Lingering effects of economic crisis
Before the pandemic hit the continent, many countries in the European Union, including Belgium, were still trying to recover from the global economic and euro crises of 2008-2011. Economic growth was anemic (below 2% a year), perceived inequalities were rising, and political fractionalization followed. Belgium, like many surrounding countries, was finding it difficult to determine how to transition toward a renewed dynamic that would be more encompassing than in previous years.
The pandemic exacerbated all of these weaknesses, while also forcing policymakers to examine solutions that would make it possible to organize a coordinated and inclusive response to shocks of historical proportions. However, it also made terribly clear that political and other tensions tend to be quelled only under extreme and urgent circumstances. Environmental challenges and technological transformations will require tremendous adjustments, but do not seem to produce the same sense of emergency. Deep adjustments in the country’s economic and technological structure will likely be needed, which will require effective coordination and leadership from authorities, as well as foresight. While the country has many technological advantages, the COVID-19 experience highlights the need for enhanced, inclusive and coordinated leadership.
Energy transition is
One of the immediate tests the country will face is the energy transition, with a need to effect a switch in electricity production: organizing the phase-out of nuclear and fossil-fuel-based electricity production, while simultaneously addressing the expanding needs of the industry and of the population. Failure to do so risks creating electricity shortages with potentially damaging consequences for the country’s reputation and economic fabric.
Evolving institutional demands
Another challenge will be to improve the education system to allow it to address the demand for new (increasingly unmet) skills within an evolving economic landscape. Finally, the country must revivify its institutional capacity: for example, the justice and higher education systems are substantially underfunded, while healthcare spending is slightly above the EU average, but the coronavirus crisis has tested the limits of previous cost-cutting measures. Other reforms, including of the pension system and related budget sustainability measures, have been delayed for too long. Up to this point in time, Belgium has been able to coast on a strong initial position, but the time to change course actively is now past.
Structurally ill-equipped; constructive federal model needed
Belgium is not structurally well equipped to meet these major challenges. On the one hand, it does possess a lot of scholarly expertise, an overall diversified economy, a skilled labor force, quite well-developed and dense infrastructures, a broad multiparty system that enables diverse citizens to at least “feel represented” by political elites, and a strong terrain of intermediate organizations including employers’ organizations, trade unions and very diverse civil society organizations. On the other hand, the very cumbersome institutional structure that has been put in place after six successive state reforms from 1970 onward is generating multiple bottlenecks. The multiplicity of players (multiple parliaments, governments and ministers; so that up to nine distinct federal, regional and community ministers end up sharing the health portfolio, for instance), the absence of constitutional hierarchy between the federal and regional/community levels, and the asymmetrical party systems in the North (more right-wing) and the South (more left-wing) of the country all contribute to deadlocks, veto games, and eventually policy responses that are often suboptimal and sluggish. The overarching issue is: How, possibly via a seventh state reform, can a more “mature and constructive” federal model be designed that is both policy-efficient and effective? This might require the re-federalization of some competences that have been delegated to regional or community authorities – an eventuality that remains absolutely taboo at least for the country’s strongest party, the Flemish Nationalist N-VA. And yet, one way or the other, the country’s political elites will need to find a way to create more homogeneous “packages” of competences, at both the federal and the regional/community levels.
Pandemic offered stress test for democracy
The COVID-19 crisis has been a terribly hard stress test for democratic countries, Belgium included. It brought back to the fore questions and tradeoffs perhaps not explicitly discussed since World War II, in particular how far a government may restrict its citizens’ freedom to meet, move, assemble or even exit their homes. Combined with different majorities in Belgium’s federated entities (Flanders, Brussels Capital region and Wallonia), these issues significantly increased polarization in the country: between left and right, between some Flemish and Francophone political leaders, and not least between population subgroups. It pitted the poor against the wealthy, the conventionally employed against the entrepreneur, the foreign-born against the native Belgians, and economic sectors against each other.
Parties doubled down
Parties that initially positioned themselves to the right in terms of economic freedom slid further to the right, whereas those that initially positioned themselves to the left in terms of the government needing to intervene to correct social and market failures slid further to the left. This polarization was reinforced by an increasing share of the vote (and hence number of seats) having gone to radical left (mainly in Wallonia) and radical right (mainly in Flanders) parties in the 2019 parliamentary elections. Trust in government dropped significantly.
Polarization less harmful than elsewhere
Nonetheless, in a global perspective, this polarization may be less handicapping in Belgium than in some other countries. Polarization is probably less strong than in the United States or in France, and less harmful than in the United Kingdom, but definitely stronger than in Germany and more harmful to government efficiency than in France, due to the higher degree of fractionalization in government and in particular a form of competition between the federal and federated entities, reinforced by debates over the whole COVID-19 response. (Score: 4)