2.6. OWNERSHIP OF BELGIAN FIRMS. Why are there no belgian multinationals?

Familial economy:

The ownership of belgian firms has been decisive in the economic evolution of the country. Most of the firms were owned by belgian households. For that reason, we say that Belgian economy was a very familial economy, made up of family led enterprises.

Most of them refused to take unnecessary risks and decided to keep acting in their comfort zone, without stepping out of it. This aversion to risk and limited frame of action prevented progress development.

Another characteristic of family owned companies is that they center on short-term profits, which does not allow for long-term planification.

Multinationals drastically transformed Belgian economy. With the arrival of globalization, many foreign multinational firms started establishing their headquarters in Belgian territory (for further information, see: 1.5.2. THE RISE TO POWER OF FLANDERS). The combination of these two factors has resulted in the scarcity of Belgian multinationals.

Foreign firms  aided Belgium’s economy because they brought with them a different way of doing business. They are strong investors, focused on long-term projects, that plan their actions and act with a specific pattern.

The importance of holding companies:

Aside from the fact that Belgium’s economy was familial, we also have to relate this to the importance of holding companies in Belgium throughout the XXth century.

A holding company is a company which, through the purchase of shares of other firms, acquires a high degree of control over them.

(Roberts, 2015)

In Belgium, holding companies had a very particular development. Previous to World War One, these companies were seen as important tools to mobilize capital throughout the economy and as providers of economic growth.



However, during the interwar period, they started concentrating exclusively in the domestic market and in the Congo. Instead of representing economic growth, they started symbolizing anti-competitive behaviour and control. This was because they focused on keeping control over their subsidiaries instead of promoting development, which led to many people arguing that they were aiding the creation of cartels. As we now know, this is partly true, because many holding companies tried to keep hold of the coal and steel market, letting it develop, even if they knew it was becoming obsolete.


(Public domain)

A perfect example of this is the case of the Société Générale de Belgique, one of the biggest holding companies in Belgium at the time, which invested in the domestic market and in the Congo.






Roberts, P. (5 de November de 2015). Reasons To Do Business In Ireland – Holding Companies. Retreiverd from Roberts Nathan: http://www.robertsnathan.com/reasons-to-do-business-in-ireland-holding-companies/


Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945. Cambridge; New York; Melbourne: Cambridge University Press.



Belgium 1835 40 Francs.jpg
(Public domain)

The Belgian franc was the currency of Belgium throughout the XIXth century. Monetary policy was of huge relevance during the century, given that the relative value of a currency determines the amount of exports and imports the country using the currency will have.

Generally speaking, Belgium has always tried to keep the currency at a constant level, without big depreciations or appreciations of the currency. 

However, if we look at the different economic periods of the century, we can see some differences.

(Market watch, 2018)

At the beginning of the 30’s, Belgium, like many other States, started pegging their coin to gold in order to stabilise the value of their currency.




This managed to keep the franc stable until 1935, when Belgium  left gold, which resulted in a devaluation of the frank of 28%. This decision has been questioned afterwards. The stability provided by pegging the coin was not reflected in economic benefits or progress of great magnitude.

Before Belgium left the Gold Standard, two important events took place: The Crack of the stock market in 1929 and the withdrawal of Britain from the Gold Standard, which put Belgium at an economic disadvantage.

During the 1940’s, the coin was devaluated in 1949, following the trend started by Britain. Some years later, in the 1950’s period, there was an appreciation of the currency in order to maintain monetary stability.

(Daily Pioneer, 2017)

From 1970 to 1982, the currency was appreciated. This appreciation worsened the situation of the Balance of Payments, since an appreciation of a currency tends to lead to a decrease in exports and an increase in imports, which is what happened in the case of Belgium. This appreciation of the currency was translated into an increase in inflation.


Finally, during the end of the century, the currency followed a path of devaluation in order to respond to the previous years of inflation.

As we can see, the currency was constantly trying to be under balance, with periods of appreciation of the currency being followed by periods of depreciation. The currency of a country is a very important tool, but in the case of intensively commercial countries, it is necessary to keep it regulated and under control in order to have a positive commercial balance.

For this reason, we can say that monetary policy (which nowadays is restricted due to the fact that Belgium is in the Euro Zone), though a very important mechanism to regulate macroeconomic variables, was not used intensively in the case of Belgium, since they preferred to keep the currency under control to prevent huge commercial imbalances among other reasons.


