Four reasons Belgium needs a government

After over 600 days without a full national government, Belgians are starting to wonder if they need one at all.

If the country can get along without a top tier of federal ministers burning money in ministerial cars and the like — particularly in a country with multiple interlocking layers of political power — it might seem an attractive proposition for some. And the last time Belgium went for a prolonged period without a federal executive (it took 541 days to form a government following the 2010 election), the economy actually grew by 2 percentage points and unemployment fell.

But scratch the surface and there are huge societal challenges limping from bad to worse without a political solution. And with the pandemic demanding strong political leadership, heading into a coronavirus winter could be the worst time to be without top-down leadership.

“All the big topics that were discussed during the 2019 election campaign: pensions, mobility, climate, security … are still there, but Belgium needs a government now that delivers on those promises,” said Carl Devos, a professor in political science at Ghent University.

The Belgian government has been in caretaker mode ever since former Prime Minister Charles Michel resigned in December 2018, meaning it can only take decisions on routine or urgent matters and cannot increase public spending. An election in May 2019 failed to break the political deadlock.

Nonetheless, last month Belgium’s King Philippe appointed the presidents of the country’s two biggest political parties to start coalition talks. With those negotiations ongoing, here are four reasons why Belgium needs government:

1. The budget

Belgium’s parliament has not voted on a proper budget since 2017.

In a system called “provisional twelfths,” each month the caretaker government can only spend one twelfth of what it spent the year before. That gives it far less flexibility for any bold spending moves.

That hasn’t stopped Belgian politicians finding spending for pet projects though. Alternating majorities in parliament have approved several recurring expenses, including tax cuts on soap aimed at helping with the coronavirus crisis costing €124 million and a pension raise for miners that will cost close to €200 million.

When the coronavirus pandemic erupted in March, parliament approved a system to allow the government of Prime Minister Sophie Wilmès to rule by proxy to deal with the fallout.

As in other countries, the impact of the crisis on the budget has been considerable, and the situation is set to deteriorate significantly in the coming months. According to July Eurostat data, Belgium’s deficit in the first quarter of 2020 increased more than any other EU country apart from Malta.

The next government will have to get around the table and fix the budget deficit, currently estimated at €52.8 billion for 2020, or 12.31 percent of GDP.

“I have repeatedly stated that we need a government in full capacity with a large majority in Parliament,” Belgian Deputy Prime Minister David Clarinval, in charge of budget, told POLITICO.

Because of the crisis, Belgium needs a “strong government that can pursue a sound socio-economic recovery policy,” he added.

2. Recovery and economic reform

Belgium is the only European country that hasn’t started a real post-COVID economic recovery program yet.

“We missed crisis management and did not start the recovery. Wilmès and her government have proven too weak for that,” Devos said.

That will require some big reforms that will shape the economy for years to come — for example, on making it more or less green and how quickly to push ahead with digital upgrades. “The main reason we need a full government now is to stop tinkering at the edges and start tackling the big reforms,” a spokesperson for the Flemish Socialist Party said.

With more uncertainty and reduced powers, the government has become a less attractive employer — meaning it is harder to attract and retain top talent.

While the levers of the economy are mainly in the hands of the regional governments, which have been in office since July (Brussels region) and September 2019 (Flanders and Wallonia) the federal government plays an important coordinating role.

Under new EU rules agreed by leaders when they came to an accord on the bloc’s long-term budget and recovery fund last month, countries will need to file their economic recovery plans by the end of the year. It is Belgium’s federal government that must be the interlocutor with the European institutions.

“The different regions will need to coordinate their policy on that. Without a federal government with a mandate and a vision, there is little chance for a proper recovery,” said Olivier Beys, a policy officer at Bond Beter Leefmilieu, a Flemish sustainability NGO.

Beys noted that an action plan for employers and NGOs to tackle challenges of the circular economy was filed in September 2019 but that the caretaker government did “not have a mandate to take an ambitious new direction.”

3. Staff

With more uncertainty and reduced powers, the government has become a less attractive employer — meaning it is harder to attract and retain top talent.

“Many cabinets are emptying because their members are seeking job security,” Devos said.

That’s a problem at national administrative bodies too. Jacques Steenbergen, for instance, was set to leave as president of the Belgian Competition Authority in August 2019, but cannot not be replaced until a full government can make new appointments.

Steenbergen said the impact on the composition of the managing board was “the most significant” result the government limbo had on competition policy in the country. The caretaker government had been able, for example, to approve a law that will allocate additional resources to the authority after its powers were expanded to go after large companies strong-arming smaller ones in supply chain negotiations, Steenbergen explained. For other decisions on mergers or cartels, the authority does not need the intervention of the government.  “I will remain until the government can provide a replacement,” he said.

Also, the coronavirus crisis split the government into “burn out” and “bore out” ministries. The first category includes corona-related ministries such as health or finance with an increased workload. In other ministries that are no longer in the center of political attention — including mobility or digital affairs — “fatigue and despair” are taking over, said Devos.

4. Pensions

As elsewhere in Europe, Belgium’s pension system is creaking under the weight of a demographic shift toward an older population. Yet it is one of the few remaining countries in Europe not to have undertaken politically difficult structural reform.

Over the past 20 years, the money poured into pensions has grown twice as fast as Belgium’s GDP. Without changes, the whole system is in danger of collapse.

Michel’s right-wing government vowed to act urgently on the matter. In 2014, it raised the retirement age from 65 to 67 as from 2030, leading to tensions with trade unions. But that could not solve the fundamental problem of the duration of working life that is, at 33.6 years, well below the EU27-average of 35.9, according to Eurostat data. That’s because barely 10 percent of Belgians actually work until the age of 65. Changing that would require reforms of the labor market that proved too much for Michel’s administration.

A solution looks as far off as ever. The leaders of the two biggest parties on either side of Belgium’s language divide — Flemish nationalist leader Bart De Wever and Paul Magnette of the Francophone Socialists, both appointed by the king to form a government — could not be further apart on the issue.

Among the most contentious points are the level of the minimum pension and the retirement age. The Socialists are aiming to raise the minimum pension to €1,500 net — but their coalition partners will not accept that without a policy concession in return.