Kingdom of Belgium
Area: 32,547 square kilometers (12,566 sq. mi.), about the size of Maryland.
Capital--Brussels (pop. 954,460). Other cities--Antwerp (445,570); Ghent (224,685); Li�ge (184,550); Charleroi (202,233); Bruges (116,559); and Namur (105,248).
Population (2000): 10,300,000; urban--69%.
Annual population growth rate: 0.4%.
Density: 861 per sq. mi.
Linguistic regions: Dutch-speaking 58%; French-speaking 32%; legally bilingual (Brussels) 9.3%; German-speaking 0.7%.
Religions: Predominantly Roman Catholic (although less than 20% practicing); Catholic, Protestant, Jewish, Islamic, Anglican, Greek and Russian Orthodox recognized, as well as secularism.
Languages: Dutch, French, German.
Type: Parliamentary democracy under a constitutional monarch.
Constitution: 1994 (revised).
Branches: Executive--King (head of state), Prime Minister (head of government), Cabinet. Legislative--bicameral parliament (Senate and House of Representatives). Flemish Parliament with the Flemish Government for regional, educational, and cultural affairs; Walloon Regional Council (legislator) and government for Walloon Regional Affairs; Francophone Community Council and government for Francophone cultural and educational affairs; Brussels Regional Council and government for Brussels regional affairs; and German language Community Council and government for cultural and educational affairs.
Major political parties: Christian Democratic, Socialist, Liberal (conservative philosophy in American terminology), Green (ecologist).
Suffrage: Over 18, compulsory.
Political subdivisions: Ten provinces, three regions, three communities, 589 municipalities.
GDP (2001): $230.3 billion.
Annual real growth rate (2000): 2.0%.
Per capita income (2000): $22,578.
Natural resources: Coal.
Agriculture: (1.4% of GDP) Products--livestock, including dairy cattle, grain, sugarbeets, nursery products, flax, tobacco, potatoes, and other fruits and vegetables.
Industry: (20% of GDP) Types--machinery, iron, coal, textiles, chemicals, glass, pharmaceuticals, manufactured goods.
Trade (2000): Exports--$186.1 billion: Iron and steel, coal, transportation equipment, tractors, diamonds, petroleum products. Imports--$173.0 billion: Fuels, chemical products, grains, foodstuffs. Trading partners--EU 80%; United States 9.9%.
GEOGRAPHY AND PEOPLE
Belgium is located in Western Europe, bordered by the Netherlands, Germany, Luxembourg, France, and the North Sea. Although generally flat, the terrain becomes increasingly hilly and forested in the southeast (Ardennes) region. Climate is cool, temperate, and rainy; summer temperatures average 77�F, winters average 45�F. Annual extremes (rarely attained) are 10�F and 90�F.
Geographically and culturally, Belgium is at the crossroads of Europe, and during the past 2,000 years has witnessed a constant ebb and flow of different races and cultures. Consequently, Belgium is one of Europe's true melting pots with Celtic, Roman, Germanic, French, Dutch, Spanish, and Austrian cultures having made an imprint.
Belgium is divided ethnically into the Dutch-speaking Flemings and French-speaking Walloons, the 70,000 residents of the eastern German cantons, and the bilingual capital of Brussels representing the remainder. The population density is the second highest in Europe, after the Netherlands.
Belgium derives its name from a Celtic tribe, the Belgae, whom Caesar described as the most courageous tribe of Gaul. However, the Belgae were forced to yield to Roman legions during the first century B.C. For some 300 years thereafter, what is now Belgium flourished as a province of Rome. But Rome's power gradually lessened. In about A.D. 300, Attila the Hun invaded what is now Germany and pushed Germanic tribes into northern Belgium. About 100 years later, the Germanic tribe of the Franks invaded and took possession of Belgium. The northern part of present-day Belgium became an overwhelmingly Germanized and Germanic-Frankish-speaking area, whereas in the southern part people continued to be Roman and spoke derivatives of Latin. After coming under the rule of the Dukes of Burgundy and, through marriage, passing into the possession of the Hapsburgs, Belgium was occupied by the Spanish (1519-1713) and the Austrians (1713-1794).
