Ghosts from the Past

The tensions between the different parties and members of the incoming government have not been resolved fully during the eight-month impasse, and ethnic, ideological, and personal disagreements all have the potential to hinder government in the coming months. At best, this will be a coalition of convenience. The main areas of tension are:

·          Ethnic: The Flemish Leterme found it difficult to win over the Francophone parties during the government formation talks after he repeatedly made derogatory remarks about Wallonian officials. This attitude certainly helped his party, the CD&V, win the highest number of votes in the June 2007 election thanks to the Flemish majority in the country, but it made subsequent negotiations with the victorious Wallonian parties very difficult. Leterme has moderated his position of late, and the recent defection of the fairly aggressively anti-Wallonian New-Flemish Alliance (N-VA) should also help to smooth tensions somewhat. However, Leterme will have to walk a tightrope between pleasing his Flemish electorate and appeasing the Wallonian sceptics if he wants to remain in power until the next general election in 2011.

·          Ideological: The incoming government also has to grapple with the barely concealed ideological differences between ministers. The relationship between the liberal Reform Movement and the Socialist Party is the most obvious threat to government stability on this front. Although both Wallonian, the MR and the PS are at the opposite ends of the spectrum as regards policy on taxation and labour-market reform, and MR leader Didier Reynders was very annoyed with the nomination of the PS by former prime minister Guy Verhofstadt.

·          Personal: Both Leterme and Reynders were keen to become prime minister. Reynders' chances of succeeding Leterme at some stage have risen with the defection of the N-VA, which reduced the number of deputies in Leterme's camp. The MR now has only one less seat in parliament than the CD&V; if Leterme cannot win over the Wallonian parties during his tenure, the tradition of nominating a Flemish prime minister for demographic reasons may well be changed by lawmakers.

The most controversial issue in Belgium is increased Flemish regional autonomy. The disagreement on this issue is influenced by all the aforementioned tensions, as it raises budgetary, statutory, and personal concerns. Leterme promised during his electoral campaign to increase the fiscal and administrative autonomy of Flanders, much to the chagrin of the Wallonian parties. This issue will be a litmus test for the CD&V in particular, as the party attracted support from many Flemish businesses and citizens with the promise to reduce the level of transfer payments to the economically poorer Wallonia. The fact that responsibility for institutional reform in the new government is being shared by the CD&V’s Jo Vandeurzen and the MR’s Reynders reflects the lack of trust on both sides on this issue, and will only raise the chances of stalemate.

Outlook and Implications

It is an achievement in itself that the “Leterme I” government has finally made it into power. It took the defection of the most radical element in the original winning formation in June 2007 (the N-VA), the skilful intervention of Guy Verhofstadt, and a few tweaks to the federal constitution to allow for the inauguration. Given the experience of most of the ministers and the passing of the 2008 budget, the first few weeks could be fairly quiet for the new government, depending on its ability to co-ordinate sometimes overlapping portfolios. It is likely to hold talks with representatives of trade unions and employers' associations on purchasing power and wage hikes, while looking for ways to reform the health service and liberalise the energy sector. The government’s first major hurdle is set to be in July when the public administration reforms will be discussed. Leterme will need all the help he can get from his still-sceptical coalition partners and the moderate members of the CD&V, as well as a good measure of coolness if he is not to throw in the towel for a third time.

The leading Belgian parties may have turned an important corner by ending the eight-month deadlock, but they are far from having resolved the country’s most pressing issues