How do you think the ongoing political crisis in Belgium has affected businesses in the country?
Well, I think we should make the distinction between the short-term and the long-term.
What we see is that in the short term, generally speaking, the economy is doing well. We are growing at a rate that is faster and more promising than the average of the euro zone. So this is positive, but a few sectors, a number of particular sectors of industry are encountering some problems.
I will give you two examples. First of all, you have the ICT, the services industry, that has a problem in terms of order books, caused by the fact that our government, which has no full power, and an administration, which has not voted the yearly budget, cannot place big ICT orders to the ICT industry.
Because when you have a caretaker government, you, as an administration, can only spend every month one twelfth of the budget of the previous year. So it is not possible to place a huge order for a full year, for a big project, and that is important for the ICT industry. So we have about 70 ICT companies in Belgium who are suffering from that.
Another example is that this government is not in full power and cannot take the big decisions in the field of energy. Hence the companies consuming energy and facing rapidly increasing energy costs suffer from the absence of an appropriate energy policy.
All in all in the short term, there is not a huge negative effect, evidenced by a reasonable growth rate. In the long run I think we are causing damage by this situation because, since the summer of 2007, we have had this kind of problems in discussions on institutional aspects.
And the result is that since the summer of 2007 the big institutional debates on pensions and similar subjects have been systematically postponed. And by postponing decisions, you make the decisions at the end of the day more painful, and we are losing time. And that, in the long run, is going to be negative for the economy.
Let us turn to the EU level now. What about the latest measures taken by the European Union to save the euro zone? What about German Chancellor Angela Merkel and French President Nicolas Sarkozy’s Competitiveness Pact - are you in favour of such an initiative?
Yes, absolutely, and I think that up to now, we had the introduction of the euro, we had a monetary union and that monetary union had monetary policies, but in fact, if you create one single currency, we should also have a European economic policy, a European economic governance. For reasons of countries not being ready to give up sovereignty, we have not done that, but we should since a long time have added this aspect, this second step of economic governance, of European economic policy, so I'm very happy that now finally, we are going to take that step, and that will have consequences everywhere, also in our country.
Some people whisper that Belgium is next on the list of countries to be rescued via bail-out. What is your view on that?
Well, I think that this is a rumour that has no foundation. There are four big arguments why I consider this as nonsense. Number one, our economic performance is better than the average in the euro zone.
Number two, at the end of the day, what is very important is the debt situation of the country, and if you take the debt situation of the country as a whole, you see that in fact we are, as a country, if you add the enterprises, the households and the public debt together, we are a net creditor instead of a net debtor. So basically, altogether, we have a position that demonstrates that Belgium is an extremely rich country, with, yes, a public debt that is somewhat above the average in Europe.
We have 15% more debt, but a debt of households and a debt of companies which is way below the European average, and therefore, all in all, our debt position is not at all comparable with the countries in difficulties in Europe.
Number three is that in the meantime we have adopted a budget, and it will be a budget that is better for 2011 than the target imposed on Belgium by the European Commission. We have a target of 4.1 [% of GDP] and we will achieve 3.7% or lower.
And last but not least, on wages the government has taken the courageous decision to introduce a cap on wage increases in this country, so that this is also under control. So for these four reasons it is clear that there is no reason whatsoever for Belgium to get into difficulties.
In May, the FEB will be participating in the organisation of the European Business Summit. Could you give us some insights on this?
Let me highlight two aspects. Number one, for the first time, we will have now, systematically, besides the additional topical debate on trade, innovation and other subjects, we will have sessions where we are in dialogue with other continents and we have invited excellent speakers from all over the world, also to discuss the global perspective, so there will be sessions with Asia, with Brazil, with Russia, with Turkey and so on.
And secondly, we will base the whole programme on an extensive survey we do throughout Europe with CEOs of companies everywhere in Europe, executed by Accenture and the results of which will be studied and commented by INSEAD Fontainebleau. So that looks very promising in terms of new perspectives, new ideas, new elements which will come on the table.