It’s less than a week since General Motors agreed to sell Opel, its European arm, to a group led by Magna International of Canada, but already a wave of anger at the implications of the deal is building up.  Nowhere is this more true than in Belgium and the UK, where workers at GM plants seem far more at risk than their colleagues in Germany of losing their jobs.

This episode is, however, about much more than potential job losses.  It’s about Europe’s reluctance to come to terms with huge overcapacity in its car industry.  It’s about how best to preserve a broad manufacturing base in an era when the other main recent driver of European economic growth - lightly regulated financial capitalism - is discredited.  Finally, it is a test of the European Commission’s ability to uphold its strict rules on competition and state aid during the worst recession in the European Union’s history.

Lord Mandelson, the British government minister responsible for business and innovation, told the BBC this morning that he hoped the Commission (of which he was a member until last year) “should not accept anything that looks like a political fix” in the Opel deal.  This remark came very close to accusing the German government of offering shedloads of financial aid to Opel - €4.5bn, to be precise - in return for a promise not to sack carworkers in Germany as the nation heads towards a general election on September 27.

This is, of course, exactly how matters are viewed in Belgium, where politicians fear that Opel’s plant in Antwerp has been earmarked for closure.  As Kris Peeters, who heads the government of the Flanders region, bluntly put it in July: “Those who put more money on the table win.”  The Flanders government had tried its best, offering up to €500m to Opel, but the Germans crushed them with a sum nine times bigger.

The Commission made clear last Friday that it intended to study very closely the terms of the Opel sale.  According to Der Spiegel, the German news magazine, some Commission experts think the Antwerp plant may be more efficient than the Opel factory in Bochum, one of four company plants in Germany.  But don’t hold your breath on this one.  In EU institutions as much as in German politics, the power of the German car industry lobby is something to behold.

The truth of the matter is that almost no one in the EU, whether in government or in the car industry, wants to face up to the chronic problem of overcapacity.  Fiat’s Sergio Marchionne is an honourable exception, but he lost out early in the scramble for GM’s European assets.

As surely as night follows day, there will be a loser in all this.  And at the moment, it looks like being the German taxpayer.

The last time that a dispute between Madrid and Brussels seized the international spotlight was in 1568 - and boy, was it big.  That was when the Spanish rulers of the Low Countries sparked the 80-year-long Dutch Revolt by executing Counts Egmont and Horne on the Grand’ Place of what is today the Belgian capital.

This month, another quarrel between Spain and Belgium broke out.  Admittedly, it’s less serious, and for the moment it’s stayed behind closed doors.  But in the interests of transparency, and because the squabble tells you rather a lot about the way the European Union operates, I shall share the details with you.

Karel De Gucht, Belgium’s foreign minister, has written an indignant letter to Miguel Angel Moratinos, his Spanish counterpart, complaining about a stitch-up at an EU operation known as the Union for the Mediterranean.  The UfM is a pet project of French President Nicolas Sarkozy, aimed at reinvigorating relations between the 27-nation EU and its North African and Middle Eastern neighbours.

When they launched the UfM last year, the EU and its neighbours agreed that it should have a co-presidency, with one EU country and one non-EU country sharing the post.  First up were France and Egypt.  No problem there.  But it was never officially spelled out who should represent the EU after France.  Belgium, which will hold the EU’s six-month rotating presidency in the second half of 2010, thought that under EU rules it would be a logical choice.

So, not surprisingly, De Gucht was most unhappy to discover, from a letter that Moratinos had written to his French and Egyptian colleagues, that Spain and France appeared to have reached a private deal without telling anyone else in the EU (or, at least, without telling Belgium).  Under this arrangement, France was to hold the job for two years and then hand over the reins to Spain, which would hold it for the following two years.

No doubt Moratinos thinks Spain is entitled to have the UfM’s co-presidency because it will hold the EU presidency in the first half of 2010.  But for two years?  The polite language of European diplomacy can scarcely hide De Gucht’s displeasure.  “I confess that I was really amazed,” he writes in his letter to Moratinos, arguing that the Franco-Spanish deal violates fundamental EU rules that set out how the bloc must be represented on the world stage.

This incident reveals many things about the EU.  It reveals how trivial squabbles constantly interfere with the efficient conduct of a common EU foreign policy.  It reveals how big EU countries (France and Spain) think they have the right to push around small ones (Belgium).  It reveals an EU obsession with process rather than substance.

And, lastly, it reveals how, all too often, EU governments look like mice fighting over a piece of cheese, while outside Europe the world is full of large, fierce cats.

Back in November I drew attention to the path-breaking research of the genealogists who had discovered that Barack Obama was 1 per cent Belgian. Now it seems Belgium’s contribution to the good of the world goes even further than that.

Two academic researchers, one Australian and one German, claim that a 16th-century English poem proves that the game of cricket originated not in England but, you’ve got it, in Belgium - specifically, in the northern, Dutch-speaking region of Flanders. The poem, attributed (perhaps erroneously) to John Skelton, a humanist writer in Henry VIII’s reign, contains the lines:

“O, Lorde of Ipocrisie / Nowe shut up your wickettes / And clape to your clickettes! / Ah! Farewell, kings of crekettes!”

The researchers say these lines refer to Flemish weavers who settled in southern and eastern England in the 14th century. And they detect a linguistic connection between the word ‘cricket’ and the Flemish phrase ‘met de krik ketsen’ (to chase with a curved stick).

Well, it’s an interesting theory - not watertight, but enough to explain why the fellow who delivers my post in Brussels looks like Geoff Boycott.

Belgians are about to find out whether it’s easier to write a haiku than form a government.

