PREVIEW-Liberals seen topping Dutch vote with spending cuts

* Liberals leading in polls ahead of vote

* Top issue: government finances

* Risk of protracted coalition talks

By Reed Stevenson

AMSTERDAM, June 7 (BestGrowthStock) – Dutch Liberals are expected to
win a general election on Wednesday, their planned spending cuts
resonating with voters alarmed by Greece’s debt woes but a close
result could mean protracted talks on forming a new government.

In the euro zone’s first national election since the euro
crisis gripped the continent, economic issues have dominated the
debate as politicians call for steep budget cuts to tackle a
deficit that is expected to reach 6.3 percent of GDP this year.

The Liberal Party (VVD), currently leading in polls, is
likely to win 36 seats in the 150-member parliament, giving its
leader Mark Rutte the chance to put together a coalition and
become the first Liberal prime minister in nearly a century.

But recent polls point to tight race, with Labour in second
place with 29 seats, while voter fatigue with Prime Minister Jan
Peter Balkenende after eight years has seen his Christian
Democrats slump to third, with a projected 24 seats compared to
41 in the outgoing parliament.

Any coalition would need more than 75 seats to pass laws.

“It will be very difficult to form a government with three
parties or four parties, because you need parties from the right
and the left so I would be very surprised if we have a
government in two months time from now,” said pollster Maurice
de Hond.

The main risk is whether a government will be up and running
before the national budget is due in September. Rutte has set
himself a deadline of creating a cabinet by July 1 if he wins.

STEEP CUTS

A 43 year-old former Unilever manager, Rutte is pushing for
steep budget cuts, smaller government, a halving of the
country’s contribution to the European Union and cutting
benefits for immigrants.

Any cuts will also have to be balanced with keeping the euro
zone’s fifth-largest economy on track. The Dutch economy pulled
out of a recession in the second half of 2009 but showed tepid
growth of 0.2 percent in the first three months of this year.

“People see where we stand and have the confidence that we
will pull the Netherlands out of this crisis,” Rutte said.

The public embrace of fiscal austerity marks a significant
shift from February, when the coalition between Balkenende’s
Christian Democrats and Labour collapsed over the Dutch mission
in Afghanistan.

It appeared at first that the vote would hinge on the
long-festering debate over integration, with anti-immigration
politician Geert Wilders’ Freedom Party enjoying early gains.

But Wilders’ surge lost momentum after Labour ditched former
Finance Minister Wouter Bos as leader and replaced him with
Amsterdam Mayor Job Cohen.

As Greece’s debt crisis worsened and a Dutch government
study group warned in March of an impending fiscal crisis at
home, Rutte’s liberals went ahead in the polls and they have
remained in the lead for the past month.

Money
(Editing by Jon Boyle)

PREVIEW-Liberals seen topping Dutch vote with spending cuts