A new Belgian government: Will Brussels control Brussels?

N-VA leader Bart De Wever and new PM Charles Michel

After less than five months, a relatively short period by local standards, a new federal Belgian government has been agreed.  In the light of our analysis in May, "Scenario 2" has materialised: a federal government which includes the Flemish nationalist N-VA, which hopes their centre-right policies may drive the Francophone socialists to return to their historic demands for more decentralisation.

The new coalition is led by 38 year-old Charles Michel, a Francophone liberal and the son of former EU Development Aid Commissioner Louis Michel, and its centre-right programme has just been revealed. Interestingly, there are a few changes on EU policy in the country which probably is the most inclined to EU-federalism. This is clearly the result of the presence of the N-VA, a party which has described itself "euro-realist" since 2011, but is part of a broader shift whereby the Francophone socialists have also dared to criticise EU policies.

Here are some excerpts from the programme which show that Belgium is now fully supporting the drive to empower national Parliaments and subscribes to the philosophy of incoming European Commissioner for 'Subsidiarity' Frans Timmermans that "the EU should do what can only be done by the EU and should leave to member states what can be better done by them":

• "To continue European integration, more legitimacy and transparency are needed. In that respect, the Federal Parliament should play its role with regards to proportionality and subsidiarity".
• "The government wants a smaller and more effective European Commission".
•  It stresses that with regards to eurozone solidarity, "this should be objective, transparent and efficient and should not encroach upon the competence of member states for social security provision".
• "The government wants the integrity of the internal market, to which all EU member states take part, to be respected" (Something the UK government can see as support for insistence that the single market shouldn't fragment as a result of Eurozone integration). 
• "In its EU policy, the government will fight over regulation and unnecessary meddling which contribute to undermining support for European integration". 
• "In order to boost democratic responsibility and to strengthen public support for the project of European integration, the Prime Minister is prepared to discuss with Parliament both ahead and after every European Council Summit in order to inform it about the positions of the government and the results of the European Council and to debate these topics. In order to support this debate, the government will as soon as possible contribute to the Advisory Committee for European Affairs" (This sees Belgium follows in the footsteps of amongst others Denmark, Finland and the Netherlands, which have similar systems, from the duty of governments to obtain a mandate and an obligation to inform MPs).

There is even a whole chapter devoted to "Introducing the principle of subsidiarity":

• "We believe strongly in the principle of subsidiarity whereby the EU focuses on domains and actions where it adds value. Policies should be efficient and at the level closest to the citizen. The Union should also be made aware of the sometimes heavy administrative burdens of regulation it imposes on member states, its citizens and companies. All of that is necessary to repair the credibility of Europe among citizens."

Of course, EU-federalist elements remain: the new Belgian government wants to scrap veto powers in foreign policy (while simultaneously supporting a "strong NATO alliance" as well) and wants more harmonisation of EU asylum and migration policy. Still, anyone supporting reform of the EU - and Belgium, which hosts the EU, seems to understand that this is in its interest, as we have made clear - can take heart.

Who will win the race for the most anti-EU MEPs: Farage or Le Pen?

***Update 18:30*** 

We flagged up earlier that Beppe Grillo was in talks with Nigel Farage and it looks like they have gone well:

#Grillo and #Farage agree to "begin discussions" over new EP group. They will meet again in coming weeks. http://t.co/5CSRVAXyCI #EP2014
— Vincenzo Scarpetta (@LondonerVince) May 28, 2014

This could be a very interesting development - stay tuned!

***Original Post***

The dust is beginning to settle after the European elections, and aside from the drama over the appointment of the European Commission President, the other big developing story is the exact composition of the groups within the new European Parliament.

As we predicted in our pre-elections briefing, despite many commentators predicting the its demise, the ECR group survived, albeit in a diminished state. However, there is a chance it could still end up making up its loses by attracting fresh recruits such as the Belgian N-VA, the Finns party, and, more controversially, the AfD or the Danish People's Party. There has been speculation that Law and Justice could move to the EPP but we consider this unlikely.

Therefore, the big question is: how will the record number of seats for a whole range of anti-EU and protest parties translate into EP groups? (regular readers will know you need at least 25 MEPs from at least 7 different member states). Assuming there will be no formal alliance between the two, the question is whether there will be two 'anti-EU' groups - a 'moderate' group headed by UKIP and Nigel Farage and a 'far right one' headed by Front National and Marine Le Pen, and if so, which one will be larger. Farage and Le Pen virtually have the requisite number of MEPs on their own but it remains to be seen whether they can get 6 other national factions on board.

