BELGIAN STEWPOT: April 11, 2007

UNCLAS SECTION 01 OF 03 BRUSSELS 001233

SIPDIS

SIPDIS

STATE FOR EB/OIA, EUR/ERA AND EUR/UBI
TREASURY FOR OASIA/ICN - ATUKORALA
USDOC FOR 4212/OECA/JLEVINE

E.O. 12958: N/A
TAGS: ECON EFIN EINT EINV SENV BE
SUBJECT: BELGIAN STEWPOT: April 11, 2007


1-2. FedEx Best Employer in Belgium
3-4. Underground Economy Flourishing

5. Wallonia Bites Climate Change Bullet

6. English Ahead of National Languages

7. A Belgian View of the Grand Canyon

8. No More Lost Tourists?
9-10.Last Belgian Horsemeat Packers in US Close

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FedEx Best Employer in Belgium
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1. (U) American package delivery firm Federal
Express was named ?Best Employer? in Belgium for
2007 in March. FedEx's over 800 employees in
Belgium lauded the company?s attention to
developing the talent of its workers. Employees
also expressed appreciation for the company?s
ethnic diversity ? over 30 different
nationalities work in Belgium for FedEx. The
human resources manager for FedEx says the firm
does regular studies of employee satisfaction,
and is constantly improving its management based
on the feedback. In 2005 another U.S. firm in
Belgium, J&J, received accolades when its
Managing Director Ajit Shetty, was named
Flander's Manager of the year.


2. (U) The annual Best Employer survey, conducted
by Belgium?s Vlerick/Leuven Management School, is
based on employee survey responses, and is
divided into those employers with over 500
employees and those with fewer than 500 employees
working in Belgium. Among big firms, other U.S.
companies in the top ten ranking were Dow Corning
(5),Cisco Systems (6),Accenture (7) and
McDonald?s (9). Among small and medium firms,
Microsoft, Amgen (pharmaceuticals),and Abbott
(generic pharmaceuticals) were chosen among the
top ten. Another "best employer" survey done by
Randstad, a leading Belgian temp agency, ranked
Belgium's J&J subsidiary as number one in three
of the past seven years.

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Underground Economy Flourishing
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3. (U) A McKinsey study on the underground
economies of EU countries says Belgium could have
as much as 22 percent of economic activity ?off
the books.? Recent OECD research, however,
declares it may be as little as 3 percent. Using
either method of calculation, Belgium ranks high
on the list: third on the basis of Eurostat data,
fifth according to the OECD, somewhere among
Greece, Italy, Spain and Portugal. The McKinsey
report evaluates the revenue lost to the
government from economic activity in the informal
sector at 30 billion euros. (The GOB fiscal
fraud campaign of 2006, by comparison, netted the
government 817 million euros.) McKinsey says
?about a fifth of Belgians work, occasionally,
partially, or fully in the informal sector.? An
expert at Belgium?s Social Security office denied
the high rate of informal sector activity was due
to high taxes, arguing that Nordic countries have
even higher tax rates but lower rates of informal
sector activity. The expert attributes it to a
mentality of citizens defending themselves from a
"gluttonous" state that exceeds the level of
intervention they consider legitimate. Changing
this behavior, he says, will require a long-term
effort. The Belgian federal government estimates
only a 3-5 percent informal sector economy.



4. (U) Methodologies used in making estimates of
the underground economy vary markedly. The
Belgian National Bank, following Eurostat norms,
compares declared national production to actual
household consumption to calculate the
difference. Alternatively, the macroeconomic
circulation of money can be used to contrast the
hours of work and production declared to the
value of national consumption, the gap between
them being made up by the "off-the-books"
economy. The informal sector includes non-
declared but legal work of citizens (off the

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books services and goods sold),the gray economy
(corporate off-shore, unreported and fraudulent
transactions),and the illegal economy (drugs,
prostitution, etc.).

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Wallonia Bites Climate Change Bullet
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5. (U) In March the Walloon regional government
decided on 82 new actions to help lower regional
CO2 emissions and achieve Belgium?s 7.7 percent
reduction from the 1990 baseline demanded by the
Kyoto Protocol. Whereas previous measures were
aimed chiefly at private sector industries, as
easy to find point-source emitters, the new
measures target mostly the public sector. They
include using biodiesel in the TEC public
transport bus system, extinguishing part of the
highway lighting between 00:30 and 05:30 at
night, and replacing traffic signal lamps with
energy-saving halogen bulbs. All public
buildings will be audited for their energy
efficiency, and corrective steps will be taken
depending on the findings. For long-term impact,
the region will fund a research center to develop
clean motor technology in Francochamps
(ironically, also the site of Belgium?s ?Indy
500? racecourse, not a fuel-efficient sport) and
will support a study on CO2 storage in the former
coalmines of Hainaut province.

