OFFICIAL NAME:
Kingdom of Belgium

Geography
Area: 32,547 square kilometers (12,566 sq. mi.), about the size of Maryland.
Cities: Capital--Brussels (pop. 992,041). Other cities--Antwerp (452,474); Ghent (228,016); Charleroi (200,460); Liège (184,303); Bruges (116,811); and Namur (105,705).

People
Population (2004): 10,396,421; urban--69%.
Annual population growth rate: 0.4%.
Density: 861 per sq. mi. Linguistic regions
- (Dutch-speaking) Flanders 58%; (French-speaking) Wallonia 31.7%;
(legally bilingual) Brussels Capital Region 9.6%; German-speaking 0.7%.
Religions:
Predominantly Roman Catholic, with Protestant, Jewish, Muslim,
Anglican, Greek and Russian Orthodox, as well as secularism,
"recognized" religions receiving government subsidies.
Languages: Dutch, French, German.
Education: Literacy--98%.

Government
Type: Parliamentary democracy under a constitutional monarch.
Independence: 1830.
Constitution: 1994 (revised).
Branches: Executive--King (head of state), Prime Minister (head of government), Cabinet. Legislative--bicameral
parliament (Senate and House of Representatives). Flemish Parliament
and government for regional and community affairs; Walloon Regional
Parliament and government for Walloon regional affairs; Francophone
Community Parliament and government for Francophone community affairs;
Brussels Regional Parliament and government for Brussels regional
affairs; and German-language Community Parliament and government for
community affairs.
Major political parties: Christian Democratic, Liberal, Socialist, Green, Vlaams Belang.
Suffrage: Over 18, compulsory.
Political subdivisions: Ten provinces, three regions, three communities, 589 municipalities.

Economy
GDP (PPP) (2004 est.): $355.5 billion.
Annual real growth rate (2004): 2.7%.
Per capita income (PPP) (2004): $34,518.
Natural resources: Coal.
Agriculture: (1.4% of GDP) Products--livestock,
including dairy cattle, grain, sugarbeets, nursery products, flax,
tobacco, potatoes, and other fruits and vegetables.
Industry: (24% of GDP) Types--machinery, iron, coal, textiles, chemicals, glass, pharmaceuticals, manufactured goods.
Trade (2003 est.): Exports--$189.2 billion: Iron and steel, coal, transportation equipment, tractors, diamonds, petroleum products. Imports--$173 billion: Fuels, chemical products, grains, foodstuffs. Trading partners--EU 74%; United States 6%.

GEOGRAPHY AND PEOPLE
Belgium
is located in Western Europe, bordered by the Netherlands, Germany,
Luxembourg, France, and the North Sea. Although generally flat, the
terrain becomes increasingly hilly and forested in the southeast
(Ardennes) region. Climate is cool, temperate, and rainy; summer
temperatures average 77°F, winters average 45°F. Annual extremes
(rarely attained) are 10°F and 100°F.

Geographically and
culturally, Belgium is at a crossroads of Europe, and during the past
2,000 years has witnessed a constant ebb and flow of different races
and cultures. Consequently, Belgium is one of Europe's true melting
pots with Celtic, Roman, Germanic, French, Dutch, Spanish, and Austrian
cultures having made an imprint.

Belgium is divided
ethnically into the Dutch-speaking Flemings and French-speaking
Walloons, the 70,000 residents of the eastern German cantons, and the
bilingual capital of Brussels. The population density is the second
highest in Europe, after the Netherlands.

HISTORY
Belgium
derives its name from the Belgae, a Celtic tribe. The Belgae were
forced to yield to Roman legions during the first century B.C. For some
300 years thereafter, what is now Belgium flourished as a province of
Rome. But Rome's power gradually lessened. In about A.D. 300, Attila
the Hun invaded what is now Germany and pushed Germanic tribes into
northern Belgium. About 100 years later, the Germanic tribe of the
Franks invaded and took possession of Belgium. The northern part of
present-day Belgium became an overwhelmingly Germanized and
Germanic-Frankish-speaking area, whereas in the southern part people
continued to be Roman and spoke derivatives of Latin. After coming
under the rule of the Dukes of Burgundy and, through marriage, passing
into the possession of the Hapsburgs, Belgium was occupied by the
Spanish (1519-1713) and the Austrians (1713-1794).

Under these various rulers,
and especially during the 500 years from the 12th to the 17th century,
the great cities of Ghent, Bruges, Brussels, and Antwerp took turns at
being major European centers for commerce, industry (especially
textiles), and art. Flemish painting--from Van Eyck and Breugel to
Rubens and Van Dyck--became the most prized in Europe. Flemish
tapestries hung on castle walls throughout Europe.
Following the
French Revolution, Belgium was invaded and annexed by Napoleonic France
in 1795. Yet with the defeat of Napoleon's army at the Battle of
Waterloo, fought just a few miles south of Brussels, Belgium was
separated from France and made part of the Netherlands by the Congress
of Vienna in 1815.
In 1830, Belgium won its independence from the
Dutch as a result of an uprising of the Belgian people. A
constitutional monarchy was established in 1831, with a monarch invited
in from the House of Saxe-Coburg Gotha in Germany.

