Six and a half months after they were elected, Dutch lawmakers have finally taken a step closer to forming a coalition government: the same as the last one.
Prime Minister Mark Rutte’s liberal VVD (of which I am a member), the Christian Democratic Appeal (CDA) and Christian Union were ready to renew their vows after the election in March. The coalition as a whole had gained seats, although the CDA lost four. The center-right parties are aligned on agriculture and EU policy, health care and taxes.
Olaf Scholz has given German social democracy a new lease on life. For the first time in sixteen years, his Social Democratic Party (SPD) — Germany’s oldest — has defeated the center-right Union of Christian Democrats. Support for the SPD went up from 20.5 to 26 percent in the election on Sunday. Still below its pre-reunification heights, when it would routinely win up to 40 percent, but enough to make Scholz the most likely next chancellor.
His counterparts in Portugal and Spain have been equally successful. António Costa was reelected with 36 percent support in 2019. Pedro Sánchez won two elections that year. Both govern with the support of the far left. Four of the five Nordic countries are led by social democrats. The fifth, Norway, soon will be, after Labor won the election two weeks ago.
Germany’s Greens and Free Democrats (FDP) are taking the lead in forming the next coalition government.
The two parties won a combined 120 seats in the election on Sunday, more than either the Social Democrats (SPD), who placed first, or the Union of Christian Democrats, who came in second. They would still need one of the two bigger parties for a majority. The Greens would prefer to team up with the SPD. The liberal FDP would prefer a coalition with the Union.
The best way to avoid gridlock is for the smaller parties to do a deal first and then see whether the SPD or Union could support it.
Germans returned at least six parties to parliament on Sunday (counting the “Union” of Christian Democrats as one). The fate of The Left still hangs in the balance. Projections give the former communists exactly the 5 percent support they need to meet the electoral threshold.
The most likely outcome is a three-party government including the liberal Free Democrats (FDP) and Greens. The question is whether the Social Democrats (SPD) or Union will lead it.
Electricity prices are hitting records across Europe. In Portugal and Spain, wholesale energy prices have tripled from half a year ago to €178 per megawatt-hour. Italy is not far behind at €176. Dutch households without a fixed-price contract could end up paying €500 more this year. In the UK, prices peaked at €247 per megawatt-hour earlier this week.
The main culprit is the high price of natural gas, up 440 percent from a year ago. But Europe is facing something of a perfect storm involving accidents, depleted reserves and a higher carbon price.
Housing is one of the top issues in the German election on Sunday. Proposals reveal a traditional left-right divide: the Social Democrats and Greens seek to rein in prices with rent controls; the Christian Democrats and liberal Free Democrats call for more construction, including by relaxing planning laws and other regulatory requirements.
Coinciding with the federal election, a referendum in Berlin will decide whether the city-state expropriates about 200,000 homes.
The proposal is for private landlords owning more than 3,000 properties to be “socialized”. Supporters argue this would lower prices, as the houses would no longer need to be profitable, but this betrays a simplistic understanding of the market. If the government makes it impossible for developers and landlords to turn a profit, they will develop and rent out fewer apartments and the housing shortage will grow, not shrink.
That’s exactly what happened when Berlin froze rents last year: the number of apartments on the market dropped 57 percent. Owners kept their flats empty while the Constitutional Court reviewed the new law. It ruled in April that the freeze was unlawful. Renters had to suddenly pay a year’s worth of missed rent increases.