  1. Market watch. (1 de November de 2018). Gold settles at a more than 3-month high a day after posting a 3-week low. Obtenido de Market watch: https://www.marketwatch.com/story/gold-rallies-from-three-week-low-as-dollar-index-sinks-2018-11-01
  2. Daily Pioneer. (14 de July de 2017). India’s June exports rise by over 4%. Obtenido de Daily Pioneer: http://energolife.info/ua/2017/Business/5557/%D0%92%D0%B8%D0%B7%D0%BD%D0%B0%D1%87%D0%B8%D0%BB%D0%B8–%D0%BD%D0%B0%D0%B9%D0%BA%D1%80%D0%B0%D1%89%D1%96-%D0%B4%D0%BB%D1%8F-%D0%B5%D0%BA%D1%81%D0%BF%D0%BE%D1%80%D1%82%D1%83-%D0%BA%D1%80%D0%B0%D1%97%D0%BD%D0%B8.
  3. Murphy, A. B., Van der Wee, H. F., Doucy, A. J., Lamberts, E. L., Materné, J. M., Van Molle, L., & Britannica, T. E. (2018, December 10). Encyclopædia Britannica. Retrieved from Belgium: https://www.britannica.com/place/Belgium/Belgium-and-World-War-I


  1. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press.




Belgium occupies a very small territory in comparison to other States, but that is not related to its Balance of Payments. Like many other small countries in Western Europe (such as Switzerland), exports and imports have a great importance in Belgian economy. Many economic studies have tried to show the relation between the size of these States and their Balance of Payments.

(The Nation)


This article will try to give a quick overview of Belgium’s Balance of Payments situation throughout the XX th century.




The composition of Belgium’s exports is closely related to its economic structure. Belgium is characterized for the production of semi-finished goods. In order to do this it needs to import raw materials and energy, which it lacks, specially since the independence of the Congo (for further information see: 1.4. BELGIAN COLONIALISM AND THE INDEPENDENCE OF THE CONGO). In terms of exportations, it exports the products it has transformed into semi-finished goods, charging for the value added through the process of transformation.

During the golden sixties, there was a recovery in the Balance of Payments. This recovery leads to a downfall due to the oil shock of 1973 in the year 1980, where it had the worst result of the period.

However, the 1980’s were very positive in terms of exports and imports. This upward trend is owed to the efforts made by the government to improve the balance of payments. In 2008, the crisis ends with this commercial growth (see graph below).

After Belgium’s incorporation to the EU, Belgium’s trade balance has changed. However, it has not changed that much in terms of numerical increases, but in terms of distribution. It now shares a more commercial relation with the EU members than it did before, but the amount of total exports and imports has not drastically changed.

Resultado de imagen de balance des paiements belge

(Actualitix, 2016)

In this graph from Actualitix, we can see the evolution of the Belgian Balance of Payments. It has had a negative balance from 1980 until 1984. However, after that it started increasing until the end of the XX th century. In the following century we can highlight the downfall in 2008 due to the Crisis of 2008, a moderate recovery in 2010, and a continuous growth path from 2014 onwards.


  1. Actualitix: https://fr.actualitix.com/pays/bel/belgique-balance-des-paiements-pib.php
  2. Kundi, I. A. (19 de May de 2017). Govt to miss exports, imports, CAD targets. Obtenido de The Nation: https://nation.com.pk/19-May-2017/govt-to-miss-exports-imports-cad-targets


Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


The Golden sixties crowned Belgium as one of the economies with more merit within the international plane: Belgium had got neither raw materials nor an export agriculture, but its power during the industrialization process was the key for its achievements.

(Foundations of Western Europe, s.f.)

However, the 1970’s radically changed the situation. In 1973 the oil shock affected all European countries in great measure. Due to Belgium’s dependence on other countries, its exports fell by 11%, which caused a deceleration of its economic growth.(for further information: 2.2. GOLDEN SIXTIES) This resulted in a disequilibrium of the economy.



(Macalister, 2011)

This was one of the worst periods for the country’s economy, which worsened its position in the international plane.

According to ‘Economic Growth in Europe since 1945‘, we can divide this period of crisis into two periods, one in which the disequilibria of the economy worsened, and one in which the government tried to take hold of the situation and stop the crisis through several policies.

This first period lasted all of the 1970’s. Due to the oil shock, energy prices started to rise. The domestic economy, which was not involved in the international plane, was not as affected by this as the domestic economy, which was open to other economies. That is because the open economies had to compete in the international market and could not regulate the prices of their goods, while the firms which were not internationally open were able to regulate the price of their products in order to keep their profit as before the prices rose.

