Thursday, January 10, 2013

Belgium: Euroland or Switzerland?

Published on Fair Observer 

One of the main challenges for the future of the European Union is the fate of the eurozone. Will it become a sustainable political union, a quasi-country that could be called “Euroland” - or will it break up? Interestingly, Belgium might offer some useful insights on the question. Since at least a century, but really more and more in the last decade, it has been going through various attempts at a break-up itself. Proponents of “Euroland”, which for the sake of argument might be equated to the idea of “Greater Belgium”, should have a look at the country to make up their mind.

After the Flemish moderately nationalist New Flemish Alliance (N-VA) booked a huge victory in the 2010 federal elections, a stalemate emerged, resulting in 541 days of federal government negotiations, the new federal government only assuming office in December 2011.

Many wondered how a country could function for one and a half years with only a caretaker government. The explanation is that politicians are only needed to take long-term decisions, while the day-to-day running of government operations is done by the  permanently employed civil servants.[AP1]  The Netherlands, also, had a caretaker government in 2012 for almost half a year, following the collapse of its coalition government. The real concern in Belgium in 2010 was not instability due to the lack of federal government, but instability because of the threat that the country could split up. [AP2] 

The origins of the tensions

Belgium can be divided culturally into three different parts: Dutch-speaking Flanders in the north, making up 60% of Belgium’s 11 million inhabitants, French-speaking Wallonia in the south, accounting for 30% of the population, and Brussels, the capital, for 10%. Brussels is the biggest city in the Benelux. It is also the seat of NATO and of the most important EU institutions.

Belgium has a federal system of government. The three parts of the country each have their own regional government layer, called “Regions[AP3] ”. On top of that, there are also three so-called “Communities[AP4] ” or government layers that grant both the Flemish and Walloons influence in Brussels, while also providing the small German minority in the east of Wallonia with a degree of self-government.  What is unique in Belgium is that every one of these Regions and Communities is on equal footing with the federal level. While the federal government’s competences are national defence, justice, social security, the governments of the Regions and Communities deal with education, culture, environmental regulations and public planning. For this to work, a lot of conciliation is needed.

Why Brussels matters

It is important to mention the cultural composition of Brussels, as the supposed fear of the Flemings of losing Brussels is seen as an obstacle to independence. While Flemish was once the dominant language, now French has taken over as the lingua franca, in Brussels, with only one third of the inhabitants still speaking Dutch. French is the mother tongue of the majority in Brussels, and Dutch of only around 10%. There is the community of international expats as well, often working for or around the European Union, and finally there are the poor immigrant communities, mainly from Turkey, Morocco and the Congo. The city is gradually becoming more and more international and perhaps even more detached from the rest of the country. 

According to prominent Flemish commentator Rik Van Cauwelaert, 80% of the Brussels economy is focused for on Flanders. He thinks that "Brussels is part of that mega region from Amsterdam until Lille and Dunkerque, whereby Antwerp is at the centre and Brussels at the periphery". Van Cauwelaert expresses the opinion of a lot of Flemings who are becoming less convinced of the importance of Brussels for Flanders. Frans Crols, the former editor-in-chief of Belgian business magazine Trends, has even proposed Flemish independence without Brussels, a taboo for virtually every Flemish politician.

The Crisis of 2010-2011

In 2010-2011, there was no intention of splitting up Belgium, whether one looks at election results or Flemish opinion polls. The big winner of the election, the N-VA, had campaigned for gradual steps to independence, not for secession. The other Flemish parties decided to form a coalition government without the N-VA, as a deal between the N-VA and Francophone parties appeared unfeasible. As a result, the current Belgian federal government does not have a majority among [AP5] the  MPs elected for the Flemish electoral districtsin the Federal Parliament. Three out of four big Francophone parties are in government, giving it a very Francophone “feel”, not corresponding to what Flemish voters have demanded for after the election victory of the N-VA.That is a sensitive issue. European Council President Herman Van Rompuy, the former Belgian prime minister, once warned that if there would ever bea government without a majority in Flanders, it would be “dangerous for the existence of the state”.

That’s because Flanders not only hosts 60% of the Belgian population but also accounts for 83% of exports. On an annual basis, financial transfers from Flanders to Wallonia are estimated to amount between 6 and 16 billion euro a year, depending on whether a French investment bank or a research institute at a Flemish University calculates them. The politician who became prime minister in 2011, Walloon socialist Elio Di Rupo, struggles to speak Dutch, for which he receives a lot of criticism. The Flemish Christian Democrat, Liberal and Socialist parties [AP6] are therefore taking a big risk forming a federal government without the big winner of the elections, the N-VA, and without a majority among Flemish MPs, to keep the country together.

