Belgium flag

Belgium country brief

Overview

Australia enjoys positive and constructive relations with Belgium, with a growing bilateral commercial relationship. Australia and Belgium share similar approaches to many international issues, including climate change, arms control, whaling and Antarctica. Australia and Belgium have been long-standing partners in NATO's International Security Assistance Force (ISAF) in Afghanistan. Belgium is a member of the Australia Group on Chemical Weapons. The capital of Belgium, Brussels, is home to the European Union (EU) and NATO.

Former Belgian Prime Minister Mr Herman Van Rompuy took up his role as the inaugural permanent President of the European Council on 1 January 2010. He was re-elected in March 2012 for an additional term through to November 2014. Concurrent with his position as President of the European Council, he was appointed President of the Euro Summit (bi-annual meetings of Eurozone heads of state and government to discuss governance issues). Within the European Commission, former Belgian Foreign Minister Mr Karel De Gucht currently serves as Commissioner for Trade.

Political overview

System of government

Belgium is a constitutional monarchy. HM King Philippe, who acceded to the throne on 21 July 2013 after his father HM King Albert II’s 20-year reign, is head of state. The country became a federal state in 1995. There are three main forms of government in Belgium: the federal government, regional governments and community councils. The Federal government is responsible for issues such as justice, the interior, foreign policy, defence, social security and some health matters.

Belgium is divided into three regional government areas. Flanders comprises mainly Dutch speakers while Wallonia is French speaking.  The Brussels-Capital Region has bilingual status. A small German-speaking community also exists. Significant power has been devolved to the regions and they retain jurisdiction over a wide range of policy areas, including economic, transport, public works, and industrial policy. Education and other 'cultural issues' are devolved to three community councils that have similar levels of authority to regional governments. These are divided along linguistic, not geographic, lines representing the Dutch, French and German speaking peoples.

Political developments

A critical issue facing the Belgian federal government in recent years has been the political and cultural divisions between the Dutch-speaking region of Flanders and francophone Wallonia. Belgium’s provincial, municipal and district elections of 2012 showed overwhelming support throughout Flanders for the centre-right New Flemish Alliance (N-VA), which supports a gradual secession of the region – the country’s most populous and traditionally wealthiest – from Belgium. The party’s leader, Mr Bart De Wever, was elected Mayor of Antwerp, the country’s second largest city. In Wallonia, the francophone Socialist Party (PS) did traditionally well and also received the most votes in eight of the nineteen districts of Brussels-Capital Region.

Tensions between the regions and major parties contributed to Belgium taking 541 days to form a six-party coalition government after the June 2010 federal elections. The coalition government is led by Socialist Prime Minister Mr Elio di Rupo, the first time since 1972 that a French-speaking Walloon has assumed the role, and was sworn in on 6 December 2011. Mr Didier Reynders, Francophone Liberal (MR) is the Minister for Foreign Affairs, Foreign Trade and European Affairs. While the coalition does not have the support of the country’s largest political party, the N-VA, it has achieved notable outcomes including negotiating several budget cuts to decrease the budget deficit and reaching an agreement on the 2013 budget. In July, the Belgian Government reached agreement on the sixth state reform package, a key component of the coalition’s program. The reform will transfer more competences and greater autonomy in the areas of health, employment and family policies from the federal to the regional and communal level.

The 2014 elections at federal, regional and European Parliament levels are expected to significantly shape Belgium’s political landscape and identity.

Economic overview

Belgium is a major trade gateway to the European Union’s Member States, but in particular to the three countries with which it shares a border – Germany, France, and the Netherlands. These three countries are Belgium’s principal export destinations and import sources. More than two-thirds of Belgium's GDP is derived from foreign sales, one of the highest percentages among industrialised nations.

The Belgian economy initially weathered the global financial crisis well but key pillars of its economy, in particular the banking sector and the manufacturing sector, have been severely affected by the downturn.  Belgium’s debt/GDP ratio of nearly 100 per cent remains one of the highest in the Eurozone. Low levels of domestic demand resulted in negative growth – -0.3 per cent – in 2012. While Belgium’s GDP is projected to remain flat in 2013, it is expected to reach 1.1 per cent growth in 2014. Unemployment – currently at 8.4 per cent – is expected to increase to 8.7 per cent in the coming year. The government remains committed to cutting its public sector deficit in line with EU obligations and aims to reach a balanced budget in 2015.

