by EU rules (see background), which would likely entail substantial cuts to health and pension spending.
The Wall Street Journal reported that the Dutch Central Bank piled on the government to reach agreement and warned that protracted talks could lead to increased borrowing costs for the country.
“This is no wild guess. If the uncertainty rises, this will have an impact on the creditworthiness of the Netherlands,” Central Bank Chief Klaas Knott reportedly said.
The opposition has called for new elections if the talks collapse. But opinion polls show no single party would win a majority if an election were held now, making this a less likely option.
Liberal Prime Minister Mark Rutte’s coalition partner, the Christian Democrats, has plunged in popularity while Wilders’ Party of Freedom has lost some ground since the 2010 election.
In recession since July, the Netherlands has since become one among the eurozone’s worst performers, expected to shrink 0.9% this year, while triple-A peers Germany, Finland and Luxembourg are seen growing.
Anti-immigrant and anti-bailout
The anti-immigrant, Islamophobic and eurosceptic Wilders is also likely to use the negotiations to pressure the government on asylum-seekers and the eurozone crisis.
Immigrant groups fear, however, they could pay the price he demands for his support. “It is threatening,” said Ahmet Azdural, director of Turkish lobby group IOT which was set up to promote minority issues. “In the last 10 years, the climate has really changed for immigrants and people who are different.”
“We want to come to an agreement but not at any price,” Wilders told reporters earlier this month.
Wilders' price is likely to be an even tougher line on asylum-seekers and immigrants, particularly Muslims. He has previously called for a closed-door policy and opposes letting fellow members of the European Union work in the Netherlands.
His anti-Islam rhetoric, likening the Koran to Adolf Hitler's Mein Kampf, has elicited death threats, and for many years he moved between various safe houses, and used disguises such as wigs and glasses when travelling.
Since storming onto the political scene in 2004, Wilders has made a significant mark. He has influenced Dutch immigration policy and set the tone of public debate, whether on Muslims and burqas or bailouts and the euro, in what once would have been regarded as politically incorrect language.
His pact with the minority coalition, signed in September 2010, sets out policies he wants this government to adopt.
Some could soon be implemented. For example, the cabinet recently proposed a law banning face-covering veils worn by some Muslim women, one of his demands, and recently agreed to a law which would ban dual nationality and set stricter conditions for obtaining Dutch citizenship.
Wilders opposes eurozone bailouts and says Greece should leave the euro: “We are paying for the Greeks’ beers and ouzo. That has to stop,” he told journalists recently.
A member of Wilders’ Freedom Party announced this week he would quit the party in a move that would further weaken the coalition's hold on power. Hero Brinkman said he would not let Rutte’s government collapse, but stopped short of pledging unconditional support for new budget cuts.