UPDATE ON THE BELGIAN POLITICAL SITUATION

SUMMER 2017

• Socialists ousted from government in Wallonia
• Deadlock in Brussels
• Agreement on reduction of corporate taxes

Although we are 2 years away from the next general elections, July 2017 saw significant political activity.
The most spectacular event was the change in political alliances in Wallonia, that led to the ousting of the
socialist party from power for the first time in 30 years.
The arrival of the liberals in power in Wallonia means that they are now heading both the federal and the
Walloon government, something they had never experienced before.
In Brussels and in the French Community the situation is very awkward. Without a new majority agreement,
the existing governments are still formally headed by the socialists, although they do not have a majority in
parliament any more. It is impossible for the moment to forecast how this unstable situation will be resolved.
On the other hand, the federal government succeeded in finding a “summer agreement” on the 2018 budget,
that includes important reforms, such as a reduction in corporate tax rates, but also the introduction of some
kind of wealth tax.
Three years ago the francophone liberals of MR took the huge gamble of deciding to take the lead of a federal
government, where they are the only francophone party, besides three Flemish parties. The socialists and the
trade unions led an aggressive opposition, including trying to block the CETA trade agreement with Canada.
But now the socialists have been forced in the opposition in Wallonia as well, and the center right social economic
policy followed by the federal and Flemish governments will now be implemented in Wallonia too.
It is clear that the current majorities will try to convince the electors of giving them a new mandate in 2019
to pursue these reform policies.

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Author

Baudouin Velge

Managing Partner, Belgium

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