The second period comprised the 80’s decade. This period was based on the prevention of the expansion of the crisis. For this reason, the government applied several strategies and policies, such as the devaluation of the franc or the reduction of public employment. These measures contributed to the recovery of the country, but did not manage to increase the economic growth rate.  

Captura de pantalla 2018-12-11 15.13.20

(Centre for Economic Policy Research, 1996)

  • As we can see in the following table, the macroeconomic data of the decade known as the ‘Golden Sixties’, are, overall, higher than in any other period; it is subdivided into (1960-1967) and (1967-1974).
  • All of the macroeconomic variables move more or less together; when we  move to another economic period, they either increase altogether, or decrease altogether, with very few exceptions. The magnitude of these increases/decreases, however, is different. In this table, two economic periods are represented, both the Golden Sixties, and the Leaden Seventies and Eighties.
    • The great downfall in exports from the (1967-1974) period to the (1974-1981) period. These results of the Exports growth are the highest and the second lowest of the economic period (10.78; 4.39). This is due to the effects of the oil crisis in Belgium’s foreign demand for domestic goods.


  1. Foundations of Western Europe. (s.f.). The Beginning of Industrialization in Britain. Obtenido de Foundations of Western Europe: http://foundations.uwgb.org/cause-and-effect/
  2. Macalister, T. (3 de March de 2011). Background: What caused the 1970s oil price shock? The Guardian.
  3. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


  1. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


During the 1960’s, Belgium’s growth reached its maximum peak within the century. This was thanks to many factors.

(Kegels, 2015)

In this graph we can visually represent the growth rate of the GDP per capita throughout the second half of the XX th century. As we can see, the Real GDP per capita grew a lot between 1961 and 1964 before it started to fall.

  • It recovered during the second half of the decade, until it reached its peak in the period 1968-1969. However, this peak led to a drastic fall, which was probably caused due to several economic factors, the main one being the oil crisis.
  • During the 1980’s, as can be seen in the article regarding this economic period, the Economy of Belgium tried to recover from the downfall, which is the reason why there are a lot of fluctuations but without great deviations from the trend.

In 1993 we can see that the growth decreases greatly, which is probably related to the tense social climate at the time, due to the modification of the Belgian Constitution. After this downfall, the growth rate has recovered, with the exception of the year 2009, which is exactly one year after the 2008 crisis which affected most States.

Firstly, output growth accelerated; labor and capital became really efficient; investment increased, starring a boom in this decade; and the openness of the economy, which led to a high level of exports, also contributed to this golden period.

Regarding the last factor, the performance on international markets led to a division of Belgian sectors: the open sector, which was the manufacturer sector and was dedicated to the transformation of raw materials, and the sheltered sector, which included construction, transport and services sectors.

Moreover, there was an increase in government spending which led to a higher control by the government. The Belgian State expected to control that high level of spending. However, it was forced to borrow through the School Pact of 1958.

A main characteristic of this period is the high dynamism of the Belgian economy. This was thanks to its membership of the EEC, which supposed an abolition of all the barriers that the country had had to face in previous periods.

Besides, there was an exponential increase of foreign investment in Flanders, leading to an increase in output and income in this region. The opposite happened with Wallonia, which was hardly damaged by the Belgian adherence to the ECSC. This was because the organization forced Belgium to reduce the production of coal.

In 1959, the Expansion Laws were created in order to stimulate inward and domestic investment through the guarantee of loans and interest subsidies among other facts.

In relation to the labor market, there were an increase in negotiations between trade unions and employers. Consequently, there was an increase in social security development. Furthermore, all the factors explained before contributed to a decrease in unemployment, something which enhanced the bargain power of employees, who achieved an increase in wages.

Captura de pantalla 2018-12-11 15.13.47

(Centre for Economic Policy Research, 1996)

In this graph we can see the division between the open and sheltered sectors of the economy, and we can see that the growth rate of output during the golden sixties affected both sectors, but had a greater impact in the Open one.

  • The most interesting fact about this graph is how the Open sector is severely changed when other States were affected by a specific event. As an example, if we look at the years of the oil crisis, more specifically at the years 1974-1976, we can see that the Sheltered sector had minor fluctuations while the Open sector suffered greatly, reaching its worse economic growth rate in the period.

In conclusion, we can say that thanks to these factors, the economy of Belgium excelled during this period. However, it does not imply that the economy of the country continued with this growth trend, as demonstrated by the analysis of the graphs. For further information: 2.3. OIL CRISIS


  1. Kegels, B. B. (2015). Labour productivity growth in Belgium . Brussels: Federal Planning Bureau. Obtenido de https://www.plan.be/admin/uploaded/201510021314080.WP_1506_11090.pdf
  2. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


  1. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


During the 1930’s, Belgium suffered an economic depression in which economic growth was very low, due to a very small variation in output. However, the most important factor was that Belgium’s adherence to gold started having negative consequences, which led to the abandonment of this system. This was due to two facts: The crack of the stock market of 1929 and that Britain left the Gold Standard earlier than Belgium.

