Belgium is going through a major political crisis in which the differences between the language communities of the country are radicalising. In the latest election debate, the issues of institutional state reform are linked to the current major socioeconomic challenges facing the country. Amid the turbulence, the social partners have made a plea for stability and responsible action, while at the same time stating their case on necessary socioeconomic reforms.
Fall of Leterme government
On 26 April 2010, after unsuccessful last-minute mediation attempts, the government of Prime Minister Yves Leterme resigned, a week after the Flemish Liberals (Open VLD) had quit the government. It was the third time the prime minister had offered his resignation since his government took office in 2008, after the 2007 elections. The five-month-old coalition collapsed when Open VLD withdrew over a long-running, albeit ‘symbolic’ dispute over the special voting rights of French speakers living in Dutch-speaking areas near the capital Brussels – the so-called ‘Brussel-Halle-Vilvoorde’ (BHV) dispute. Differences between the Dutch-speaking Flemish majority and French-speaking Walloon minority often threaten Belgian governments, but the consecutive Leterme governments were seriously hampered by the rift because Leterme won a majority of the Flemish vote (Flemings make up 60% of the population) by promising profound state reform; a promise that was not welcomed as heartily by the Walloon population (which comprises 40% of the total).
Reactions of the social partners
In an unusual step, after the King had installed a mediator and while he was considering Leterme’s resignation, the Group of Ten – the top trade unions and employer organisations in Belgium – issued a joint press statement expressing their concerns about the political crisis. They stated:
As social partners we know very well that concluding honourable and defendable compromises requires concessions from all parties. No party can achieve all its objectives. The current socioeconomic crisis and the coming Belgian presidency of the European Union make it unthinkable for our country to fall into institutional and political chaos. We call on all political parties and representatives … to reach a solution.
The Group of Ten defined their own role as constituting a ‘stability factor’, as in the previous crisis of 2007 (when it took six months after the elections to constitute a new federal government) (BE0801019I).
Campaign for the 13 June elections
The plea from the social partners was not enough to prevent the resignation of the Leterme government. Elections were announced for 13 June.
At first, the election campaign focused on the institutional BHV crisis, state reform and the differences between the language communities. However, the need for socioeconomic reforms and the necessity for austerity measures later became strong campaign issues.
Crucial factors in this shift were a new report by Belgium’s Planbureau, which attracted a lot of attention, and the call by the liberal political leader of the Open VLD, Alexander De Croo, inspired by his colleague in the Dutch campaign, for each party to disclose its detailed savings plan for the state budget prior to the elections.
The Federal Planbureau is an independent institution that publishes socioeconomic studies and forecasts for the government and the social partners. In the middle of the electoral campaign, the Planbureau published its socioeconomic forecasts (in French and Dutch) for the next five years. It projects a limited annual average growth rate of 2%. The rising state debt has to be countered by finding €22 billion of structural savings or new income before 2015 to reach the EU norms. Looking to the competitive position of the Belgian economy and especially considering the trends in Germany, it also urges the social partners to implement a strong wage moderation policy when talks start in autumn 2010 on the next intersectoral wage agreement in the private sector. Finally, the organisation projects that 33,000 people will lose their jobs this year. From next year on, the labour market is expected to recover.
Union and employer demands for government
Throughout the campaign, the main social partners published their ‘memoranda’ listing their demands and opinions for the next government.
In its memorandum, ‘Reset & go (in Dutch)’, the Belgian Federation of Employers (VBO/FEB) stressed the need for more efficient state functioning, cost savings to ensure that pensions and social security payments are sustainable and measures to recover the country’s economic competitiveness. The organisation acknowledged that institutional reform by the state is necessary to reach these targets. However, it proposed some concrete measures that could be taken at federal level: the abolition of a 4.5% growth rate in the health sector budget, and pension reform including the scrapping of early retirement schemes. It also defended the so-called ‘notional interest deduction’. This is a fiscal technique enabling all companies subject to Belgian corporate tax to deduct from their taxable income a fictitious interest calculated on the basis of their shareholder’s equity (net assets).
In its memorandum, ‘Squarely for solidarity (in Dutch, 493Kb PDF)’, Belgium’s largest trade union confederation, the General Christian Trade Union Federation (ACV/CSC), focused on four ‘solidarity’ priorities::
- solidarity with unemployed people and those in insecure employment, by creating more and better jobs and organising a strong fight against youth unemployment and job insecurity;
- solidarity with those who are unable to work and people in need by enforcing social protection and high-quality public services;
- solidarity of the strongest with the weakest by a redistribution of income, capital and life chances, especially by bringing about greater fiscal equity;
- solidarity with the future generation by preparing the state budget, the labour market, social security provisions and the public services for the greying of the population and a fair and just transition towards a green economy.
Election results of 13 June
Belgium’s Flemish separatist party, the New Flemish Alliance (NVA), emerged as the largest force in parliament, taking 27 of 150 seats. The NVA’s ultimate aim is independence for Flanders, and it made convincing wins in the Flemish part of the country. Coalition talks are underway. The Christian Democrats (CD&V) and Open VLD, both from the Flemish side, lost a considerable number of votes and seats. The Socialist Party (PS) won the elections in Wallonia. The NVA in Flanders and the PS in Wallonia-Brussels seem to have best grasped the issues at stake in the elections: either carrying out institutional reform or failing to make progress in the socioeconomic field.
Guy Van Gyes, Higher Institute for Labour Studies (HIVA), Catholic University of Leuven (KUL)