Located in the heart of Europe and the site of the European Union's major offices, Belgium offers an attractive destination for goods and services throughout the world. The nation has built its economy with a strong emphasis on foreign trade and investment, and prides itself on having few impediments to foreign business. Prior to the formation of the European Union in 1992, Belgium and Luxembourg formed their own economic union with a shared currency (the Belgium franc was linked to the German mark in 1990). A country which is often mistaken as being simply a smaller version of France, Belgium has overcome severe public debt and a lackluster economy in recent years to emerge as a leading European market. This research examines the country's financial performance over the past ten years, and considers the outlook for foreign investment and exports in the future.
Overview of Belgium's Political and Economic Systems
Like Italy, Belgium has changed government numerous times since the end of World War II. However, the results of these changes are often that the same people are simply in different positions within the government. In this way, the government has seen a long period of continuity despite the numerous changes. Prior to 1992, the European Community Commission issued a number of warnings to Belgium for failure to comply with EC law, but the infractions pointed to the largest divisive point about Belgium: while the nation welcomes and houses individuals from around the world, it is sharply divided with regard to its own Flemish and French heritage. The two regions have developed nearly entirely separately in terms of bureaucracies and day-to-day operations; Brussels, which is French-speaking, is yet a third, smaller region surrounded by Flanders.
Because Belgium itself is a relatively small market compared to its neighbors (Germany, France and Britain), it has long depended on trade for its economic strength. B...