Belgium was invaded by the
Germans in 1914 and again in 1940. Those invasions, plus
disillusionment over postwar Soviet behavior, made Belgium one of the
foremost advocates of collective security within the framework of
European integration and the Atlantic partnership.

Since 1944, when British,
Canadian, and American armies liberated Belgium, the country has lived
in security and at a level of increased well-being.

Language, economic, and
political differences between Dutch-speaking Flanders and Francophone
Wallonia have produced increased cleavages in Belgian society. The
Industrial Revolution of the late 18th and the 19th century accentuated
the linguistic North-South division. Francophone Wallonia became an
early industrial boom area, affluent and politically dominant.
Dutch-speaking Flanders remained agricultural and was economically and
politically outdistanced by Brussels and Wallonia. The last 50 years
have marked the rapid economic development of Flanders, resulting in a
corresponding shift of political and economic power to the Flemish, who
now constitute an absolute majority (58%) of the population.

Demonstrations in the early
1960s led to the establishment of a formal linguistic border in 1962,
and elaborate rules made to protect minorities in linguistically mixed
border areas. In 1970, Flemish and Francophone cultural councils were
established with authority in matters of language and culture for the
two-language groups. Each of the three economic regions--Flanders,
Wallonia, and Brussels--were granted a significant measure of political
autonomy.

Since 1984, the German
language community of Belgium (in the eastern part of Liège Province)
has had its own legislative assembly and executive, which have
authority in cultural, language, and subsequently educational affairs.

In 1988-89, the
Constitution was again amended to give additional responsibilities to
the regions and communities. The most sweeping change was the
devolution of educational responsibilities to the community level. As a
result, the regions and communities were provided additional revenue,
and Brussels was given its own legislative assembly and executive.

Another important
constitutional reform occurred in the summer of 1993, changing Belgium
from a unitary to a federal state. It also reformed the bicameral
parliamentary system and provided for the direct election of the
members of community and regional legislative councils. The bilingual
Brabant province, which contained the Brussels region, was split into
separate Flemish and Walloon Brabant provinces. The revised
Constitution came into force in 1994.

A parliamentary democracy,
Belgium has been governed by successive coalitions of two or more
political parties. The centrist Christian Democratic Party often
provided the Prime Minister. The June 13, 1999 general election saw a
significant drop in overall Christian Democratic support. Driven in
part by resentment over a mishandled dioxin food-contamination crisis
just before the June 1999 election, Belgian voters rejected Jean Luc
Dehaene's longstanding coalition government of Christian Democrats and
Socialists and voted into power a coalition led by Flemish Liberal
Leader Guy Verhofstadt. The first Verhofstadt government (1999-2003)
was a six-party coalition between the Flemish and Francophone Liberals,
Socialists, and Greens. It was the first Liberal-led coalition in
generations and the first six-party coalition in 20 years. It also was
the first time the Greens had participated in Belgium's federal
government. In the most recent general election in May 2003, the Greens
suffered significant loses, while the Socialists posted strong gains
and the Liberals also had modest growth in electoral support. Liberal
Prime Minister Guy Verhofstadt reconstituted the coalition as a
four-party government in July 2003, with only the Liberals and
Socialists in power.

GOVERNMENT AND POLITICAL CONDITIONS

National Government
Belgium
is a hereditary constitutional monarchy. The current monarch is King
Albert II, who took the oath of office on August 9, 1993.

As titular head of state,
the King plays a largely ceremonial and symbolic role in the nation.
His primary political function is to designate a political leader to
attempt to form a new cabinet following either an election, the
resignation of a government, or a parliamentary vote of no confidence.
The King is seen as playing a symbolic unifying role, representing a
common national Belgian identity.

The Belgian Parliament
consists of a Senate and a House of Representatives. The House of
Representatives has 150 directly elected members. The Senate has 71
elected members. The executive branch of the government consists of
ministers and secretaries of state (junior ministers) drawn from the
political parties that form the government coalition. The number of
ministers is limited to 15, and they have no seat in Parliament. The
Council of Ministers is chaired by the Prime Minister and consists of
the ministerial heads of the executive departments.

The allocation of powers
between the Parliament and the Council of Ministers is somewhat similar
to the United States--the Parliament enacts legislation and
appropriates funds--but the Belgian Parliament does not have the same
degree of independent power that the U.S. Congress has. Members of
political parties represented in the government are expected to support
all bills presented by the Cabinet.

The House of
Representatives is the "political" body that votes on motions of
confidence and budgets. The Senate deals with long-term issues and
votes on an equal footing with the Chamber on a limited range of
matters, including constitutional reform bills and international
treaties.

