Flemish holdings on a short leash
Today the Flemish Parliament will learn its lessons from the liquidation of the Municipal Holding, the investment vehicle of Belgian cities and municipalities, and one of the major shareholders of the dismantled bank insurer Dexia, which has since split into Dexia Holdings with its portfolio of loans and bonds, and the nationalised bank and insurer Belfius. To prevent this or anything worse from happening again, Flemish political parties have drafted a series of ‘policy recommendations’ with the intention of compiling a joint list by 23 May. According to the Flemish Nationalist majority party N-VA, local authorities should no longer be allowed to participate in purely commercial enterprises as the prospect of a dividend leads politicians to conduct a ‘short-term’ policy which can ‘threaten survival in the long term’. The party is however willing to make an exception for public investments in businesses that fulfil a ‘policy assignment’ such as public utilities. The party moreover feels that government bodies that save a ‘systemic business’ should enjoy ‘proper’ power in the board of directors and not only play the role of observer. CD&V, the party of Flemish Minster-president Kris Peeters, understands that the government of Flanders supports systemic businesses if necessary, but his party believes that in future such investments should occur in Flanders ‘as a matter of priority more than in Belgian umbrella holdings’. Moreover the party would like to clearly determine the role and mandate of government commissioners acting on behalf of the government. “Boards of directors should consist of experts in their field,” the SP.A believes. To this end the party advocates a ‘stronger organisation, with independent directors’. The socialists do not believe the Municipal Holding did the right thing to borrow from Dexia while being shareholder in the bank insurer at the same time. The environmental party Groen believes a debacle such as the liquidation of the Holding could be prevented if the observer’s statute were clearly outlined. The observer which sat on the board of directors on behalf of the government of Flanders was supposed to ‘give a proper view of the situation in the Municipal Holding’, but failed to do so. The liberal Open VLD party sees no reason for local authorities to be involved ‘in the capital structure of risky economic activities’ and ‘in the banking sector’ and consequently proposes an ‘exit scenario’. The party further believes ‘shareholdership in utility industries’ should be evaluated. The rightwing liberal LDD believe it is essential that ‘the financial expertise of representatives of the government of Flanders be assessed’.