TOUR D'HORIZON WITH BELGIUM'S PRIME MINISTER

C O N F I D E N T I A L BRUSSELS 000648

SIPDIS

C O R R E C T E D COPY SIGNATURE
E.O. 12958: DECL: 05/07/2029
TAGS: PREL EFIN SENV PGOV ECON PINR BE
SUBJECT: TOUR D'HORIZON WITH BELGIUM'S PRIME MINISTER

Classified By: CDA Wayne Bush, Reasons 1.4 (b) and (d).


1. (C) SUMMARY: Belgian Prime Minister Herman Van Rompuy
told Charge May 5 that he was very impressed by President
Obama during their recent contacts in Strasbourg and Prague,
especially the President's active role at the NATO summit in
forging unanimity on the selection of a new NATO Secretary
General. Van Rompuy said he would soon visit Afghanistan
where he would review Belgian efforts and hoped to meet
Karzai. On Guantanamo detainees, Van Rompuy said Belgium is
waiting for specific requests. On Africa, Van Rompuy said
that Belgium's diplomatic relations with the Congo (DRC) had
been repaired, but the economic crisis is hitting the DRC
hard, and China's importance is increasing. Van Rompuy
strongly supported coordinated efforts on the economic
crisis, but was frustrated that coordination had been
primarily via the G-20 of which Belgium is not a part.
Economic recovery tops Van Rompuy's agenda. Belgium will
undertake no further economic stimulus, but another Belgian
bank will require additional support in the near future, Van
Rompuy said. He also emphasized Belgium's desire for
membership in the Financial Stability Forum. On climate
change, Van Rompuy said that Europe is good at setting goals
but not at meeting them. Van Rompuy said that all but one
party in the current governing coalition is prepared to
overturn an earlier government's decision to close all of
Belgium's nuclear power plants, and he hoped action to retain
the plants could be accomplished in the second half of 2009.
Van Rompuy does not expect the June regional elections in
Belgium to cause a change in the federal government
coalition, and hopes that possible "asymmetry" between the
federal and regional governing coalitions after the elections
will be manageable. END SUMMARY.

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AFGHANISTAN - LEBANON
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2. (C) Belgian Prime Minister Herman Van Rompuy, appointed
at the very end of 2008 after the resignation of his
predecessor over controversy related to the sale of Fortis
Bank, met with the Charge and Pol/Econ Counselor May 7. The
PM's diplomatic advisor, Dirk Wouters, also was present. Van
Rompuy said he had just returned from Lebanon where he
reviewed Belgium's contingent in UNIFIL (Belgium has just
taken command of UNIFIL's naval arm). He will travel to
Afghanistan in early June where he will review Belgian
activities and hopes to meet with President Karzai. The
Charge expressed appreciation for Belgium's decisions to
expand its military and development assistance to
Afghanistan. He noted that President Obama was meeting that
day with the leaders of both Pakistan and Afghanistan,
underscoring the importance of addressing the region in its
entirety. He said that the Embassy would continue to consult
closely with appropriate Belgian ministries as they move
forward with consideration of how best to implement the
decision to double development assistance to Afghanistan and
to examine the possibility of providing police trainers. Van
Rompuy said that he had recently met with British Prime
Minister Gordon Brown who had also emphasized the critical
importance of Pakistan to what is happening in Afghanistan.

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RELATIONS WITH THE U.S.
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3. (C) Van Rompuy expressed strong satisfaction with
relations with the U.S., and the high level of consultation
between U.S. and Belgian officials. Van Rompuy said he had
met President Obama at the recent summits in Strasbourg and
Prague. He described the President as "very impressive in
style and substance." Van Rompuy praised President Obama's
role in obtaining consensus on the appointment of the new
NATO Secretary General and said President Obama's
intervention had been critical. Van Rompuy was particularly
impressed by President Obama's willingness to listen to other
points of view. He described President Obama as "very
European" in his approach and with respect to views on a
range of issues. The Charge replied that the President and
other senior members of his team understand the importance of
the Trans-Atlantic relationship and the need for the U.S. to
work with Europe on the full range of challenges before us.