The largest parties in the
current Chamber are the Flemish Liberal Party (VLD), 25 seats; the
Francophone Socialists (PS), 25 seats, the Francophone Liberals (MR),
24 seats; the Flemish Socialists and Spirit alliance (SP.A/Spirit), 23
seats, the Flemish Christian Democratic party (CD&V), 21 seats; the
right-wing Vlaams Belang party (VB), 18 seats; and the Francophone
Christian Democrats (CDH) 8 seats. The Francophone Greens (ECOLO), have
4 seats, while the New Flemish Alliance (NV.A) and Francophone Front
National each have 1 seat. The Flemish Greens (AGALEV -- now Groen!)
did not win any Chamber seats in the 2003 election, but have one
"co-opted" Senator (see below) as a result of an agreement with the
Flemish Socialist Party.

The Prime Minister and his
ministers administer the government and the various public services.
Ministers must defend their policies and performance in person before
the House.

The Council of Ministers
At
the federal level, executive power is wielded by the Council of
Ministers. The Prime Minister chairs the Council. Each minister heads a
governmental department. No single party or party "family" across
linguistic lines holds an absolute majority of seats in Parliament.
Consequently, the Council of Ministers reflects the weight of political
parties that constitute the governing coalition for the House,
currently the four-party Liberal-Socialist coalition.

Principal Government Officials
Prime Minister--Guy Verhofstadt
Deputy Prime Minister, Minister of Justice--Laurette Onkelinx
Deputy Prime Minister, Minister of Finance--Didier Reynders
Deputy Prime Minister, Minister of Budget and Public Enterprise--Johan Vande Lanotte
Deputy Prime Minister, Minister of Interior--Patrick Dewael
Minister of Foreign Affairs--Karel De Gucht
Minister of Defense--Andre Flahaut
Minister for the Economy, Energy, Foreign Trade, and Science Policy--Marc Verwilghen

Ambassador to the United States-- Frans van Daele
Ambassador to the United Nations--Johan Verbeke

The Belgian embassy is located at 3330 Garfield Street NW, Washington, DC 20008 (tel. 202-333-6900; fax 202-333-3079).

The Electoral System
The
number of seats in the House of Representatives is constitutionally set
at 150, elected from 11 electoral districts. Each district is given a
number of seats proportional to its total population (not number of
eligible voters) ranging from 4 for the Luxembourg district to 24 for
Antwerp. The districts are divided along linguistic lines: 5 Flemish, 5
Walloon, and the bilingual district of Brussels. Eligibility
requirements for the House are a minimum age of 21, citizenship, and
residency in Belgium.

The Senate consists of 71
seats. For electoral purposes, Senators are divided into three
categories: 40 directly elected; 21 elected by the community
parliaments; and 10 "co-opted" Senators. For the election of the 25
Flemish and 15 francophone directly elected Senators, the country is
divided into three electoral districts--Flanders, Wallonia, and the
Brussels Capital Region. Of the 21 Senators representing the
communities, 10 are elected by the Flemish Parliament, 10 by the French
Community Parliament, and 1 by the German-language Parliament.

The remaining category, the
10 "co-opted" senators, are elected by the first two groups of
senators. Eligibility requirements for the Senate are identical to
those for the Chamber. The princes and princesses of the royal line are
also members of the Senate--currently Prince Phillippe, Prince Laurent,
and Princess Astrid.

In Belgium, there are no
"national" parties operating on both sides of the linguistic border.
Consequently, elections are a contest among Flemish parties in
Dutch-speaking Flanders and Francophone parties in Wallonia. Only in
officially bilingual Brussels can voters choose from either Flemish or
Francophone parties. Several months before an election, the parties
form a list of candidates for each district. Parties are allowed to
place as many candidates on their "list" as there are seats available.
The formation of the list is an internal process that varies with each
party. The number of seats each party receives and where on a list a
candidate is placed, or how many individual votes a candidate receives,
determines whether a candidate is elected. Since no single party holds
an absolute majority in Parliament, after each election the strongest
party or "party family" will create a coalition with other parties to
form the government. Voting is compulsory in Belgium; more than 90% of
eligible voters participate.

Belgium has 25 seats in the European Parliament in Strasbourg.

Belgium’s Linguistic Divide
In
August 1980, the Belgian Parliament passed a devolution bill and
amended the Constitution, establishing "Community autonomy." As a
result, in Flanders, the Flemish Parliament and government are
competent for both regional and community affairs; in Wallonia, the
Francophone Community Parliament and government are competent for
community affairs, while the Walloon Regional Parliament and government
are responsible for regional affairs. Subsequent constitutional reform
established a community Parliament and government governments for the
German-speaking cantons in 1983, and a regional Parliament and
government for the Brussels Capital Region in 1989.

