Belgium: One Year On, Still No Government

One year after Belgians went to the polls to elect a new government, the suggestion that Belgium is boring has taken on new meaning. Failed coalition talks and political deadlockhave become synonymous with the country, and an end to the impasse looks further away than ever.

Aerial view of a town square Bruges Belgium
Panoramic Images | Getty Images
Aerial view of a town square Bruges Belgium

The separatist New Flemish Alliance or N-VA, which emerged as the winner of elections in the Dutch-speaking region of Flanders on June 13, 2010 has been unable to form a coalition government with the francophone socialists, who won in French-speaking Wallonia.

Both sides have refused to give in to specific demands.

A poll carried out by francophone newspaper La Libre Belgique and broadcaster RTL showed 35.1 percent of Flemish respondents would now vote for the separatist N-VA, 2,1 percent more than in March.

Across the linguistic border, support for the francophone socialists has also increased, the poll showed.

Outgoing Prime Minister Yves Leterme and his caretaker government have kept the country afloat since June 13, 2010, but the political uncertainty has unsettled investors who fear the lack of progress in government formation talks will prevent the country from reducing its debts.

Although the caretaker government has committed to reducing the budget deficit in 2011, bond markets are keen to see a permanent resolution to the crisis.

The wider euro zone debt crisis has exacerbated concerns over Belgium’s debt, which is close to 100 percent of gross domestic product.

Leterme tried to reassure investors in New York last week when he joined the country’s debt agency on a roadshow, addressing fund managers’ concerns over Belgium's debt and budget deficit and outlining a number of policy targets, Belgian newspaper De Standaard reported.

Small businesses have been hit too.

In a survey published on Monday, Belgium’s UNIZO, which represents small- and medium-sized enterprises in the country, reported that 53 percent of businesses said they had been negatively affected by the lack of a stable government, up from 20 percent in a similar survey carried out in December 2010.

The absence of a government has caused delays in orders and has weakened consumer confidence, UNIZO said in a statement.

But a growing sense of apathy has also emerged among many Belgians on both sides of the linguistic divide, and even Leterme’s caretaker government is growing weary.

In an interview with Dutch newspaper Trouw, Leterme said he was seeing “tiredness” in his caretaker government, in particular over the past few weeks.

“We are running the country while others are lying back. This is not the normal state of affairs,” he told Trouw.

French-language newspaper Le Soir’s editor in chief writes on Monday that Belgium is still standing one year on. “It has not evaporated, it is just…a little less Belgian,” she said."

Monday is a public holiday in Belgium. Euronext Brussels is open, but trade is thin.