The first of the big 3 elections in EU countries this year
After the last Ice Age, Britain and the Netherlands were joined by land. The Thames and the Rhine were part of a single river system. Following an inundation caused by a megatsunami, the two were separated, ironically, under a torrent of water.
In 2016, European politics was hit by the megatsunami of Brexit, separating Britain from the rest of Europe. Are there previously joined political currents that have now been separated by this?
Pundits have not been shy to suggest exactly this. Marine Le Pen’s strong showing in the French presidential election, the new highs of the AfD in Germany and the long periods during which Geert Wilders’ PVV have led the Dutch polls have all been cited as examples of part of a wider nativist anti-immigration movement sweeping world politics.
The referendum vote to leave the EU and Donald Trump’s election victory were both unexpected by the betting markets. Determined not to be caught out again, punters are putting their money behind the outsiders this time. In France, despite every poll for many months showing that Marine Le Pen would be very soundly beaten in the second round by whoever she is remotely likely to be up against, she is shorter than 3/1 on Betfair at present to become next president. In Germany, Angela Merkel is only just shorter than evens on Betfair to remain as Chancellor after the election in October. And in the Netherlands, PVV are odds-on favourites to get most seats.
I don’t propose in this piece to look at the betting markets in France or Germany (though for what it’s worth I’m very happily betting against Marine Le Pen and for Angela Merkel). Instead, I’m going to turn to the Netherlands. Is the dyke holding out the PVV going to burst?
Very probably not. The Netherlands operates a highly proportional system. The PVV are getting nothing like 50% of the vote. Their list of allies grows thin. Even if they take the most seats in Parliament, they are going to struggle to put together a government.
The Dutch electorate, always quite fragmented, has atomised. On current polling, the largest party, whichever that may be, will get less than 20%. Meanwhile, six parties are regularly polling above 10%. Up to 14 parties may get Parliamentary representation.
The polls have recently turned against the PVV. For the last week, the VVD (the current Prime Minister’s party) has been consistently in the lead. The PVV appear to be fading.
The election campaign has been galvanised in the last few days by a spat with the Turkish government. It appears that bettors think that this will help Geert Wilders – the PVV have shortened markedly on Betfair in that time.
But this seems illogical. The Turkish government’s ire was provoked by the Dutch government’s actions. Floating voters unconvinced to date by the government’s readiness to deal with immigration will presumably have been heartened by this, which I would have thought would help government parties and hinder the PVV.
This is not to say that the VVD is home and hosed, far from it. It’s anything up to a six horse race who is going to cross the finishing line first. It’s certainly possible that the PVV will do it in the end.
But should the PVV be odds-on favourites? In my view clearly they shouldn’t. The polls might be wrong or there might be a last minute swing but there is no reason why either of those considerations should necessarily benefit the PVV rather than another party.
From all this it follows that the Betfair markets look wrong. The VVD, who are after all in the lead in all the recent polls should be favourites and probably shorter than the 2.66 which at the time of writing they were last matched at. The PVV should definitely be longer than the 1.81 which at the time of writing they were last matched at. In fact, those odds look roughly the wrong way round. Bet accordingly.