The regional and community
governments have jurisdiction over transportation, public works, water
policy, cultural matters, education, public health, environment,
housing, zoning, economic and industrial policy, agriculture, foreign
trade, and oversight of provincial and local governments. They rely on
a system of revenue sharing with the federal government for most of
their funds. They have the authority to levy taxes (mostly surcharges)
and contract loans. Moreover, they have obtained treaty-making power
for those issues coming under their respective jurisdictions.

Of total public spending--interest payments not considered--more than 40% is authorized by the regions and communities.

Regional Executives
Minister-President, Flemish Government--(CDV) Yves Leterme
Minister-President, Walloon Regional Government--(PS) Jean-Claude van Cauwenberghe
Minister-President, Brussels Capital Government--(PS) Charles Picque
Minister-President, Francophone Community Government--(PS) Marie Arena
Minister-President, German Community Government--(PS) Karl-Heinz Lambertz

Provincial and Local Government
In addition to three regions and three cultural communities, Belgium also is divided into 10 provinces and 589 municipalities.

The provincial governments
are primarily administrative units and are politically weak. A governor
appointed by the King presides over each province. Each governor is
supported by an elected Provincial Council of 47 to 84 members
(depending on the size of the province), which sits only four weeks a
year.

Municipal governments, on
the other hand, are vigorous political entities with significant powers
and a history of independence dating from medieval times. Many national
politicians originate from municipal political bases; and many often
double as mayor or alderman in their hometowns in addition to their
federal and regional political positions.

Political Parties
From
the creation of the Belgian state in 1830 and throughout most of the
19th century, two political parties dominated Belgian politics: the
Catholic Party and the Liberal Party. In the late 19th century the
Socialist Party arose, representing the emerging industrial working
class. These three groups still dominate Belgian governments, but they
have evolved substantially in character and face new electoral
challengers.

The Christian Democratic Parties.

After World War II, the Catholic (subsequently Christian Democratic)
Party severed its formal ties with the Church. It became a mass party
of the center (more like a political party in the United States). In
1968, the Christian Democratic Party responded to linguistic tensions
in the country by dividing into two independent parties, now known as
the Center Democratic and Humanistic (CDH) in Francophone Wallonia and
the Flemish Christian Democrats (CD&V) in Flanders. The two parties
share similar policies but maintain separate organizations. The
CD&V is the larger of the two, getting more than twice the votes
than the CDH. The CD&V Party Chairman is Jo Vandeurzen.
Representative Joelle Milquet is president of the CDH.

The Socialist Parties.
The modern Belgian Socialist parties are labor-based parties. Despite
the post-WWII dominance of the Christian Democrats, the Socialists
headed several postwar governments. The Socialists also split along
linguistic lines in 1978. Mayor of Hasselt Steve Stevaert is head of
the Flemish Socialist Party now in alliance with the small Flemish
nationalist party Spirit (SP.A-Spirit). Mayor of Mons, Elio Di Rupo, is
president of the Francophone Socialists (PS). In general, the Walloon
Socialists tend to concentrate on domestic issues. During the 1980s,
the Flemish Socialists focused heavily on international issues and on
security in Europe, in particular, where they frequently opposed U.S.
policies. However, subsequent Flemish Socialist Foreign Ministers Willy
Claes, Frank Vandenbroucke, and Erik Derycke progressively made a
significant shift to the center adopting less controversial stances on
foreign policy issues. The francophone Socialists dominate the cities
and towns of Wallonia and Brussels. The Flemish Socialists' support is
less concentrated.

The Liberal Parties.
Liberal Parties in Belgium have chiefly appealed to business people,
property owners, shopkeepers, and the self-employed. In American terms,
the Liberals' positions would traditionally be considered to reflect a
conservative economic ideology. The two current Liberal parties were
formed in 1971, after the original all-Belgium Liberal Party split
along linguistic lines. They are the Flemish Liberals and Democrats
(VLD) (PM Verhofstadt's party) in Flanders and the Reform Movement (MR)
in Wallonia. The VLD is led by Chairman Bart Sommers. The MR is headed
by Deputy Prime Minister and Minister of Finance Didier Reynders.

Greens. The Flemish
(Groen!) and Francophone (ECOLO) ecologist parties made their
Parliamentary breakthrough in 1981. Following significant gains in the
1999 general elections, the two Green parties joined a federal
coalition cabinet for the first time in their history in Prime Minister
Verhofstadt's six-party coalition government (Verhofstadt I). The
parties experienced significant losses in the May 2003 election,
however; with ECOLO winning only four seats in the House and AGALEV
failing to win any seats. They were thus excluded from the new
coalition formed by returning Liberal Prime Minister Verhofstadt
between the Flemish and Francophone Liberals and Socialists. Following
the election, AGALEV changed its name to "Groen!".

The Linguistic Parties.
A postwar phenomenon in Belgium was the emergence of linguistic-based
parties, which were formed to defend the cultural, political, and
economic interests of one of the linguistic groups or regions of
Belgian society.

