Why nobody seems to care
We're six months after the elections and it seems nothing has happened. The negotiations for a new state reform seem to have evolved into trench warfare. What the French speaking politicians see as their best and final offer is not enough for the Flemish politicians. The Flemish best and final offer goes far beyond what is considered acceptable in French speaking Belgium. Every day seems to have its own variation on that theme, but basically, every one stays in the trenches.
One could ask why politicians are granted so much time. In our last post, we explained why bond investors don't panic. But equally important is the question why the Belgian population doesn't seem to care.
The answer is that the impact of what a federal government does in Belgium is not as big as in other countries. That's because it is only one of the many engines of the Belgian machine. These are the other engines, and they are still working.
- Local government: The most visible part of politics is what happens in your street or your town. The fact that Belgium doesn't have a federal government has no significant impact on this local level.
- Regions: A big part of the government is regional in Belgium. That's why there is no problem for education, culture, economic policy, work (except unemployment benefits), foreign trade, environmental policy, social housing, infrastructure, mobility policy or urban planning.
- EU: A lot of political decisions are originally enacted in the European Union. Belgian government can change the details, but not the main characteristics of the decision. In countries such as the United Kingdom this is often seen as a disadvantage and a loss of control. In Belgium nowadays the importance of the EU level of decision making is a blessing.
- Other international organisations: Since Belgium is a small country, a lot of political decisions have been delegated to international organisations where other and bigger countries have the biggest influence on the strategy. An example of this is defence. Basically it is NATO that takes care of this. Of course Belgium has to do its share, but it's not because there is no Belgian government during six months that all of a sudden there is a military problem.
- Economic policy. It goes even further than this. As a small country Belgium has adapted its future to the future of its neighbours. The economy is strongly connected with the economy of Germany, France, Netherlands and the UK. The Belgian economy is even growing rather strong for the moment, because it rides in the slipstream of the German industry.
Economic policy is built on this observation. Unions and business federations agreed in the nineties that Belgian wages cannot grow stronger than the average wage growth of the neighbouring countries. Every two years, a so called 'wage standard' is calculated, based on the British, French, German and Dutch wage evolution. Unions and business federations then start negotiating a new framework for wage growth. These discussions are going on at this very moment.
Of course this not the whole story. Some issues go very wrong because there is no government to deal with them. The most urgent problem that has been mismanaged is the accommodation crisis for people who seek asylum.
But it is one of the exceptions. Most Belgians seem not to care that Belgium doesn't have a government. We have the regions, the local government, the European union, the neighbouring countries, the German industry and international institutions. It isn't a recipe for another year of standing still, but is a recipe for buying a surprisingly large amount of time.
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