Brussels diary

Brussels diary
April 19, 1997

Europe's capital is under siege. Blue police trucks armed with water cannon line the streets. Coils of barbed wire ring the subway exits. The marching season is upon us, and right now Belgians think they have plenty to be angry about.

Another girl's body has turned up. This time, a nine-year-old Mor-occan discovered in a basement in the centre of Brussels. She had been missing for four years. The investigating magistrate told the parents there was no point in consulting a lawyer. Case closed.

The suspect is a convicted paedophile, let out after a few months' detention despite a long gaol sentence. Detectives interviewed him when the girl went missing, but he got away thanks to his brother's alibi. Sound familiar? Marc Dutroux slipped away from credulous cops before he was exposed as Belgium's most notorious child killer.

Several thousand people marched in silent tribute to the victim. Theirs was a protest too, against sloppy police work, bureaucratic infighting which has paralysed the judicial system, and political leaders who are out of touch. Prime Minister Jean-Luc Dehaene didn't interrupt his holiday when police uncovered the bodies of Julie and Melissa last year.

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the latest focus of public outrage is the closure of the Renault car plant in Vilvoorde, just north of Brussels. Three thousand jobs will disappear. Somebody forgot to tell the French that Vilvoorde is Dehaene's constituency. Van Rompuy, the Flemish economics minister calls the shutdown a "terrorist act."

Dehaene is livid, but this is one political fix even the "Plumber" cannot pull off. Belgium's social security contributions and income tax are among the highest in the EU. The total costs of employing Renault workers in Belgium are 30 per cent higher than costly France.

But wait a minute. The Belgians are the world's greatest exporters going back to the wool trade. Belgium is Europe's industrial dynamo, a frontline candidate for economic and monetary union. So what's up?

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AJP Taylor once described the condition of the Austro-Hungarian empire as hopeless but not serious. He might as well have been writing about modern Belgium.

The country is split on ethnic lines between rich Flanders in the north and poor Wallonia in the south-Germanic discipline versus Latin laxity. The tension goes to the heart of the European project-and the plan to launch a single currency.

Belgium runs the same sado-monetary policy as the Bundesbank. The Belgian franc has barely budged against the D-Mark since 1982. But unemployment is well over 10 per cent. The public sector unions are still in the stone age. Labour market flexibility is a joke.

The outcry over the Renault closure shows that Belgian politicians still refuse to accept the logic of the single market or the right of companies to take decisions on a commercial basis. Dehaene's reaction was typical. He said the single currency would solve everything, provided that it was accompanied by a new raft of EU directives harmonising social policy.

The truth is Emu will make the disparities between north and south worse. One consequence of the single currency will be the scrapping of the automatic wage indexation system. Flanders is already plotting to break away from national collective bargaining in favour of a regional system. This would allow more flexibility and enable Flanders to win wider autonomy in fiscal and social security policy-and reduce transfers from Brussels to Wallonia.

So here we have the ultimate irony: the Emu project which is supposed to keep the EU together risks splitting Belgium apart.

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much of the muddled thinking about Emu lies in the inability of the political classes in Belgium to examine its economic consequences seriously. They have bought Helmut Kohl's line that the single currency is all about the difference between war and peace in Europe.

But you can also point the finger of blame at coalition politics-a never-ending series of compromises between Flemish Christian democrats and Wallonian socialists who run a one-party state from their power-base in Liege.

Take a look at Karel Van Miert, the EU's Flemish competition commissioner. He has cultivated a reputation as a crusading trust-buster since he took over from Leon Brittan four years ago. Only last month, he refused to bail out a Wallonian steel company called Clabeq, a decision which brought thousands on to the streets of Brussels.

But since Renault announced its closure, Van Miert has denounced the company's conduct to any journalist within shouting distance. He claims Renault failed to comply with EU consultation laws, and now he is strong-arming the company over an application for Spanish state aid.

So, Van Miert has moved from socialist to free-market liberal and back to socialist. Where next?