Steven Mastropaolo
The Means of Belgium
There are many factors that go into making international business and policy profitable for all parties involved. Whether it’s small private enterprise businesses or international politics, certain planes of cooperation must be attained for relations between countries to start off and remain strong. Although there are some cases of countries that succeed on isolationist policies, most of the world strives for unions that benefit all parties and the world as a whole. While geographical holdups or leftovers of global conflicts plague some countries, free market competition is an apparent force that keeps the world’s economic wheel turning. Free market trading exists across the globe wherever democratic forms of government thrive.
One of the founding members of the European Union (EU), Belgium, is conveniently located in Europe between Germany and France north of Luxemburg and south of the North Sea. Often referred to as the “Crossroads of Europe,” Belgium is an international hub where officials from all nations meet to take part in the EU’s institutions. Belgium’s economy is highly integrated based mostly on trade of exports and imports. Unfortunately, as a result of Belgium being integrated so closely with other members of the EU, the European debt crisis of 2010 affected Belgium with equal magnitude as the other countries.
Belgium gained independence from the Netherlands in 1830 after a revolution took place in the southern catholic French speaking providences of Holland. These territories are now modern day Wallonia in Belgium. After the Belgians took their independence, they were the first country to experience the industrial revolution in Europe. In 1855, at the Berlin Conference, Belgium was given control of the African Congo. From this colony, Belgium gained revenue from goods like ivory and rubber. These combined factors brought prosperity to the people for the larger part of the 19th century.
However, they also provided opportunities for other national conflicts. Belgium faced government structural issues that demanded attention. When Belgium succeeded, a revolution committee was formed to oversee the revolt. When the Kingdom of Belgium was formed, the committee never disbanded. Instead, it acted as a provisional government. In the early 20th century, Belgium was the battleground during both world wars. This period of time is commonly referred to by historians as the “rape of Belgium,” when thousands of civilians were killed and even more fled the country in fear of the German Army- which invaded in 1914. The Germans not only killed innocent people, but they destroyed infrastructure and plants. The Germans decimated 41 of the 51 steel mills in Belgium as they flanked the French army.
In modern day, Belgium is seen as a cultural hub for Europe for a few reasons. Up until its independence, the land on Belgium’s boarders always belonged to another country. Therefore, the citizens of Belgium have strong ties with the surrounding countries like France, Holland, and Germany. These cultural differences lead to conflicting interests when it came to political and economic sanctions. Wallonia, located in the south of Belgium, is primarily catholic French speaking citizens. They belong to the catholic party, which is extremely conservative- basing their ideology closely with the Catholic Church. The opposing liberal party in the south is pro progression. The northern region called the Flanders is predominantly Dutch speaking. The party that holds the majority is called the New Flemish Alliance, and is liberally moderate.
The two regions also differ economically; the south is much more industrialized than the north. This is because the small amounts of coalfields in Belgium are located in Wallonia. 95 percent of Belgium is urban. It is all city life where the population density is 349 per km2. The north is much more densely populated than the south. In the Flanders, much of the economy is based on manufacturing. However, the service industries also contribute greatly to the economy. Transportation networks like canals, railways, and highways allow the integration of Belgium’s industries with its neighbors.
Because Belgium is a fairly young country, it hasn’t developed a strong identity. Seen as a mutt of a country, Belgium contains many demographics of people who seek control. Nearby countries may view Belgium as a second home due to the lack of an official language in combination with the several languages spoken across the country. This allows Belgium’s economy to be highly integrated with the countries around it. Brussels, the capital, is the biggest city in Belgium. It is significant because it is home to the capital of the European Union. There is also a North Atlantic treaty Organization consulate there.
As demonstrated in the graph of Gross Domestic Product (GDP) in purchasing power parity (PPP) above, the Belgium line always stayed within ten points of Germany from 2002 to 2013. These two countries are in between two other countries on the graph that are integrated heavily with Belgium, Holland and France. The amount Belgium imports and exports is also a good indication of its level of integration with fellow European Union countries. In 2011, Belgium exported $332 billion worth of machinery goods, chemicals, diamonds, and metal products. This is equivalent to a third of its GDP expressed in the chart above. Though Belgium’s GDP and trading numbers seem good, when things turn for the worst in Europe Belgium is not left out among the ones hit the hardest. For example, the European sovereign debt crisis is one that hit all of Europe very hard. It started in 2009 as a result of countries in 4 different eurozones not being able to pay off big government debts without the help of third parties like the European central bank or the International monetary Fund (IMF). Interest rates across the European Union for purchasing government bonds in these four zones sky rocketed, making some of the these countries debt so large that it violated the criteria under which the Maastricht treaty was signed. With so many countries breaking their respective debt levels it is clear that something must be done to bail out Europe.
The inflated interest rates have increased substantially in smaller countries like Greece, Cyprus and Portugal, while countries that have traditionally low inflation have only increased slightly. Mario Draghi, the president of the ECB, caused another key turning point for the crisis. He is planning an inspection of balance sheets for the 128 biggest banks in late 2014 as a “asset quality review” to find the bugs in the system. This process will determine which banks need to be stimulated with capital and which ones need to be shut down. This is an excellent step to what will be a series of tasks that will work out the problems Europe.
Overall, Belgium is an internationally attractive country that has a lot to offer eager tourists looking to experience a European gem in the heart of some of the oldest countries in the world. Belgium has always been seen as a small country that has a very strong economy because it is heavily integrated with the other large and thriving countries that are at its borders. However, crisis hasn’t missed Belgium though it has a relatively low unemployment and consistent growth rate, interest rates on government bonds increased heavily with the rest of the EU members.