It did have certain good structural factors which aided future economic growth: the development of human capital (through an increase in scholarization), and the incorporation of the socialist government in 1935, which tried to apply policies to regulate the situation, and a stable foreign exchange position.

The 1940’s in Belgium, more known as the Belgian miracle, are characterized by the good economic position of the country. This good position meant that Belgium hardly needed aid from the Marshall Plan (initially).  

Domestic production was really high, due to the fact that it satisfied the postwar demand through the sale of coal, metal, glass or cement (among other resources).

(Public domain)

In order not to lose control over the currency, the interest rate was high. This also prevented  industrial borrowing.

During this decade, energy and labor costs (both wages and Social Security costs) for firms started increasing. The recovery of the rest of Europe from World War Two meant that Belgium’s demand started falling, and its economy could not face this increasing costs.

(Pahissa, 2018)

However, over 1950 (the silver fifties), the country needed to ask for direct aid in order to finance consumption and production and to maintain social peace. This aid ended up going almost entirely to  the coal sector, because it favored the economy in the short-term and kept the population satisfied, and did not go to long-term economic measures such as financing investment.


The 1950’s were a time of economic splendor for Belgium (not as big as during the 1960’s), since the economy started opening up more to trade, savings increased, and the first international Belgian companies started emerging and investing in the Congo.

However, the region of Wallonia started losing economic stability due to the downfall of the coal industry, and the government was not able to attend to economic matters since it had to deal with the royal and scholar question during this decade, which could explain why the economy did not grow as much as it did during the 1960’s.


  1. Pahissa, E. (2018, May 25). MEJORA TU COMPETITIVIDAD DE LA MANO DE UNA STARTUP: NUEVOS MODELOS COLABORATIVOS EN ENTORNOS INDUSTRIALES. Retrieved from Amec: http://www.amec.es/evento/mejora-competitividad-la-mano-una-startup-nuevos-modelos-colaborativos-entornos-industriales/


  1. Centre for Economic Policy Research. (1996). Economic Growth in Europe Since 1945.Cambridge; New York; Melbourne: Cambridge University Press


  1. Murphy, A. B., Van der Wee, H. F., Doucy, A. J., Lamberts, E. L., Materné, J. M., Van Molle, L., & Britannica, T. E. (2018, December 10). Encyclopædia Britannica. Retrieved from Belgium: https://www.britannica.com/place/Belgium/Belgium-and-World-War-I


Belgium has become a very important State regarding International Law for its active participation in many International Organizations.

Before Brussels became the headquarters to the European Union, Belgium was also a relevant Member State of NATO, Euratom, and the ECSC.


NATO: The NATO (North Atlantic Treaty Organization) was created through the ratification of the North Atlantic Treaty in 1949. Belgium was one of its 10 founding members. To this day, Belgium has continued supporting the NATO and its core objectives, which include the promotion of peace and stability among its members, through the handling of crisis, the mutual defense of its members, and the cooperation in the area of international protection.

Its headquarters were originally established in London, but they were transferred to Paris in 1952. However, since France withdrew from the military structure in 1966, the headquarters is settled in Belgium.

  • ECSC. The European Coal and Steel Community was created in 1951 through the Treaty of Paris and Belgium was one of its original members. All of the members of the Benelux joined the ECSC. Its main objective was: ‘to supervise its members reduction of their excess production of coal as that mineral was replaced by petroleum as an industrial fuel’ since 1962. However, its original objective was ‘to create a common market for coal and steel’ for its Member States. (The Editors of Encyclopædia Britannica, 2016)

Given the importance of the coal industry in Belgium, it originally was one of the members which generated a lot of output, which was specially notorious after the Second World War. However, it forced the region of Wallonia to decrease the production of coal during the 1960’s, which damaged the economy of the region.

  • Euratom 2_0
    (European Commission)

    Euratom: The European Atomic Energy Community was created in 1957 through the Euratom Treaty. It was established by the ECSC. It is an International Organization which establishes a common market for nuclear resources. Since nowadays it is regulated by the EU organs, Belgium also plays an important role in the organization, and it was one of its founding members. It also tries to ensure the ‘secure access to nuclear materials and technology for peaceful uses and research.’ (Institute for Government, n.d.)

