Is the euro behind Belgium's blowup?

The Economist's Certain ideas of Europe blog makes a point I hadn't thought of:

WILFRIED MARTENS, the former prime minister of Belgium and a grand old man of Christian Democratic politics in Europe, is not the first person to observe that the euro deserves thanks for keeping Belgium calm during the country's current political crisis (103 days without a new government). But he is the best qualified to make this point. As prime minister in the 1980s, he lived through political fights as bitter as anything seen today. But the fact that Belgium had its own currency, the franc, made a crucial difference, he recalls. Politicians knew they had a duty to resolve their disputes as quickly as possible, and end the damage being done to the franc.

In an interview with La Libre Belgique, Mr Martens recalls being visisted by central bankers from the Belgian national bank, pleading with him to resolve the latest crisis (this was in 1981).

"They told us all the time how they were having to intervene every day, billions at a time, to support the value of the Belgian franc," he recalls.

Today, with Belgium part of the single European currency, its politicians have no urgent monetary reasons to end their disputes: the Belgian travails have caused not a ripple within the vast euro system, which is far more concerned just now with the American economy than Brussels squabbling. (In proof of which, the euro this week just headed past 1.40 to the dollar).

The problem of disentangling financial assets and currency is one of the major forces mitigating against separatism. It's generally a good bet that the weaker party in the national union will be the one to lose out from a separation; given their financial and political structure, for example, I'd expect to see a Quebecois franc trail the Canadian dollar by a considerable margin. (Although I'm pretty sure Alberta would experience the many joys of a rapidly appreciating currency). Now that the European Union has taken over the currency, as well as many of the trade and customs functions of traditional federal governments, Belgium as a state suddenly looks a lot less necessary. One wonders if the current era of economic integration (assuming it continues) might not bring increasing political balkanization.

Comments

The "political balkanization" combined with "economic integration" could work to strengthen the European Union's power versus its member nations: a fragmented Belgium's successors would almost certainly assume membership of their own in the EU, meaning more member states but smaller ones.

Posted by Adan | September 23, 2007 5:33 PM

Indeed, one of the arguments often made for Scottish independence is that in the large framework of the EU, Scotland doesn't "need" the UK anymore. In recent years there has been a flow of power away from the nation-state, both upward into the EU, and downward into the regions (think UK devolution, more regional power in Spain, etc) - the two are almost certainly related.

Posted by Andrew | September 23, 2007 5:47 PM

There may very well be something to the devolution of size from larger nations to smaller regional nations. In the USA it would be the states v. federalism.

If the north american nations (Canada, US, Mexico) want to form a loose economic union to increase the power shown by economy of size, there isn't a reason why it should be limited to just these nations. It seems smart to invite those countries that might not want to merge with the EU to consider joining the north american unit. Heck, in England's case, two of the three nations up here is primarily based on Anglo culture and systems, no big dislocation there.

The small state status of England (or the UK) could be protected by expanding on our states' rights. With the financial markets centering in England, this seems like a very worthwhile approach, and an incredibly strong one, too.

Posted by falkoyn | September 23, 2007 7:04 PM

Clearly the intention of the EUSSR polibureau is to dissolve all member states and create a semi-or non-democratic technocracy of the political elite. Combined with unrestricted third world muslim immigration I really don't see how western europe can survive another two generations as a "european" entity.

Posted by Amsterdamsky | September 23, 2007 7:17 PM

The emergence of EU and increasing desire of certain regions for more autonomy (Flanders, Scotland, Catalonia, ...) has nothing to do with non-democracy nor islamization of the West. Those are separate issues as a result of WWII.
These regions have historically always been unique cultures, different from their 'host' nations. The reason that they have not been vocal about their desire to divorce from their 'hosts' the last 50 years was the cold war and the need for protection. With the disappearance of the communist treat and a new entity to take care of extra-national affairs (economy, security, financial, ...), being Europe, there is no need to have to 'endure' the rule of the former conqueror. It makes perfect sense to allow regions to divorce from their 'captors' and take all cultural-related decisions (language, religion, social security, education, law enforcement, jobs, health care, ...) in their own hands. All extra-national responsibilities can be more efficiently handled by the EU. There is no need anymore for a Belgium, Great-Britain or Spain in their current forms. Which regions should be allowed self-rule: simple, just ask the people. It's called democracy. In an ideal world, healthcare and social security have a better yield when covering more people, so moving this to EU would make sense from an economical viewpoint. But weather this is politically feasible in the next decade remains the question.
Fact is that divorcing Flanders from Wallonia will free up their agenda to deal with real issues instead of bickering with each other and remain inactive, the exact scenario of Belgian politics of the last 60 years. The equivalent would be a divorce of an eternal bickering married couple would free up their time to attend their estranged children that never got the attention they needed. I urge everyone that criticizes the Flemish will for independence, first catch up on Belgian history. Wikipedia has some good articles in English these days.

