Belgium bids for place in premier league

Date: 01/06/2000

As EU leaders prepare for their summit in Portugal later this month, Tim Jones reports on how Belgian Prime Minister Guy Verhofstadt is striving to raise his country's profile on the Union stage and play a bigger role in policy-making

BRUSSELS may be widely known as the 'capital of Europe', but the country which plays host to the key EU institutions has never had more than a walk-on part in Union politics.

Ever since the European Communities were formed, successive Belgian governments have recognised that they cannot hope to wield the clout of the EU's biggest players. Ever-present Union figures such as Wilfried Martens, Marc Eyskens and Leo Tindemans seemed to accept Belgium's role as a bit-part, positioning themselves as the kind of 'fixers' now exemplified by Luxembourg Prime Minister Jean-Claude Juncker.

But, since the election last summer of a Dutch-style right-left 'purple' government led by Premier Guy Verhofstadt's Vlaamse Liberalen en Democraten (VLD) and its francophone sister Parti Réformateur Liberal (PRL), things have changed.

Verhofstadt, who spent most of former Christian Democrat Premier Jean Luc Dehaene's second term of office in the political wilderness, is a careful student of Union politics and believes that Belgium has failed to even come close to punching its political weight. "He sees the stasis that typified the political class over the past 30 years as having been transferred to the way we have done business in the EU," says a senior source.

This reputation reached its peak under Dehaene and his long-serving Finance Minister Philippe Maystadt. Dehaene was so renowned for his ability to fix problems that he earned the nickname "plumber" and was annointed - unsuccessfully as it turned out - by German Chancellor Helmut Kohl and French President François Mitterrand to be the next European Commission president after Jacques Delors.

"We have for too long been seen as an echo chamber or a proxy for the Commission and the French especially," says a diplomat deeply involved in policy-making during the last Belgian EU presidency in 1993. "I do not want to say whether that is a fair view, but it is certainly how some of the new cabinet see things."

Verhofstadt and his top government brass - PRL Finance Minister Didier Reynders and Foreign Minister Louis Michel - have quite deliberately become 'players'. Indeed, some commentators have detected the replacement of the old EU policy-driving axis between Mitterrand, Kohl and Commission President Jacques Delors by one between Delors' successor-but-one Romano Prodi, Spanish Premier José María Aznar, the UK's Tony Blair and Verhofstadt himself.

It is highly significant that, before the March Lisbon summit - a strategy meeting on the Union's 'new economy' taken very seriously by the British government - Blair chose to issue a joint statement with Verhofstadt rather than with any other leader.

It was pure third-wayism. The paper called for the "modernisation of Europe's social model" and "the transformation of our societies into active welfare states". Social security systems should act as a springboard into jobs and not as unproductive safety nets, "rights and opportunities are balanced by responsibilities", and pension systems must be made "sustainable'.

It is unthinkable that Dehaene would have made such a joint statement. Belgian rhetoric could not have been more different from the EU public-spending solutions often sought by Maystadt and his successor Jean-Jacques Viseur.

Verhofstadt swept aside the idea of another round of 'grand projects'. "The means already exist," he said dismissively. The man once known as 'Baby Thatcher' went to Lisbon determined to accelerate liberalisation of the energy and telecoms markets with tough, early deadlines. "It is hard to believe that this was the same country that dragged its feet in both these areas for so long," says a Union official who was involved in negotiating the 1996 electricity market-opening package.

The past two Dehaene governments sought to liberalise markets at a snail's pace and - even once it had agreed to do so - sought transitional protection for phone-operator Belgacom, pumped subsidies into airline Sabena and turned a blind eye to Electrabel's attempts to renegotiate supply contracts that would have shut some markets for up to 40 years.

Instead, last month, Verhofstadt and his party ally Rik Daems, who holds the telecoms/public enterprise portfolio, drove through the sale of most of the government's remaining 50.1% stake in Sabena to Swissair. Nobody doubts that full-blown privatisation of this former job-creation enterprise is on the cards.

Belgacom looks extraordinarily vulnerable in Europe's fast-changing telecoms market, a stake in Distrigas is being valued for an expected sale to Suez Lyonnaise des Eaux, and even Belgium's long-standing intransigence on the part-liberalisation of the EU's railways is said by diplomats to be softening.

Where Verhofstadt parts company with Blair and Aznar is in his enthusiasm for Union employment targets, but even here his views are noticeably different from those which held sway in the Dehaene/Maystadt years.

His favoured target is not for 3% GDP growth - a view championed by the French and Germans - but for raising the proportion of the EU's working population that is either in work or actively seeking it from a meagre 57% in Belgium to 70% by 2010.

In a nod to his Socialist coalition partners - Labour Minister Laurette Onkelinx and Social Affairs Minister Frank Vandenbroucke also produced a joint paper for Lisbon - Verhofstadt declared a preference for targeting a reduction in the percentage of Europeans living

officially below the poverty line from 18% today to 10% by 2010.

Maystadt's hard line in support of a Union-wide savings tax has also been tempered. Reynders and Paul Hatry, his representative on the EU group looking into the issue, are seen to be playing a tactical game to protect sweetheart corporate tax regimes rather than fighting to the death for the old withholding-tax model.

The government minister who has made the biggest splash in the Union is Louis Michel as he develops what he considers to be an "ethical foreign policy". Michel, whose family suffered at the hands of the Nazis, has been way out front in the EU campaign to isolate Austria following the creation of a coalition government between the People's Party and the far-right Freedom Party. None of his words has been minced. "I reject the diplomacy of civility, where you hold back from taking action to avoid upsetting anyone," he said. "A country must behave like a human being: have some deep principles - not too many - and respect them. It must also be able to recognise the wrongs it has done."

On this basis, Verhofstadt has made a public apology for Belgium's complicity in the Rwandan genocide and Michel has ordered an inquiry into recent allegations that Brussels was involved in the assassination 40 years ago of Congolese Prime Minister Patrice Lumumba.

Michel's uncompromising position that former Chilean President Augusto Pinochet should stand trial in the EU for falsely imprisoning and killing European nationals following his coup against an elected government in 1973 upset both London and Madrid - Verhofstadt's closest political allies. In a damage-limitation exercise, Michel reassured both governments that he was not pleading "moral superiority" and held back from taking the case to the International Court of Justice in The Hague, something he had threatened to do early in the game.

Part of Michel's stance is political positioning. His PRL party is taking advantage of the weakness of the francophone Christian Democrats and the corruption-tainted Parti Socialiste to turn it away from the radical liberalism of late leader Jean Gol and become a "centre-social" party. It is even to be renamed the Parti Démocrate.

Some things never change, however. Verhofstadt and Reynders are determined to use their one-year-long presidency of the Euro-11 ministerial group to boost its coordinating powers. And they will do this hand in glove with Paris.

"Belgium will shift alliances according to interests," said a Dehaene-era diplomat. "I think it means we have grown up."

Major feature. As EU leaders prepare for their June 2000 summit in Portugal, Belgian Prime Minister Guy Verhofstadt is striving to raise his country's profile on the Union stage and play a bigger role in policy-making.