A few years ago, a far-right anti-Islam party winning the second most seats in the Netherlands’ election would be a cause for panic in the European Union. In 2017, it’s being hailed as a great victory for liberalism.

The Dutch elections on Wednesday saw center-right Prime Minister Mark Rutte fend off a challenge from far-right populist Geert Wilders and gain the largest share of the vote. The result sets up lengthy coalition talks between Rutte and some of the dozen-plus parties that managed to gain seats in Parliament, which will create a ruling government certain to exclude Wilders.

Wilders’ Party for Freedom, or PVV, came in a distant second behind Rutte’s VVD, and finished just one seat ahead of two ascendant progressive parties. It gained five seats more than it did last election, but fell far short of poll predictions just a few weeks ago that showed the party on track to become the largest in the country.

Pro-EU politicians have immediately seized on Wilders’ somewhat disappointing finish as a rebuttal to the far-right’s narrative that an inevitable populist uprising is taking place in Europe. After the U.S. election and Brexit referendum last year, France and Germany met the lack of a populist surge in the Netherlands with a sigh of relief, despite still-substantial popular support for Wilders. Both states are dealing with rising far-right parties ahead of their own elections later this year.

“The Netherlands is showing us that a breakthrough for the extreme right is not a foregone conclusion and that progressives are gaining momentum,” said French independent leader Emmanuel Macron. He is expected to face off against far-right leader Marine Le Pen in the final round of France’s presidential elections in early May.

“Large majority of Dutch voters have rejected anti European populists. That’s good news,” Germany’s Foreign Office posted on its Twitter account. German Chancellor Angela Merkel and the former president of the European Parliament, Martin Schulz, both congratulated Rutte on the result.

But while many pro-EU politicians celebrated the Dutch election as a defeat for Europe’s right-wing populist movement, it was about far more than just Wilders. Instead, the vote reflected a number of huge shifts in Dutch domestic politics that could threaten the long-term stability of its political system.

Michael Kooren / Reuters Dutch far-right politician Geert Wilders of the PVV, left, and Jesse Klaver of the Green-Left Party, right.

There were 28 parties running in the Dutch elections, necessitating roadmap-sized ballots ― and highlighting the fragmentation of the country’s politics.

A crowded multi-party system is nothing new in the Netherlands, but the divisions are growing more intense, and major parties are attracting smaller percentages of the vote. In part because of the plethora of options, around 50 percent of voters were still undecided at the start of election week.

The decentralization will force a number of parties that hold opposing views to work together in a new coalition, which could lead to difficulties in governance.

Wilders’ PVV is not the only party to gain from this fracturing. The progressive Green-Left, led by 31-year-old Jesse Klaver, won the greatest number of seats since the last election, and the newly formed pro-immigrant party, Denk, entered Parliament for the first time after winning up to three seats.

The biggest loser of the election was undoubtedly the PvdA, a labor-oriented party that lost 29 seats in a crippling defeat. The PvdA came into the election as the second-largest party in the Netherlands, but fell to seventh after Wednesday’s vote. A number of small- and medium- sized parties, including the liberal, pro-EU D66, took over the PvdA’s lost seats.

MARCO DE SWART via Getty Images A woman holds up an enormous election ballot for the Dutch general election on March 15, 2017.

This decentralization of politics and turn away from historically powerful parties has been a trend in a number of countries across Europe.

In Germany, the far-right populist Alternative for Germany party is looking to secure its first-ever seats. The party has practically no chance of actually governing, but its emergence is notable in a country that has lacked mainstream far-right political parties since World War II.

As France also gears up for its first round of elections next month, the two candidates leading the polls are the independent Macron and far-right Le Pen. If either wins the vote, it would be the first time that a non-establishment party candidate has become president.

With the Dutch election behind it, the EU has so far avoided the threat of a Brexit-style populist insurgence, but the real test for the bloc will be in these two-round French elections. A win for National Front leader Le Pen in that vote would present a greater danger to the EU than any result in the Netherlands could have posed, and it’s far more likely that she could govern. Even if Wilders had won, other Dutch parties had long sworn never to work with him due to his discriminatory platform.

Wilders now finds himself in a familiar and comfortable position. Far-right populist parties thrive in the opposition, where they are freed from having to find ways to actually implement or deal with the consequences of their policies. Representing the second-largest party yet excluded from government, Wilders will be able to criticize any ineffectiveness or infighting among the ruling coalition as proof that he is the only real alternative to politics as usual.

Wilders has already managed to influence Dutch politics from this outsider position, adding to the splintering of the political landscape and dragging the VVD to the right on issues like immigration. His failure to come out on top in the election puts a crack in the far-right narrative, but pro-EU politicians’ relief over the mixed results also shows how far the goal posts concerning populism have moved.

On Twitter, Wilders celebrated the election’s outcome:

“We were the 3rd largest party of the Netherlands. Now we are the 2nd largest party. Next time we will be nr. 1!”