Posted by kempenaar_in_ca | September 23, 2007 9:01 PM

It's all very well to blow smoke about the potential benefits of independence for Flanders, but the problem of Brussels remains insoluble. This is historically the pattern with all such efforts at ethnic disentanglement: the cities are mixed, and no side will agree to give them up.

Posted by brooksfoe | September 23, 2007 10:07 PM

As Kempenaar says, the safety blanket provided by membership in the EU will probably encourage more of these separatist movements - there is practically no downside to splitting away as along as membership in the EU and NATO is maintained. Czechoslovakia was just the first of what will probably be many bloodless divorces. Catalan, Scotland, Wales, Flanders, Wallonia are all good candidates.

Those who want to maintain Belgium's current status as a single independent state might want to find a Prime Minister who does not break into a stirring rendition of La Marseillaise when asked to recite the Belgian National Anthem.

Posted by Internet Ronin | September 24, 2007 12:06 AM

Given the extreme complexity and sensitivity of how voting in the EU is weighted, I would think the EU itself should be sending a very clear message that new statelets should not expect one-country-one-vote status. Flanders is not going to have the same voting weight in the EU as Belgium did, nor will it have the same weight as Poland.

Posted by brooksfoe | September 24, 2007 12:42 AM

In Yves Leterme's defense for not being able to recite the National Anthem: Yves is Flemish and was ambushed by a French-speaking film-crew to SING, not recite the anthem in FRENCH. Not being much of a singer (the last time I checked, not yet a requirement to be a politician), he screwed up and mistook it for the lyrics of the French anthem. In his (and most other Flemish politicians) defense, he can actually speak French. There are probably less than 5 Walloon politicians that can keep up a conversation in French. So instead of buying into the spectacular spin given by Walloon media of 'a candidate prime minister not knowing the lyrics to the national anthem', what actually is the case of yet another Flemish politician mastering the language of their fellow countrymen and even reciting a song in that language. So he goofed up. If a blunder like that costs you your mandate in office, then what is Bush still doing in the Oval office.

About Brussels, (as you have guessed by now, I am Flemish) that is a problem, and I do not want to impose Flemish rule on a population that considers themselves French-speaking. That would be hypocritical, because the Flemish have been trying since 1830 to get away from Walloon rule. Not being an expert on this, (my next statement probably is naive) but one of the possible scenario's could be to give Brussels autonomy on all issues pertaining to the region (e.g. public works, law enforcement, economic development, ...) and give the Brussels inhabitants a choice whether they want to associate themselves with Flanders or Wallonia on cultural matters (education, ...) and direct that portion of their taxes to these regions. Sounds complicated ? Believe me, the current system is far more complicated than that.

Concerning the proliferation of new member states, I have no problem with fixing the number of votes allowed in EU parliament and given each region their share in proportion to their population. So Flanders will have less votes. So be it. That part of EU parliament can take oversight of most cultural matters. Another part of parliament (some kind of congress) can have let's say 2 representatives of each member state and have a madate over extra national affairs (defense, foreign policy, ...). These matters are usually too complex to be understood by voters directly anyway because they involve the need to have knowledge of sensitive information. Stupid idea ? Maybe but it seems to work for the Americans.

A small problem I have with splitting up the country is what to do about the head of state. So far, we've had a monarchy where certain powers (signing laws, forming governments, ...) are granted by the Belgian people to a monarch under the condition that he/she obeys the constitution and remains partial to political or cultural affairs. Sounds good. Problem is that the Belgian royals suck at it. Since Baudouin got on the throne barely an adult himself (before he was able to get some decent education and experience), he was 'tutored' by 'experts', a practice that still exists with current throne contenders today. So some people that did not get elected, who are unknown to the public and are appointed for life are controlling a head of state's every move. History has thought us that Belgian royals end up showing alliances which they are supposed to transcendent. Leopold III didn't put up enough of a fight against Hitler, Baudouin was too religious, Philip on occasion makes comments on political debates, and none of them speak decent enough Dutch to save their lives the next time people start yelling "schild en vriend". That and the fact that I don't like overprivileged incompetents getting handed golden opportunities just because they are born. (but that is another discussion).
The problem is the alternative: a Flemish head of State is most likely going to become a president. Presidents usually come out of stable of politicians, who by design have an agenda. A head of a government (prime minister) needs to be a politician with an agenda (that is why you elect him, to represent the majority). But a head of State needs to transcendent that and represent ALL citizens. He/she should not polarize and should have a stabilizing effect. Problem is that not every country has a Nelson Mandela/Vlacef Havel/... all the time, if ever at all.

