Belgium Politics


Belgium: Flemish separatists win Belgian federal elections

May 25, 2014

Belgium held federal and regional elections on 25 May together with the European elections as part of the State reform that was adopted on 19 December 2013. According to the preliminary official results, the separatist New Flemish Alliance (N-VA) was clearly the dominant party in the Dutch-speaking part of the country and garnered 20.3% of the total votes. The N-VA will obtain 33 seats in the 150-seat Belgian Chamber of Representatives and the Socialist Party (SP), with 11.7% of the votes, came in second place with 22 seats. The SP was the predominant political force in French-speaking Wallonia. Meanwhile, the Reformist Movement (MR) and the Christian Democratic and Flemish party (CD&V) won 19 and 18 seats respectively. Most analysts and political observers see that the N-VA will need to make alliances with Flemish- and French-speaking parties in order to form the next government. Analysts expect that this task will not be easy given the experience in the government formation negotiations that followed the 2010 federal election, which left the country divided and without a government for an unprecedented 541 days. On the economic front, despite the fact that some encouraging improvements have been made, the fiscal situation in Belgium remains challenging and could worsen quickly if some structural economic problems are not addressed by the new government. In 2013, Belgium's fiscal deficit was 2.6% of GDP and public debt ended the year at a whopping 101.5% of GDP. Most analysts agree that the country urgently needs to implement structural reforms this year. However, they recognize that if the country experiences another period of political uncertainty, these reforms could be put at risk and weigh on investors' perceptions of the country. Against this backdrop, the country's borrowing costs could increase, resulting in the spread of Belgian 10-year sovereign debt yields widening over the French and German equivalents

Author:, Senior Economist

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