King Albert II has asked Herman Van Rompuy, the 61-year-old head of Belgium’s lower house of parliament, to put together a government following the collapse of Yves Leterme’s coalition a mere nine months after it took office.

Herman Van Who? Few people outside the Benelux countries will have the slightest clue who Van Rompuy is. But let me tell you something. Beneath the cool exterior of this 61-year-old Flemish Christian Democrat beats the heart of a man of passion, honour and intellect.

Oh, yeah? I hear you say. Well, let me direct all you sceptics to the website on which Van Rompuy publishes poetry … in the form of haikus.

With apologies in advance to Van Rompuy and to the worldwide community of specialists in the Dutch-language variant of this Japanese poetical form, here is my translation of a haiku he put out on November 3:

ALL SOULS

A dead leaf hangs weak/ on a branch. A dead person/ lies still forever.

Great stuff. So, once again with apologies to Van Rompuy, here is my personal effort:

THE STATE OF BELGIUM

Governing Belgium is a thankless/ Task. Please, let’s have/ An election. 

For the politicians, diplomats, European Union officials, lawyers, lobbyists, journalists and other folk who have to fly in and out of Brussels a lot in their course of their duties, Brussels Airlines is a fairly popular choice.

Created in 2006 from the merger of Virgin Express and Sabena, the ill-fated Belgian national carrier, Brussels Airlines is a busy, friendly, no-frills company that in my experience does a good job getting you from A to B in Europe without a great deal of fuss.

With that thought in mind, let’s turn to the Brussels Airlines website and take a look at what the airline calls its ’Praise Form’. This states: ”Brussels Airlines will be delighted to hear from you if you are extremely satisfied with the service you have received. Did you have a great flight or enjoy being served by a comely stewardess? Please tell us about it …”

The Brussels-based traveller who pointed this out to me says he has trouble with the very concept of a ‘Praise Form’, since it is implicitly discouraging you from criticising the service you’ve received.

Be that as it may, the phrase that caught my eye was the one about the “comely stewardess”. It seemed so politically incorrect by today’s standards that I had a look at the French-language version of the same ‘Praise Form’. This reads: ”… or if you have been charmed by the professionalism of our employees …”  

So why are English-language customers prompted to sigh with extreme satisfaction and recall the services provided by comely stewardesses, whilst French-language customers are sternly reminded of the professionalism of Brussels Airlines staff?

I don’t know, but I imagine Lufthansa - which is in the process of buying 45 per cent of Brussels Airlines - will want to do something about it.

The times are so alarming that sometimes all you can do is laugh. Consider Fortis, the large Belgian-Dutch bank and insurance company, which this week became Europe’s biggest casualty so far of the world financial turmoil.

Only a few months ago it launched a new advertising campaign.  It was a nice catchy slogan, too. ”Here today. Where tomorrow?”

Where indeed? As self-fulfilling prophecies go, this was right up there with the Oedipus legend.

Yet the slogan also brings to mind what many Belgians and other people see as the grievous condition of Belgium itself. The Belgian state is here today, as it has been for the past 177 years, but where will it be tomorrow?

The gulf between the prosperous, Dutch-speaking northern region of Flanders and the less prosperous, French-speaking southern region of Wallonia is so wide that, apart from Bosnia-Herzegovina, Belgium must be classified these days as Europe’s most internally divided country.

Belgium has been in almost total political paralysis since a general election in June 2007, with Flemish and Walloon parties unable to agree a deal on more autonomy for the regions. Only a week before Fortis was bailed out, Prime Minister Yves Leterme’s government was brought to its knees when a Flemish nationalist party withdrew its support.

Yet this is by no means the whole story. Perhaps the most important lesson from the Fortis drama is that, when the chips were down, the Belgian government and Belgian regulators were able to co-ordinate a rapid emergency intervention to save the company.

It wasn’t other banks or the private sector that rescued Fortis. It wasn’t Flanders and it wasn’t Wallonia. It was, together with the Netherlands and Luxembourg, the much-maligned Belgian state. Two days later, the Belgian state helped shore up the finances of Dexia, the Franco-Belgian financial services group.

No wonder Leterme was confident enough to appear on Belgian TV on Tuesday evening and say pointedly that, “as a new shareholder” in Fortis, the Belgian government would not be happy if the bank awarded a €4m-5m payoff to Herman Verwilst, the former chief executive.

So, three cheers for Belgium - and a loud raspberry for the people who dreamed up Fortis’s advertising campaign!

It is 2028. The ice caps are dwindling, Chelsea Clinton continues her parents’ presidential legacy in the White House…and Belgium still awaits a new federal government after elections in June 2007.

Yes, I’m joking. Belgium faces a very difficult situation right now, and many people hope it will get out of its impasse in the coming weeks. But how?

A quick recap: The linguistically-divided country has been without a new government since an election more than five months ago.

The francophone parties and the Flemish groups expected to make up a centre-right coalition just can’t agree on state reform, prompting concerns that the country could break up along its linguistic fault lines.

Continue reading "It takes two to make a pact, but only one to break it"

And on it goes…

Belgium waits and waits for a new federal government, almost five months after the election. Next week, it is expected to break its record for the longest-ever talks to form a coalition.

This leaves everyone to muse about the linguistically-divided country’s future, and in particular, the claim that the Flemings of the wealthy (Dutch-speaking) north and the Walloons of the poorer, francophone south, barely know each other.

I suppose when your country has been (briefly) put up for sale on eBay, and the prime minister designate appears unwilling to sing the national anthem, you’re justified in questioning things? But is the doom and gloom making everyone become a bit too tough on themselves?

Continue reading "Belgium: Five months and still no government"