Belgian crisis deepens.


No one seems to be laughing anymore about the jocular September 20, 2007 posting on eBay offering Belgium for sale. The country was put up on eBay for auction by a Belgian who was protesting the fact that since the June 2007 elections, Belgium's 11 political parties have yet to form a government.

Problem: No coalition, no government action. The caretaker government has almost no power at all. The country is--effectively--without a government.

The issue at hand is that activists in the north of the country, who are mainly Dutch speaking Flemings (until 1830 Belgium was part of the Netherlands) and activists in the southern part of the country, mostly French speaking Walloons, want to split Belgium in two.

At first, no one thought the crisis was terribly serious. But now, nearly five months after the elections with talks dragging on, the crisis is deepening.

At least, Belgium's consumer confidence numbers provide support for the idea that Belgians are worried. For the first six months of 2007, that is through the election month of June 2007, the component of the confidence index relating specifically to the financial situation of Belgian households, averaged 4.9 points.

From August 2007 through October 2007, household financial sentiment was at 2.5 points--just about cut in half.

Far worse were the results of the Belgian National Bank's (NBB) survey question about how Belgians feel in regard to the country's general economic situation. From January 2007 through June 2007, the average was zero--in other words, neutral. From August 2007 through October 2007 the economic sentiment average dropped to negative 7.25 points.

The consumer confidence index itself was negative 2.o points in both August 2007 and September 2007, and moved up to negative 1.0 in October 2007.

Even if Belgium does manage to disappear, it is unlikely that the surviving entities will suffer devastating economic harm. But as October 9, 2007 commentary in the Los Angeles Times asks, if Belgium, the capital of the European Union (EU) cannot keep it together, what does that say about the EU experiment itself?


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