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.

Would a Dutch euro-exit lead to other countries leaving? Possibly. Finland would be a candidate, pursuing "Fixit", but also Germany, the Eurozone's paymaster, may do so. Countries which would see their new currency depreciate against the euro are less likely to exit as a lot of their debt would then still need to be settled in euros, making a default more likely.

Still, the precedent would make markets more convinced that an exit of a weak Eurozone member state could be a serious option, so a Dutch euro exit would accelerate the end of the euro.

Geert Wilders
Geert Wilders is not expected to win the election on WednesdayRemko de Waal/ AFP

What about Dutch EU-membership? On the one hand, there is a much stronger consensus that the EU is a good thing for the Netherlands than there is about the euro. On the other, it's probably much easier for the Netherlands to leave the EU, as costly as it may be, than to leave the euro.

A "Nexit" is currently not enjoying support in opinion polls, but the difference between Remainers and Leavers is only a few percentage points in some polls. Also, well-known pollster Maurice de Hond has pointed out that EU opponents could win a referendum if the turnout among Nexit supporters would be higher than expected.

Even if the Netherlands would somehow remain a member of the Eurozone while leaving the EU, this would be a massive blow to the EU project. Not only was the Netherlands one of the six founding members of the project in 1960, it's also a member of the EU's predecessor, the Benelux Customs Union, which was agreed in 1944.

In all likelihood, a Dutch exit from the EU would cause a fundamental rethink of European cooperation. If a new alternative arrangement would be created, it would have the following two features.

First of all, it wouldn't be as intrusive as the EU has been at times, with its overregulation, fiscal transfers, national budget supervision and measures imposing mandatory quotas to accept asylum seekers.

Secondly, it wouldn't have as many member states, as especially Bulgarian and Romanian EU-accession are seen as a mistake by many Dutch. This is also why the Dutch government is blocking accession to the passport-free Schengenzone for them.

According to a Pew poll, a majority in EU member states wants to return powers from the EU back to national capitals. In the public discourse, the European Union rarely gets criticised for making it easier to buy or sell products or services across borders. Typically, when it is under fire, it's because some are annoyed about freedom of movement of people. It's hard to imagine that if the EU were to be refounded in some modified form, monopolies for airlines would be restored. Imagine the public outcry.

On the contrary, the "new EU" may not include a number of Balkan countries, something that could make them more unstable, while also freedom of movement may face more restrictions. In any case, especially in the age of ecommerce, if the EU wants to become more popular again, it should focus on its core task where it still enjoys trust: removing national barriers to trade.


Pieter Cleppe is head of the Brussels office of the independent thinktank Open Europe.