Dutch center-right Prime Minister Mark Rutte fought off the challenge of anti-Islam and anti-EU rival Geert Wilders to score an election victory that was hailed across Europe on Thursday by governments facing a rising wave of nationalism.
The euro EUR= gained as the results of Wednesday's vote showed a clear win for Rutte, albeit with fewer seats than in the last parliament.
He declared it an "evening in which the Netherlands, after Brexit, after the American elections, said 'stop' to the wrong kind of populism."
|Dutch Prime Minister Mark Rutte of the VVD Liberal party appears before his supporters in The Hague, Netherlands, March 15, 2017. REUTERS/Yves Herman
The result was a disappointment for Wilders, who had led in opinion polls until late in the campaign and had hoped to pull off an anti-establishment triumph in the first of three key elections in the European Union this year.
A win for him would have been seen as a boost for French far-right leader Marine Le Pen, running second in opinion polls before a presidential election in April and May, and for populist parties elsewhere that want to curb immigration and weaken or break up the European Union.
The sense of relief among European leaders was palpable.
"The Netherlands are our partners, friends, neighbors. Therefore I was very happy that a high turnout led to a very pro-European result, a clear signal," said German Chancellor Angela Merkel, who will run for re-election in September.
French presidential candidate Emmanuel Macron, expected to face Le Pen in a two-way run-off on May 7, said: "The Netherlands is showing us that a breakthrough for the extreme right is not a foregone conclusion and that progressives are gaining momentum."
The risk premium demanded by investors to hold French government bonds rather than safe-haven German bunds sank in early trade to its lowest level in two weeks, although the move proved temporary.
European shares hit their highest level in 15 months, encouraged partly by the Dutch result but also by the dovish tone from the Federal Reserve that accompanied Wednesday's U.S. interest rate rise.