As we illustrate below (click to enlarge), theoretically, the numbers are there for both but it depends heavily on how exactly the parties end up lining up. UKIP's EFD group are potentially more attractive to new members, but they are also more vulnerable to losing MEPs both to the ECR and to Le Pen's new European Alliance for Freedom (EAF) group, with Lega Nord having already jumped ship.

Click image to enlarge

Le Pen has just given a press conference in Brussels, but nothing new emerged. For the moment, her alliance includes five countries and 38 MEPs - what she described as an "extremely solid basis". Therefore, two more countries (and parties) are needed to wrap up a group, but Le Pen, Wilders & co. were all extremely tight-lipped when asked what these parties could be.

While the neo-fascist MEPs will remain beyond the pale for everyone, the question is will Farage and Le Pen want to link up with parties like Janusz Korwin-Mikke's Congress of the New Right? This could be the missing piece of the jigsaw for both Farage and Le Pen but given that Korwin-Mikke has said that it is "not possible to rape a woman" and that "there is no proof Hitler knew about the Holocaust" the question is whether the domestic reputational costs of such an association would outweigh the benefits. An intriguing possibility would be a Farage-Grillo alliance (the two met today) but ultimately we think this is unlikely.

One potential - and highly ironic - scenario would be if neither group attracts enough national factions in order to satisfy EP rules thereby missing out both on lucrative taxpayer subsidies as well as a highly visible platform from which to undermine the EU from within. In the longer term, could this yet lead to a rapprochement between Le Pen and Farage?

Belgium's general election: Will we see another 541 days without a government?

This Sunday, on the same day as the European Parliament elections, Belgium will hold a general election, electing both new federal and regional assemblies to govern 11 million people. The key question is how strong the Flemish nationalist N-VA, which is already the biggest political party, will perform this time around.

Background

The N-VA, a "eurorealist"  formation, wants to reform the country, a mini-EU/Eurozone composed of Flemish and Francophones, into a confederation (although it favours splitting it up in the very long term). It became the biggest party in 2010, but was ultimately excluded from a federal government because it appeared impossible to wrap up a coalition deal with Francophone parties, resulting in 541 days without a federal government.

A coalition of six parties led by Francophone socialist Elio Di Rupo eventually emerged. One big issue was that the coalition did not enjoy support among the majority of Flemish MPs in the federal Parliament. European Council President Herman Van Rompuy, who has been Belgian PM himself, once warned that if such a government would ever be formed, this would be “dangerous for the existence of the state”. His party, the Flemish Christian-Democrats, have now pledged not to enter such a coalition again.  This Sunday, it will become clear how voters have judged this.  For more background on the complexities, we refer you to this comment piece by our resident Belgian expert. 

Post-election scenarios

Scenario 1: Business as usual (most likely)

Opinion polls are notoriously unreliable in Belgium, but suggest that, in the Flemish districts, the N-VA will improve on their 2010 showing, while the three traditional parties will remain broadly at the same level. If they again fail to command a majority of Flemish seats but, nevertheless, prefer to avoid complicated talks with the N-VA, the Flemish Christian-Democrats will need to break their promise, something which they may do if one of them becomes PM and the incumbent Elio Di Rupo is offered a job in the European Commission, for example. Di Rupo's Socialist Party is expected to suffer considerable losses, but would easily remain the biggest party in the Francophone part of the country.

Scenario 2: A federal government which includes the N-VA

Bart De Wever, the N-VA's leader, has himself indicated he's willing to enter a federal government and not make new demands to decentralise powers, if centre-right policies are implemented. The N-VA hopes this pressure may drive the Francophone socialists to return to their historic demands for more decentralisation (in his maiden speech to the Belgian Parliament in 1988, PM Di Rupo himself proclaimed that "there are no Belgians", while demanding "a confederal Belgium").

Such a federal government without Francophone socialists (who have been in power since 1988) but with Francophone liberals and Christian-Democrats is an unlikely scenario, also because this time around it would probably not command a majority of the Francophone seats in Parliament. However, if the N-VA does better than expected, this scenario could materialise.

Scenario 3: Prolonged stalemate 

Last but not least, there is the scenario of another one and a half years of stalemate, prolonged to an indefinite period without a federal government, which could result in negotiations on an eventual divorce. We rate this as very unlikely.

As you can see, it's complicated.