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Social security brings Belgians to brink“If our country splits up, we’ll all be worse off.”
REUTERS/Francois Lenoir
Belgians tussle over their health-care system. Hospital workers recently protested lack of funding for the non-profit health sector.
A major struggle is brewing over Belgium’s social security system and the battle could alter the country’s federal structures. What is at stake is Belgium’s once-generous network of social services, which could be considerably rolled back as a result of recent national elections. The tug of war over social security began June 10 after the national elections for the federal parliament. As there was not a clear majority, King Albert II named the leader of the largest party, Flemish Christian Democrat leader Yves Leterme, to form a coalition government. But disagreement among the parties over whether to devolve social security to the regions of Belgium has led to a stalemate. It is not known when a new coalition government will be formed. In the meantime, Guy Verhofstadt, the outgoing prime minister, whose Flemish Liberal party was defeated in the June 10 election, has agreed to govern as a caretaker. The communities in Belgium most at odds over social security are the two that make up the vast majority of the country: Dutch-speaking Flanders in the north, which comprises 58 per cent of Belgium’s 10.4 million population, and French-speaking Wallonia in the south, where 31 per cent of the people reside. Most of the balance of the population is in Brussels, a separate, largely French-speaking region, surrounded by Flanders. The struggle is playing out against a background of disquieting talk of separation where, in a recent poll, 43 per cent of those polled from the Flemish north said they favour separation from Wallonia. Decentralizing social security A clear winner at the polls on June 10, Yves Leterme’s Christian Democrats want greater weight to be given to the federal constituent units (the communities and regions). This is good news for the Flemish nationalists. It is not at all reassuring for French-speaking Belgians of all political colours, who see in this the seeds of destabilization of the federal system, starting with social security. The stakes are high. Each year, the social security system provides income to 1.7 million pensioners, 600,000 unemployed and 150,000 pre-retirees. It also pays family allowances to more than one million families, covers 26 million days of hospitalization and pays for 70 million visits to the doctor. Leterme, the Flemish Christian-Democrat leader, has translated his voters’ desires into government proposals. For example, his much-debated federal proposal gives regions the right to help determine salary costs through targeted reductions of employer contributions to social security. Implicit in this proposal is the creation of three different methods for the funding of social security: one for Flanders, one for Brussels and one for Wallonia. Two conflicting visions of the future For Robert Deschamps, economics professor at the Facultés universitaires de Namur and author of Fédéralisme ou scission du pays (Federalism or splitting up the country), “these measures risk – without it becoming clearly apparent – an irreversible destabilization of the federal system and, in time, will result in a splitting of the country to the advantage of only one partner – the richest and most powerful.” Deschamps wrote that he fears “a decline of the federal system, basically to the detriment of the inhabitants of Brussels and Wallonia, who are the poorest.” 
REUTERS/Francois Lenoir
Protesters march on the residence of Belgium’s King Albert II in Brussels in August with a banner reading “Now more than ever: Flanders independence.”
Might it go so far as to have a prosperous and enterprising Flanders split off from Wallonia, which is stuck in a post-industrial crisis? This is a simplistic and unhelpful scenario. A study published in June by the Centre for Social Policy Research of the University of Antwerp, titled Social Security, Transfers and Federalism, concluded that Wallonia receives more social benefits than Flanders, particularly in the areas of unemployment benefits and early retirement pensions. However, since 2003, more social security payments have gone to Flemish pensioners than to Walloons. This trend probably will continue because there is a larger aging population in the Dutch-speaking north of the country. The co-author of this study, Béa Cantillon, defends the principle of financial transfers managed by the social security system: “Differences in income within and among the Flemish and Walloon regions are reduced. The ‘sécu’ therefore reduces, to a significant degree, the risk of poverty.” Yet many in Flanders are determined to turn social security over to the regions. And the sécu is not all that Flanders wants the regions to control. Former Flemish minister Eric Van Rompuy was recently quoted as saying that a “new deal” was necessary to put control of Belgium’s “economic levers” under the regional governments. An article on the Vlaams Belang separatist party’s website claims that in 1999, Flanders financed 64 per cent of Belgium’s social security benefits and received less than 57.6 per cent in return. The University of Antwerp team evaluated the effect of a major cut in north-south transfers. In Flanders, the average household income would increase by seven per cent while in Wallonia it would drop by four per cent, exacerbating poverty levels. Study co-author Cantillon said she wondered whether the aging population of Flanders would like to see a Wallonia with low salaries and poor social security developing on its doorstep. Belgium trails other EU countries in social security The need for reform is pressing because the social security system has become less effective. In a February 2007 comparison of the Belgian system with the evolution of European social policy, Cantillon made a harsh assessment: “In 1997, we were champions of the fight against poverty. We were ahead of Denmark, Norway, France, Germany and the Netherlands. Today, in 2007, our social safety net is comparatively mediocre; we risk heading towards minimal social protection. We’re moving from the Scandinavian to the British model.” But the mesh of the net could become too wide. The risk of poverty is particularly high for families that depend entirely on replacement income, namely many single mothers and pensioners. The Minister of the Economy says that one Belgian in seven (14.7 per cent) is poor, which for a single person, means living on less than 822 euros a month. For a couple with two children, it is less than 1,726 euros. This is the situation of 10.7 per cent of the population of Flanders and 17.5 per cent of that of Wallonia. What is at stake here? Cantillon points to the reduction of the family allowance for the first child, which has lost one-third of its value in 25 years. (Leterme aims to increase it). She also cites pensions – “among the lowest in Europe” – which have failed to keep pace with the cost of living. However, a measure to progressively link the lowest pensions with social assistance has been introduced recently. Belgians are not equal when it comes to health. And the Fondation, which claims that the Belgian government is indifferent about this inequity, has submitted concrete proposals to the government coalition negotiators to create a federal body to combat inequalities in the health care system, enhance primary care and step up preventive efforts. Reforms require the financial means to carry them out, and these means are not lacking in Belgium. Since 2005, the centrally managed pool of pensions, health and disability insurance, unemployment and family allowances has posted surpluses. To date, this money has been used to pay off debts and to bolster the Fonds de Vieillissement (Aging Fund), created in 2001 to cover the costs generated by the growing number of senior citizens. Other steps are expected. Economics professor Deschamps advocates broadening responsibilities for the regions and increased co-operation between the federal government and the constituent units. “Co-operation here is still piecemeal, in contrast to countries like Germany, where federalism is really entering a phase of maturity.” What is needed is a maturity that requires imagination, Cantillon said. “In Flanders, people see separation as the cure-all. At the other end of the country, people feel continually under threat. This situation puts social security on the line. It prevents us from coming up with more constructive solutions.”
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Ricardo Gutiérrez and Bénédicte Vaes are Belgian journalists based in Brussels.
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