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ANALYSIS-Should the world be more like Belgium?

Published 03/30/2011, 03:01 AM
Updated 03/30/2011, 03:04 AM

HELD TOGETHER BY RED TAPE

One requirement for any country considering a spell without an elected government is a functioning bureaucracy. Belgians like to carp about the size and cost of theirs -- the business federation says it has 7 more civil servants per 1,000 citizens than its nearest neighbours, at an extra cost of 5 to 6 billion euros a year -- but it keeps things working, which may be a cost worth paying for now.

"It may have faced criticism, but our government administration is certainly functioning," said Ghent University's Devos. Unlike in some countries, such as the United States, senior civil servants in Europe are generally not elected or appointed by ruling parties, which makes any period of transition smoother.

On top of that, many players besides politicians have pivotal roles. "The system is less dependent on a dominant leader. You have unions and employer groups, controlling agencies," said Keukeleire, of the University of Leuven and College of Europe. "The European Union, international organisations and international agreements also determine the limits of government."

In fact, central government in Belgium doesn't actually have all that much power at all. It's restricted to managing public finances, the army, judicial system, foreign affairs and certain other issues such as social security and nuclear power. That makes leadership a less coveted prize than in more centralised countries.

It's a similar story in the Netherlands, next door.

"In some countries, the president can appoint ministers, judges and people in administrative functions and in the army," says Jan Tuit, a senior adviser at the Netherlands Institute for Multiparty Democracy. "If you look at for example the power of the Dutch prime minister, it's really very limited. He cannot even reshuffle the cabinet."

And the longer Belgium's caretaker government has been in charge, the more powers it is assuming, or being given.

"Of course it's better to have a government with full competence, but it's possible as a caretaker government to take many decisions and we are doing that," acting Finance Minister Didier Reynders told Reuters.

The country's constitution has nothing to say on caretaker governments. In theory, a stand-in government would just cover a month or two before a new administration is sworn in, but the prolonged deadlock means the unwritten rules are changing.

"As time goes by, the scope of decisions taken by the government is widening. You could not have imagined six months ago that the government would nominate a new director of the national bank. Now they have done so," said Rudi Thomaes, chief executive of the Federation of Enterprises in Belgium.

Having a monarch has also helped. As head of state, King Albert II has been busy appointing mediators, but he has also demanded the caretaker government revise the 2011 budget, a highly unusual intervention.

NOT ONE, BUT MANY GOVERNMENTS

And despite the vacuum at the top, Belgium has plenty of government to keep it ticking over. The country has five federated regional governing bodies, not counting provincial and local authorities. "You cannot say that Belgium is stuck," says Ghent University's Devos. "We have many other governments running the country."

There are separate administrations representing the regions of Wallonia and Brussels, for French speakers and for German-speaking minority and a joint one covering the province of Flanders and Dutch speakers.

In a series of reforms since 1970, the powers of the regions and language communities have grown and those of the federal state shrunk. That's at the heart of the current impasse: Dutch-speaking Flemish people, who make up about 60 percent of the Belgian population, have voted for parties seeking yet more control for the regions and fewer subsidies for French-speaking Wallonia, where the unemployment rate is double that of Flanders.

Yet in some ways it's a boon: already, culture and education are the exclusive preserves of the language communities. The regions control a wide range of policy areas including the economy, employment, agriculture, housing, energy, transport and foreign trade.

Lambertz, premier of Belgium's German speakers, says the federal system has helped in the present crisis. "The current system isn't all that bad. Otherwise, it would have collapsed or the country would have found itself in crisis and that is not the case. Whoever travels through Belgium doesn't notice much of the current difficulties," he said.

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Federal states from Australia to Switzerland might also benefit from their multiple layers of government in the absence of a national administration.

But in most places, and especially in the developing world, strong political leaders are needed to fill the hole created by a lack of bureaucracy. In Iraq last year, for example, nine months of political limbo delayed investments to rebuild the war-torn country and left people short of basic services such as water and power.

Even in developed democracies, being without political leadership can be crippling. The lack of a plan to manage its debts has sent Portugal's bond yields to new highs this week, inflating the cost of borrowing and increasing the chances the country will need an international bailout. Portugal faces a political vacuum of at least two months, if a snap election is called, with a caretaker government reduced to basic management of public affairs.

"It's a pretty messy situation," says Ken Wattret, chief euro zone economist at BNP Paribas. "In the Belgian context that may be fine, but Portugal has a pressing need to deliver a credible consolidation programme."

And even Belgium has had to put important decisions on hold. Analysts and economists say it needs to reform its pensions system and its labour market, reduce energy consumption and determine what to do with asylum seekers. It's muddling along with unresolved questions about the future of nuclear power. These are decisions for the long term that a caretaker government simply cannot take.

"The longer these items are unresolved, the more costly they become… We have a fire brigade to put out fires, but we cannot renovate the building," said Ghent University's Devos.

The business federation says a government is urgently needed to rein in the debt and tackle the rising cost of an ageing population. Its chief, Rudi Thomaes, said the deadlock really began four years ago at the 2007 election, as disputes over the future of the country stalled progress elsewhere.

"If I make the comparison with other countries I see a huge difference," Thomaes says, poring over a chart listing the budgetary efforts of six countries - France, Germany, Italy, the Netherlands, Spain and the United Kingdom.

Yet Devos and others say that Belgium might need a crisis such as this to force through change acceptable to its Dutch and French speakers. It may indeed look back on nine month or even a year of political deadlock as a price worth paying.

(Additional reporting by Robert-Jan Bartunek; Editing by Sara Ledwith and Simon Robinson)

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