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English Ranked Ahead of Belgian's Own Languages
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6. A recent poll by Francophone Brussels daily Le
Soir and Dutch-language daily De Standaard
revealed surprising Belgian attitudes about
languages. The poll asked, ?Is there another
language that is more important than the other
national language?? Most respondents said ?yes?
? 77% of Flemish speakers and 87% of French
speakers in both Wallonia and Brussels responded
affirmatively, both saying that English was more
important than the Dutch or French spoken by
their co-citizens. German was a distant runner-
up, followed by Spanish and Chinese. The survey
also asked respondents to rate their skills in
the other official language. Dutch-speakers in
Flanders largely said they can get by in French
(77 percent),but in Wallonia only 39 percent of
respondents claimed they could manage in Dutch.
The Brussels region was a middle ground, as 61
percent said they felt their skills in their non-
primary language were either ?sufficient? or
?perfect.? Interestingly, 81 percent of
Francophone Belgians and 65 percent of Dutch-
speakers said they have regular contact with
members of the other linguistic community.
Respondents in Brussels had the most contact with
?the other half,? at 89 percent.

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A Belgian View of the Grand Canyon
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7. (U) The latest attraction at the Grand Canyon
in Arizona was "made in Belgium," but is not
chocolate. The new Skywalk Pier is a glass-
floored walkway of nearly 80 feet suspended 1200
meters (3,934 feet, three-quarters of a mile)
above the floor of the canyon. It was
constructed with glass produced by Saint Gobain
in Belgium, and Belgian engineer Frank Serruys
coordinated the construction. Its fans call it
the next best thing to skydiving. Persons with
vertigo are urged to take a different path...

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No More Lost Tourists?
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8. (U) Belgian-Dutch firm TeleAtlas is well
positioned to profit from the coming boom in
cellphones that integrate GPS functions. Almost
2 million such phones are already in use
worldwide, and another 25 million are expected to
be in circulation by 2010. TeleAtlas is charting
the world?s cities in order to sell GPS services
to businesses and tourists. With a fleet of

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sophisticated camper-vans coursing cities and
highways, TeleAtlas is charting leading cities
and tourist sites, and will soon offer 3-D images
and locations to travelers. The company
currently employs 2300 persons, and has already
charted Brussels, Berlin, Paris, Barcelona,
Athens and other well-frequented European venues.
Since it was listed on the Euronext Amsterdam
exchange in 2006, TeleAtlas has raised 50 million
euros for corporate acquisitions to expand its
database. TeleAtlas plans to spend 10 million
euros in China to gain a database of 337 major
cities. The company already has sales exceeding
250 million euros per year, and recorded 80
percent growth last year. Its goal is 20,000
points of interest in 64 countries, covering 21.3
million kilometers of highway. Lost tourists may
become a thing of the past!

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Last Belgian Horsemeat Packers In U.S. Close
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9.(U) Belgian meatpackers Cavel in DeKalb,
Illinois, closed down on April 6, after a U.S.
court decided that the firm could no longer pay
U.S. Department of Agriculture directly for
inspection of their facilities and products. A
year ago a U.S. court decided that no tax money
could be used for inspection of horsemeat packing
facilities; the new decision makes it impossible
for the facility to remain in production and
export its products. Cavel was the third and
last of Belgian facilities in the United States
that processed horsemeat for the European and
Japanese market; fifteen such slaughterhouses
existed ten years ago. The three Belgian
facilities generated 60 million dollars in sales
annually, and processed 2,000 animals per week.


10. (U) The closures come after a three year
court battle by the Belgian companies against a
well-funded animal rights campaign demanding
humane treatment for America's 8 million horses.
The Belgian investors claimed they faced an
emotional and sentimental battle impossible to
win, in light of America's attachment to the
animal. Defenders of the packing plants noted
they handled only wounded, old, and unable to
work animals, bought at between $600 to $700
each. Ironically, inhumane treatment to horses
may rise due to the closures, say Belgian
investors, because now owners of such animals
will have to pay up to $1000 each to
veterinarians to euthanize them. They expect a
rise in horses being abandoned or left to starve.

IMBRIE