WHAT FUTURE FOR FEDERAL BELGIUM?

The next Belgian election (deadline) will be the occasion for new extremist outbreaks against the nation state. Once again, we will speculate on the future of the country and make the North hope for the advantages of a formal divorce and (in the South) to emphasize, with shame, the need for compromise. These political gesticulations will of course have little to do with the real issues, which are economic and financial, but the convergence between the political agenda and the economic reality cannot be denied either. How can we find our way around and thus propose an answer to the recurring question of Belgium’s future? 

The discussion must be centered on economic realities and it can be conducted on the basis of very simple principles that common sense easily extracts from experience. There are two restrictions: we will not discuss political proposals and arguments, which have been epiphenomenal for the past fifty years; nor will we propose a detailed economic analysis of North-South financial flows. On the one hand, politics, let us repeat, is no longer a shadow theater and we must turn our gaze towards the harsh light projected on it by the economic world in the broad sense. On the other hand, this is not the place to undertake academic analyses that will only ever corroborate what common sense, correctly informed, tells us. 

The argument is simple. First, a comparison of North-South public financial flows since the 1980s should indeed lead to the recognition of a differential in favor of the South, but it will not be necessary to repeat this issue here, which is already well publicized in the media. Secondly, these flows must be read in the light of the much larger private flows, which benefit Flanders entirely. Third, the conclusion is easy: we are heading for total federalism, which will leave Belgium as an empty shell. In this way, Flanders will keep its private hold on the Walloon economy without having to pay a cent of public money. 

There can be no question of separatism. Political entities that manipulate this idea for demagogic reasons are, consciously or unconsciously, promoting the privatization of federalism. How can we estimate these private South-North flows which seal the economic, social and political dependence of Wallonia on Flanders? Simply by consulting the data provided by the Walloon Region and the Federal State, for example on the pages www.actionnariatwallon.be and www.plan.be.

Unlike Flanders, the Walloon industrial fabric is essentially made up of SMEs that supply goods and services to a very localized market. The only companies that are highly capitalized in Wallonia are the intercommunal companies: it cannot be claimed that the capital of the multinationals GSK Biologicals (7252 jobs) and Anheuser-Busch InBev (500 jobs in Jupille) is Walloon. There are few large-scale companies covering the national territory and having their headquarters in Wallonia. However, two exceptions are notable: Sirop de Liège and Icewatch. All the others have their headquarters in Flanders or Brussels (and their staff is mostly Flemish) while the logistics are based in Flanders. In practice, this means that goods and services in most of the key sectors consumed in Wallonia are either produced in Flanders or imported from Flanders for the Belgian market, with the related VAT being declared in the region of the headquarters. If this situation of dependence offered qualitative or quantitative advantages to Wallonia, it might be acceptable in the name of the sacrosanct good governance, but the opposite is true. The Belgian market is a special niche in terms of marketing (especially), packaging, distribution channels and therefore sales prices: the average Belgian income is significantly higher than that of its neighbors and this has an impact on the sales prices of everyday consumer goods. 

Let’s take the agri-food industry. All major companies are located in Flanders or managed in Flanders or import through Flanders. Some examples: Findus, Bonduelle, Panzani, Chiquita, Mars, Uncle Ben’s, … Some labels seem to be Walloon, like « Marcassou », but the capital is Flemish (Imperial Meat Product, in Lovendegem). Some products are Walloon, such as milk or fresh water, but they are largely labeled in Flanders for the former and virtually offered to Flanders for the latter. There are three notable exceptions: Kraft (with a factory in Rhisnes but the headquarters in Flanders), Materne (Floreffe) and Ferrero (the factory is located in Arlon and the headquarters in Brussels). 

If the Belgian market were to cease to exist, the Walloon market would be attached, in fact or in law, to France. In this regard, it should be remembered that the quantity of French products consumed in our country is extremely high and that importers are systematically established outside Wallonia. Prices would then fall by twenty-five percent, with the understanding that packaging and advertising campaigns, which are excessively costly, would be the same as in France. The second consequence would be an explosion of Flemish purchases in Wallonia, whose economy would recover while that of Flanders would implode. 

The retail sector is dominated by Colruyt (Halle), followed by Brussels-based Delhaize and French Carrefour. The automotive sector has only regrets in Ghent (Volvo), Antwerp (Opel), Genk (Ford) and Drogenbos (Renault). Only Peugeot keeps its headquarters in Nivelles. The oil sector is Antwerp-based. Only TotalFina retains operations in Feluy. What about household appliances where no brand has its headquarters in Wallonia? And so on. 

In conclusion, Flanders has nothing to gain and everything to lose by demanding the split of Belgium. Moreover, the status of Brussels would become untenable: 90 percent French-speaking, the region is currently subject to bilingualism standards that are totally irrelevant. Federal institutions, public hospitals, OCMWs, the police and the post office operate with linguistic parity, whereas a 90/10 standard would be democratic. Private companies that are 60 percent oriented towards the Flemish market operate mainly with Flemish staff. Let’s remember that 70% of the 340,000 commuters coming to work in Brussels come from Flanders. If it turns out that Walloon does not sell anything — or not much — in Flanders, while Flemish employment is very dependent on Wallonia, it is urgent to reform the use of languages in Belgium. In this regard, it is worth mentioning that language immersion, which has become very popular in Wallonia in recent years, is purely and simply prohibited in Flanders. 

On the other hand, making people believe that Wallonia depends heavily on Flemish subsidies is to its advantage. This makes it possible, on the one hand, to claim to reduce taxes whose proceeds are allocated to an ethnically and culturally different (read: inferior) people, and on the other hand, to highlight a further exemplification of the fatal logic of the social state. On the other hand, the Walloon is labelled as a lazy, profiteering immigrant. Why are such racist statements tolerated at the highest level of government? 

In conclusion, those who want to preserve the unity of Belgium, i.e. the vast majority, should prepare themselves for the split… in order to prevent it. In the North, because the Walloon has understood the fool’s game he is playing and could be tempted to open up his economy 360 degrees; in the South, because the Flemish, thanks to the global systemic crisis and the rise of extremism, could resort to economic suicide. The very idea of an unequal confederalism is dead. 

Ludovic Peters (Walloon entrepreneur) & Michel Weber (philosopher)