What about Belgium?

In this article, the author assesses the record-breaking government formation crisis in Belgium and addresses why a complete deadlock in government formation negotiations has a detrimental effect on Belgium’s economy and its international reputation. 


By Matthias Pauwels, 22 Nov, 2011

Ten thousand thundering typhoons! Filibusters! If the insults of Belgian King Albert II strike any resemblance to those of his fellow compatriot, Tintin’s Captain Haddock, this perhaps would be the best of times to hear them in the corridors of the Royal Palace in Laken. When Belgium’s federal elections took place on Sunday 13th June 2010, no one could have imagined that the country would end up in political limbo due to a record-breaking political crisis.

As Belgium hit a crippling 526 days without a government on 21st November 2011, the man tasked with ending Belgium’s political crisis, Francophone Socialist leader Elio di Rupo, offered his resignation to King Albert II for the second time in five months on Monday night after talks collapsed over budget cuts to counter the Eurozone’s debt crisis. And after an endless string of appointing mediators, negotiators, and government formation specialists, even the palace’s inspiration to come out with a strong statement appeared rather stale when the king urged to “recall the gravity of the current situation and underlined that the defence of the general interest of all Belgians and European deadlines require a very quick resolution to the political crisis.”

Quo Vadis, Belgica?

In the 1830s, the artificial construct that is Belgium found its unified strength, as the Southern Provinces from the United Kingdom of the Netherlands – albeit linguistically divided but united as Roman Catholics – tore away from the overwhelmingly Dutch Protestants. William I, the Dutch King, rightly believed that the separation of the Southern Provinces of the rest of the Netherlands would be detrimental to his country’s economy. In many ways, the Belgian Revolution had several causes; mainly, the treatment of the French-speaking Catholic Walloons in the Dutch-dominated United Kingdom of the Netherlands, the difference of religion between the Belgians and their Dutch King, and the domination of the Dutch over the economic, political, and social institutions of the Kingdom.

Two centuries later, the power of religion that once unified Belgium as a whole has traded places with the finer Burgundian things in life the country is internationally renowned for, such as trappist beers, mussels and fries, and chocolates. But as apathic as Belgians seemed to be about their deepening political crisis, is the savoury of the country’s cuisine strong enough to keep the Dutch and French-speaking centres united?

In a striking resemblance to the Dutch King’s woes and sorrows regarding the separation of the Southern Provinces in 1830, Belgium’s current political squabbles are heavily embedded in the country’s unequal regional economic growth, combined with the intractable problem of revenue flow to the different regions. Flanders – not to be confused with the Simpsons’ sometimes sickeningly cheerful Hi-didly ho next-door neighbour – accuses the Walloon region of being too dependent on economic subsidies from the Flemish region. Wallonia, once the shining beacon of Belgium’s industrial revolution, capitalised heavily on its extensive deposits of coal and iron from the beginning of the 19th to the middle of the 20th century. This brought the region wealth, making Wallonia undoubtedly the more prosperous half of Belgium.

Since World War II, however, the importance of heavy industry has greatly declined, and the Flemish Region gradually surpassed Wallonia in wealth as this region economically declined while the former specialised in IT, engineering, pharmaceuticals, and shipping. Wallonia, making up 55% of Belgium’s territory but with only a third of its population, now suffers from high unemployment and a significantly lower GDP per capita than Flanders, leaving the region to rely heavily on economic subsidies from the Flemish region. It is this fact exactly that has led Bart De Wever, leader of the right-wing New-Flemish Alliance and winner of the previous general elections in Flanders, to quote that “Belgium is the sick man of Europe, with unbridled money flows to Wallonia, a junkie on a Flemish drip.”

The most recent elections were fought mainly on the failure to resolve the conflict over the electoral arrondissement of Brussels-Halle-Vilvoorde. The conflict centered on the political and linguistic differences in the arrondissement and exacerbated tensions between Dutch- and French speaking Belgians, with the Flemish desiring to split the arrondissement into two separate areas, while the Walloons wish to keep it together. Belgium’s latest marathon government formation talks collapsed after Flemish and French centre-right parties rejected formateur di Rupo’s plan to curb the public deficit, saying it relied too much on tax hikes and not enough on cuts. Hopes of an end to the crisis had risen last month after the feuding Flemish and French-speaking parties at the negiotiating table reached a deal on the thorniest issues, such as giving the regions more power and reforming the status of bilingual Brussels. The New-Flemish Alliance however, winner of the election in the northern part of Belgium and the largest political party in Flanders, had by then long left the negiotiating table, claiming that the reforms outlined by di Rupo still catered too much to the needs of Wallonia. The remaining negotiating parties, now deeply divided over how to slash the Belgian debt, leave the country without any hopes of a government before the new year.