Under these various rulers, and especially during the 500 years from the 12th to the 17th century, the great cities of Ghent, Bruges, Brussels, and Antwerp took turns at being major European centers for commerce, industry (especially textiles) and art. Flemish painting--from Van Eyck and Breugel to Rubens and Van Dyck--became the most prized in Europe. Flemish tapestries hung on castle walls throughout Europe.
Following the French Revolution, Belgium was invaded and annexed by Napoleonic France in 1795. Yet with the defeat of Napoleon's army at the Battle of Waterloo, fought just a few miles south of Brussels, Belgium was separated from France and made part of the Netherlands by the Congress of Vienna in 1815.
In 1830, Belgium won its independence from the Dutch as a result of an uprising of the Belgian people. A constitutional monarchy was established in 1831, with a monarch invited in from the House of Saxe-Coburg Gotha in Germany.
Belgium was invaded by the Germans in 1914 and again in 1940. This, plus disillusionment over postwar Soviet behavior, made Belgium one of the foremost advocates of collective security within the framework of European integration and the Atlantic partnership.
Since 1944, when Belgium was liberated by British, Canadian, and American armies, the nation has lived in security and at a level of increased well-being.
Because of the emerging language, economic, and political differences, there were increased cleavages in Belgian society. The Industrial Revolution of the late 18th and the 19th century further accentuated the linguistic North-South division. Francophone Wallonia became an early industrial boom area, affluent and politically dominant. Dutch speaking Flanders remained agricultural and was economically and politically outdistanced by Brussels and Wallonia. The last 50 years have marked the rapid economic development of Flanders, necessitating a corresponding shift of political to the Flemish, who now constitute an absolute majority (58%) of the population.
Demonstrations in the 1960s led, in 1962, to the establishment of a formal linguistic border, and elaborate rules were made to protect minorities in linguistically mixed border areas. In 1970, Flemish and Francophone cultural councils were established with authority in matters of language and culture for the two-language groups. Each of the three economic regions--Flanders, Wallonia, and were granted significant measure of political autonomy.
Since 1984, the German language community of Belgium (in the eastern part of Li�ge Province) has had its own legislative assembly and executive, which have authority in cultural, language, and educational affairs.
In 1988-89, the Constitution was again amended to give additional responsibilities to the regions and communities. The most sweeping change was the devolution of educational responsibilities to the community level. As a result, the regions and communities were provided additional revenue, and Brussels was given its own legislative assembly and executive.
Another important constitutional reform occurred in the summer of 1993, changing Belgium from a unitary to a federal state. It also reformed the bicameral parliamentary system and provided for the direct election of the members of community and regional legislative councils. The bilingual Brabant province, which contained the Brussels region, was split into separate Flemish and Walloon Brabant provinces.
A parliamentary democracy, Belgium was governed by successive coalitions of two or more political parties, with the centrist Flemish Christian Democratic Party providing the Prime Minister most of the time. This changed in the last general election held on June 13, 1999. Driven in part by resentment over a mishandled dioxin food-contamination crisis in June 1999, Belgian voters rejected Jean Luc-Dehaene's longstanding coalition government of Christian Democrats and Socialists and voted into power a coalition put together by Flemish Liberal Leader Guy Verhofstadt.
Belgium is a hereditary constitutional monarchy. The present King, Albert II, succeeded his brother, King Baudouin, who died July 31, 1993. Albert took the oath of office to become King on August 9, 1993.
As titular head of state, the King plays a ceremonial and symbolic role in the nation. His primary political function is to designate a political leader to attempt to form a new cabinet following either an election, the resignation of a government, or a parliamentary vote of no confidence. The King also is seen as playing a symbolic unifying role, representing a common national Belgian identity.
The Belgian Parliament consists of a Senate and a House of Representatives (the Chamber). The House has 150 directly elected members. The Senate has 71 members. The executive branch of the government consists of ministers and secretaries of state (junior ministers) drawn from the political parties which form the government coalition. The number of ministers is limited to 15, and they have no seat in Parliament. The Cabinet is chaired by the Prime Minister and consists of the ministerial heads of the executive departments.
The allocation of powers between the Parliament and the Cabinet is somewhat similar to the United States--the Parliament enacts legislation and appropriates funds--but the Belgian Parliament does not have the same degree of independent poser that the U.S. Congress has. Members of political parties represented in the government are expected to support all bills presented by the Cabinet.
