Belgian Leader Leterme Stumbles in Major League Debut as he tries to form a Cabinet







E.O. 12958: N/A
SUBJECT: Belgian Leader Leterme
Stumbles in Major League Debut as he
tries to form a Cabinet

1. (U) For Yves Leterme, the first week
of trying to form Belgium's next
government has been a sobering
experience. His interlocutors at the
government formation talks have given
him a rude welcome to the premier
division of Belgium's political world.
To make matters worse, Leterme himself
has contributed to the dismal show with
two embarrassing gaffes, both of which
occurred on Belgium's National day.

2. (SBU) As has been widely reported in
the international press, Leterme could
not remember why his country celebrated
its national day on July 21, and he
could not remember the French version
of the national anthem. (Leterme is a
Fleming.) The cascade of mistakes fed
already extant suspicions that he was a
closet Flemish nationalist, and sparked
a series of stinging attacks in the
francophone press. The gaffes and the
press critiques together put him on the
defensive as the formation talks began
on July 23.

3. (U) The first week of direct
negotiations among the two Christian
Democratic and two liberal parties has
produced an agreement, in principle, on
lowering income taxes. After having
dragged her feet for several days,
francophone Christian Democratic Party
(CDH) president Joelle Milquet caved
in, but immediately added that in
working out the tax cut modalities, she
would make sure to fulfill her party's
promises on upgrading pensions and
social welfare entitlements. This
first hurdle taken allowed the two
liberal parties to boast about a major
concession wrenched out from the
Christian Democrats.

4. (U) As the week closed, Leterme
announced the formation of working
groups on the politically touchy
subject of fashioning incentives and/or
sanctions to "force" the long-term
unemployed back to work. The Liberals
believe in sanctions, while the
Christian Democrats favor less
draconian measures. Although this
discussion may well go the Christian
Democrats' way, they are taking place
against the gloomy backdrop created by
growing concerns about the 2007 budget
and the government's ability to keep it
out of the red without further belt
tightening measures.

5. (SBU) Leterme also has conducted his
first exploratory discussions on the
institutional agenda. He is handling
this matter personally in a series of
direct talks with the other party
leaders. The presence at the
negotiating table of Bart De Wever, the
Flemish nationalist leader of the N-VA,
and his francophone counterpart,
Olivier Maingain of the FDF, will not
necessarily contribute to any easing of
tension over linguistic questions.

6. (SBU) Comment: Local analysis of
the first week of coalition talks
reflects the commentator's linguistic
allegiance. While there is a consensus
that the discussions are progressing at
a disappointingly slow pace, most
Flemish commentators profess a relative
indifference, arguing that this has
happened before. The francophone
press, reflecting the fears of its
audience, appears deeply concerned that
Leterme has let loose "institutional
demons" that ultimately might threaten
the foundations of the Belgian state.
Some Francophone commentators are even
pleading with outgoing premier Guy
Verhofstadt (Open VLD) to come back.

7. (SBU) At this stage, we see no
reason not to believe that Leterme will
succeed in cobbling a government
together between "orange" (the
Christian Democrats) and "blue" (the
liberal parties). From our
perspective, the present difficult
discussions between the four parties
are the natural result of having former
rivals sit down together. The way the
electorate has shuffled the cards,
there is no real alternative now to a
government involving Liberals and
Christian Democrats. In this process
the formateur plays a key role, and
Leterme's clumsy antagonizing of the
francophone public opinion is certainly
not the best way to secure success.