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VIEWS ON AFRICA
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4. (C) The Charge referred to recent consultations between
the U.S. and Belgium on Africa, including the discussion
between the Secretary and FM De Gucht, and subsequent
consultations between diplomatic and military counterparts.
The U.S. valued these discussions, which would help pave the
way for further consultation when the new Administration's
senior leadership on Africa is in place. Van Rompuy
appreciated the ongoing dialogue on Africa. He noted that
Belgium had repaired its diplomatic relations with the Congo
(DRC) in January. However, the government there still has
many problems. The eastern part of the country remains very
unstable and the global financial crisis is hitting the
region particularly hard. He added that the role of China
has become very important there. He looked forward to
continued consultation with the U.S.

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GUANTANAMO DETAINEES
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5. (C) The Charge noted recent exchanges between U.S. and
Belgian officials on the issue of Guantanamo detainees. The
Charge said that the President had committed to closing the
Guantanamo detention center by the end of the year; we needed
the help of our allies to make this happen. The U.S.
expected to have to continue to deal with the most difficult
cases, but hoped that allies would consider accepting at a
minimum those whose detention is no longer required. He said
an intensive review process is currently underway in the
U.S., and expressed the hope that when the U.S. comes forward
with specific requests for Belgium, the PM would consider
such requests favorably. We have discussed with the EU a
framework within which this could happen. The PM
acknowledged the consultations that have occurred, including
with his diplomatic advisor. He said that Belgium is ready
to review specific requests from the U.S. on this matter.

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CLIMATE CHANGE
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6. (C) On the issue of climate change, the Charge noted
that the U.S. is working vigorously with others to prepare
for a successful outcome to the year-end climate change
conference in Copenhagen. He emphasized the importance of
arriving at a new treaty that could be ratified by the U.S.
Senate. He underlined the U.S. focus on defining a pathway
for achieving the CO2 reductions needed by 2050, and not only
the targets for 2020. Van Rompuy replied that Europe is
always strong in setting goals but not in accomplishing them.
The Charge said that on the issue of climate change, the
implementation of any agreement is critical. The PM noted
that Belgium still faces the issue of nuclear energy, an
issue that is very important both for public opinion and for
policy makers. The government needs to decide whether to
overturn a previous government's decision to close all the
country's nuclear power plants by 2015. Two/thirds of public
opinion supports retaining nuclear power, the PM said, but
the remaining third opposing nuclear power is very vocal.
Van Rompuy said that five of the six parties in the federal
government coalition are prepared to overturn the law and
retain nuclear power; he hoped to be able to accomplish that
in the second half of 2009.

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ECONOMIC RECOVERY IS NUMBER ONE
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7. (C) For Van Rompuy, economic recovery is the greatest
challenge. He regretted that Belgium is not part of the
G-20, despite having one of the 20 largest economies. He
said that Belgium is also a large relative contributor to the
IMF, and just provided five billion more euros to the IMF's
new lending facilities. In addition, Belgium leads an IMF
constituency representing 150 million people, from
Kazakhstan, Turkey and others. Belgium supports the need for
reform of the IMF but does not intend to ask for new
privileges for Belgium. Van Rompuy is also very interested
in having Belgium join the Financial Stability Forum and he
said Britain's Gordon Brown is supportive.


8. (C) Van Rompuy said the most important step now is
implementation of the recommendations of the G-20 and of the
European Union for fighting the crisis, which has caused the
biggest recession since the 1930's. He believed Germany's
GDP is likely to decline by 6 percent this year, while
Belgium's economic contraction should fall in the middle
range of eurozone countries.


9. (C) Van Rompuy described the sale of Belgium's flagship
bank Fortis to France's BNP Paribas as a difficult decision.
This now makes the government of Belgium the largest single
shareholder in BNP. Fortunately, the worst of the liquidity
crisis is over, but two of Belgium's other top banks still
have solvency issues and one of them will need further
attention. Van Rompuy predicted that unemployment in Belgium
would rise a further 2.2% this year.