The House of Representatives is the "political" chamber that votes on motions of confidence and budgets. The Senate deals with long-term issues and votes on an equal footing with the Chamber on a range of matters, including constitutional reform bills and international treaties.
The largest parties in the Chamber are the Flemish Liberal Party (VLD), 23 seats; the Flemish Christian Democratic party (CD&V), 22 seats; the Francophone Socialist Party (PS), 19 seats; the Francophone Liberal Party (MR), 18 seats; the right-wing Vlaams Blok Party, 15 seats; and the Flemish Socialist Party (SP.A), 14 seats. The two Green parties, the Flemish AGALEV and Francophone ECOLO, have 9 and 11 seats, respectively. The Francophone Christian Democrats (CDH) hold 10 seats.
The Princes and princesses of the royal line are full members of the Senate, and Prince Phillippe, Prince Laurent, and Princess Astrid actually sit in the Senate.
The Prime Minister and his ministers administer the government and the various public services. As in Great Britain, ministers must defend their policies and performance in person before the Chamber.
The Cabinet and the Ministries
At the federal level, executive power is wielded by the Cabinet (or Council of Ministers). The Prime Minister is President of the Cabinet. Each minister heads a governmental department. The Cabinet reflects the weight of political parties that constitute the current governing coalition for the Chamber. No single party or party family across linguistic lines holds an absolute majority of seats in Parliament. Consequently, the Cabinet reflects the weight of political parties that constitute the six-party governing. The present government is a coalition of the Flemish Liberal Party (VLD), the Francophone Liberal Party (MR), the Flemish Socialist Party (SP.A), the Francophone Socialist Party (PS), the Flemish Green Party (AGALEV), and the Francophone Green Party (ECOLO). Prime Minister Verhofstadt's government is the first Liberal-led coalition in generations and the first six-party coalition in 20 years. It also is the first time the Greens have participated in Belgium's federal government.
Principal Government Officials (protocol ranking)
Prime Minister--Guy Verhofstadt (VLD)
Deputy Prime Minister, Minister of Employment--Laurette Onkelinx (PS)
Deputy Prime Minister, Minister for Foreign Affairs--Louis Michel (PRL)
Deputy Prime Minister, Minister of Budget and Social Integration--Johan Vande Lanotte (SP)
Deputy Prime Minister, Minister of Mobility and Transportation--Isabelle Durant (ECOLO)
Minister for Consumer Interests, Health, and Environment--Magda Aelvoet AGALEV)
Minister of Interior--Antoine Duquesne (PRL)
Minister of Social Affairs and Pensions--Frank Vandenbroucke (SP)
Minister of Civil Service Affairs--Luc Van Den Bossche (SP)
Minister of Defense--Andre Flahaut (PS)
Minister of Agriculture--Jaak Gabriels (VLD)
Minister of Justice--Marc Verwilghen (VLD)
Minister of Finance--Didier Reynders (PRL)
Minister of Telecommunications and Public Enterprises--Rik Daems (VLD)
Minister of Economic Affairs and Science Policy--Charles Picqu� (PS)
State Secretary for Foreign Trade--Annemie Neyts (VLD)
State Secretary for Development Cooperation--Eddy Boutmans (AGALEV)
State Secretary for Energy and Sustainable Development--Olivier Deleuze (ECOLO)
Ambassador to the United States--Franciskus van Daele (as of August 2002)
Ambassador to the United Nations--Jean De Ruyt
The Belgian Embassy is located at 3330 Garfield Street NW, Washington, DC 20008 (tel. 202-333-6900; fax 202-333-3079).
The Electoral System
The number of seats in the Chamber is constitutionally set at 150 elected from 20 electoral districts. Each district is given a number of seats proportional to its population (not number of voters) ranging from 3 for the Luxembourg district to 22 for Brussels. The districts are divided along linguistic lines: 10 Flemish, 9 Walloon, and the bilingual district of Brussels. Eligibility requirements for the Chamber are a minimum age of 21, citizenship, and residency in Belgium.
