Belgium

Belgium is a country of 31,000 km² located at the heart of northwestern Europe. It is densely populated (11.6 million inhabitants) and very open to the rest of the world. This is a strong asset that the country normally exploits very well, but which turned into a weakness when the COVID-19 pandemic hit.

One of the main reasons for Belgium’s openness is institutional: the country hosts the headquarters of several supranational institutions (prominently the European Commission, the European Council and NATO) and the headquarters of several multinational corporations. Perhaps related, the country has a history of migration, both in and out. The country’s capital, Brussels, is now home to people from 179 different nationalities; about a third of its population is not Belgian.

The Belgian economy is globally healthy and quality-of-life indicators are globally advantageous, although with a few sticking points that we extensively discuss in this report. The country’s 2019 GDP reached €478 billion (or $614 billion). GDP per capita is the eighth-highest in the EU, ahead of France but behind Germany – Eurostat data). In real terms, GDP had grown by 35% above its 2000 level (to be compared with about 27% for France and Germany, or 4% for Italy, according to IMF data). The unemployment rate was 5.4% in 2019, a good performance both by recent historical standards and better than the euro area average. However, after the eruption of the pandemic, GDP contracted by 6.3% and was not forecast to have fully recovered in 2021.

The flipside of this high degree of internationalization is that, like the rest of Europe, Belgium was hit suddenly and severely by the COVID-19 pandemic in March 2020. The crisis was compounded by the inability of the country to respond promptly and appropriately to the shock. While the initial vulnerability was clearly beyond the country’s (or Europe’s for that matter) control, the delayed and initially clumsy response was a sign of the country’s institutional complexity and political stasis. On the other hand, after the end of 2020, the country managed to turn the tables and perform better than most of its regional peers.

While debates about what would have been the most appropriate response will remain with us for some time, we can already venture some conjectures about causes and effects.

To start with, why did the pandemic impact European countries, including Belgium, so hard? Available evidence suggests that initial conditions predestined Europe to high hospitalization and eventually mortality, rates. For example, COVID-19 is particularly lethal for older and overweight people, and Belgium’s population is old and overweight indeed: the median age is 42 years (44 for the EU), 25% of the population is 60 or older (27% for the EU), and 50% are overweight (53% for the EU). These risk factors were exacerbated by the country’s international openness and high population density. Finally, Europeans travel extensively and commute via public transportation, facilitating the transmission of a virus like the coronavirus. All this helps explain why Belgium was exposed to a comparatively sudden and significant wave of infections in March 2020, which resulted in one of the world’s highest official COVID-19 death tolls per capita during the first wave (with hindsight, excess mortality was similar in neighboring countries; this reveals that, when there was doubt, and in contrast to most other countries, Belgium’s statistical procedures assigned deaths to COVID-19).

How to evaluate the country’s policy response? Initially, authorities were sanguine, then sluggish, until a rather stringent lockdown was implemented in the second half of March 2020. This delayed government response can be understood only through the fractured political landscape inherited from the regional, federal and European elections of May 2019. That election penalized incumbent parties and produced a highly fractionalized parliament, producing largely opposed majorities between the North (Flanders) and the South (Wallonia) of Belgium. This made the formation of a federal government nearly impossible. It was actually a caretaker government that was in place when the pandemic hit the country, with a substitute prime minister and a diminished minister of health whose main experience was in curbing the costs of healthcare via a variety of restrictions. For historical reasons, Belgium’s institutional setup is also exceedingly complex: The federal government does not have authority over subnational entities, and each entity has both a minister of health and other ministers (say, of education) that possess some competence relevant to rolling out a COVID-19 response. In total, Belgium features nine different ministers with some healthcare responsibility, with no formal hierarchy between them. Any element of policy response required corralling all of them into making a joint decision. The structures meant to produce a swift response were simply absent, and the caretaker government eventually had to request temporary special powers to enforce coordination during the first wave.

On the economic front, however, the Belgian response was significant and effective. Armed with the experience of the 2008 economic crisis, the government rapidly organized temporary unemployment measures, together with relatively targeted support to ensure that private companies (including SMEs) did not suffer too much from cashflow problems. The measures probably erred on the side of caution; bankruptcy rates in 2020 and 2021 actually reached long-term lows. But the response was effective at limiting the contraction in the GDP and the rise in unemployment during the pandemic. It likely contributed to the solid economic recovery experienced by the country in 2021.

The political situation evolved only when the second wave of the pandemic loomed in the autumn of 2020. This time, political parties realized they had to form a new, full-fledged government despite their ideological differences. After a year and a half of failed attempts, a grand coalition formed under the leadership of the right-of-center Prime Minister Alexander De Croo. The second most prominent figure was probably the left-of-center Health Minister Frank Vandenbroucke. This government instituted improved procedures for coordinating the different federated entities and organizing a more coherent response to the pandemic.

The country’s handling of the second wave turned out to be quite effective in regional comparison. Belgium actually managed to avoid another wave in the first months of the year 2021, unlike France for instance. Helped by delays in the delivery of vaccines across the continent, the country also managed to mount an effective vaccination response, and now boasts a vaccination rate close to 80% for the entire population (94% among those 65 and older). As soon as vaccination rates advanced, and whenever the sense of emergency receded, however, political tensions came back to the fore, both between the different subnational governments and within the government coalition.

The pandemic response, both in its strengths and its failures, epitomizes Belgium: when pressed, it has the required talent and industry (a significant share of Pfizer’s vaccines are produced in Belgium, for example) to move forward, innovate, and offer a good or very good performance, both economically and socially. But all too often, this energy and force of innovation is misdirected into rent-seeking and self-damaging measures that handicap the country. Technological and environmental changes will pose many important challenges, that will require hard decisions and leadership. Belgium’s fractured political landscape risks producing very mixed responses to these challenges as well.

“Brussels, is now home to people from 179 different nationalities; about a third of its population is not Belgian”: https://brussels-express.eu/one-three-inhabitants-brussels-not-belgian/.
Excess mortality compared to officially reported COVID-19 deaths: https://www.economist.com/graphic-detail/coronavirus-excess-deaths-estimates