Dutch set to defy austerity as left takes poll lead

According to a survey released on Wednesday (22 August) by opinion pollsters TNS-Nipo, both parties are projected to win 34 seats in the 150 member Parliament, with the centre-left Labour party (PvdA) expected to poll in third place with 21 seats. A poll of polls compiled this week by the University of Leiden pegs the Socialist and VVD parties at 35 and 33 seats respectively.

The election, which takes place on the same day as the German constitutional court rules on whether the European Stability Mechanism, the permanent EU bail-out fund, breaches national law, comes after the centre-right coalition led by Liberal leader Mark Rutte collapsed in April over budget cuts.

The Socialist party is more eurosceptic than the mainstream Dutch parties, leading opposition to the ill-fated Constitutional Treaty which was defeated in a 2005 referendum. It also opposed EU bail-out packages and the European Stability Mechanism, and is against further moves towards fiscal federalism in the eurozone.

Last week, the Socialist party leader Emile Roemer promised to hold a referendum on the fiscal compact treaty, describing it as "idiotic" to impose a 3% limit on budget deficits. The treaty, which was designed by Merkel and former French President Nikolas Sarkozy, and enthusiastically backed by Rutte, would put the deficit and debt brakes from the Stability and Growth Pact into national constitutions.

Although Rutte's Liberal party are expected to make slight gains on the 31 seats claimed in 2010, with no party likely to score a decisive victory the election is likely to lead to lengthy negotiation to fashion a coalition government. The Rutte government was cobbled together in October 2010 after four months of negotiations.

Geert Wilders' Freedom party (PVV) is expected to lose up to ten of their 24 seats. Wilders', whose party courted controversy earlier this year over its website calling on people to report unruly immigrants, toppled the Rutte administration in April by walking out of negotiations for further budget cuts demanded by the European Commission.

Rutte had promised to make further spending cuts in a bid to reduce the country's 4.7% deficit in 2011 below the 3% threshold. Wilders's deputies had voted with the government to give it a parliamentary majority. Meanwhile, economic data released on Friday (24 August) by the Dutch Central Planning Bureau (CPB) forecast that the country's deficit would fall to 2.7% in 2013, with the economy expected to grow by 0.75%.