The Senate consists of 71 seats. For electoral purposes Senators are divided into three categories: directly elected; appointed by the community assemblies; and co-opted Senators. For the election of the 25 Flemish and 15 francophone directly elected Senators, the country is divided into three electoral districts. Of the Senators representing the communities, 10 are elected by the Flemish Council, 10 by the French Council, and 1 by the German-language Council.
The remaining category, the co-opted Senators, consists of 10 representatives elected by the first two groups of Senators. Eligibility requirements for the Senate are identical to those for the Chamber. Under the electoral system, smaller parties rather easily attain the required quorum (minimum number of votes required in a given district) and have representation in the federal parliament.
In Belgium, there are no "national" parties operating on both sides of the linguistic border. Consequently, elections are a contest among Flemish parties on one side and Francophone parties on the other. Only in bilingual Brussels can voters choose from either Flemish or Francophone parties. Several months before an election, the parties form a list of candidates for each district. Parties are allowed to place as many candidates on their "ticket" as there are seats available. The formation of the list is an internal process that varies with each party. The number of seats each party receives and where on a list a candidate is placed determines whether a candidate is elected.
Political campaigns in Belgium are relatively short, lasting only about one month, and there are restrictions on the use of billboards, one of the more prominent forms of advertising. For all of their activities, campaigns included, the political parties rely on government subsidies and dues paid by their members. A campaign finance law restricts expenditures of political parties during an electoral campaign.
Voting is compulsory in Belgium, and more than 90% of the population participates. Belgian voters are given the option to vote for a party ticket, or for individual candidates on one party ticket.
Since no single party holds an absolute majority, after the election the strongest party or party family will create a coalition with some of the other parties to form the government.
Voting is compulsory in Belgium; more than 90% of the population participates. Belgian voters are given four options when voting. They may:
Belgium has 25 seats in the European Parliament in Strasbourg. Elections for the members of Belgium's municipal and provincial councils will be held in October 2000.
Belgium's Linguistic Challenge
In August 1980, the Belgian Parliament passed a devolution bill and amended the Constitution, establishing:
Subsequent constitutional reform established similar regional and community councils for the German cantons in 1983, and for Brussels in 1989.
The new regional and community councils and governments have jurisdiction over transportation, public works, water policy, cultural matters, education, public health, environment, housing, zoning, and economic and industrial policy. They rely on a system of revenue sharing for funds. They have the authority to levy taxes (mostly surcharges) and contract loans. Moreover, they have obtained exclusive treaty-making power for those issues coming under their respective jurisdictions.
Of total public spending--interest payments not considered--more than 40% is authorized by the regions and communities.
President, Flemish Government--(VLD) Patrick Dewael
President, Francophone Community Government--(PRL) Herve Hasquin
President, Walloon Regional Government--(PS) Jean-Claude van Cauwenberghe
President, Brussels Capital Government--(PRL) Francois-Xavier de Donnea
President, German Community Government--(PS) Karl-Heinz Lambertz
Provincial and Local Government
In addition to three regions and three cultural communities, Belgium also is divided into 10 provinces and 589 municipalities.
The provincial governments are primarily administrative units and are politically weak. A governor appointed by the King presides over each province. Each governor is supported by an elected Provincial Council of 47 to 84 members (depending on the size of the province), which sits only four weeks a year.
Municipal governments, on the other hand, are vigorous political entities with significant powers and a history of independence dating from medieval times. Many national politicians originate from municipal political bases. Many often double as mayor or alderman in their hometowns.
The Lower House is officially called Chambre des Repr�sentants (in French) or Kamer van Volksvertegenwoordigers (in Dutch). In English, it is often called the Chamber of Deputies or the House of Representatives. All are correct.
From the creation of the Belgian state in 1830 and throughout most of the 19th century, two political parties dominated Belgian politics: the Catholic Party and the Liberal Party. In the late 19th century the Socialist Party arose, representing the emerging industrial working class.
These three groups still dominate Belgian politics, but they have evolved substantially in character.
