Today Belgium, Tomorrow the European Union

20 June 2010

Today Belgium, Tomorrow the European Union

By Gwynne Dyer

Bart de Wever, the Flemish politician who promises the “evolutionary evaporation” of Belgium, is now the political king-maker in Brussels. The bureaucrats and politicians of the European Union, who also hang out in Brussels, will therefore have a ringside seat for the dismantling of the Belgian state. They should pay close attention, for their own turn may be coming.

De Wever’s New Flemish Alliance won 28 percent of the vote in Dutch-speaking Flanders, the northern half of Belgium, in the national election on 14 June. Elsewhere that would not be an impressive result, but in the highly fragmented Belgian political system it counts as an avalanche.

A long struggle will now ensue while the many Flemish and Walloon parties struggle to form a coalition with a parliamentary majority. It’s always a struggle, because there is very little by way of shared identity between the Flemish and the French-speaking Walloons. (After the 2007 election, it took 200 days to negotiate a coalition, and then there were three governments in three years.) Belgian politics has reached a state of semi-permanent paralysis.

The project for an independent Flanders is no longer a political pipe-dream, but the reaction elsewhere is likely to be a loud Who Cares? So we end up with a separate Flanders and a (reluctantly) independent Wallonia. We can live with that. However, the very thing that is destroying Belgium may also destroy the European Union, or at least drive it back to a much earlier version of itself.

It is customary, when discussing what’s wrong with Belgium, to recite a history lesson about how the French-speaking part, Wallonia, was one of the first industrialised areas in Europe and dominated the Belgian state for over a century. The Flemish always resented their lower status, and after the Second World War the shoe moved to the other foot.

Wallonia’s smokestack industries were dying, while Flanders got all the new high-tech industry and grew rich. By the 1980s the Flemish were powerful and confident enough to demand and get an extravagantly federal system, but in two key areas they failed. The Walloon political leaders ceded all sorts of powers to the various federal entities, but they managed to keep both taxation and social spending under the control of the central government.

So long as the Flemish politicians must negotiate with them about how money is collected and spent, the Walloons can ensure that a big chunk of federal spending is actually transfers of wealth from rich Flanders to poorer Wallonia (where unemployment is twice as high). After a few decades of subsidising the Walloons, many of the Flemish have concluded that the problem is the central government itself, and that the solution is its abolition.

Now consider the present difficulties of the European Union: most urgently the crisis of the euro currency, but more broadly the growing popular resistance to any further attempts to “broaden” or “deepen” the EU.

Might this be connected to the fact that the richer countries of northern Europe are getting fed up with the huge transfer of resources to southern Europe, and in particular with the way that their common currency has been undermined by the fiscal irresponsibility of the southern members? Of course it is, and it does not bode well for the future of the EU as currently constituted.

The architects of the euro half-understood that rich countries like Germany and France and relatively poor countries like Greece and Portugal need to run their currencies in different ways. The euro, as a one-size-fits-all straitjacket, was therefore a problematic currency from the start, but the elite policy-makers who wanted to “deepen” European unity were determined to have it anyway.

They tried to erase the north-south disparity by large transfers of resources from the rich to the poor countries, but that didn’t really change the economic structures and political habits of the poorer, mostly Mediterranean countries – and it awakened a powerful sense of grievance among the rich. Like the Flemish in Belgium, the northern European countries that use the euro are running out of patience.

Large transfers of resources between different regions are possible if people at both ends of the exchange see themselves as part of the same greater enterprise. But the Flemish don’t see themselves in that light – and neither do most ordinary people in the EU.

The “European” identity that has emerged with the growth of the EU in the past half-century is not a mere fantasy, but it is not a deeply rooted, instinctive identity for most people either. The sheer foot-dragging reluctance of the German government to finance the bail-out of Greece, even though the euro itself was at risk, is a measure of how deep the rot has gone.

Greece will probably declare bankruptcy in a couple of years, but the euro currency as a whole will survive until the next major recession. It will probably not survive beyond that, however, unless the national economic policies of EU countries can be subordinated to some all-powerful central bank. That is very unlikely to happen.

The euro, it turns out, was probably a step too far. Devised as a means of uniting Europe, it instead threatens to divide it fatally, and all the good that the previous, more modest version of the EU did could be lost.
To shorten to 725 words, omit paragraphs 3, 12 and 14. (“A long…paralysis”; “Large…EU”; and “Greece…happen”)