(From R) Dutch Prime Minister Mark Rutte of the People's Party for Freedom and Democracy (VVD), Gert-Jan Segers of the ChristenUnie, Alexander Pechtold of D66 and Sybrand Buma of the CDA present their new government pact in The Hague on October 10, 2017. Four Dutch parties on October 10 officially sealed a coalition pact after a record 209 days of negotiations, unveiling their plan to govern the Netherlands for the coming years. / AFP PHOTO / ANP / Jerry Lampen / Netherlands OUTJERRY LAMPEN/AFP/Getty Images
(From right) Mark Rutte of the VVD, Gert-Jan Segers of the Christian Union, Alexander Pechtold of D66 and Sybrand Buma of the CDA present their new government pact in The Hague on Tuesday © AFP

Four Dutch political parties have struck a deal to give the Netherlands a fragile coalition government led by Mark Rutte, more than 200 days after elections left unprecedented political fragmentation in the eurozone’s fifth-largest economy.

Mr Rutte, head of the centre-right People’s Party for Freedom and Democracy (VVD), the biggest political party, will preside over his third coalition in six years. His government is likely to side with Germany in many aspects of eurozone reform, in a blow to French president Emmanuel Macron’s agenda for transforming the single currency area.

The first four-party alliance since the 1970s will shift rightward after Dutch Labour, a previous coalition partner, suffered losses in elections seven months ago. it will have just a one-seat majority, holding 76 seats in the 150-seat parliament. 

Mr Rutte said: “It took a long time but we have an ambitious and balanced plan.”

On the UK’s plans to leave the EU, the government stressed it would support the unity of the remaining 27 member states while seeking to protect the interests of the Dutch fishing sector in any trade talks.

Elections in March pitted the Netherlands’ establishment parties against the Eurosceptic anti-Islam party of Geert Wilders. Mr Wilders’ PVV, which campaigned for the Netherlands to leave the euro, came second in the vote with 20 seats behind the VVD’s 33. 

In an agreement that took 208 days to reach the new government — which includes the Christian Democrats, Christian Union and D66 — has ruled out support for a eurozone budget as supported by Paris. It has pushed a tough line on the need for private sector investors to take losses if eurozone governments require taxpayer rescues.

In the coalition agreement, the government also said any common eurozone debt instruments were “undesirable”.

In a reflection of a hardline German position laid out in a paper this week, the Dutch government said: “All member states must fulfil their responsibilities and cannot shift the negative impact of their policies on to other countries”.

Europe is the cause of a number of divergences between the parties, spanning areas such as tax policy, immigration and euthanasia. Of the coalition partners, D66 is the most pro-European, Mr Rutte’s VVD is hostile to deeper risk-sharing in the eurozone, and the Christian Union has previously campaigned for a north-south break up of the currency union.

The Netherlands has been a traditional ally of Germany, stressing the need for budgetary discipline, structural reforms and clear rules in the single currency area. 

The coalition is formally expected to take power by the end of the month once all cabinet positions have been filled.

Mr Wilders said the coalition agreement was a “monstrosity” that neglected the threat posed by Islam to Dutch society.

Despite the absence of a working government since March, the Dutch economy has been thriving. Annual GDP growth accelerated 3.3 per cent at the end of the second quarter, the highest since the country joined the euro in 1999.

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