Economist.com Cities Guide: Brussels Briefing - February 2006

News this month

Breaking up is hard to do

King Albert II of Belgium may have limited power in government, but that has not stopped him from riling local politicians. He ruffled feathers on January 31st when he used his annual New Year’s reception to speak out against efforts to divide Belgium. Calls to split the country have mounted in Flanders, the northern, Dutch-speaking half of the country, where most residents are wealthier than those in francophone Wallonia. In December the Warande Group, a Flemish think-tank, published a manifesto for an independent Flanders, arguing that the region subsidises the poorer south. The king's speech seemed to offer a direct response, as he warned against “an anachronistic and disastrous separation” caused by “over-hasty conclusions based on certain economic differences”. His talk coincided with celebrations to mark the 175th anniversary of the Belgian constitution.

The speech enraged Flemish nationalist parties of all stripes, including the Christian Democrats, Vlaams Belang, N-VA and Spirit, with politicians accusing the king of exceeding his constitutional powers. The Christian Democrats—an opposition party at the federal level but leader of the Flemish regional government—have been pressing for devolving more power to the regions, an effort that is expected to gain momentum after local elections in the autumn. Though a complete split is unlikely in the near future, such a divide would create a problem for Brussels. The city is capital of both Belgium and Flanders, but Brussels is bilingual, with francophones far outnumbering Dutch-speakers. Some suggest Brussels could become an independent city-state or even a European preserve.

Steely resolve

Lakshmi Mittal, the Indian owner of Mittal Steel, has been knocking on doors in Brussels to win support for an €18.6 billion ($22.1 billion) takeover bid. On January 27th Mr Mittal announced an offer to combine his steel company, the world’s largest, with Arcelor, a Luxembourg-based firm with plants throughout Europe. While Arcelor hired a phalanx of bankers to fend off the bid, Mr Mittal began courting Europe’s leaders, travelling to Brussels to meet Neelie Kroes, the European Union competition commissioner, Günter Verheugen, the enterprise commissioner, and Josep Barrol, president of the European Parliament. But Mr Mittal also wants to win over local authorities. Politicians in Madrid, Paris and Luxembourg have already condemned the takeover, but Belgian leaders have been a bit more open, if still wary. Guy Verhofstadt, the prime minister, has met Mr Mittal and Arcelor’s chief, Guy Dollé, while Didier Reynders, Belgium’s finance minister, said on February 14th that there was no need to denounce the Mittal offer before learning more about it.

Despite the gripes from elsewhere in Europe, the Mittal offer is not anti-competitive and will probably go through. It remains unclear how the takeover would affect Belgium. The steel industry has long been integral to the country’s economy, and Arcelor employs 15,400 people in Belgium, at plants in Ghent, Genk, Liège and Charleroi. Furthermore, the regional government of Wallonia still owns a 2.4% stake in Arcelor, a remnant of the days when Belgian steel was state-owned. But Wallonia is fairly immune to swings in Arcelor’s fortune, for better or worse: the Walloon government entered into share arrangements to guard itself against sharp drops in Arcelor’s stock price, which in turn means it will miss out on rises brought about by a takeover.

A pressing issue

Belgium’s national security chief, Koen Dassen, resigned on January 30th amid charges that he had allowed a Flemish company to breach the international nuclear embargo on Iran. In November 2004 Epsi, a local firm, exported an isostatic press to Iran, despite warnings from America's Central Intelligence Agency (CIA) that the press could be used to fortify nuclear weapons. A committee report to the Belgian Senate on January 31st revealed that Mr Dassen’s security service had not only ignored the request to intervene from the CIA, but had kept information from Laurette Onkelinx, Belgium’s justice minister.

With the international community fighting tooth and nail to halt Iran’s nuclear programme, the scandal over the isostatic press was sure to make heads roll. Belgium’s interior minister, Patrick Dewael and Ms Onkelinx said that Mr Dassen would become a “special expert” on security and migration policy. Epsi, for its part, denies wrongdoing, insisting that Iran Aircraft Industries bought the press to treat aircraft parts.

Under quarantine

Belgium’s Federal Food Safety Agency has placed almost 400 pig and poultry farms in temporary quarantine after discovering in January that animal feed had been contaminated with dioxin, a cancer-causing chemical. More than 200 farms in the Netherlands and a handful in Germany have also been closed. The scare recalled a similar incident in 1999, when news of dioxin-contaminated feed in Belgium created such a frenzy that the Christian Democrats were ousted from office in the general election.

The origin of the current crisis seems to have been Tessenderlo Chemie, a Belgian chemical producer. Hydrochloric acid used to strip pork fat from the bone at the company may have contaminated the feed, and filters supposed to purge the acid of dioxins malfunctioned for three weeks in October. The defect was not detected, so contaminated material was distributed to subsidiaries, then to feed producers. This sequence has exposed errors in the safeguards put in place after the 1999 crisis, when Belgium’s meat industry lost more than €600m ($713m). South Korea, Taiwan and China have quickly banned pork imports from Belgium and the Netherlands, despite assurances from Belgian authorities that dioxin levels are not high enough to pose a serious health risk.

A match made beforehand

Fans need not get so worked up during Belgian football games—the fate of the matches may be predetermined. A documentary broadcast on February 5th by VRT, a Flemish television station, claimed that the league is riddled with match-fixing. VRT’s charges centred on the involvement of Zheyun Ye, a Chinese businessman, in the club La Louvière. Mr Ye is not new to controversy: as a stake-holder in other Belgian clubs, he was arrested and questioned about match-fixing last year, but released without charge. The fresh allegations provoked threats of libel action from La Louvière, as well as from agents and coaches.

Belgian football authorities have voiced concern over the unusually large amounts of money sometimes bet on league games. Match-fixing may be more common in Belgium than in neighbouring countries because its leagues have smaller teams with often shaky finances, making them more vulnerable to bribery. Laurette Onkelinx, the Belgian justice minister, said that an investigation of the charges was underway.

Catch if you can

February 2006

The desire for beauty: the Wiener Werstätte and the Stoclet Palace

February 17th–May 28th 2006

The Palais des Beaux-Arts celebrates Austrian art nouveau with work from the Wiener Werstätte, or Viennese Workshop. Josef Hoffman and Kolo Moser created the atelier in 1903 with the aim of elevating everyday objects, such as a teapot or vase, into high art. More than 1,000 items from the Wiener Werstätte make up this exhibition.

The show lavishes attention on the Stoclet Palace in Brussels, hailed as the apex of art nouveau. Designed by Hoffman and decorated from doorknob to teaspoon by the Wiener Werstätte, the building has been a landmark since its completion in 1911. The palace, built for the family of Adolphe Stoclet (a Belgian banker and industrialist), is closed to the public, but this may soon change. Since the death of Baroness Stoclet in 2002, her heirs have been fighting over whether the palace should be on view. This exhibition at the Palais des Beaux-Arts offers a hint of the wonders that would be revealed.

Palais des Beaux-Arts, Rue Royale 10, 1000 Brussels. Tel: +32 (0) 2-507-8200. Open: Tues-Sun, 10am-6pm. For more information see the Bozar website.

More from the Brussels cultural calendar