The far-right Vlaams Belang
(Flemish Interest) is the most militant Flemish regional party, with a
separatist, anti-immigration, law and order platform. The Vlaams Belang
was formerly called the Vlaams Bloc, until a 2004 high-court ruling
confirmed a lower court verdict that the Bloc was a "racist" party.
Faced with further legal problems, the Bloc disbanded and resurrected
itself as the Vlaams Belang, with the same party leaders but a less
radical party policy. Late 2004 polls showed the Vlaams Belang as the
most popular political party in Flanders. Its predecessor, the Vlaams
Blok, had broken out of its "fringe" party status in the 1991 federal
election, when it posted significant electoral support in much of
Flanders, especially Antwerp. The Bloc continued to gain in popularity
in each successive federal and regional election. In the 2004 regional
elections, the Bloc received 24%) of the votes in Flanders, with only
the alliance of CD&V and NVA winning more votes at 26.3%. The new
Vlaams Belang party is attempting to shed its "racist" past,
characterizing its current party policies as those of a "traditional
conservative party."

In Wallonia, the small
Francophone nationalist Front National (FN) surprised many political
pundits by gaining enough votes in the May 2003 federal election to
survive the new 5% cutoff limit for votes in any precinct required to
enter Parliament. FN retained its 1 Chamber seat and gained 2 new
Senate seats.

The now-defunct Volksunie
Party (VU) was the most militant Flemish regional party in Parliament
in the 1950s and 1960s, drawing nearly one-quarter of Belgium's
Dutch-speaking electorate at the height of its popularity. However, as
much of the VU's nationalist agenda was realized through subsequent
Constitutional reforms that saw the devolution of significant power to
the Regions, the VU suffered severe setbacks in more recent elections,
winning only 8 seats in the 150-seat Chamber in 1999. In 2001,
Volksunie splintered into a traditional Flemish nationalist faction,
the NVA (currently in alliance with the CD&V since before the 2004
regional election), and a more liberal faction, Spirit (in an electoral
alliance with the Flemish Socialist Party since before the 2003 federal
election).

Labor Unions
Belgium
is a highly unionized country, and organized labor has been a powerful
influence in politics, although less so in recent elections. About 53%
of all private sector and public service employees are labor union
members. Unlike many American unions, Belgian labor unions take
positions on a wide range of political issues, including education,
public finance, defense spending, environmental protection, women's
rights, abortion, and other issues. They also provide a range of
services, including the administration of unemployment benefits and
health insurance programs.

Belgium's three principal
trade union organizations are the Confederation of Catholic Labor
Unions (CSC/ACV), the Belgian Socialist Confederation of Labor
(FGTB/ABVV), and the Confederation of Liberal Labor Unions
(CGSLB/ACLVB). Until the 1950s, the FGTB/ABVV was the largest
confederation; since then, however, the CSC/ACV has become the leading
trade union force.

The Confederation of Catholic Labor Unions (CSC/ACV).

Organized in 1912, the CSC/ACV rejected the Marxist concept of "class
struggle" and seeks to achieve a just social order based on Christian
principles. The CSC/ACV is not formally linked to its party political
counterparts, the Christian Democratic parties (CD&V and CDH) but
exercises influence in their councils. The CSC/ACV is the leading union
in all Flemish provinces and in Wallonia's Luxembourg province. It has
almost equal strength with the socialist confederation in the Brussels
area.

The Belgian Socialist Confederation of Labor (FGTB/ABVV).
The FGTB/ABVV derives from the Socialist Trade Union Movement,
established in the late 19th century in Walloon industrial areas,
Brussels, and urban areas of Flanders. Today, the FGTB/ABVV is the
leading union in the Hainaut, Namur, and Liège provinces and matches
the CSC/ACV in Brussels.

The Confederation of Liberal Labor Unions (CGSLB/ACLVB).
With 240,000 members, this is the smallest of the major union groups.
Drawing primarily from management positions, the Brussels-based
CGLB/ACVB is Belgium's most pro-business union. The union is not
formally affiliated with any political party.

Current Issues
Belgium
is a member of the European Economic and Monetary Union. Budgetary
issues remain a key concern of the current Verhofstadt II government,
particularly given the slow economic growth Belgium and most of Europe
have experienced of late.

As a result of bills
enacted in 2001, control over local government, agriculture, and
foreign trade was devolved from the federal to the regional
governments. The Verhofstadt I government (1999-2003) also implemented
justice and police reforms. An integrated federal police force is now
fully operational. Also under that government, a liberal euthanasia
bill came into force in fall 2002, and the legality of gay marriages
came into effect in early 2003.

During the second half of
2001, Belgium held the EU Council Presidency. As EU President, Belgium
helped boost the issue of EU enlargement, culminating in the Laeken
Summit in December 2001, when the EU named the 10 countries that
subsequently became EU members in 2004. Belgium also successfully
chaired the Eurogroup in 2001, which played a key role in helping the
EU work through the economic and financial issues related to the
launching of the Euro currency.

