BELGIUM'S PLIGHT

Evening Post, Volume CXV, Issue 48, 27 February 1933, Page 7

BELGIUM'S PLIGHT

GOVERNMENT PROBLEMS

FINANCIAL REFORM

The Belgian Government has obtained the assent of Parliament to a programme of financial reform. But only with, the greatest' difficulty, after repeated searches in tho lobbies was the necessary quorum of 94 members collected to .confer on tho Government extraordinary powers for realising half a milliard francs of economies and a milliard and a half of extra revenue in the coming year. (One milliard at present exchange rates is rather over £8,000,000), says the "Manchester Guardian." The Minister of Finance (M. Jaspar) reminded Parliament of the accumulated deficit of threo and a half milliards on recent Budget years and of a milliard of short debt and a milliard of middle term debt, consequently requiring prompt attention. Most urgent of all, 500,000,000 francs were due to be paid in January, and the necessary funds had only been secured through a one-year advance from France pending the placing of a loan of one and a half milliards which the Government needs for meeting impending maturities. The Government's embarrassment is shown .by the rates paid on the various loans issued this year. A 5 per cent, internal loan of one milliard was placed at an actual discount; a 25-year loan of 800,000^00 ,francs at 5$ per cent, could only be placed in Paris at 95i; 290,000,000 of Treasury bills were taken up by a Swiss-Dutch group at; 5 per cent. In October 800,000,000 of bonds had to bo prolonged at 6 per cent. Including the one and a half milliard loan not yet issued, the Belgian State and its subsidiaries have borrowed over seven milliard francs (some £60,000,000) in the present year. Tor next year a further borrowing of two milliards is expected, apart from urgent needs of the Congo Colony, which has a floating debt of over one milliard. To a considerable extent this money may be sought abroad. Access to the French issue market is assisted by the political connection— now especially that the Flemish element in Parliament and Government has been weakened—and certainly also by the great desire of the French to keep as many European countries as possible on the gold standard. CALLED IN CAMERA. Three, months ago Belgium seemed only,precariously attached to gold. The Luxemburg Council was called upon to discuss in camera the outlook for the Belgo-Luxemburg currency union, and the Belgian currency was quoted distinctly off its gold parity. The recently formed De Broqnteville Government is a Liberal-Catholic Coalition without, co-operation of the Socialists, and tho Socialists opposed the t granting of full emergency pOWOI'S to it; not only this, but the attitude of some of the Liberals was also doubtful. But the terms of the law which (after some modifications introduced by the Finance Commission of the Chamber) has just passed, the Government is not authorised to revise the mechanism of internal taxation but only the details of application up to a total of 450,000,000.. A now special tax on profits from restrictions and quotas is to be allowed. Customs and Excise duties may be raised to yield a further halfmilliard. A further "crisis tax" will be levied on employees' incomes, but tho Government's original "axing" proposals have been greatly modified. ■ The Socialist Opposition maintained that the delegation of fiscal powers by the Chamber to the Government was unconstitutional, but the necessary majority is said to have been obtained by the King's intervention. In practice the financial reform is to be entrusted to a Treasury Committee composed of M. Jaspar (Financo Minister). M. Tschoffen (Colonial Minister), and the Governor of tho Societo Generate (Bank). A substantial reduction of the military budget has been promised by M. Jaspar.