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Young Conservative Takes Helm In Belgium

November 27, 2014
Originally published in Global Finance Magazine
Michel favors deficit reduction and a balanced budget.

After almost five months of parliamentary squabbling since the elections of May 25th, Belgium finally inaugurated a new government in mid-October. At the helm of the center-right administration is 38-year-old Charles Michel, leader of the francophone liberal Reformist Movement and the youngest prime minister in the country’s modern history. Philippe Ledent, senior economist at ING Belgium, notes: “Though he is quite young, Michel already has a long political career behind him, and his father is also well known politically.” Charles is the son of Louis Michel, a former Belgian minister and European commissioner under whose wing he began, when he was just a child, his rise in politics.

At age 18, Michel won a seat in the provincial government of Brabant Wallon. At 22, he was one of the youngest MPs ever elected to the federal parliament. By age 25 he had already become the youngest cabinet member in Belgian history.

Michel’s key job will be to hold together a coalition of four parties that, while homogenous in their free-market political leanings, are linguistically divided, like the country they represent. In fact, it was the Dutch-speaking, separatist New Flemish Alliance that received the most votes in May and is now the largest part of the government. “Some say it could be a rather unstable coalition, but we don’t know that yet,” says Ledent.

What we do know is that Michel’s executive is focused on austerity-centered policies to reboot the economy, starting with a public spending review to pursue its goal of deficit reduction and a balanced budget by 2018. Structural reforms to lower labor costs and improve competitiveness are also on the table, including at least a temporary suspension of the policy of automatic wage indexation and an overhaul of the healthcare and pension systems. “I think there is real determination by the coalition to go ahead with these reforms,” says Ledent. Whether these measures will be effective remains to be seen.

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