  • EEC: The European Economic Community was also created in 1957 by the Treaty of Rome. All the topics which this organization is  involved in are related to economy. Among its objectives we can point out the establishment of a common market, fixing a common tariff, and a shared agricultural policy. After the signature of the Treaty of Maastricht in 1992, this organization was renamed as the European Commission (EC). This year, The ECSC, Euratom and EC (previously ECC) became components of the new EU.


  1. European Commission. (n.d.). Euratom. Retrieved December 2018, from European Commission: https://ec.europa.eu/programmes/horizon2020/en/h2020-section/euratom#Article
  2. NATO. (n.d.). Retrieved from North Atlantic Treaty Organization: https://www.nato.int/


  1. Leboutte, R. (2017). 14 Coal Mining, Foreign Workers and Mine Safety: Steps towards European Integration, 1946-85. In A. Croll, Towards a Comparative History of Coalfield Societies. Routledge.


  1. Institute for Government. (n.d.). Euratom. Retrieved December 2018, from Institute for Government: https://www.instituteforgovernment.org.uk/explainers/euratom


  1. Institute for Government. (n.d.). Euratom. Retrieved December 2018, from Institute for Government: https://www.instituteforgovernment.org.uk/explainers/euratom
  2. Gabel, M. (2018, September). European Community. Retrieved from Encyclopædia Britannica: https://www.britannica.com/topic/European-Community-European-economic-association
  3. The Editors of Encyclopædia Britannica. (2016, March 15). European Coal and Steel Community. Retrieved from Encyclopædia Britannica: https://www.britannica.com/topic/European-Coal-and-Steel-Community


The European Union is an integration International Organization which derives from the ECSC, Euratom and the EC, and originated to promote peace, stability and cooperation among European States. Its implications have been vast, since it has implied the establishment of an area of free movement of people, capital, and labor, and the creation of the Eurozone, an area in which States share a common currency, among other things.

(Public domain)


As a member, Belgium received in 2017 7.3 million € from the EU, and its contribution to the EU was of 2.9 million €. It became part of the Euro-zone in 1999, and its commercial structure has been transformed radically since it became a member of the EU.


However, this article focuses on the implications the EU has had in Belgium, more specifically in Brussels. Brussels is known globally for being the headquarters to the European Union. The impact that this has had in the region of Brussels is immense.

Brussels is the capital of Belgium and the de facto capital of the European Union. Its main organs are situated there. Given these characteristics, it is logical that it is a very cosmopolitan city and metropoli.

(Public domain)

As a curiosity, we can see that both the old (second flag) and new flag (first flag) of Brussels share the color palette of the EU flag (navy blue and yellow), which helps symbolize that Brussels is its de facto capital

If we look at its labor structure, we can see that Brussels has followed the tendency of tertiarization of the economy, since nowadays, as of 2016, 90.5% of its economic structure is associated to third sector activities. The population of the Brussels-Capital region in 2015 was of 1,175,173 residents, of which the 33% had a different nationality from the Belgian one.

Specifically in the Brussels-Capital region, 14.5% of those jobs were related to public administration, 9.3% were related to commerce, and 7.5% to administrative and support services. This is a consequence of Brussels being de facto capital of the EU and being a capital of the State. However, if we account for the percentage of workers which work in international institutions, it corresponds to 16.7% of the employment of the region, which is equivalent to 121,000 job positions.


(Public domain)

Some of the buildings of the  European Parliament, the European Commission, the Council of the European Union and the European Council are located in Brussels, which is why we say that Brussels is the European Union’s de facto capital.

This data allows us to see numerically the impact that the EU has had not only in Brussels, but in the region of Brussels. Thanks to the installation of headquarters in Brussels, its economy has developed and transformed, which has also modified the economic progress of Belgium.


  1.  Brussels.info. (s.f.). European Institutions in Brussels. Obtenido de Brussels.info: https://www.brussels.info/institutions/
  2. Commissioner Brussels. (n.d.). BRUSSELS-EUROPE, THE FIGURES 2016. Retrieved from Commissioner Brussels: http://www.commissioner.brussels/i-am-an-expat/news/item/625-brussels-europe-in-figures
  3. McNally, P. (2016, January 13). Brussels by numbers: Facts and figures for a truly international city. Retrieved from The Bulletin: https://www.thebulletin.be/brussels-numbers-facts-and-figures-truly-international-city
  4. Wikipedia, the free encyclopedia. (21 de September de 2018). Brussels and the European Union. Obtenido de Wikipedia, the free encyclopedia: https://en.wikipedia.org/wiki/Brussels_and_the_European_Union