Located between Germany, France, and the Netherlands, Belgium has a short coastline on the North Sea. The south includes the forested Ardennes region, while the north is crisscrossed by canals. Belgium has been fought over many times in its history; it was occupied by Germany in both world wars. Tensions have existed between the Dutch-speaking Flemings and French-speaking Walloons since the 1830s. These have been somewhat defused by Belgium's move to a federal political structure and the national consensus on the benefits of EU membership.

Belgium has been marked by the divisions between its Flemish and Walloon communities. The majority Dutch-speaking Flemings are concentrated in Flanders. Wallonia is French-speaking and Brussels is 85% francophone. French-speakers were in the ascendancy for many years, their greater economic wealth reinforced by a constitution giving them political control; tensions between Walloons and Flemings occasionally erupted into violence. In the past three decades, however, the situation has been reversed: Wallonia's industries have declined and Flanders is now the wealthier region. To defuse tensions, Belgium began in 1980 to change from being the most centralist to the most federal state in Europe; each community now controls most of its affairs and has its own government. A small German-speaking community in the east has extensive autonomy in educational and cultural matters.

Belgium has a sizable immigrant population. Women account for 40% of the workforce and 19% of administrators and managers.

Strengths

One of world's most efficient producers of metal products and textiles. Flanders is a world leader in new high-tech industries. Successful chemicals industry. Highly educated and motivated multilingual workforce: estimates suggest productivity is 20% above that of Germany. Attractive location for US multinationals. Good sea outlets and access to Rhine inland waterway from Antwerp and Ghent.

Weaknesses

Public debt of around 100% of GDP, well over EU target of 60%. High long-term and low-skill joblessness with sharp local variations. Large numbers of workers retire early, resulting in high state pension bill. Bureaucracy larger than European average.

Profile

Recession and rising unemployment in the early 1990s prompted the introduction of work-sharing schemes and benefit reforms. Unemployment and the massive public debt are declining gradually. Against a background of a downturn in the world economy, the government is committed to both greater fiscal stringency, in pursuit of a budget surplus, and reduction in taxation over 2002–2005.

Until 1970, Belgium was a unitary state. Tensions between language groups led to four waves of federalist reforms from 1980, which culminated in the St. Michel Accords of 1993, confirming the state as a federal monarchy.

Profile

Belgian politics are defined along lines of language. Apart from this, a high degree of consensus exists over the benefits of membership of the EU and monetary union. In recent years, support has increased for the racist VB, which objects to Belgium's Turkish, Moroccan, and other African minorities. VB won 28% of the vote in local elections in Antwerp in 1994 and 33% in 2000.

The ruling centrist coalition of the Socialist and Christian Democrat parties of the Flemish and Walloon communities had a parliamentary majority, but had difficulty in securing the necessary majority for the constitutional reforms enacted in the St. Michel Accords. These gave the regional governments – Flanders, Wallonia, and Brussels – significant powers under a federal government. The government of Jean-Luc Dehaene was defeated in the 1999 election, and a new coalition composed of the Liberals, Socialists, and Greens was formed by the VLD's Guy Verhofstadt.

Main Political Issues

Language

Tensions between the two language groups have been mitigated by progressive decentralization. Each community has a right–liberal party (the VLD in Flanders, the PRL in Wallonia), a socialist party (SP/PS), a Christian democratic party (CVP/PSC), and a green party (Agalev/Ecolo).

Police handling of pedophile case

Apparent police incompetence, cover-ups, and corruption in combating the activities of pedophile rings has provoked public anger and protest, focusing in particular on failure to save children from pedophile killer Marc Dutroux. Arrested in 1996, he escaped briefly in 1998, causing two ministerial resignations.

Belgium's key concern is its role in the EU. It is a keen supporter of economic and monetary union. As a frequent victim of wars between France and Germany, Belgium sees the EU as a guarantor of western European peace. It is also perceived as an important foundation for Belgium's own federalist structure, without which many fear that Belgium could split into two.

Belgium has little in the way of an independent foreign policy, but does frequently contribute troops to the UN's operations. Belgian soldiers have served in the Democratic Republic of the Congo and the Middle East in recent years, and a number were killed in Rwanda in 1994.

Belgium spends less on defense than the NATO average of 2.2% of GDP. In 1994, as part of Belgium's program to reduce government debt, all three military services were targeted for cuts. The government abolished conscription and undertook to cut troop levels. The defense budget was frozen for five years.

However, spending on paratroopers and transport planes has increased. The aim is to allow Belgian forces to fulfill their role in NATO's new rapid reaction forces. It will also make Belgian forces more useful to the UN's worldwide operations. In 1996, the Belgian and Netherlands' navies came under a joint operational command based at Den Helder, the Netherlands.

Belgium has few natural resources and depends largely on the export of goods and services. The once-rich coal mines of Wallonia are almost depleted. There is some deciduous and conifer forestry in the Ardennes region.

