Tuesday, September 7, 2010

Belgian Government Talks Fail -- Risk of Meltdown, Splitting of Country

The Future "State" of Belgium?

The Belgian national government crisis is again peaking in the red, with questions of separation now being voiced openly by the country's statesmen in Brussels. 

Following the meltdown Friday of negotiations between leading Socialist Laurette Onkelinx and separatist Flemish leaders for a coalition government, Onkelinx warned that the world should "get ready for the break-up of Belgium."

Even as King Albert II attempts to restart talks between the seven-party patchwork currently working toward a more stable Belgian government, the dysfunction is reeling and risks pushing the country into political chaos.

The underlying problem traces back to dissent between Belgium's two main linguistic communities, the French-speaking Walloon and the Dutch-speaking Flemish. The threat of Flemish secession has loomed with real potential since 2007, when a fractious multi-party coalition took nine months to solidify. Scarce public confidence and musical chairs among senior leaders only perpetuated the rift. 

In 2008 the high-profile Flemish figures Yves Leterme stepped down from the prime ministership to allow Herman Van Rompuy into power in December. Van Rompuy was called just eleven months later to take up the immensely demanding post of President of the European Council. Leterme then returned to his former seat as prime minister, only to see talks founder in April 2010 amid party disputes and overall dysfunction.

The Belgian political scene risks to devolve further if leaders and parties fail to cobble together a government, make it function and keep it working over time. 

Chiefs of the Belgian government in Brussels have chosen words with unusually strong tones on the prospect of a split. Francophone socialist Philippe Moureaux has warned of a "progressive organization of separation." Another senior from the Wallonia state government has expressed that "all options" are possible.

"Let's hope it doesn't come to that because if we split, it will be the weakest who will pay the heaviest price," Onkelinx, the francophone leader, has said, as reported by Agence France Presse.  "On the other hand, we can no longer ignore that among a large part of the Flemish population, it's their wish [to separate]... Loads of people think it's possible. (Our) politicians have to be prepared."

Some have dismissed Onkelinx's remarks as exaggerated. But almost all observers agree that such statements could rock not only the Belgian political scene, but far more broadly, European markets.
"I'm afraid the political parties are playing with fire," said Philippe Ledent, a Brussels-based economist at ING, in a Reuters wire. Continued rancor in the Belgian government could impact public finances and the country's stable image abroad. 

Some pessimistic Belgians fear that Belgium may take on a reputation as the "Greece of the North Sea," an echo of the Mediterranean nation's severe deficit woes in the last year. 

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