Belgium's reaction to the
September 11 terrorist attacks was strong and supportive. For example,
Belgium played a key role in helping to obtain EU-wide agreement on a
European arrest warrant and in facilitating extradition of terrorist
suspects. In support of Operation Enduring Freedom, Belgium contributed
a navy frigate in the Mediterranean, AWAC crews for surveillance
flights over the United States, as well as aircraft for humanitarian
assistance to Afghanistan. Belgium has contributed ground troops to
ISAF since 2002 and provides humanitarian and reconstruction assistance
to both Afghanistan and Iraq..

Current issues before the
new Verhofstadt II government include job creation, having promised to
create 200,000 new jobs; election reform; modernizing the civil
service; dealing with rising health care costs; and adjusting the
federal social security system to a rapidly aging population. The
Government is also in the process of reforming the armed forces. The
military seeks to increase its rapid reaction and peacekeeping
competencies by improving efficiency.

Belgium is increasing its
counter-terrorism capabilities by adding domestic legislative,
judicial, intelligence, and law enforcement tools that increase its
ability to prevent or respond to terrorism. The government also has
been assisting other European states and the United States in
investigating cases of international terrorism; a Brussels trial of
al-Qaida-related defendants ended in September 2003 with sentences for
18 of the 23 accused, with another 2004 terrorist-related trial
resulting in 8 more guilty verdicts. Belgium operates fully within UN
and EU frameworks concerning the freezing of terrorist assets, while
considering the development of a domestic legal framework to act
independently.

ECONOMY
Belgium,
a highly developed market economy, belongs to the Organization for
Economic Cooperation and Development (OECD), a group of leading
industrialized democracies. With a geographic area about equal to that
of Maryland, and a population of just over 10 million, Belgian per
capita GDP ranks among the world’s highest. In 2004, the per capita
income (PPP) was $34,518. The federal government has managed to present
balanced budgets in recent years, but public debt remained high, at 96%
of GDP in 2004. GDP growth in 2004 was 2.7%, above the Euro-zone
average.

Densely populated Belgium
is located at the heart of one of the world's most highly
industrialized regions. The first country to undergo an industrial
revolution on the continent of Europe in the early 1800s, Belgium
developed an excellent transportation infrastructure of ports, canals,
railways, and highways to integrate its industry with that of its
neighbors. One of the founding members of the European Community (EC),
Belgium strongly supports deepening the powers of the present-day
European Union to integrate European economies.

With exports equivalent to
over two-thirds of GNP, Belgium depends heavily on world trade. Belgium
exports twice as much per capita as Germany and five times as much as
Japan. Belgium's trade advantages are derived from its central
geographic location and a highly skilled, multilingual, and productive
work force.
The Belgian industrial sector can be compared to a
complex processing machine: It imports raw materials and semi-finished
goods that are further processed and re-exported. Except for its coal,
which is no longer economical to exploit, Belgium has virtually no
natural resources. Nonetheless, most traditional industrial sectors are
represented in the economy, including steel, textiles, refining,
chemicals, food processing, pharmaceuticals, automobiles, electronics,
and machinery fabrication. Despite the heavy industrial component,
services account for 74.6% of GDP. Agriculture accounts for only 1.4%
of the GDP.

Belgian Economy in the 20th Century
For
200 years through World War I, French-speaking Wallonia was a
technically advanced, industrial region, while Dutch-speaking Flanders
was predominantly agricultural. This disparity began to fade during the
interwar period. As Belgium emerged from World War II with its
industrial infrastructure relatively undamaged, the stage was set for a
period of rapid development, particularly in Flanders. The postwar boom
years, enhanced by the establishment of the EU and NATO headquarters in
Brussels, contributed to the rapid expansion of light industry
throughout most of Flanders, particularly along a corridor stretching
between Brussels and Antwerp (now the second-largest port in Europe
after Rotterdam), where a major concentration of petrochemical
industries developed.

The older, traditional
industries of Wallonia, particularly steelmaking, began to lose their
competitive edge during this period, but the general growth of world
prosperity masked this deterioration until the 1973 and 1979 oil price
shocks sent the economy into a period of prolonged recession. In the
1980s and 1990s, the economic center of the country continued to shift
northward to Flanders.

Foreign Investment
Foreign
investment contributed significantly to Belgian economic growth in the
1960s. In particular, U.S. firms played a leading role in the expansion
of light industrial and petrochemical industries in the 1960s and
1970s. The Belgian Government encourages new foreign investment as a
means to promote employment. With regional devolution, Flanders,
Brussels, and Wallonia now have substantial autonomy in courting
potential foreign investors, as each deems appropriate.

