‘In times of crisis, we do our best to create a stronger federal umbrella’

‘In times of crisis, we do our best to create a stronger federal umbrella’
‘In times of crisis, we do our best to create a stronger federal umbrella’

‘In times of runaway inflation and rising energy prices, the discussion about transfers to Wallonia has also resurfaced’, writes Tom Zwaenepoel of B Plus. ‘But framing these solidarity mechanisms as a purely Flemish-Walloon story is incorrect.’

Anyone who calls for a division of the country and social security, whether or not through confederalism, would like to cite the annual transfers from Flanders to French-speaking Belgium (some aiming for up to 12 billion euros in total). Once Wallonia will have to work with its own resources, it will soon be over with the clientelism of the hard-working Flemish. That’s not true, for several reasons.

First, it is a political choice to represent transfers, especially in social security, as a north-south flow. This implies that in a confederal Belgium or an independent Flanders extra money would become available, which could then be spent on other things. That is very reminiscent of theBrexit-bus” by Boris Johnson & Co who claimed that the £350 million that would go to Europe every week would be better spent on their own NHS. We know today that that claim is false. Nigel Farage, among others, explicitly admitted this afterwards. Brexit has many negative effects that the Brexiteers concealed and that are now becoming painfully obvious. It is therefore hardly surprising that campaigns are being conducted to allow the British to return to the EU. We also deliberately misrepresent things. And besides, we only tell part of the story.

As far as the social security system in Belgium is concerned, it follows the Western European model. A legal framework determines who contributes to what extent to a central pot of money, in order to protect fellow citizens against the most extreme consequences of illness, old age, loss of income, etc. It is a mandatory redistribution mechanism that objectively allocates contributions to the sick, unemployed, orphans, pensioners , and this automatically, provided that the legal conditions are met. On average, in unemployment and health insurance, more benefits go to people who have many socio-economic and health problems. These are interpersonal transfers. The contributions required are calculated on the wages of those who are working. Everyone who works today therefore knows that, if necessary, he or she will be able to count on the solidarity of his fellow citizens. When we look at this at the level of the families, it was found that a family with a highly educated person pays an average of more than 5,000 euros a year in social security, while a family with a short education receives more than 8,000 euros a year (André De Coster and Willem Sas, 2019 ).

It is in some mediums good ton to frame these solidarity mechanisms as a purely Flemish-Walloon story. So that’s not right. It is true that, on average, in areas where things are going well socio-economically, more people will contribute and fewer people will receive. However, as long as the same conditions apply to everyone and they are applied correctly, there is no problem with this. This must be continuously monitored, otherwise the sense of solidarity will be undermined.

However, it is wrong to present social security as a whole. It is in reality a house with many rooms and one should not lose sight of the fact that the aging of the population is hitting much harder in Flanders than in Wallonia. With all the consequences that entails on pension benefits and also health care expenditures, which are highest later in life. According to the NBB, this will exert increasing downward pressure on transfers between now and 2050, even with unchanged policies.

Moreover, in terms of socio-economic prosperity, to present Wallonia as a whole with the same characteristics is to do violence to reality. The actual transfers in Belgium follow the pattern found elsewhere in Western Europe, namely from areas of high economic activity (service sector in Brussels & Flemish and Walloon Brabant; the ports in Antwerp and Zeebrugge), to the so-called “rest belt” (old industry in the Borinage and Liège region) and rural areas (of which there are more in Wallonia). In addition, a very nuanced picture is obtained if you zoom in on the situation per province.

A study by the NBB last year showed, for example. that the transfers from Flemish Brabant, Walloon Brabant and Brussels to the rest of the country are just as large as the transfers from Flanders to Wallonia. To say that “the Waal” is a profiteer and “the Fleming” is the one who works hard and has to pay for it all, is therefore a bad and incorrect framing, which would also be presented as racist, if the comparison is made between Belgians and immigrants. . After all, you wrongly stigmatize an entire population group with it.

And in any case, it is appropriate to work with correct figures. The amount of 12 billion euros often mentioned in Flemish nationalist circles is incorrect. The IESEG School of Management in Paris reduced this amount to the actual proportions, namely EUR 6.4 billion per year. Still a lot of money in absolute numbers, but only 2.5% of gross domestic product. Which isn’t much when you look at transfers in other Western European countries (West Germany to East Germany: 4%, Ile-de-France to Nord-Pas-de-Calais: 6%, South-East England to Wales & North-West England: 8%, Catalonia to Southern Spain: 8.5%, Stockholm to Far North: 7.6%).

So how come the transfers are so politicized with us? There are several reasons for this. It is especially useful for Flemish nationalists to reinforce their plea for separatism. But sometimes the discourse conducted outside classical nationalist circles also falls on fertile ground. This is a consequence of zero-sum thinking in Belgian politics: what is good for one person is by definition bad for another. This image is also accelerated because over the years we decided to divide Belgium mainly in two. That gives extra ammunition for those who want to polarize on this theme, by claiming that draining the money flows to Wallonia will make the Flemish richer. But one forgets that Wallonia is the first trading partner of Flanders.

Imaging about the alleged Walloon hammock culture also leads to unrealistic expectations. Studies from other countries show that the stick, namely removing a financial drip, rarely if ever leads to an increase in employment in areas with a weakened economy. Another possibility is, of course, that those other countries actually manage joint matters (such as social security). In Belgium, on the other hand, until now it was apparently only thought that reforming the state meant that we had to do less together. Almost all parties are also split according to language group. This makes Belgium just about the only federal country without federal parties.

This zero-sum thinking is also reflected in resolution 5 of the Flemish Parliament from 1999: “Solidarity should be preserved, based on objective, clear and transparent mechanisms and reversibility. Such a mechanism may not result in the receiving sub-area having more per capita than the paying sub-area”. The reasoning followed can only come about if one completely disregards the automatic and already objective nature of social security. What that resolution demands is therefore by no means the objectivity of the transfers. On the contrary, it is motivated by a subjective, nationalistic rhetoric.

What about the deficit of four billion euros in the Walloon budget? Considering this amount amounts to 200% of the income, Wallonia is bankrupt, isn’t it? Isn’t that a lever to introduce confederalism after 2024? However, the actual figure tends to be closer to 100%. After all, for such calculations the French-speaking Community must be counted as part of the Walloon Region. Let this be an argument for an internal state reform on the French-speaking side, rather than for confederalism or separatism. In addition, the structural deficit amounts to only 1 billion euros (the rest was caused by one-off expenses related to the post-covid recovery and the floods in 2021).

According to experts, that gap can be closed in ten years, albeit that this is not included in the current crisis situation regarding inflation and energy. Anyway, all hands on deck. Because it has to actually happen. All Belgians have an interest in this. But the average Fleming, Walloon or Brussels resident is not helped any further by first splitting social security. Further impoverishment threatens the poorer regions in this country, causing us all to deteriorate in the end, and this while every Belgian is equal.

So let’s quickly work on a much more constructive and forward-looking alternative: a stronger federal umbrella for the benefit of all of us. After all, we are currently once again experiencing a crisis that cannot be resolved by relying solely on ourselves.

The article is in Dutch

Tags: times crisis create stronger federal umbrella

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