Ever since the last elections in Belgium, in June 2007, there have been events and background conditions, which have led to a political crisis. We’ve discussed that ongoing crisis here at CT at length (one two three four five six). So it is super-ironic that the Belgian government fell last Friday, not because of the communautarian tensions, but because of a chain of events that is linked to the global financial crisis.
What happened? When several banks got into acute problems due to the credit crisis, Fortis, a Belgian-Dutch bank, was saved by the intervention of the Dutch and Belgian governments. Fortis was split in a Belgian and a Dutch part. The Belgian government said from the beginning that she would only support the bank temporarily, and would sell it as soon as appropriate. The major French bank BNP Paribas and the Belgian government struck a deal in October. Yet a Belgian court ruled that that deal had to be suspended for 65 days since the Belgian government would not have given adequate consideration to the interests of the Fortis shareholders, who have seen an almost complete collapse of the value of their Fortis-shares. There are strong indications that members of the Belgian government, including most prominently the prime minister Yves Leterme, tried to influence the courts ruling so that the deal with BNP Paribas could go ahead.
So now there are two sets of problems. On the one hand there are allegations that the government has tried to meddle in the independent judgements of the Courts – something that some commentators have labelled as unprecedented. On the other hand there is now an acute political crisis on top of the deeper and more structural crisis. The chaos and instability have reached a new record: it was already almost impossible to form a government before the financial crisis hit Europe, and there is no reason to think it is now going to be any easier. There is the appealing option to hold elections next June, when the elections for regional governments are scheduled to take place – but there remains the concern that those elections would not be constitutional as long as the problem of Brussels-Halle-Vilvoorde is not solved (yet some politicians dispute the claim that such elections would be unconstitutional, as long as the majority of the newly elected parliament would ex-post backup the election outcome).
I was in India last week (at this conference), so only had access to internetsites to stay informed. Hence those of you who’ve been able to watch Belgian news, read the local newspapers and listen to the radio are warmly invited to complement and/or correct me in the comments section.