The Christian Democratic Parties. After World War II, the Catholic (now Christian Democratic) Party severed its formal ties with the Church. It became a mass party of the center (more like a political party in the United States). In 1968, the Christian Democratic Party, responding to linguistic tensions in the country, divided into two independent parties: the Democratic and Humanistic Center (CDH) in French-speaking Wallonia and Brussels and the Flemish Christian Democrats (CD&V) in Flanders. The two parties pursue the same basic policies but maintain separate organizations. The CD&V is the larger of the two, getting more than twice as many votes as the CDH. CD&V Party Chairman is Stefaan De Clerck. Deputy Joelle Milquet is president of the CDH. Following the 1999 general elections, the CD&V and CDH were ousted from office, bringing an end to a 40-year term in coalition governments.
The Socialist Parties. The modern Belgian Socialist parties are now primarily labor-based parties similar to the German Social Democratic Party and the French Socialist Party. The Socialists have headed several postwar governments and have produced some of the country's most distinguished statesmen. The Socialists also split along linguistic lines in 1978. Patrick Janssens is head of the Flemish Socialist Party (SP.A), and Mayor of Mons, Elio Di Rupo, is president of the Francophone Socialists (PS). In general, the Walloon Socialists tend to concentrate on domestic issues. In the 1980s, the Flemish Socialists focused heavily on international issues and on security in Europe, in particular, where they frequently opposed U.S. policies. However, subsequent Foreign Ministers Willy Claes, Frank Vandenbroucke, and Erik Derycke progressively made a significant shift to the center adopting less controversial stances on foreign policy issues. The francophone Socialists are mainly based in the industrial cities of Wallonia (Li�ge, Charleroi, and Mons). The Flemish Socialists' support is less regionally concentrated.
The Liberal Parties. Liberal Parties in Belgium chiefly appeal to business people, property owners, shopkeepers, and the self-employed. In American terms the Liberals' positions would be considered to reflect a traditionally conservative ideology. The two current Liberal parties were formed in 1971, after the original all-Belgium Liberal Party split along linguistic lines: The Flemish Liberals and Democrats (VLD) are the largest political force in Belgium. The VLD is headed by Karl De Gucht, member of the Flemish regional Parliament. The Reform Movement (MR) on the francophone side is headed by Euro-MP Daniel Ducarme.
Green. The Flemish (AGALEV) and Francophone (ECOLO) Ecologist Parties made their Parliamentary breakthrough in 1981. Following significant gains made in the 1999 general elections, the two green parties joined a federal coalition cabinet for the first time in their history. Due to the voter concern about health and environmental issues, the Greens made significant gains in the 2000 municipal elections.
The Linguistic Parties. A postwar phenomenon in Belgium was the emergence of linguistic parties whose only reason for existence was the defense of the cultural, political, and economic interests of one of the linguistic groups or regions of Belgian society. The most militant Flemish regional party in Parliament in the 1950s and 1960s, the Volksunie (VU), once drew nearly one-quarter of Belgium's Dutch-speaking electorate. However, recent elections dealt the party severe setbacks, lowering its seat count to only 8 seats in the 150-seat House. In 2001, Volksunie split into a traditional Flemish nationalist faction (NVA) and a more liberal faction (Spirit). Another linguistic party, the ultra-right Vlaams Blok (VB-Flemish Bloc), broke away from the Volksunie in 1976. The VB replaced the VU as the most militant Flemish regional party and strongly opposes the large number of immigrants in urban centers. Long dismissed as a "fringe" party by mainstream politicians, the VB shocked observers in the 1991 elections when it posted respectable scores in much of Flanders, especially Antwerp. The 1995 and 1999 elections increased the VB's total in Parliament. Until 1982, the Front Democratique des Bruxellois Francophones (FDF) was the dominant political force in the local politics of Brussels. Today, the FDF operates under the wing of MR.
Belgium is a highly unionized country, and organized labor is a powerful influence in politics. About 53% of all private sector and public service employees are labor union members. Unlike many American unions, Belgian labor unions take positions on a wide range of political issues, including education, public finance, defense spending, environmental protection, women's rights, abortion, and other issues. They also provide a range of services, including the administration of unemployment benefits.
Belgium's three principal trade union organizations are the Confederation of Catholic Labor Unions (CSC/ACV), the Belgian Socialist Confederation of Labor (FGTB/ABVV), and the Confederation of Liberal Labor Unions (CGSLB/ACLVB). Until the 1950s, the FGTB/ABVV was the largest confederation; since then, however, the CSC/ACV has become the leading trade union force.
