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Belgian report Belgian report
by Euro Reporter
2011-07-11 10:09:15
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Economic fundamentals are strong

Belgian political parties must first form a government, then reduce debt and balance the budget, the leader of current negotiations Elio di Rupo said Tuesday after setting out proposals to unlock the political impasse. "The country has been in crisis for over a year; my feeling is that financial markets and rating agencies have so far understood that despite the current difficulties, Belgium's economic fundamentals are strong," Mr. di Rupo said in an interview. "If—and this isn't in any way my hypothesis—we don't find a solution, markets and ratings agencies could change their views from one day to the next." King Albert II tasked the leader of the Francophone socialist party with trying to establish a coalition after the failure of repeated attempts since elections in June 2010. Mr. di Rupo sent a note to other political parties Tuesday setting out starting points for negotiations and is expecting to hear back by Friday. The socialist party won in southern Wallonia, while the Flemish separatist party N-VA was first with a third of the vote in the country's north.

In December Standard & Poor's Corp. lowered its ratings outlook on Belgium to negative from stable, citing the lack of government. "If this political crisis isn't resolved in a reasonable time, which I hope it can be, it will greatly increase the risk of the country going into uncharted territory," Mr. di Rupo said, adding that warnings from S&P and the International Monetary Fund "have to be taken seriously." In the note, Mr. di Rupo set out plans for a balanced budget in 2015 in line with European Union targets, and to reform unemployment benefits and pensions. The government's internal monitoring committee says savings of €22.5 billion ($32.71 billion) are necessary to achieve this, with €17.5 billion coming from the federal government and the rest from the regions.

Belgium's debt was 96.6% of gross domestic product in 2010 and is forecast to fall to 95.4% in 2012. Mr. di Rupo said federal cuts could include trimming unemployment benefits, health spending, pensions and parliamentarians' salaries and freezing most budgets. "I'm very orthodox in terms of budget control, it's essential to control debt as it's the least well-off who end up paying the most if there's a problem, but this can be done by being focused," he said. "We have to strike a balance—rigor, yes, austerity, no." He also pledged to create 250,000 jobs by 2015, establish a temporary wealth tax to reap €1.25 million over the same period, and tax first-class and business-class plane tickets.


Flemish separatists reject offer to end Belgium crisis

Belgium's largest party, the Flemish separatist N-VA, on Thursday rejected a make-or-break offer to end the language-divided country's more than year-long crisis. The N-VA rejected out of hand a political reform platform outlined by Socialist leader Elio Di Rupo that was offered as a basis to set up a governing coalition after almost 13 months without a government.

"With the best will in the world I do not believe negotiations on the basis of this note can lead to success," said N-VA leader Bart De Wever, referring to Di Rupo's plan. Speaking at a news conference, De Wever sharply criticised the platform's economic targets while blasting it for failing to devolve enough power to the country's three language-based regions -- Dutch-speaking Flanders, French-speaking Wallonia and a small German-speaking region.

The linguistically split nation at the heart of Europe has been run by a caretaker government since June 13, 2010 elections failed to produce a workable coalition. Di Rupo, whose Socialists are the country's second party and the biggest movement in Wallonia, was asked in May by King Albert II to form a government. His platform, released on Monday as a basis for a new coalition, was seen as a make-or-break bid to end the political impasse.


King issues plea to politicians to save crisis-hit Belgium

Belgium's King Albert II stepped into the public arena Friday to urge the country's fractious politicians to ease a deepening crisis, a day after a failed bid to end a 13-month stalemate. In a rare political statement, the sovereign said that "given the gravity of the political situation, the king wishes that each of the country's political leaders take a few days of reflection to measure the consequences of the political situation and seek avenues towards a solution".

The statement was issued after talks between the sovereign and French-speaking Socialist leader Elio Di Rupo, who had been tasked by Albert II in mid-May to form a coalition after almost 13 months of caretaker government in the country at the heart of Europe. But a position paper drafted by Di Rupo that was to serve as the basis for a coalition was rejected Thursday by the country's largest party, the Flemish separatist N-VA. After months of tense and trying negotiations, the move underlined the widening gulf between the wealthier 6.2 million Dutch-speakers in northern Flanders and the 4.5 million French-speakers of struggling Wallonia.

The palace statement also said Di Rupo had asked the king to be relieved of the mission to form a government but that the king had "suspended" a decision. The collapse of Di Rupo's mission dashed hopes of ending the impasse which has left Belgium holding the dubious record of the world's country longest without a government. "The N-VA no longer wants Belgium," said deputy Socialist party leader Laurette Onkelinx, echoing fears of a looming breakup of the country. The setback for Di Rupo, whose party ran second behind the N-VA in an inconclusive June 13, 2010 election, leaves no obvious exit strategy.

As French commentators blasted hardline N-VA leader Bart De Wever, Flemish editorialists said a snap election loomed. Di Rupo and De Wever would never sit side-by-side in a government, said commentator Liesbeth Van Impe in the daily Het Nieuwsblad, forecasting an early election. "De Wever has given Di Rupo, with all due respect, the middle finger." But Di Rupo on Friday ruled out early elections, telling the RTBF television station that they "would resolve nothing". "Tomorrow it will be even more complicated to find a solution," he added.

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Emanuel Paparella2011-07-11 16:03:34
Where are the political giants of yesterday: the founding fathers of the European Union, the Likes of De Gasperi, Aidenauer, Schumann, Monnet, able to confront a crisis such as the present one in the EU? Nowhere to be seen; we wouldn’t recognize them if we saw them. What we unfortunately have today are political midgets half clowns and half villains, a la Berlusconi, kings of the media circus. The Titanic may have already hit the iceberg but nobody knows it yet and the party goes on…

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