Global Insight Perspective | |
Significance | Yesterday, 35,000 protestors marched in the capital, Brussels, in support of a united Belgium and to call for a swift, positive end to the deadlocked government formation talks. Meanwhile, the American Chamber of Commerce (AmCham) has echoed concerns voiced earlier by the Belgian Federation of Enterprises about the negative impact of the impasse on new foreign investment. |
Implications | Both the protests and the comments by AmCham have increased the pressure on the victorious parties of the June 2007 general election to speed up the formation of a new government by agreeing to compromises. |
Outlook | There is currently no alternative to the government formation talks in their present form. King Albert II cannot call on anyone else to lead the negotiations, and new elections in the current climate would most probably only repeat the results of June 2007. |
Public resentment over the deadlocked government formation talks became clear yesterday, when 35,000 Dutch- and French-speaking protestors marched in the capital, Brussels, to commemorate the anniversary of Belgium's independence from the Netherlands in 1830, and simultaneously to call for a swift and positive end to government negotiations. The march was organised by Marie-Claire Houart, a francophone civil servant who has set up a petition calling for Belgian unity that contains almost 140,000 signatures. The petition further calls for an end to the squandering of public funds on the negotiations between the so-called "orange-blue" coalition consisting of the victorious parties in the June 2007 election: the Flemish Liberal Democrats (VLD) and the Christian, Democratic and Flemish Party/New-Flemish Alliance (CD&V/N-VA) on the one side, and the francophone Reform Movement (MR) and the Humanist Democratic Centre (CDH) on the other. The previous administration of outgoing prime minister Guy Verhofstadt is acting as an interim government until the orange-blue coalition is sworn in, but it cannot pass any significant legislation.
Patience is running low not only among the negotiating parties, but further afield as the country enters a record fifth month without a government. Disputes over the status of Wallonian parties and French-speaking Belgian citizens in Flanders have resulted in bitter exchanges and controversial rulings by Flemish authorities in recent weeks (see Belgium: 16 November 2007: Election 2007: Belgian Crisis Worsens as Flemish Interior Minister Rejects Nomination of Wallonian Mayors). Further adding to the pressure, the American Chamber of Commerce (AmCham) in Belgium has now warned that the current impasse could deter potential foreign investment due to concerns over political instability. AmCham's chairman, Marcel Claes, said that it is not so much the 1,200 U.S. and Belgian companies already present in the country that he is worried about, but rather potential investors, who may now decide to stay clear of the country and instead opt for alternatives, such as Germany. Claes's comments echo those voiced by the Federation of Belgian Enterprises earlier this year (see Belgium: 27 September 2007: Election 2007: Federation of Belgian Enterprises Uneasy About Deadlocked Government Formation Talks). The leader of the MR and interim finance minister Didier Reynders has brushed aside such concerns, however, stating that despite the lack of an approved budget for 2008, which can only be established by a new government, Belgium's government finances are strong, heading for a surplus in the years to come.
End in Sight?
The public protests and AmCham's comments raise the pressure on the orange-blue coalition to come to an agreement, as patience wears thin over the current impasse. However, the situation seems unlikely to change in the near future as both sides harden their stances on highly contentious issues such as devolution and transfer payments to the less affluent French-speaking southern region of Wallonia. In general, Wallonians are said to be more in favour of a united Belgium, not least due to their comparatively poor economic performance, which increases the need for transfer payments from the more affluent Flemish northern regions. In this respect, yesterday’s demonstrations are likely to be dismissed by Flemish hardline parties such as the far-right Vlaams Belang (VB) as another show of force by the "poor but vociferous" Wallonians. Indeed, the majority of the 35,000 participants are said to have been francophone, due to the location of the demonstration (the predominantly French-speaking Brussels) and the increasing anger among Wallonians over recent developments. The CD&V/N-VA and other Flemish parties are increasingly questioning why the affluent north should support the south, claiming that this constrains economic growth by preventing the introduction of tax-reduction measures on overtime, as is occurring in France.
Outlook and Implications
Despite the current impasse in the talks, King Albert II has very few alternatives available to him at this stage. Given the hardening of stances on both sides recently, new elections would most probably only exacerbate the conflicts in the Flemish and Belgian parliaments. Moreover, there is a lack of alternative negotiation leaders; King Albert II had little choice but to welcome Yves Leterme back into the role after the latter had resigned from the post in August (see Belgium: 24 August 2007: Election 2007: Talks on Formation of Belgian Government Terminated by Christian Democrat Leader). However, Leterme's return to the negotiating table has not changed the course of the talks. Although the parties have reached a number of deals in the past weeks, major decisions are still outstanding, and with relations between the Flemish and francophone sides souring following the dispute affecting the region around Brussels, it is difficult to see how a satisfactory deal can be struck any time soon.
Indeed, it is now looking more and more possible that a new government will not be agreed by the current negotiating parties at all. There is a possibility of a symbolic agreement on a number of issues by the Christmas period in an attempt to foster greater public trust in the process, or even a final agreement by the end of the year. However, even if a government is formed, given its difficult birth and the issues that have erupted to the surface in the course of the negotiations, it is difficult to see how it would last out its term.