Government Collapses

After weeks of negotiations, the government failed to gain
support for an additional EUR 14 billion (2.3% of GDP) austerity
programme meant to bring the fiscal deficit to 3% by 2013.
Anticipated elections could be held in September. In case of
urgency, the government could still pass legislation concerning
European issues with the support of the opposition.

•After weeks of negotiations, the government failed to gain support
for an additional EUR 14 billion (2.3% of GDP) austerity programme
meant to bring the fiscal deficit to 3% by 2013. At the last moment, the
extreme right Freedom Party, which backs the minority government of
Christian-Democrats and Liberals, withdraw its support.

•The government package included an increase of the VAT (from
6% to 7% and from 19% to 21%), a freeze of salaries for civil servants
and social security benefits, and the raising of contributions for medical

•Today, Prime-Minister Rutte is likely to go to Queen Beatrix to offer his resignation. The Queen will start consultations to see if the coalition can be restored. This is unlikely, in which case anticipated elections will be organised, probably in September. 

•This will bring the coalition parties in a difficult position as
campaigning on an austerity package is hardly an election winner.
Opinion polls suggest that the winners could be the Socialist Party (in the Dutch context a radical left-wing party contrary to the mainstream Labour Party) and the Freedom Party.
Hence, it might be very difficult to form a majority government after the election.

•In the meantime, the government will have caretaker status. The
direct consequences are that the Netherlands will miss the 3% fiscal
deficit target by 2013, a widening of the spread with the Bund (on
Friday already at 61 bp) and a possible loss of the triple A status.

•Moreover, it will be difficult for a caretaker government to
implement new policies. This could also have consequences for the
adoption of European legislation, which may be put on the backburner
till after the election. Nevertheless, in case of urgency, decisions could
still pass, as the government may still find a majority in parliament on
these issues with the support of the pro-European Labour Party and
Social Liberals (Democrats66).

Upcoming Events

31st May 2012
SIX – ConventionPoint, Zurich

PIP Investor Zurich

For the 5th consecutive year the PIP Investor Zurich Conference 2012 will feature contributions from senior investment specialists and major allocators, analysing current behaviour across financial markets. As downgrades and politics continue to implicate the growing concerns in Europe, we evaluate to what extent will the impact of inflationary pressure have on global bond and commodity portfolios? 

With unprecedented volatility in equity markets, are traditional investment techniques still appropriate for institutional investors and does diversifying a portfolio really work in today’s financial markets? Our experts will evaluate whether the Swiss franc is likely to get stronger and what lessons have hedge fund managers learnt from the previous crisis? All this and more from this year’s PIP Investor Zurich conference. 
Alongside the main conference will feature a host of interactive workshops, dedicated exclusively to a number of timely investment strategies

PIP Investor Zurich

25th September
SIX – ConventionPoint, Zurich

Global ETPs delivered total AUM growth of $191.1bn so far in 2012 driven by $66.0bn of inflows and $125.1bn of favourable market and exchange rate movements. Fixed income was the top asset gathering category for the year with $25.5bn or 39% of total net new assets. North America Equity attracted $21.6bn YTD or 33% of total ETP inflows. Europe equity ETPs relinquished ($5.9bn) YTD concentrated in April outflows from German DAX products.* 

This ETF seminar will provide a dedicated and educational platform, offering professionals a concise and timely insight into the latest themes and topics concerning the ETF landscape. 

As the industry continues to evolve, professional investors are challenged with new themes concerning the ETF landscape. The seminar will elaborate on topics concerning ETF product innovation, optimum strategies for portfolio implementation, due diligence of ETPs, as well as looking at regulatory developments by ESMA.