* Rutte's Liberals biggest party in parliament
* Liberals and Labour seen as coalition partners
* Coalition talks to start on Thursday, likely to be lengthy
* Eurosceptics from hard left, far right lose out
By Thomas Escritt and Gilbert Kreijger
AMSTERDAM, Sept 13 Dutch Prime Minister Mark
Rutte, one of the few European leaders to survive an election
during the euro zone crisis, is expected to form a coalition
with his close rival, Labour, and stay committed to a policy of
The victory of two centrist, pro-European parties in the
general election on Wednesday was hailed by analysts and
investors as a sign that one of Europe's richest countries
remained a close ally of Berlin.
Liberal Party leader Rutte's last government, which fell
after two years, repeatedly urged fiscal discipline on the
indebted countries of southern Europe, while insisting that the
Netherlands also needed to implement painful austerity measures
to meet European Union deficit targets.
The pro-business Liberals won 41 seats in the 150-seat
chamber, while Diederik Samsom's Labour Party came second with
39 seats, results showed on Thursday.
Coalition talks will start later on Thursday and typically
take weeks or even months in the Netherlands.
The chairwoman of the lower house of parliament, Gerdi
Verbeet, spoke by telephone to all the party leaders on Thursday
morning, and will meet them at 1200 GMT.
Afterwards, she will inform Queen Beatrix about which
procedure parliament will follow in forming a new cabinet.
While Labour is seen as the most obvious partner, Rutte may
lose his ally, the outspoken Finance Minister Jan Kees de Jager,
whose Christian Democrat party - which has dominated the Dutch
post-war political landscape - crashed to its worst result ever,
Voters in one of Europe's last countries with a triple-A
credit rating roundly rejected two anti-European fringe parties
that dominated the early stages of the campaign, reassuring
investors who feared the Netherlands might reject Berlin's
strategy for dealing with the euro zone debt crisis.
"Moderate parties that are firmly in the pro-euro camp and
committed to fiscal discipline emerged as the winners at a
crucial time for the euro zone," said Riccardo Barbieri
Hermitte, chief European economist at Mizuho International.
Together, Labour and Liberals would command a comfortable
majority in the lower chamber of parliament, although they would
need a third party to have majority support in the senate, or
TOUGH TALKS AHEAD
Party leaders were expected to meet in The Hague later on
Thursday to begin coalition talks, which at least one senior
Liberal figure said would be difficult.
"There are two clear winners who are substantially different
from each other," Jozias van Aartsen, the mayor of The Hague,
told Dutch radio.
During its campaign, Labour called for a slower pace of cuts
in order to allow for fiscal stimulus at home, and Samsom said
he was prepared to allow Greece more time to meet its targets
"if that is good for Europe".
In contrast, Rutte emphasised that fiscal discipline was
essential, and Greece should not get a third bailout.
Whatever the differences, parliamentary arithmetic means it
would be almost impossible to form a coalition that did not
include these two leading parties of left and right.
"Whatever coalition is formed it will include these two,"
said Rudy Andeweg, professor of politics at Leiden University.
Rutte and Samsom were keeping their cards close to their
chests on Thursday, with Rutte telling reporters he would be
"silent" about attempts to form a cabinet. Samsom has not yet
WILDERS SUPPORT FADES
The leader of the anti-immigration Freedom Party, Geert
Wilders, tried to turn the election into a referendum on Europe,
saying he would pull the country out of the 27-nation bloc and
reintroduce the Dutch guilder. He won 15 seats, almost halving
his parliamentary representation.
The Socialist Party, which opposed austerity at home and
abroad and characterised euro zone bailouts as hand-outs to
banks, also won 15 seats, unchanged from the previous election.
Rutte made increasingly eurosceptic noises as the campaign
progressed, though analysts saw this as a part of a strategy to
win over Freedom Party supporters.
Sweder van Wijnbergen, a University of Amsterdam economist
and former Labour junior minister, said the differences between
the two parties on fiscal policy and the euro zone were far from
"In the end, Samsom is right that the Greeks should get help
as long as they continue their reform programme," he said.
"Rutte has wiggle room inside his campaign commitments, and he
may be in power for as long as four years, so he has the time to
The parties' differences on meeting the budget deficit
target set by the European Union were exaggerated, he said. "The
difference is about how quickly you get to the 3 percent limit,
not about whether to do so," Van Wijnbergen said.
The budget deficit is forecast at 3.6 percent of gross
domestic product this year, falling to 2.7 percent of GDP next
Rutte is almost certain to remain prime minister.
Traditionally, the second-largest coalition partner names the
finance minister, which would come from Labour if the two
parties form a government.
Leading Labour candidates for the job include Ronald
Plasterk, a former academic biologist and education minister who
is the party's finance spokesman, and Coen Teulings, the head of
the CPB, the government's economic forecaster.