Belgium is a small state in the north of Western Europe, traditionally divided into two culturally, linguistically and politically distinct regions. Flanders in the north is Flemish-speaking and Walloon in the south is French-speaking. Separate political and economic organizations exist in each region. Traditionally French-speakers have dominated the Belgian state, despite the fact that they were outnumbered by the Flemish-speaking population. From the late 1960s resentment of this imbalance of power was expressed in riots and in the growth of Flemish nationalism.
Founded as a constitutional monarchy in 1830, the head of state since 1993 has been King Albert II. Originally a unitary state, power in Belgium was divided between the two houses of parliament: the Kamer and the Sénat. It was a system of symmetrical bicameralism, and the Sénat could block legislation deriving from the lower house. The Belgian state underwent a series of institutional reforms in 1970, 1980 and 1988 to better accommodate regional demands and diffuse regional conflict. These reforms established the administrative regions of Flanders, Walloon and (bilingual) Brussels with members of the national parliament sitting in regional authorities. Powers over policy areas such as public works, the environment, employment, health and transport were devolved to the regions. In addition, authorities representing three linguistic communities—French, Flemish and German—were established to manage education and cultural policy.
Belgium was transformed into a full federal state composed of communities and regions with a constitutional amendment agreed in the ‘Saint Michael’s Accord’ in September 1992 and voted into law in July 1993. The bicameral parliament was reduced in size; the Kamer from 212 seats to 150, and the Sénat from 184 seats to 71. Also, the Sénat can no longer block federal legislation; it now exists to mediate conflicts between the constituent institutions of the federal state. On 21 May 1995 the Belgian electorate voted for the first time for both the national and the regional parliaments, the 118-seat Vlaamse Raad (Flemish Parliament), the 75-seat Conseil Wallon (Walloon Parliament), the 75-seat Conseil Regional Bruxellois (Brussels Regional Parliament) and the 25-seat Rat der Deutschsprachigen Gemeinschaft (Council for the German-speaking Community). In addition, the 75 members of the Walloon Council plus 19 members of the Brussels Regional Council form the Conseil de la communauté française (the Council of the French Community); and six members of the Brussels Regional Council also serve as delegates in the Flemish Council. Federal and regional elections are all held on one day, on ballot papers the size of newspapers. Voting in Belgian elections is compulsory.
The formalization of a federal state has not been wholly successful in reducing nationalist sentiment. During the 1990s support for the extreme right-wing Vlaams Blok, the party representing the Flemish nationalists, increased steadily. In the 1995 elections the party increased its level of support in the national parliament to 6.6% and in the Flemish Parliament to 12.3%. It also won 27.2% of votes in Belgium’s second city, Antwerp. Its support continued to increase in the 1999 and 2003 elections, but it has been excluded from power by a ‘cordon sanitaire’ imposed by all mainstream parties. The party was formally banned by the Belgian courts in 2004, but its leaders plan to form a new party.
Belgian politics has been dominated in the post-Second World War era by the Christian People’s Party, now the Flemish Christian Democrats, and the Christian People’s Party, now the Humanist Democratic Centre, on the right; and by the French- and Flemish-speaking Socialist Parties on the left. In elections held on 13 June 1999 support for the conservative-socialist coalition of Jean-Luc Dehaene, which had introduced constitutional reform and prepared the Belgian economy for membership of the final stage of Economic and Monetary Union, collapsed. A number of scandals—ranging from the justice system’s handling of the paedophile Marc Dutroux to hormone and dioxin scandals in agriculture and political and financial corruption among socialist politicians in the Augusta helicopter affair—eroded confidence in the parties which had dominated the post-war political scene. After decades dedicated to managing regional conflict and institutional and constitutional reform, the focus of politics shifted to ethical issues, democracy and transparency.