Bilateral relationship

Historical ties

The contemporary bilateral relationship is underpinned by strong historical ties stemming from World War I. Many Australians served in Belgium between 1916 and 1918, notably during the Battle of Messines, on 7 June 1917, and the Third Battle of Ypres, from 31 July to 6 November 1917. Of the approximately 12,500 AIF men who died, half have 'no known grave'.

In April 2009, former Minister for Veterans' Affairs, the Hon Alan Griffin MP, visited Belgium as part of the Western Front ANZAC Day commemorations, including to sign with Minister-President of Flanders, Mr Kris Peeters, an Arrangement between the Governments of Flanders and Australia to "Cooperate in the Shared History of the World Wars of the Twentieth Century". The Centenary of World War I (2014-2018) isincreasingly providing a focus for bilateral commemorative activities. The Australian Government's Western Front Interpretive Trail is developing seven key sites in France and Belgium, in partnership with local authorities, to honour the courage and sacrifice of the more than 290,000 Australians who served on the Front. Sites in Belgium are Ypres and Tyne Cot.

In the 2011 Census there were 5,762 Belgium-born people in Australia, and just over 10,000 who claimed Belgian ancestry.

Agreements

Australia and Belgium have concluded a number of bilateral agreements. A Working Holiday Maker Arrangement took effect in November 2004. Australia and Belgium have had a Double Taxation Agreement since 1977 (amended in 1984). An Agreement between Australia and Belgium on Social Security entered into force in 2005, providing improved social security protection to people who have lived and/or worked in both Australia and Belgium. The social security agreement also exempts Australian employers from the need to provide Belgian social security support for Australian employees sent temporarily to work in Belgium, provided the employee remains covered in Australia, by compulsory superannuation arrangements.

A bilateral reciprocal Agreement on Health Care Insurance entered into force on 1 September 2009. A bilateral Air Services Agreement was signed in 2012.

High level visits

Regular high-level visits and meetings are important in promoting cooperation and understanding between Australia and Belgium. Recent visits of Australian officials to Belgium include:

Bilateral economic and trade relationship

Australia maintains a strong  investment relationship with Belgium.  In 2012, total Belgian investment in Australia was valued at A$6.4 billion, of which A$6.1 billion was foreign direct investment (FDI). Total investment outwards from Australia to Belgium totalled A$2 billion.

Established in 1921, the Belgium-Luxembourg Economic Union (BLEU) is Australia’s 8th largest investor with combined inward investment valued at A$32.7 billion at December 2012. The BLEU is the second largest European Union (EU) investor in Australia. Total two-way trade between Australia and the BLEU is also substantial, reaching A$3.6 billion in 2012.

The Macquarie Group owns 75 per cent of Brussels International Airport. The European headquarters and regional headquarters for the Middle East and Africa of Ansell Limited (formerly Pacific Dunlop) are located in Brussels. Rio Tinto Diamonds NV and BHP Billiton Diamonds sell their rough diamonds throughout the world via offices in Antwerp. The Belgian branch of De Bortoli Wines (Europe) NV distributes the company's wines throughout continental Europe. Amcor has two manufacturing sites in Belgium and a corporate office near Brussels International Airport. Nyrstar is a Belgian publicly-listed joint-venture between Australian zinc miner Zinifex and Belgian metals company Umicore.

In 2012, Belgium was ranked as Australia’s 24th largest merchandise trading partner, with total two-way trade in goods with Belgium valued at A$3.4 billion, consisting of Australian exports to Belgium worth A$1.7 billion and imports of goods worth A$1.7 billion. Australia’s major merchandise export to Belgium was oil seeds and oleaginous fruits (A$465 million). Major Australian imports from Belgium included passenger motor vehicles (A$357 million) and medicaments incl. veterinary (A$231 million).

Australia exported A$79 million worth of services to Belgium in 2012, with the most significant being personal travel services (A$52 million). For the same period, services imports from Belgium were dominated by business and professional services (A$77 million).

Updated September 2013