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What happens is this:

All parties that are elected get a one on one with the Queen to ask them what the best cabinet would be. She then appoints a person (the informateur) who gets the reports of these talks, and tells him to look for the best option available. It's also possible she tells him to look for a certain coalition, but it's not mandatory.

He then goes to talk to the different parties, maybe other people, and determines the best new coalition.
Then, he reports back with the most viable solution, and then the Queen appoints a 'formateur', whose job it is to form the new cabinet. This person is almost always the next prime minister, and usually the head of the biggest party.

When the 'formateur' is done, he reports to the Queen, she swears them all in, they get a nice picture done, and then business as usual.

by Freud (freud@freudie.org) on Wed Nov 22nd, 2006 at 08:43:27 AM EST
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