Amsterdam (CNN) Voters in the Netherlands are heading to the polls Wednesday in an election widely seen as an indicator of populist sentiment across Europe.

With the first round of the French presidential election just over a month away and Germany headed to the ballot box later this year, the Dutch battle is being closely watched for clues to wider political trends.

Conservative Prime Minister Mark Rutte is facing a tight battle with far-right rival Geert Wilders, whose anti-immigrant, anti-Islam tirades have landed him in court -- but also won him widespread support in a country that is increasingly polarized by austerity and immigration issues.

Rutte's Party for Freedom and Democracy, the VVD, leads the latest Peilingwijzer poll of polls by Leiden University, but Wilders' Freedom Party, the PVV, is hot on its heels.

The Dutch political landscape is splintered, with 28 parties on the ballot, and the country's system of proportional representation means some form of coalition government is almost guaranteed.

Rise of populism

The Netherlands vote will be studied for insight into a wider populist trend in Europe and elsewhere.

Close to a dozen European countries will hold elections this year with populist-nationalists, many buoyed by US President Donald Trump's victory, riding high in the polls. A strong showing for them could put the European Union, already rocked by Britain's impending exit, under greater strain.

In France, Marine Le Pen -- who wants France to drop the euro and has threatened, like Wilders, to hold a Brexit-style referendum on quitting the European Union -- has made her right-wing National Front party a leading contender in April's presidential ballot.

Meanwhile, German Chancellor Angela Merkel, who's due to meet with Trump this week, faces attacks from the right over her handling of Europe's refugee crisis.

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But Wilders' popularity has slipped in recent weeks, said Quentin Peel, associate fellow at London-based think tank Chatham House -- and he believes that could be down in part to Trump's arrival in power.

"I think that very well-grounded, middle-of-the-road, solid Dutch citizens have been a bit concerned about what has been happening in Washington," Peel said.

"The trouble is [the results] are very difficult to predict. You've got no less than 28 parties running in this campaign, and you're probably going to ... end up with a very complicated coalition and Mr. Wilders is not going to be part of it."

A volunteer at a polling station in Prinsengracht, Amsterdam, told CNN that the significance of the election appeared to have motivated voters to turn out.

"It's incredible. They already had 500 voters. It's a really big turnout," said Hanneke Spijker, a yachting journalist in her 50s. "It's on and on and there were lines -- we never have lines! Lots of people coming here. It's a very important election."

Poll position but no gold

Should Rutte's lawmakers form the largest group in the 150-seat House of Representatives, he is expected to form a new coalition government with at least three other parties, giving him a third term in office.

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But maintaining the status quo is exactly what many Dutch voters have tired of, and Wilders rated strongly in pre-election polls thanks to his no-nonsense rhetoric and often controversial views . Other parties -- including Rutte's VVD -- have lurched to the right in response.

Musician and actor Ron Mesland, from Amsterdam, said he was concerned about the wider impact of Wilders' popularity. "Most other parties seem to adopt his speech and his ideas, and that really worries me," he said.

Ruud Koole, politics professor at the University of Leiden, said that in the event Wilders secures the most seats in the House of Representatives, the country's political system would likely make it extremely difficult for him to govern. "The problem for Wilders is that other parties do not want to enter a coalition with the PVV," he said.

Koole said Wilders is popular because he speaks to the specific concerns of some voters, "about unemployment, about health care, but especially about the Dutch national identity, which lead to foreigners, immigrants, asylum seekers, also refugees.

"Voters for Wilders don't really believe that he has the solutions to solve these problems, but at least he expresses their concerns."

Author Bert Nap in Amsterdam voted for a progressive party.

Voter Bert Nap, an author who lives in Amsterdam, said he hoped the rise of populist sentiment would mean that issues around national identity and integration that trouble a large part of the population -- though not him -- were now out in the open.

"Now you can address these problems and these feelings, rather than deny them and let [the voters] all go to the populist party that can cash in on it," he said.

Nap said he himself voted for the progressive PvdA party because it had had the guts to go into government with Rutte's party, despite that making it "very unpopular" with many supporters.

Military historian Kathie J. Somerwil, 86, said she had voted strategically -- for Rutte. "With this Wilders, I think this is not the Dutch way and with what's going on in America, I must vote for the most strategic thing to keep the balance," she said.

Tensions with Turkey

Turkey's President Recep Tayyip Erdogan responded by accusing the Dutch of being responsible for the massacre of Bosnian Muslims in Srebrenica in 1995, when Dutch UN peacekeepers failed to protect them from Bosnian Serb forces.

Donald Tusk, President of the European Council, waded into the diplomatic row Wednesday, tweeting that Rotterdam was "destroyed by Nazis" but now has a Moroccan-born mayor. "Anyone seeing fascism there is detached from reality. We are Europeans & proud," he said.

Andre Krouwel, a political scientist with the Free University Amsterdam, told CNN that Erdogan had in effect handed Rutte the election "on a silver platter" through his actions.

"[Rutte] needed to show statesmanship and a strong position against anti-immigration and anti-Islam," he said. "It was an electoral dream moment. You couldn't script this."

Robin Vanstraalen, a research analyst based in Amsterdam, said he thought Rutte had handled the situation with Turkey well, and that it had influenced how friends of his had voted.

He predicts, given the Netherlands' fragmented politics, that forming a government will "be a long process and eventually it will end up in the middle -- which is where we have been for the last few years already."

Key issues for voters

According to preliminary Eurostat data, the Netherland's economy grew by 2.1% last year , and investors have remained reasonably calm throughout the campaign.

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But Rutte's tough austerity measures aimed at combating the 2011-2012 recession have hit the country's poorest the hardest and that has weighed on their minds as they prepare to visit the ballot box.

"My biggest concern is that the working class is being put down," said delivery driver Tony Regnerus. "The immigrants are all coming in, and they get a better life than the working man. They're not pushed to do anything with their life, they're not pushed to get a job.

"Every day, I go to big cities like Rotterdam and Gouda and Delft, they're all wearing Canada Goose jackets -- €600, and I can't pay it -- [but] I'm a working man. It's gotta be the other way around."

The Netherlands' relationship with the European Union has been another hot topic on the campaign trail. The Dutch were founding members of the union, but attitudes have cooled in recent years.

Dutch fisherman Jan de Boer plans to vote for far-right politician Geert Wilders because of his anti-EU stance.

Fisherman Jan de Boer said he is concerned about the future of his industry -- which he says is threatened by EU regulations -- and this will be at the forefront of his mind when he comes to fill out his ballot on election day.

"The rules are very bad for the fishermen of the Netherlands," he said. "We want fishing and our children want fishing."

Until now, de Boer has always voted for the Christian Party -- but this time around, he said, that will change. "Geert Wilders' ... is the only party that fights European rules, and for me that's important."

But bus company worker Leonard Schaab said he didn't believe Wilders will do as well as expected: "The polls are always a little bit off, and when the real elections [take place] most of the time people will vote for other parties."

"The man doesn't have the skills to do it," he added. "The only thing Geert Wilders does is shout about all kinds of problems ... he creates problems, but he never has solutions."