01 February 2011

Paul Goldschmidt: "Belgium in Crisis"

In his excellent article “And if Belgium tried international law?” (Libre Belgique 30/08/2010), Philippe de Schoutheete pointed out the numerous obstacles Belgium would face, at European level, if it went down the road of separatism.

Since then, under the very successful Belgian Presidency, significant progress has been made, opening the way for a more coherent coordination of economic policies within the European Monetary Union (EMU), through the implementation of the “European Semester” and through proposals for strengthening the Stability and Growth Pact (SGP), including sanctions. These reforms aim at giving a meaningful content to the “Economic” aspect of EMU, the absence of which had considerably inhibited the exit of the financial crisis by falling back on an excessive reliance on the ECB, responsible for the shared “Monetary” policy measures.

At the same time, this new reality seems to have been totally overlooked by those charged with negotiating the Belgian institutional reforms despite their key incidence on both the institutional and socio-economic aspects, which demonstrates, if need be, that any attempt to deal with them separately is totally illusory.

Indeed, it will be necessary to organise, within the framework of the envisaged “transfer of competences” to the Regions together with their associated budgets, not only the responsibilities to be assumed but also the assignment of the efforts they will have to shoulder in order for Belgium to meet its commitments to the EMU. It is evident that, after a transfer of budgetary resources of the magnitude demanded by the Flemish Region, the limitation of the “European Semester” revue to the budgetary elements that remain under the control of the Federal Government would render it totally meaningless. To my knowledge, this question was not considered by the Belgian National Bank, the Planning Office or the independent “experts” that were asked to evaluate the (now rejected) compromise proposals submitted by Mr Vande Lanotte as a basis for further discussion.

It raises a number of problems that must imperatively be addressed before reaching any agreement if one wishes to avoid facing an inextricable situation. Let us review some of them:

A first problem is purely logistical: the “European Semester” demands that a preliminary budget be submitted early in the year to the European Commission and thereafter to the Council so that the Budgetary Authorities are given the opportunity to integrate any remarks in the budgets submitted to ratification by national Parliaments. The new Belgian institutional framework will therefore impose on regional governments the obligation to inform federal authorities at least one year ahead of time of their plans. This stretching of the calendar will make forecasts all the more difficult and unreliable, without even mentioning the problems that will undoubtedly surface in the event – by definition more likely – that elections are scheduled to take place during the budgetary process.

In addition, the Federal Government will need to retain the power to arbitrate to ensure coherence between the proposals submitted by Belgium and the rules of the SGP. Similarly, in case of “recommendations” addressed to Belgium after examination by European Council, a method by which the requisite “efforts” will be assigned must be devised, because, as a result of the transfer of competencies, the margins of flexibility at federal level will be severely curtailed.

Similarly, it will be necessary to agree on new arrangements concerning the Belgian representation (already chaotic at present) within the various ministerial Council meetings. It is difficult to see how a regional Minister, pursuing an independent policy, could represent impartially the interests of his colleagues and validly commit the country to enforceable European policies.

It follows that, whatever the aspirations of the federated entities for assuming greater responsibilities may be, it will be absolutely necessary to institute a hierarchy of norms which will enshrine the subordination of the Regions to the Federal Government (just as European norms are imposed on all Member States). That is also why the proponents of a “Confederal” Belgium are heading down a blind alley: “Confederalism” is totally incompatible with membership of the European Union; it is incumbent on politicians to make this clear to citizens. This is all the more so that Belgian citizens are – thankfully - already overwhelmingly convinced (as underscored by Bart de Wever himself on election night) that the European Union membership, with Brussels as its Capital, constitutes an enormous advantage.

If the arguments put forward herein are accepted, they are bound to have a profound incidence on the forthcoming socio-economic negotiations leading to the formation of a new fully empowered government. It behoves Bart de Wever, Elio di Rupo and all those who are encouraging them to find a common ground, to integrate the “European dimension” in their discussions, failing which they will be wasting their time and that of the citizens.

It should be evident to any negotiator in good faith, that we are living in a globalised world where any narrow idea of “well being,” limited to the inexistent borders of a community or a region, has no chance whatsoever to be successful over time. To the contrary, we should devote our efforts to deepening European Union integration in order to preserve the European socio-economic model which – for how long? – remains the envy of the great majority of the world population.

Brussels, January 31st 2011
Paul N. Goldschmidt
Director, European Commission (ret); Member of the Thomas More Institute

© Paul Goldschmidt