Thursday, 15 September 2011

All smiles

Negotiators for a new Belgian government reached an agreement last night on the thorny issue of the break-up of the electoral district of Brussels-Halle-Vilvoorde, the largest electoral district in Belgium and the only one with both Flemish and French-speaking voters. This is an issue that caused the fall of the last government and has remained unsolved for 48 years.

After 459 days of negotiations the agreement was hailed as truly historic, in a Belgian dimension. The district will be split-up into Brussels (mainly French-speaking) and Halle-Vilvoorde (mainly Flemish). In six villages with large numbers of French-speaking voters (indeed in five of them a majority), citizens will be able to choose for candidates of the Brussels district if they prefer this. Other subtle compromises in the package have to deflate the symbolism of this issue on both sides.

Of course the agreement will have to hold in the discussions of the next days. And the real work of negotiations has still to begin: budget cuts for 20 bn € in the next four years and a new financial framework for Belgian federalism. But the fact that an agreement was reached on this highly symbolic issue, signals for the first time after 459 days of negotiations that eight parties around the table of formateur Elio di Rupo are trusting each other enough to step together in a new government.

The breakthrough came after a serious dramatization in the night of Tuesday on Wednesday. After the umpteenth round of useless talks - with French-speaking and Flemish politicians sitting apart in different rooms - Mr. di Rupo, who leads the negotiations,  at 2:30 am issued and angry statement saying that these were 'extremely blocked' and that he would start an 'ultimate attempt' in the afternoon at 2 pm. King Albert, who was at the cote d'Azur, was asked to return to Belgium.

The sense of dramatization - which was partially sought, of course - was still sharpened by the announcement of the caretaking prime minister, the Flemish christian democrat Yves Leterme, that he would take up a new post as deputy secretary-general of the OECD in Paris at the beginning of next year.

Leterme  had before announced that he would start Friday discussions inside the caretaking government on the budget of 2012 that has to be proposed to the Belgian parliament at the beginning of October. To reach the budgetary targets for 2012 that were accepted by the European Commission earlier this year, budget cuts of around 6 bn € are needed.

Negotiations to form a new federal government in Belgium have been taken place for 459 days now since the last parliamentary elections (June 13, 2010). One of the big winners then, the Flemish nationalists, left these negotiations at the beginning of July. Since then Mr. Elio di Rupo, the president of the French-speaking socialists, the other big winner of the elections, has tried to form a government with eight parties: Flemish and French-speaking socialists, liberals, christian democrats and greens.

Belgium is not in the frontline of exposed countries in the Eurocrisis, but surely in the second line (on the same level as France) as far as the (in)famous spreads on long term govenment bonds are concerned. It has for the moment one of best growths in the Eurozone, but still a debt of 97 % of gdp (88 % being the average in the eurozone), that is no longer growing. It's year-on budget deficit is about 3,5 % gdp and declining.

It could go fast now, following  a good Belgian tradition that once the first compromise is reached the next ones follow on rapidly, regardless of their content. Nevertheless expect still at least a few weeks before there might be – at last – a new  Belgian government.

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