More than 1,400 U.S. firms
invested over $25 billion in Belgium by 2003. U.S. and other foreign
companies in Belgium account for approximately 11% of the total work
force, with the U.S. share at about 6%. U.S. companies are heavily
represented in the chemical sector, automotive assembly, and petroleum
refining. A number of U.S. service industries followed in the wake of
these investments--banks, law firms, public relations, accounting, and
executive search firms. The resident American community in Belgium now
exceeds 20,000. Attracted by the EU 1992 single-market program, many
U.S. law firms and lawyers have settled in Brussels since 1989.

Monetary
On May
1, 1998, Belgium became a first-tier member of the European Monetary
Union. Belgium switched from the Belgian franc (BF) to the Euro as its
currency after January 1, 2002.

Trade
About 75%
of Belgium's trade is with fellow EU member states. Given this high
percentage, Belgium seeks to diversify and expand trade opportunities
with non-EC countries. Belgium ranks as the 11th-largest market for the
export of U.S. goods and services. If goods in transit to other
European countries are excluded, Belgium still ranks as the
12th-largest market for U.S. goods.

Bilaterally, there are few
points of friction with the U.S. in the trade and economic area. The
Belgian authorities are, as a rule, anti-protectionist and try to
maintain a hospitable and open trade and investment climate. As a
result, the U.S. Government focuses its market-opening efforts on the
EC Commission and larger member states. Moreover, the Commission
negotiates on trade issues for all member states, which, in turn
lessens bilateral trade disputes with Belgium.

Employment
The
social security system, which expanded rapidly during the prosperous
1950s and 1960s, includes a medical system, unemployment insurance
coverage, child allowances, invalid benefits, and other benefits and
pensions. With the onset of a recession in the 1970s, this system
became an increasing burden on the economy and accounted for much of
the government budget deficits. The national unemployment figures mask
considerable differences between Flanders and Wallonia. Unemployment in
Wallonia is mainly structural, while in Flanders it is cyclical.
Flanders' unemployment level equals only half that of Wallonia. In
general, sunset industries (mainly coal and steel) dominate in Wallonia
and sunrise industries (chemicals, high-tech, and services) in
Flanders.

Belgium’s unemployment rate
was 8.0% in 2004. A total of 4.4 million people make up Belgium’s labor
force. The majority of these people (73%) work in the service sector.
Belgian industry claims 25% of the labor force and agriculture only 2%.
As in other industrialized nations, pension and other social security
programs have become a major concern as the "baby boom" generation
approaches retirement.

Budget
Although
Belgium is a wealthy country, it overspent income and under collected
taxes for years. The Belgian Government reacted with poor macroeconomic
policies to the 1973 and 1979 oil price hikes: hiring the redundant
work force into the public sector and subsidized ailing industries like
coal, steel, textiles, glass, and shipbuilding in order to prop up the
economy. As a result, cumulative government debt reached 121% of GDP by
the end of the 1980s. However, thanks to Belgium's high personal
savings rate, the Belgian Government financed the deficit from mainly
domestic savings, minimizing the deleterious effects on the overall
economy.

The federal government ran
a 7.1% budget deficit in 1992 at the time of the EU’s Treaty of
Maastricht, which established conditions for Economic and Monetary
Union (EMU) that led to adoption of the common Euro currency on January
1, 2002. Among other criteria spelled out under the Maastricht treaty,
the Belgian Government had to attain a budget deficit of 3% by the end
of 1997; Belgium achieved this, with a total budget deficit in 2001
(just prior to implementation of the Euro currency) that amounted to
0.2% of GDP. The government has balanced the budget every year since.
Belgium’s accumulated debt remains high, at 96% of 2004 GDP.

FOREIGN RELATIONS
The
Concert of Nations sanctioned the creation of Belgium in 1830 on the
condition that the country remains strictly neutral. During the two
World Wars Belgium tried, but was unable, to follow a policy of
neutrality due to the German invasions. In 1948, Belgium signed the
Treaty of Brussels with Great Britain, France, the Netherlands, and
Luxembourg, and a year later became one of the founding members of
NATO.
Belgium remains a strong proponent of both NATO and European
defense efforts. Belgium also is a strong advocate of strengthening
economic and political integration within the EU. Having federalized
their own country, many Belgians view themselves as the ultimate
"European federalists."

Both NATO (since 1966) and
the EU have their headquarters in Brussels; SHAPE (Supreme Headquarters
Allied Powers Europe, NATO's military headquarters) is in the south of
the country, near Mons.
Belgium supported the expansion of NATO
and EU membership to the new democracies of central and eastern Europe
and is actively engaged in the Organization for Security and
Cooperation in Europe.

U.S.-BELGIAN RELATIONS
The
United States and Belgium are good friends and allies, despite
occasional disagreements on a limited number of foreign policy issues.
Good will and affection for Americans continues as a result of the U.S.
role during and after the two World Wars, most recently exhibited
during the 60^th anniversary commemorations of the Battle of the Bulge and the liberation of Belgium in 2004.