10. (C) Regarding next steps on the economy, Van Rompuy
said the government planned to provide no further fiscal
stimulus in 2009, having already injected the equivalent of
0.9% of GDP. Seeking to return to a balanced budget regime
remains a major constraint. The public is already expecting
taxes to go up and government spending to be cut. A proposal
for further fiscal stimulus would not be popular, mainly
because of Belgium's history of very high debt levels.
Belgians are as afraid of public deficits as the Germans are
of inflation, Van Rompuy asserted. For this reason, there
would be no further fiscal stimulus this year. As for the
two remaining weak banks in Belgium, the government does not
intend to recapitalize them, only to give them state
guarantees. One of the two will need that support next week.


11. (C) The Charge appreciated Belgium's support for
coordinated international action to support financial
institutions and stimulate economic activity. He underscored
U.S. concern for free trade and the need to resist temptation
toward protectionism. The Charge said that the U.S. greatly
valued its partnership with Belgium in international fora,
including Belgium's service on the UN Security Council
through the end of 2009, and its chairmanship of the Iran
Sanctions Committee. He said that the U.S. looked forward to
working with Belgium on the UN Human Rights Commission, and
promised to convey to Washington Belgium's interest in
joining the Financial Stability Forum.

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BELGIUM'S ELECTIONS
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12. (C) Van Rompuy did not expect the June regional and
European elections to have as much of an impact as some
observers expect. The financial crisis has pushed into the
background the divisive issues between the Flemish and
francophones If any party in the regional elections loses
votes in this election, it will be because of the financial
crisis. Van Rompuy (a Flemish Christian Democrat) hopes for
a modest but "good result." He is more optimistic today than
he was several months ago. However, the prognosis for
Wallonia is less certain.


13. (C) Van Rompuy hopes the regional elections will return
the same coalitions as the federal government coalition.
Otherwise, the resulting "asymmetry" could be a problem. The
best solution for Belgian politics is symmetry, i.e., the
same parties represented in government at both the regional
and federal levels. What will happen, of course, depends on
the June 7 vote tallies. The francophone green party, Ecolo,
is surging, said Van Rompuy, only because it is the only
opposition party in the south, since all other parties are in
the coalition governing Wallonia. Ecolo is the sole
beneficiary of the protest vote. Flanders, on the other
hand, has five opposition parties, so there is more choice
for those wanting to vote against the governing coalition
there.


14. (C) Van Rompuy said that the proposed state reforms
will require simultaneous elections at the federal and
regional levels. That cannot happen now because of the
on-going dispute over the complex redistricting issue of
Brussels-Halle-Vilvoorde (NOTE: BHV, where francophone
voters in Flemish districts want to continue being able to
vote for francophone candidates outside of Flanders. END
NOTE). In referring to the next federal elections,
currently slated for 2011, Van Rompuy casually added that he
planned to run.

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COMMENT
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15. (C) Prime Minister Van Rompuy clearly welcomes the new
Obama administration and believes the two governments share
similar goals in many areas. He is eager to work with the
U.S., within the constraints of Belgium's EU membership, on
the full range of issues, including Afghanistan/Pakistan. He
is also willing to help with Guantanamo detainees, depending
on who the U.S. asks Belgium to take. His main focus
continues to be reducing the impact on Belgium of the global
financial crisis and strengthening Belgium's banking sector,
partly because that sector's weakness helped bring down his
predecessor. He is keenly interested in the June regional
elections but intends to stay above the fray since he sits at
the federal level. Indeed, he made this clear by indicating
that he intends to travel to Afghanistan during the week of
the elections themselves.


16. (C) Van Rompuy speaks excellent English. As an
economist, he is clearly very much at ease discussing
economic issues and economic policy. He was personable and
fully confident discussing every topic raised. So far, he
has made none of the missteps and public flubs of his
predecessor. Low key and conciliatory, he has been able to
lower the volume on the intense debates on the future
structure of Belgium's political system, with help from the
distracting financial crisis and pending regional elections.
Once the June election dust settles, however, Van Rompuy is
likely to have his political skills tested.
BUSH