Ian Ormiston, manager of the Old Mutual European (ex UK) Smaller Companies Fund, reacts to news of victory for Prime Minister Mark Rutte’s VVD party in the Dutch elections

The much anticipated year of European elections has begun in earnest with the Dutch electorate going to the polls yesterday.

The election was viewed as a helpful signal as to how the more precarious elections to come in Europe this year – in France and Germany – might play out. While far-right candidate Geert Wilders had made much of the running over the last 12 months, due to the Netherlands' proportional representation system, his chances had been overstated outside his home country. In the end, it looks as though he won fewer seats than his PVV achieved in 2010. Prime Minister Mark Rutte will work to form a new coalition over the coming weeks.

With a large number of credible political parties and a proportional representation system that doesn’t have a minimum threshold in order to win seats, the Netherlands lent itself to headlines about Wilders leading in the polls, while disregarding the other parties ruling out coalitions with his PVV in a system where coalitions are essential.

Even at the peak of its popularity (which has since waned), the PVV attracted less than a quarter of the electorate, far below the levels of support that Marine Le Pen is enjoying in France. Part of this is due to Dutch electorate’s disgruntlement with the EU and what it perceived as transfers of wealth from responsible northern EU members to their profligate cousins in the Mediterranean. However, these perceived injustices have faded with the gradual healing of the Eurozone, while the domestic economy is growing at a robust pace.

With yesterday’s election proving to be something of a non-event for financial markets, our attention now shifts to the French presidential and parliamentary elections next month.