Whether they have made the right decision will be seen in the next federal elections, in 2014. If the coalition suffers heavy losses, it may not be so eager any more to save the country once agai[AP7] n. This decision will depend on the verdict of the Flemish voter. Therefore, we may say that the 2014 elections are really a referendum on the future of Belgium.

The two big issues

There are two contentious issues in the institutional debate in Belgium. The first one has already been mentioned: the fiscal transfers from Flanders to Wallonia and Brussels, 1,000-2,500 euro per Fleming per year. Flemings not only criticise the transfer of the money to the south, but also that it doesn’t really appear to do much good. This is acknowledged by certain Francophones, such as the Liberal politician Alain Destexhe, author of "Wallonia, the Truth of the Figures”, who says that “it can be questioned whether the transfers, coming not only from Flanders but also from the rest of Europe are an incentive for Wallonia”.

The second contentious issue is the definition of the border between north and south. There has been discrimination by the Belgian state until deep into the 20th century against the Flemish majority, for example by using French as the only language of government and legislation. This has led to feelings of resentment which still exist in Flanders today. Di Rupo recently complained that “the Flemings are a majority in this country and yet they behave as a minority. That’s disturbing sometimes.”

A big step to resolve this issue was the agreement on a so-called linguistic border in 1962. Since then, tensions have remained in a number of municipalities around Brussels where a lot of Francophones live, often having moved there from Brussels while outnumbering the original Dutch-speaking population. This is linked to the emergence of a metropolitan area of Brussels, transforming rural areas into urban ones. Because the electoral district of Brussels wasn’t separate from the surrounding area in Flanders, Francophone politicians from Brussels campaigned in the Flemish periphery around Brussels to get elected. For 50 years, therefore, Flemish politicians campaigned to split this electoral district, called “Brussels-Halle-Vilvoorde”, provoking several government crises. A deal was finally reached in 2011 to do so, while making special arrangementsfor Francophones in the Flemish municipalities around Brussels[AP8] . It can be questioned whether this will do much to stop the periphery of Brussels becoming more French-speaking, but in every single country, border-issues are a sensitive political issue.

A more profound reason for why the split-up of this electoral district has caused a lot of political tension over the years is that it raises the chances that the 1962 linguistic border will at one point be recognised as the border between a Flemish and Walloon state. This is because the electoral district’s borders now fall along the linguistic border. The arrangement on the latter provides that there is no territorial link between Wallonia and Brussels. That’s relevant in case of a split-up of the country, analysts in both north and south hold, because of the Uti possidetis principle of international law. According to that principle which has often been applied when new countries have emerged, a territory remains with its possessor at the end of a conflict, unless otherwise provided for by treaty.

This means that in case of a break-up, Wallonia and Brussels would have a hard time forming a country together. This also leads Flemings to believe their chances on keeping Brussels as an island within Flanders are greater. The Francophone inhabitants of Brussels however fear to be enclosed as a minority within Flanders, while a lot of Walloons believe an independent Wallonia can only be economically viable together with Brussels.

The latter belief, that a small country would have more difficulties to survive economically than a big country, is widely held - also internationally. Time and again, it has been proven wrong. Singapore and Slovakia are only two examples. Of the top 20 countries in The Economist's "Where-to-be-born index", 18 are with less than 35 million people. Only Germany and the US just made it. Belgium is at number 15, despite the economic suffering of the south.  

For a small country, it’s not as easy as for a big one to maintain a disfunctional redistributive welfare system, as the one Wallonia is suffering from. Once the transfers to the south of Belgium would be phased out, long-needed reforms would be enacted. The possibility to receive unemployment benefits indefinitely and the inflexible hire-and-fire regulations, both impediments to more job creation, would likely be reformed. Maybe after a period of adjustment, the main winners of a Belgian breakup could well be the people of the less affluent south.

Many in Flanders favour the model of a confederation. Like in Switzerland, the different regions would co-exist in one country, but would be largely responsible for themselves, economically speaking. If the voter decides to create a stalemate again in 2014, that may well be the outcome.

 [AP1]What administration? Clarify.
 [AP2]THis doesn’t make sense: threat of a break-up is unstable – could you clarify what you mean by ‘instability’?
 [AP3]What’s the original word? This one
 [AP4]Original word, not translation? One can translate it like this
 [AP5]I don’t understand this sentence!
 [AP6]Do you mean specifically the Liberal Party, the Socialist Party – or do they have other names? Yes I mean the 3 parties
 [AP7]Save the country in what way?
 [AP8]How? Too complicated to explain. They get more rights to demand official documents in French, for example, and they’ll still be able to vote for politicians in Brussels in some cases.