The Confederation of Catholic Labor Unions (CSC/ACV). Organized in 1912, the CSC/ACV rejects the Marxist concept of "class struggle" and seeks to achieve a just social order based on Christian principles. The CSC/ACV is not formally linked to its party political counterparts, the Christian Democratic parties (CD&V and CDH), but exercises great influence in their councils. The CSC/ACV is the leading union in all Flemish provinces and in Wallonia's Luxembourg province. It has almost equal strength with the socialist confederation in the Brussels area. Its President is Luc Cortebeeck.
The Belgian Socialist Confederation of Labor (FGTB/ABVV). The FGTB/ABVV derives from the Socialist Trade Union Movement, established in the late 19th century in Walloon industrial areas, Brussels, and urban areas of Flanders. Today the FGTB/ABVV is the leading union in the Hainaut, Namur, and Li�ge provinces and matches the CSC/ACV in Brussels. The FGTB/ABVV is led by President Michel Nollet.
The Confederation of Liberal Labor Unions (CGSLB/ACLVB), with 240,000 members, represents the smallest of the major union groups. Drawing primarily from management positions, the Brussels-based CGLB/ACVB is Belgium's most pro-business union. The union is not formally affiliated with any political party. CGLB/ACVB is led by President Guy Haaze.
By tight budgeting, the previous Dehaene II center-left coalition succeeded in qualifying the country for the Economic and Monetary Union. During its first year in office, the Verhofstadt cabinet has sought to implement justice and police reforms. An integrated federal police force is now fully operational.
As a result of bills enacted in 2001, control over local government, agriculture, and foreign trade was devolved from the federal to the regional governments.
Controversial issues currently being addressed include extending the franchise to non-EU immigrants for municipal elections, a more permissive drug policy, and election reform. Other priorities include modernizing the civil service and adjusting the federal social security system to a rapidly aging population. The Cabinet also issued a blueprint for reforming the armed forces. The military seeks to increase the "tooth to tail" ratio, increasing its rapid reaction and peacekeeping competencies by improving efficiency. Parliament recently enacted a liberal euthanasia bill, which will come into force in fall 2002.
During the second half of 2001, Belgium held the EU Council Presidency. As EU President, Belgium helped boost the issue of EU enlargement, culminating in the Laeken Summit in December 2001, when the EU named the 10 countries most likely to become EU members in 2004. Belgium also successfully chaired the Eurogroup in 2001, which played a key role in helping the EU work through the economic and financial issues related to the launching of the Euro currency. Additionally, Belgium helped shepherd an agreement on an EU Constitutional "Convention" with a broad mandate to consider issues on the future of the EU in preparation for the 2003 EU Inter-governmental Conference.
However, because of the events of September 11th, much of Belgium's original EU agenda was necessarily sidetracked, given the EU's increased focus on regional and international cooperation in the war on terrorism. Belgium's reaction to the September 11th terrorist attacks was strong and supportive. For example, Belgium played a key role in helping to obtain EU-wide agreement on a European arrest warrant and in facilitating extradition of terrorist suspects. In support of Operation Enduring Freedom, Belgium contributed a navy frigate in the Mediterranean, AWAC crews for surveillance flights over the United States, as well as aircraft for humanitarian assistance to Afghanistan.
Belgium is continuing its counter-terrorism measures by adding domestic legislative and judicial tools to increase its ability to respond to terrorism. The government also has been assisting other European states and the U.S. in investigating cases of international terrorism. Finally, Belgium is implementing all UNSC resolutions concerning the freezing of terrorist assets.
Belgium, a highly developed market economy, belongs to the Organization for Economic Cooperation and Development (OECD), a group of leading industrialized democracies. In recent years, with a geographic area about equal to that of Maryland, and a population of just over 10 million, Belgium ranks seventh in per capita GDP worldwide. In 2001, the per capita income was $22,578. For 2002, the federal government presented a budget that was almost in equilibrium (0.2% of GDP deficit). GDP growth remains moderate at 2.2%.
Densely populated Belgium is located at the heart of one of the world's most highly industrialized regions. The first country to undergo an industrial revolution on the continent of Europe in the early 1800s, Belgium developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbors. One of the founding members of the European Community (EC), Belgium strongly supports deepening the powers of the EC to integrate European economies.
