The Belgian Economy in the Twentieth Century

The Belgian Economy in the Twentieth Century

The Belgian Economy in the Twentieth Century

The Belgian Economy in the Twentieth Century

Synopsis

By the end of the nineteenth century Belgium was enjoying considerable economic success. However, the economic experience has proved significantly less stable in the twentieth century.
In The Belgian Economy in the Twentieth CenturyProfessor Andre Mommen describes and analyzes the changing fortunes of the Belgian economy throughout this century. He traces the Belgian experience from the state regulation of the inter-war period to its current difficulties. Central to the discussion is the innate problem of Belgian dependence on international trade due to her small domestic market. This volume explains how a small but industrialized European nation succeeded in preserving its competitiveness only to succumb to a devastating debt crisis in the last decade.

Excerpt


O friends, not these sounds!
Let us sing something more pleasant,
more full of gladness.

Friedrich von Schiller

With its 30,500 square km and its 10 million inhabitants Belgium belongs to the category of the small European powers. Since the foundation of the Belgian State in 1830 the total population has doubled and the agrarian character of the nation has disappeared. Nowadays less than 3 per cent of the population works in agriculture

In September 1830 a liberal revolution swept away the Dutch king’s autocratic power. Because the revolutionary leaders had opted for a constitutional monarchy Belgium’s political and economic reforms soon reflected its capitalist transformation. As industry developed, imports of raw materials (wool, cotton, iron and zinc ore) increased. Meanwhile coal became the very backbone of heavy industry in Wallonia where blast furnaces and rolling mills were built in the Meuse and Sambre Basins. This industrial development was generously financed by big banks with a ‘mixed character’. Of them, the Société Générale de Belgique and the Banque de Belgique played a dominant role in the metal and coal industries.

The Société Générale, founded in 1822 by the Dutch King Willem I, constituted an important centre of decision in Belgian politics. After the Revolution of 1830 Willem’s bank remained the only Belgian bank of national importance, issuing notes and playing the role of Treasurer. Liberal politicians and bankers fearing this concentration of so much power founded the competing Banque de Belgique in 1839. But the cyclical business made both ‘mixed banks’ vulnerable to liquidity crises, making it difficult for banks to con-

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