IV.  POLITICAL ENVIRONMENT:

Since 1830, Belgium has been a hereditary and constitutional monarchy.  In
1993, hundreds of thousands of Belgians mourned the death of King Baudoin,
who had ruled the country for forty three years.  The monarchy remains a
symbol of Belgian unity, and the government moved quickly to invest King
Baudoin's brother as Albert II.  The King, Prime Minister, and Cabinet
represent the executive branch, with the Senate and House of
Representatives representing the legislative branch.  The Cabinet must
retain parliamentary support to remain in power.  Parliamentary elections
are held every four years or before that when the government loses
parliamentary support and no alternative coalition can be formed.  There
is universal suffrage, with obligatory voting and proportional
representation.  Governments are usually coalitions comprising two or
three of the traditional parties - the Christian Democrats (center), the
Socialists (left wing), and the Liberals (right wing.)  Elections were
last held in November 1991, with no party gaining a majority.

The current government is a coalition of Christian Democrats and
Socialists, with periodic support on certain issues from the green and
other small parties.  Consequently, the government is a relatively weak
one, although in recent months it has survived several critical tests over
austerity measures, environmental issues, and constitutional reform.
Despite this weakness, there seems to be strong across-the-board political
support for governmental budget actions which will prepare Belgium to join
the European Monetary Union by 1997.  Naturally, that support can easily
dissipate when particular measures are proposed which hurt, for example,
labor union members.

The most significant and long-term factor in Belgian politics is the
gradual devolution of powers from the central authority to the regions.
In the new federal structure, which was approved during the summer of
1993, sovereignty is spread over three policy authorities: the central
state, the regions, and the communities.  There is no hierarchy between
these policy levels.  Each of the three levels of authority has its own
exclusive powers and is not allowed to interfere in matters under the
jurisdiction of the others.  Increasingly, Belgian politicians and
political parties are in favor of devolving even more powers to the
regions and communities.

The regions are Flanders (northern Dutch-speaking part of Belgium),
Wallonia (southern French-speaking area) and Brussels (the capital region
limited to 19 communes which are bilingual.)  Each region is responsible
for a wide range of socio-economic matters on its own territory.  Elected
regional assemblies for Flanders, Wallonia and Brussels, each with their
own executive councils, exercise legislative power, whereas executive
authority is exercised by the regional executive or the regional
government.  Under the evolving federal system, the responsibility for
areas of interest to U.S. business - such as foreign trade, environment,
investment regimes, and incentives - will increasingly become the
responsibility of the regional governments.  This devolution means that
Americans wishing to do business in Belgium may have more contact with
regional officials than in the past.

U.S./BELGIAN RELATIONS:

U.S.-Belgian bilateral relations are excellent.  Active in international
diplomacy with regard to Eastern Europe, Africa, and the Middle East,
Belgium is a close ally and works with the United States on many
international issues.  Successive Belgian governments have been committed
to the development of a strong, federal European Union with the ability to
set common foreign and security policies as well as common economic
policies.  These governments have also been proponents of strong
transatlantic ties within NATO.  Belgium is home to the European Union,
NATO, WEU, and over 100 other international organizations.  Belgium is a
substantial aid donor and provider of peacekeeping troops.  As a member of
the IMF Executive Board, the G-10, NATO, the UN, EU, WEU, and a new member
of the EUROCORPS, Belgium wields significant weight in world affairs.