In 1999 Belgian politics were transformed again when the Flemish Liberal and Democrat Party (VLD), the liberal parties which formed the Reformist Movement, the green parties (AGALEV and Confederated Ecologists for the Organization of Original Struggles) and the Vlaams Blok made substantial electoral gains. The leader of VLD, Guy Verhofstadt, became Prime Minister, heading a coalition between his party and five other liberal, socialist and—for the first time in Belgian politics—green parties. Verhofstadt was the first liberal Prime Minister in Belgium for 61 years, and his 1999 government was the first without Christian Democrat participation in 41 years. He formed a second coalition with both socialist parties, but without the greens, following the 18 May 2003 elections.
Economy: Belgium was the first nation in continental Western Europe to industrialize. A founder member of the European Coal and Steel Community, its economy specialized until the 1960s in the production of raw materials, coal and steel, and industrial products. Since the decline of heavy industry, Belgium’s main exports have been machinery and electrical equipment, chemicals, vehicles, metals and diamonds. It also has a growing service economy with Belgium’s capital, Brussels, hosting a number of international organizations, including the European Union (EU) and the North Atlantic Treaty Organization.
GNP: US $245,300m. (2001); GNP per caput: $23,850 (2001); GNP at PPP: $269,000m. (2001); GNP per caput at PPP: $26,150 (2001); GDP: $229,610m. (2001); exports: $213,811m. (2001 including Luxembourg); imports: $203,106m. (2001 including Luxembourg); currency: euro; unemployment: 7.5% (2002).
Belgium’s post-war economy can be classified as a model of negotiated capitalism with a high degree of corporatism. Representatives of labour and capital were awarded a high degree of autonomy to agree wage, labour and welfare policy. Social partnership became institutionalized in 1952 in the Conseil National de Travail (CNN—the National Labour Council). Until the recession of the 1970s social partners generally followed the guide-lines set by the Social Pact in 1944 and the Productivity Agreement in 1952. The Belgian welfare state is organized along the lines of the corporatist or conservative model and most social spending is concentrated on transfer payments to mitigate occupational risks such as unemployment or ill health, and to provide levels of benefit that preserve the status of the male breadwinner. Social security benefits are funded by employee and employer contributions and insurance schemes are managed by social partners.
The Belgium economy has suffered from a series of recurring problems since the 1970s. The 1970s recession led to a rapid rise in rates of unemployment which doubled in the two years 1974–76, and by 1981 Belgium had the highest level of public-sector debt in the Organisation for Economic Co-operation and Development. The impact of the recession was greater in the French-speaking region of Walloon, which has the older industrial tradition, than in the traditionally rural, Flemish-speaking region of Flanders, which had successfully attracted more modern investment. Since the 1970s Flanders has outperformed Wallonia and there has been a redistribution of national wealth to the poorer region. The traditional institutions of social partnership struggled to provide solutions to Belgium’s economic problems and the state became increasingly involved in corporatist decision-making from the mid-1970s, transforming the bipartite system to a tripartite form of social partnership.
In Belgium, increases in wages and welfare benefits are traditionally indexed to price increases. Labour organizations were reluctant to accept a policy of wage restraint to accelerate economic and employment growth. Instead, labour market policies concentrated on public subsidies and demand-led measures. Policies also sought to reduce the labour supply by banning the recruitment of foreign workers, offering early retirement schemes and extending the duration of education. In the 1980s schemes to redistribute work through cuts in working hours were also attempted. The state also tried to cut welfare spending by restricting the entitlement of all workers except the male breadwinner to benefit. In the 1980s there was no employment expansion in Belgium and at the start of the 1990s unemployment remained high and productivity and employment growth was slow.
In the 1990s Belgium struggled to meet the criteria for membership of the final phase of Economic and Monetary Union on account of its public debt to gross domestic product ratio—the highest in the EU. The conservative-socialist government reduced the budget for 1996/97 in order to successfully meet the convergence criteria. The two liberal-led coalitions in 1999–2003 and from 2003 onwards have since managed to balance the national budget and have started to cut national debt. However, unemployment remains high and regional inequalities persist. In some areas of Wallonia (Liège and Charleroi) unemployment rates are as high as 35%.
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