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The Netherlands began what is likely to be a long period of political uncertainty and economic inertia on Thursday after the Christian Democrats kept power in an election but failed to win a majority in parliament.
A surge in support for the far right, as in other parts of Europe, as well as for the far left could condemn the major centrist rivals to work together as in Germany or Austria - and agreement on such a coalition could take months.
Prime Minister Jan Peter Balkenende's Christian Democrats (CDA) won 41 seats in the 150-seat parliament, far short of the 76 needed for a majority even if they renewed their alliance with the VVD liberals.
The opposition Labour party shed 10 seats to end on 32 as voters switched to the far-left Socialists (SP), who almost tripled their representation to 26 places. But even if they joined forces, the two parties would still not have a majority.
Balkenende's Christian Democrats and Labour differ on many important issues which could mean debilitating battles in government over tax, pensions and immigration policy.
"It would be very difficult to bring Labour and the CDA together. Labour would be scared of losing further ground to the Socialists if they worked with the centre right," said politics professor Philip van Praag of Amsterdam University. "It would not be a very stable coalition and we could see another election within one or two years... Each party would look at the polls every day to see whether it would be a opportune time to call another election."
The re-election of Balkenende, who has promised voters calm and security to follow a period of painful welfare reforms, and the strong gains for the Socialists could mean many economic reforms are put on hold, economists said. Geert Wilders' anti-immigration Party For Freedom won nine seats, a reminder of voters' concerns about Muslim integration.
Dutch politics has become much more unstable since the murder of anti-immigration populist Pim Fortuyn in 2002, with three elections in four years and last year's rejection of the European constitution, opposed by both Wilders and the SP. Germany hopes to revive discussions on the treaty next year, but the Dutch contribution to that debate now looks uncertain.
Balkenende, who rode to victory on an economic upturn in the past year and falling unemployment, favours business-friendly policies and has taken a tough line on immigration. Labour wants to slow corporate tax cuts and lift spending on childcare and job-creation programmes. It has promised an amnesty for some people who have waited years for asylum.

Copyright Reuters, 2006

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