In early 2003, private
parties filed a number of politically motivated criminal complaints in
Belgium alleging "war crimes" by a number of past and present U.S.
civilian and military leaders. The Belgian Government reacted to amend,
and then repeal, the nation’s expansive law of "universal competence"
for war crimes, crimes against humanity, and genocide. In September
2004, Belgian legal authorities acted to remove the cases related to
U.S. leaders from the Belgian judicial system.

The U.S. appreciates
Belgian activism in international affairs including its participation
in the International Security Assistance Force in Afghanistan, its
early 2004 support for NATO air policing over the new NATO Baltic
members, and its frequent provision of airlift in international crises.
For example, in 2005 Belgium planned to provide limited air transport
support to the UN in Iraq. The U.S. continues to believe that Belgium
could be even more active in sharing the international security burden.

As an outward-looking
nation, Belgium works closely with the United States bilaterally and in
international and regional organizations to encourage economic and
political cooperation and assistance to developing countries. Belgium
has welcomed hundreds of U.S. firms to its territory, many of which
have their European headquarters there.

Principal U.S. Embassy Officials
Ambassador--Tom C. Korologos
Deputy Chief of Mission--William Imbrie
Political Counselor--Theodore H. Andrews
Economic Counselor--Terri L. Robl
Management Counselor--Kathleen Austin-Ferguson
Commercial Counselor--Camille Sailer
Regional Security Officer--Darwin D. Cadogan
Public Affairs Counselor--Chris Rochester
Consul--Hale C. VanKoughnett

The U.S. Embassy

in Belgium is located at 27 Boulevard du Régent, 1000 Brussels (tel.
02/501-2111, fax 02/511-2725). The European Logistical Support Office
(ELSO) is at Norrderlaan 147, Box 12A, 2030 Antwerp (tel. 03/542-4775,
fax 03/542-6567). The Consular section in Brussels is located at 25
Boulevard du Régent.

U.S. Mission to NATO
Permanent U.S. Representative to NATO (USNATO)--Ambassador R. Nicholas Burns
Deputy Chief of Mission, USNATO--John M. Koenig

The U.S. Mission to NATO (USNATO) is at
NATO Headquarters, on the Autoroute de Zaventem, 1110 Brussels (tel.
02/724-3111, fax 02/726-5796).

U.S. Mission to the EU
Ambassador to the European Union--Ambassador Rockwell Schnabel
Deputy Chief of Mission, USEU--Mike McKinley

The U.S. Mission to the EU is located at 40 Boulevard du Regent, 1000 Brussels (tel. 02/508-2222, fax 02/502-8117).

TRAVEL AND BUSINESS INFORMATION
The
U.S. Department of State's Consular Information Program provides
Consular Information Sheets, Travel Warnings, and Public Announcements.

Consular Information Sheets exist for all countries and include
information on entry requirements, currency regulations, health
conditions, areas of instability, crime and security, political
disturbances, and the addresses of the U.S. posts in the country. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Public Announcements
are issued as a means to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas
that pose significant risks to the security of American travelers. Free
copies of this information are available by calling the Bureau of
Consular Affairs at 202-647-5225 or via the fax-on-demand system:
202-647-3000. Consular Information Sheets and Travel Warnings also are
available on the Consular Affairs Internet home page: http://travel.state.gov.
Consular Affairs Tips for Travelers publication series, which contain
information on obtaining passports and planning a safe trip abroad, are
on the Internet and hard copies can be purchased from the
Superintendent of Documents, U.S. Government Printing Office,
telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning
Americans traveling abroad may be obtained from the Office of Overseas
Citizens Services at (202) 647-5225. For after-hours emergencies,
Sundays and holidays, call 202-647-4000.

The National Passport Information Center
(NPIC) is the U.S. Department of State's single, centralized public
contact center for U.S. passport information. Telephone: 1-877-4USA-PPT
(1-877-487-2778). Customer service representatives and operators for
TDD/TTY are available Monday-Friday, 8:00 a.m. to 8:00 p.m., Eastern
Time, excluding federal holidays.

Travelers can check the latest health
information with the U.S. Centers for Disease Control and Prevention in
Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web
site at http://www.cdc.gov/travel/index.htm

give the most recent health advisories, immunization recommendations or
requirements, and advice on food and drinking water safety for regions
and countries. A booklet entitled Health Information for International
Travel (HHS publication number CDC-95-8280) is available from the U.S.
Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa
requirements, currency and customs regulations, legal holidays, and
other items of interest to travelers also may be obtained before your
departure from a country's embassy and/or consulates in the U.S. (for
this country, see "Principal Government Officials" listing in this
publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register their travel via the State Department’s travel registration web site at https://travelregistration.state.gov
or at the Consular section of the U.S. embassy upon arrival in a
country by filling out a short form and sending in a copy of their
passports. This may help family members contact you in case of an
emergency.


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