Far-right lawmaker Geert Wilders conceited defeat in the closely watched Dutch election on Wednesday, pouring cold water on anti-European Union (EU) populism – at least for now.
Provisional results on Thursday showed that Dutch Prime Minister Mark Rutte’s Liberal Party won 32 seats in the 150-member parliament, 13 more than Wilders’ anti-immigration Freedom Party (PVV). Although PVV made up ground in the election, the gains weren’t nearly as big as some of the more recent polls suggested.
European markets cheered Rutte’s victory as a blow to populism, which has threatened to undermine EU integration since last summer’s Brexit vote. European stocks on Thursday enjoyed their highest close since 2015, buoyed by mining shares and broad gains across the region.
In individual bourses, the United Kingdom’s FTSE 100 Index climbed 0.6%. Germany’s DAX and France’s CAC 40 rose by a similar amount.
The election result sent the euro to five-week highs against the dollar. The common currency settled at 1.0772 U.S. on Thursday, having gained more than 2% over the past week.
Wilders’ defeat probably signaled to investors that the populist movement has not yet spilled over into the EU’s liberal core. The Netherlands is one of the most liberal EU states, and its embrace of right-wing populism could have sparked contagion throughout its neighbours.
The Netherlands is the first of three EU countries to face a hotly contested election this year. France will hold the first round of its general elections next month, with a run-off scheduled for early May should no candidate win an all-out majority. Marine Le Pen is the populist champion of the French election. Like Wilders did, she vows to curb immigration and pull France out of the EU.
Germany also heads for elections later this year. A February poll suggested Angela Merkel’s reign as Chancellor could be under threat, as her handling of the refugee crisis has undermined her image in the eyes of many Germans. The far-right AfD party has already made inroads in local elections and appear poised for a bigger splash at the national level.
The defeat of Wilders is significant for many investors, who prefer political stability over uncertainty. However, the populist uprising likely isn’t over, as more anti-EU parties make their voices heard across the region.
 Mike Corder and Raf Casert (March 16, 2017). “Far-right candidate Geert Wilders handed solid defeat in closely watched Dutch election.” National Post.
 Carla Mozee and Sara Sjolin (March 16, 2017). “European stocks log highest close since 2015 after Dutch election.” Market Watch.
 Vincent Wood (February 13, 2017). “Election LATEST: New German poll shows Angela Merkel’s reign as Chancellor is under threat.” Express UK.