Flanders is concerned about the pollution of groundwater supplies through acid rain, heavy metals, fertilizers, and pesticides. Its government operates an environmental management plan to raise standards. Wallonia has strict laws against illegal tipping of waste, and regulations on air quality and emissions. Awareness of environmental issues is reflected in the rise of the two green parties, which entered government for the first time in the coalition formed in 1999.

Belgium can be crossed within four hours by car or train. The expressway network is extensive, and athough the railroad system has been reduced since 1970, it still constitutes one of the world's densest networks. Using high-speed TGV lines, Paris is just 80 minutes from Brussels and London via the Channel Tunnel is 2 hours 40 minutes.

Antwerp is Europe's second-largest port. National carrier Sabena collapsed dramatically in November 2001, amid a slump in the aviation industry. A section of Sabenasubsequently formed the basis for a new private airline, SN Brussels Airlines.

The quality of health care is among the best in the world, and government spending is high. Belgium is a world leader in fertility treatment and heart and lung transplants. Treatment is not free, but Belgians hold insurance enabling them to claim up to 75% of their costs.

Only heart disease and cancer rank before car accidents as a cause of death. There were nearly 8000 people living with HIV/AIDS in 1999. In May 2002 Belgium became the second country (after the Netherlands) to legalize euthanasia.

In Belgium, parents can choose between schooling provided by the two main language communities, by public authorities, or by private interests. Roman Catholic schools constitute the greatest number of "free" (privately organized) establishments. Since 1989 the system has been administered by the governments of the two main language groups. All universities are split by language.

Brussels has one of the lowest murder rates for any capital city. In urban areas pickpocketing is rising and car theft is a problem. Penalties for illegal use of narcotics are strict.

Despite high levels of state debt and failing traditional industries, Belgium is one of Europe's richest countries. GDP per capita is lower than for Germany but higher than for Italy or the UK.

This statistic masks considerable regional differences. In Flanders, with its many high-tech businesses, the level of unemployment is only half that in Wallonia.

The presence of highly paid EU officials and international company employees and bankers has made Brussels a distinctly wealthy, and expensive, city. The recession of the early 1990s prompted Belgians to save a higher proportion of their income, but the level of savings has fallen since then as consumer confidence has recovered.

Belgium's main attractions are its historic cities and the museums of Flemish art. Bruges, the capital of West Flanders, is often referred to as the "Venice of the North." With Gothic and Renaissance architecture and a complex canal system, it has become a favored destination for British weekend trippers and Japanese honeymooners. In Brussels, the famous "Grande Place," a cluster of Gothic, Renaissance, and Baroque buildings in a cobbled square, survived bombing during World War II. Much of the rest of the old city center, however, was destroyed. Belgium has 15 resorts on its 62-km (38-mile) coastline, with a single tramline running its entire length. Forests in the Ardennes to the south attract hikers.

Formerly ruled by the French dukes of Burgundy, Belgium became a Habsburg possession in 1477. It passed to the Austrian Habsburgs in 1713. Belgium was incorporated into France in 1797.

• 1814–1815 Congress of Vienna; European powers decide to merge Belgium with the Netherlands under King William I of Orange.
• 1830 Revolt against Dutch; declaration of independence.
• 1831 European powers place Leopold Saxe Coburg as king.
• 1865 Leopold II crowned king.
• 1885 Berlin Conference gives Congo basin to Leopold as colony.
• 1914 German armies invade. Belgium occupied until 1918.
• 1921 Belgo-Luxembourg Economic Union formed. Belgian and Luxembourg currencies locked.
• 1932 Dutch language accorded equal official status with French.
• 1936 Belgium declares neutrality.
• 1940 Leopold III capitulates to Hitler. Belgium occupied till 1944.
• 1948 Customs union with Netherlands and Luxembourg (Benelux) formed.
• 1950 King abdicates in favor of his son, Baudouin.
• 1957 Becomes one of six original signatories of the Treaty of Rome, the principal foundation of what develops into the EU.
• 1992 Christian Democrat and Socialist government led by Jean-Luc Dehaene takes over federal government.
• 1993 Culmination of reforms creating federal state. Greater powers for regions and city governments. Death of Baudouin. Succeeded by Albert II.
• 1995 Allegations of corruption and murder involving French-speaking PS force resignations of Walloon premier, federal deputy premier, and Willy Claes as NATO secretary-general.
• 1996 The murder and disappearance of young girls arouse fears of an international pedophile ring.
• 1999 February, Claes found guilty of bribery in connection with defense contract to buy helicopters. June, VLD/PRL wins general election. New coalition formed, including Greens for first time.
• 2001 November, collapse of national airline Sabena.
• 2002 January, euro fully adopted, with introduction of coins and notes, and withdrawal of Belgian franc from circulation. May, legalization of euthanasia.