With exports equivalent to about two-thirds of GNP, Belgium depends heavily on world trade. Belgium exports twice as much per capita as Germany and five times as much as Japan. Belgium's trade advantages are derived from its central geographic location, and a highly skilled, multilingual, and productive work force.
The Belgian industrial sector can be compared to a complex processing machine: It imports raw materials and semi-finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has virtually no natural resources. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 70% of GDP. Agriculture accounts for only 2% of the GDP.
Belgian Economy in the 20th Century
For 200 years through World War I, French-speaking Wallonia was a technically advanced, industrial region, while Dutch-speaking Flanders was predominantly agricultural. This disparity began to fade during the interwar period. As Belgium emerged from World War II with its industrial infrastructure relatively undamaged, the stage was set for a period of rapid development, particularly in Flanders. The postwar boom years, enhanced by the establishment of the EU and NATO headquarters in Brussels, contributed to the rapid expansion of light industry throughout most of Flanders, particularly along a corridor stretching between Brussels and Antwerp (now the second-largest port in Europe after Rotterdam), where a major concentration of petrochemical industries developed.
The older, traditional industries of Wallonia, particularly steelmaking, began to lose their competitive edge during this period, but the general growth of world prosperity masked this deterioration until the 1973 and 1979 oil price shocks sent the economy into a period of prolonged recession. In the 1980s and 1990s, the economic center of the country continued to shift northward to Flanders.
Foreign investment contributed significantly to Belgian economic growth in the 1960s. In particular, U.S. firms played a leading role in the expansion of light industrial and petrochemical industries in the 1960s and 1970s. The Belgian Government encourages new foreign investment as a means to promote employment. With regional devolution, Flanders, Brussels, and Wallonia are now courting potential foreign investors and offer a host of incentives and benefits.
More than 1,400 U.S. firms invested a total of over $20 billion in Belgium by 2001. U.S. and other foreign companies in Belgium account for approximately 11% of the total work force, with the U.S. share at about 6%. U.S. companies are heavily represented in chemical, automotive assembly, and petroleum refining. A number of U.S. service industries followed in the wake of these investments--banks, law firms, public relations, accounting, and executive search firms. The resident American community in Belgium now exceeds 20,000. Attracted by the EU 1992 single-market program, many U.S. law firms and lawyers have settled in Brussels since 1989. Other foreign firms, particularly French ones, have invested locally for the same reason.
On May 1, 1998, Belgium became a first-tier member of the European Monetary Union. Belgium shifted away from the use of the Belgium franc (BF) to the use of the Euro as its currency after January 1, 2002.
About 80% of Belgium's trade is with fellow EC member states. Given this high percentage, Belgium seeks to diversify and expand trade opportunities with non-EC countries. Belgium ranks as the 10th-largest market for the export of U.S. goods and services. If goods in transit to other European countries are excluded, Belgium still ranks as the 12th-largest market for U.S. goods.
Bilaterally, there are few points of friction with the U.S. in the trade and economic area. The Belgian authorities are, as a rule, anti-protectionist and try to maintain a hospitable and open trade and investment climate. As a result, the U.S. Government focuses its market-opening efforts on the EC Commission and larger member states. Moreover, the Commission negotiates on trade issues for all member states, which, in turn lessens bilateral trade disputes with Belgium.
The social security system, which expanded rapidly during the prosperous 1950s and 1960s, includes a medical system, unemployment insurance coverage, child allowances, invalid benefits, and other benefits and pensions. With the onset of a recession in the 1970s, this system became an increasing burden on the economy and accounted for much of the government budget deficits. The national unemployment figures mask considerable differences between Flanders and Wallonia. Unemployment in Wallonia is mainly structural, while in Flanders it is cyclical. Flanders' unemployment level equals only half that of Wallonia. In general sunset industries (mainly coal and steel) dominate in Wallonia and sunrise industries (chemicals, high-tech, and services) in Flanders.
From the second half of 1999 onward, Belgian unemployment figures declined substantially to 8%, one percentage point below the European average. Labor market participation also increased significantly from 54% in 1993 to 58.5% in 2000. In some sectors, labor shortages are already beginning to appear. To partly offset the increased labor costs which go with a tight labor market, the Belgian Government introduced stock option legislation for salaried employees in 1999. As in other industrialized nations, pension and other social security programs have become a major concern as the baby boom generation approaches retirement.