Impact of Belgium’s deadlock government formation

The impact of Belgium’s political woes affect the country both on a domestic and international level. On a domestic level, Belgium’s growth prospects, like the rest of the debt-saddled 17-nation Eurozone, have deteriorated in recent months. In the second trimester of 2011, the economy of the EU grew by 0.2 %, according to Eurostat. In the same period Belgium, paradoxically enough, registered a comparative high growth rate of 0.7 %, leaving many analysts baffled on how to explain “the Belgian wonder”. A government-less country that hadn’t dare to introduce anything remotely resembling austerity measures surpassed Germany and France in economic growth. The absence of a government seemed to make little difference to day-to-day life in the small kingdom. Many state functions, from education to welfare, have already been ceded over the years to regional and community governments. Belgium deftly helmed the presidency of the European Union in the second half of 2010, and the caretaker government headed off market jitters over its debt levels in January 2011 by quickly agreeing on a tighter budget.

The Belgian wonder, however, seems to be over. Belgium’s borrowing costs have spiked in recent months, but so far the nation has fended off the type of market pressure that has already toppled the Spanish, Italian, Greek, Irish, and Portuguese governments and forced the latter three to take out multi-billion-euro EU-IMF bail-out loans. Moreover, the European Commission published new growth figures this month showing that Belgium’s economy would expand by only 0.9 % next year, as against the 2.2 % previously predicted by the EU six months ago. Additionally, EU economic affairs commissioner Olli Rehn warned Belgium and four other EU states earlier this month that they could face fines if they failed to get their public finances back in order. In order to remain financially feasible, Belgium would have to slice 11.3 billion euros off the deficit next year and some 20 billion in all by 2015. Caretaker Belgian premier Yves Leterme and the European Commission have repeatedly called for a deal that would bring the country’s public deficit below 3 % of gross domestic product by 2012 – rather than the 4.6 % now forecast. In October of this year, Moody’s put Belgium’s Aa1 government bond ratings on review for possible downgrade, a decision that was heavily influenced by troubled Franco-Belgian Dexia bank. The nationalisation of Dexia was one of the only major tour de forces the Belgian caretaker government was capable of. The approval of new legislature on Belgium’s federal level, the expansion of new development aid plans, and a clearly outlined federal approach to implement austerity measures tackling the current economic crisis have been put on hold for a painful 527 days in the absence of a new government. And while Belgians initially celebrated breaking the Iraqi world record of government formation in February of this year – an event which was whimsically dubbed the “Fries Revolution” – at this point, the party is long over. And Belgians are undoubtedly left to wonder: is there still a party planner left that can fix this mess?

Furthermore Belgium’s international reputation is at stake. As the heart of Europe and hub to the European Union and NATO, the country’s political struggles have left many international politicians to wonder whether or not Belgian politicians can rise above their differences. The partition of Belgium has been deemed not viable by many leading political analysts and would leave the intractable problem of bilingual Brussels, home to many domestic and international political institutions.

End of Belgium?

For some in Belgium, the question is not if, but when the divorce of Flanders and Wallonia will be consummated. But the partition of Belgium has been deemed not viable by many as well. You wind up with the intractable problem of bilingual Brussels and, more worryingly, the demise of Belgium – a sticking plaster over the fault-line between Europe’s Protestant north and Catholic south – could potentially make Europe a more dangerous place.

According to many Walloons, Flanders has systematically organised its independence over 35 years, taking away responsibilities from Belgium’s federal level and transferring them to local community governments, such as education and welfare. French-speaking Brussels – whose cultural and linguistic affinity is with Wallonia to the South – sits like an island in Flemish speaking Flanders, courtesy of the newly established linguistic frontier that was drawn southwards in 1962.

In the 45 years since, Belgium as a state, steered by the economically and numerically superior Flemish, has effectively devolved itself out of existence. ”Now Flanders with six million people makes the rules and four million French-speakers adapt,’” said Myriam Delacroix-Rolin in an interview with the Guardian in 2007. Delacroix-Rolin is the mayor of Rhode Saint-Genese, a small town 9 miles south of Brussels, who is banned from speaking French at council meetings or official functions. ”The Flemish are very clever. My council does not use language criteria to allocate housing, but the region does. In this way Flanders is ensuring that more Flemish-speakers settle in my municipality. The region also imposes a language test on teachers seeking to work here or parents wishing to adopt children. One way or another, your route is barred unless you have Dutch language diplomas.”

It used to be the opposite. During centuries of Walloon prosperity – including 200 years as Europe’s most productive mining and steel basin – the Flemish were looked down on and their language banned. Recently they have gained the economic upper hand, and now see post-industrial Wallonia as a costly passenger. Increasingly, Flemish politicians speak of the ‘Czechoslovakia option’ and point to the fact that the ‘velvet’ break-up in 1993 was a success for both sides. But economically it is hard to imagine what the wastelands of Wallonia would stand to gain.

Most observers believe the break-up is just a matter of time; Flemish nationalist support will grow every time there is a local or national election. But nothing will happen without the EU, to which an independent Flanders, would have to apply for membership. Flanders believes that Brussels will be its new capital, but with the capital’s linguistic and cultural affinity to Wallonia, this is highly contentious. Flanders could be pushing for a messy divorce.

For the time being, Belgian King Albert II has not yet accepted the resignation of formateur di Rupo. While the King deliberates on where to go from here and Belgians await his next move with bated breath, the tricolor Belgian flag remains to wave stately at the royal palace. For Belgium and Europe’s sake, let’s hope it’s not the last time.

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