Posted by kempenaar_in_ca | September 24, 2007 3:21 AM

The Economist got the exchange rate upside-down -- it's 1.4 USD to the EUR, not conversely.

Posted by sammler | September 24, 2007 3:46 AM

Speaking of a North American Union, a decade ago, despite reservations, Canada would have likely jumped at an economic union with the US. Today you could not find enough Canadians to field a road-hockey team who would go for it. I am a citizen of both countries and I realize the US is a sick nation ruled by hate and is in the early stages of an economic melt down. So why would the UK join that? what should happen is Canada should join the EU and screw the US forever.

Posted by bob | September 24, 2007 8:43 AM

It does seem, on the surface, that Canada gives the impression of being more politically in-line with Europe, where the UK still can't figure out whether they want to be in or out the EU. Fact is that without the UK, EU would have been a lot further in achieving their goals. From one perspective, the UK's only reason of being in the EU is so that they can slow it down. For some reason, they seem to think the US is more of a natural ally to them. The sick twist is that the US seems to be abusing their loyalty (e.g. Iraq) and the EU wants to give them a major vote in EU matters, but they are repelled by it (just read any British blog on the subject). The equivalent of a wife undecided whether she want to be with a hot-shot rock artist, constantly abusing and cheating on her, not giving her the respect she deserves, or a dependable husband, somewhat boring, willing to give her an equal value in the relationship and committing for the long-haul. I can understand that the Brits are still trying to come to terms with the fact that they are not the world leader anymore but why do they persist on allowing themselves to be humiliated over and over by the US.

Posted by kempenaar_in_ca | September 24, 2007 1:20 PM

It's all very well to blow smoke about the potential benefits of independence for Flanders, but the problem of Brussels remains insoluble. This is historically the pattern with all such efforts at ethnic disentanglement: the cities are mixed, and no side will agree to give them up.

I remember reading in Hans-Hermann Hoppe's excellent book Democracy: The God That Failed that Brussels may not be as much of a problem as the writer thinks it will be.

Apparently, a situation exists there where various parts of the city are subject to French law while various other parts are subject to Belgian law. The distinction is declared by which flag flies over which street, and it's said to change from street to street. I am not an expert on this, but perhaps Brussels is not a problem at all.

Posted by matt | September 24, 2007 7:09 PM

The US is past. The last two presidents have, in their own divergent ways, done their best to lower its economic vitality. Now, there is room for a real global community to grow, without some big bully forcing himself upon the weak sisters of the world.

Posted by nostorus | September 25, 2007 9:31 AM

There are far more "nations within nations" than are mentioned so far. How about Friesland in the Netherlands, with its own language? Or Bavaria in Germany? A few years ago north Italy talked of splitting from the south. Some of these may even do the deed and split away from the majority.
But I suspect that it's not the safety of being in the EU that is causing it. It's the fact that their own elected governments are so controlled by Brussels that the larger "demos" has been devalued. In search of a realistic unit to identify with, the citizens gather around a smaller unit of regional identity.
What will not happen is that these groups obtain internal self-government within the EU. The whole ethos of the EU is that national identities should be suppressed. There is to be no divergence from the elite's decision of the "common European values" that all have to abide by. Local democracy? It aint gonna happen.

Posted by El Draque | September 25, 2007 4:53 PM

I see a lot of anti-EU rethoric being used in discussions on the Belgium split-up. A lot of people see this trend in Belgium as proof that the EU is not working.
That is not the case.
The international media is quick to grab a quote of Vlaams Belang politicians. Vlaams Belang shares with almost all Flemish parties a desire for more Flemish autonomy. They go one step further and demand outright independence. However their outcast status (brought upon themselves with their fascist/Nazi-like views on immigration) repels other parties in associating themselves with anything VB claims.
Although VB have a lot of votes, they are NOT included in any government and have no real say in things. They are a true opposition party that has the luxury of saying what they want. VB is also the only Belgian party that is against the EU. By quoting VB, the international media is giving the perception that the Flemish cause is inherently linked with anti-EU sympaties. That is just not the fact.
It is because there is an EU that many Flemings come to realize that there is no need for Belgium anymore and see it as an obsolete layer. A lot of Flemings would not mind having the EU take over the role of Belgium, as long as the EU guarantees their cultural identity (something Flanders has had to fight VERY HARD for in the last 170 years).
And what is this about devaluation? The EURO has never been so strong.
When people use term like 'elitist' when referring to EU, they forget that the EU parliament consists of people they voted for. So if you don't like what EU is doing, then send someone else to Brussels.
About EU being bureaucratic, that is true. That is exactly the thing the EU was trying to fix with the new constitution. But some countries voted against it because they didn't like the bureaucracy. A self-fulfilling prophecy like none other.

Posted by kempenaar_in_ca | September 25, 2007 10:22 PM