Although Belgium is a wealthy country, it overspent income and undercollected taxes for years. The Belgian Government reacted with poor macroeconomic policies to the 1973 and 1979 oil price hikes: hiring the redundant work force into the public sector, and subsidized ailing industries like coal, steel, textiles, glass, and shipbuilding in order to prop up the economy. As a result, cumulative government debt reached 121% by the end of the 1980s. However, thanks to Belgium's high personal savings rate, the Belgian Government financed the deficit from mainly domestic savings, minimizing the deleterious effects on the overall economy.
In order to meet one of the five criteria for membership into the first-tier group of Economic and Monetary Union (EMU) under the Maastricht treaty, the Belgian Government had to attain a budget deficit of 3% by the end of 1997, a goal that was successfully attained. Historically, Belgium has done relatively better on its budget in times of cyclical downswings. The total budget deficit in 2001 (federal, regional, plus social security) amounted to 0.2% of GDP. This represents a substantial decrease from the 7.1% deficit recorded in 1992, as well as a significant difference from the expected figure of 2%, well within the Maastricht criterion. Belgium cannot possibly bring its accumulated debt down from the 1999 level of 113% of GDP to the Maastricht target of 60% within the required time period. In order to meet the "substantial progress" criterion" for its debt, Belgium has run a substantial primary surplus (excluding interest payments), reaching 6.2% of GDP in 1999.
The Concert of Nations sanctioned the creation of Belgium in 1830 on the condition that the country remain strictly neutral. During the two World Wars Belgium tried, but was unable, to follow a policy of neutrality. In 1948 Belgium signed the Treaty of Brussels with Great Britain, France, the Netherlands, and Luxembourg in 1948, and a year later became one of the founding members of NATO.
Belgium remains a strong proponent of NATO. It cooperates closely with the United States within the alliance framework, in addition to supporting European defense efforts.
At the same time the Belgians, perceiving their diminutive role on the international scene, are strong advocates of strengthening economic and political integration within the EU. Recently, having federalized their own country, many Belgians view themselves as the ultimate "European federalists."
Both NATO (since 1966) and the EU have their headquarters in Brussels; SHAPE (Supreme Headquarters Allied Powers Europe) is in the south of the country, near Mons.
Belgium actively seeks improved relations with the new democracies of central and eastern Europe through such means as the Organization for Security and Cooperation in Europe, EU association agreements, and NATO's Partnership for Peace with the former Warsaw Pact countries and several others.
Relations between the United States and Belgium are excellent. Good will and affection for Americans continues as a result of the U.S. role during and after the two World Wars. However, there also is a willingness to criticize U.S. policies and a tendency to adopt a more explicitly European viewpoint on many issues.
As an outward looking nation, Belgium works closely with the United States bilaterally and in international and regional organizations to encourage economic and political cooperation and assistance to developing countries. Belgium has welcomed hundreds of U.S. firms to its territory, many of which have their European headquarters here.
Principal U.S. Officials
Ambassador--Stephen F. Brauer
Deputy Chief of Mission--Brenda B. Schoonover
Permanent U.S. Representative to NATO (USNATO)--Ambassador R. Nicholas Burns
Deputy Chief of Mission, USNATO--Victoria Nuland
Ambassador to the European Union--Ambassador Rockwell Schnabel
Deputy Chief of Mission, USEU--James J. Foster
The U.S. Embassy in Belgium is located at 27 Boulevard du Regent, 1000 Brussels (tel. 02/501-2111, fax 02/511-2725). The European Logistical Support Office (ELSO) is at Norrderlaan 147, Box 12A, 2030 Antwerp (tel. 03/542-4775, fax 03/542-6567).
The U.S. Mission to NATO (USNATO) is at NATO Headquarters, on the Autoroute de Zaventem, 1110 Brussels (tel. 02/724-3111, fax 02/726-5796). The U.S. Mission to the EU is located at 40 Boulevard du Regent, 1000 Brussels (tel. 02/508-2222, fax 02/502-8117).