By Thomas Escritt
AMSTERDAM (Reuters) - Dutch Prime Minister and Liberal party leader Mark Rutte has urged voters to beware what he suggested was the rival Labour party's radical leftwing agenda as the country's two most popular parties traded jibes ahead of next week's election.
In a move analysts said looked like a calculated attempt to stress their separate identities before a vote that may see both pro-EU parties form a coalition government, the exchanges erupted late on Wednesday after a poll suggested the duo would take first and second place in the election.
"As I see it now, Labour has again put on the red feathers, it has moved back on the ideological road under Diederik Samsom's leadership," Rutte told Dutch TV program Nieuwsuur in an item broadcast on Wednesday night.
"That is a choice they make."
Hans Spekman, the Labour chairman, quickly shot back, accusing the fiscally conservative Liberals of moving to the right and "riding like a huge bulldozer over the interests of people who aren't doing so well". The party served the interests of only the country's top 10 percent, he added.
With Labour - which is more of a social democrat party - starting to nip at the heels of the Liberals in the polls, the election has suddenly turned into a close contest between two parties that worked well together in previous so-called "purple" coalitions, reviving talk this could happen again after the September 12 election.
"We have seen this in 2006 when they started to squabble but the day after the elections they jump into the same bed," Emile Roemer, the Socialist Party leader whose party has been eclipsed in the polls by Labour, told a Dutch news program on Thursday.
"Of course they are saying very loudly 'No, not with the Liberals. No, not with Labour'. But the chance is high that if these two parties are big ... it heads in that direction."
A Liberal-Labour coalition, which would still require one other party for a majority in parliament, would be good news for European politicians anxious about whether the Netherlands, a core euro zone country, will stick to a painful path of spending cuts designed to bring the country's budget deficit below 3 percent of GDP in line with European Union rules.
Such a coalition would be in a position to take a firm line on austerity in order to meet EU budget deficit requirements with room for some growth stimulus, and would probably be keen to maintain the pressure for reform on the indebted countries of southern Europe.
Just a few weeks ago, it looked like Rutte's Liberal Party, with its tight fiscal policies and tough love position on the euro zone's budget sinners, might cede first place to the eurosceptic, pro-growth Socialists.
But a series of disastrous performances by Socialist leader Roemer in TV debates have hurt the party's rating, while Diederik Samsom, the authoritative leader of the more moderate Labour Party, has used the same debates to establish himself in the public mind as a credible future prime minister.
Polls currently put the Liberals in first place, suggesting they would win 34 seats in the 150-seat parliament. But they show Labour is not far behind with its current level of support at 32 seats, according to an Ipsos Synovate poll late on Wednesday, well ahead of the Socialists, who are third with 22.
For a majority, the Liberals and Labour coalition would probably join up with D66, the social liberals.
Even though they have successfully governed together in the past, the two parties would have to bridge important differences if and when they again take the reins of power.
Labour's Samsom has repeatedly argued that the EU's 3 percent deficit ceiling should be reached in a gradual fashion in order not to hurt economic growth, while Rutte has argued that swift consolidation is essential for the country's economic health.
And even though Labour as an opposition party supported Rutte's government on euro zone bailouts, the Spanish bank rescue, and approved the euro zone's permanent bailout fund, the European Stability Mechanism (ESM), the two parties differ on other euro zone issues.
In a television debate last week for example, Rutte ruled out supporting a third bailout for Greece, while Samsom promised a more flexible approach if he were prime minister.
The major sticking points in any coalition negotiation would probably center on domestic and social policy, according to Tom Louwerse, a political scientist at the University of Leiden.
"There are big differences on spending policies that would affect lower income groups," he said, citing the parties' differing attitudes towards the Netherlands' generous welfare state.
Rutte's government collapsed in April when his ally, anti-immigration politician Geert Wilders, refused to back budget cuts that were needed to bring the deficit within the EU limit.
Within days, Rutte's caretaker government had pulled together a package of cuts to achieve that goal by 2013. A few of those budget measures still have to be approved when the new parliament sits.
The parties' differences could make agreement on economic policy easier.
"Labour would certainly want to extract a price for going into coalition," said Newton, "but I'm not sure that sticking point would be the 3 percent deficit target."
Labour might be happy to cede the post of finance minister to another party in order to avoid being closely associated with any unpopular cuts, he added.
But after such a volatile campaign, few are making any definite predictions.
"If you'd asked me two or three weeks ago if Labour could bridge their gap with the Socialist Party I'd have said it's very unlikely," said Louwerse.
There is still room for an upset - polls show that as many as 50 percent of voters remain undecided, a historic high that suggests many people are disgruntled with the political process.
"This is one of the big problems with Dutch politics at the moment," said Jan Wijsman, a lawyer.
"It's like a box of chocolates, you never know what you're going to get."
(Additional reporting by Gilbert Kreijger; Editing by Sara Webb and Andrew Osborn)