An SMS from Ernst (14): Short Messages Services

Finally political hope for Belgium: Millstone issue Brussels-Halle-Vilvoorde seems finally solved

A few months ago, I wrote on the awkward political situation in the friendly country of Belgium in my article: Why is Belgium a failed state….

Belgium is currently already 15 months without a real government, as every attempt from every party (Wallonic or French-speaking as well as Flemish or Dutch-speaking) to form a new government, was shipwrecked, due to the issue around Brussels-Halle-Vilvoorde (BHV). This question is like a festering wound that is dividing Belgium already for more than 50 years. As the representation of the BHV-issue in my earlier blog was not accurate, I will retry to explain this situation :

Brussels-Halle-Vilvoorde is a region around the capital of Belgium. While Brussels is a bilingual city where French and Dutch speaking aldermen can be elected, the small villages Halle and Vilvoorde were meant to be exclusively Flemish territory.

However, when Wallonic citizens of Brussels started to live outside the city in the Flemish villages Halle and Vilvoorde, they were still able to choose for French-speaking aldermen, as these could be elected within the whole BHV-region. Thus, Halle and Vilvoorde were silently assimilated within the French-speaking part of the country. This angered the Flemish inhabitants and aldermen of Halle and Vilvoorde. The argument about this region was already going on for more than 50 years.

I am truly happy to announce that yesterday, politicians from eight parties under leadership of Wallonic Candidate Prime-Minister Elio di Rupo, found a solution for Brussels-Halle-Vilvoorde.

The region will probably split up into two regions: the region Brussels where French and Dutch aldermen can be chosen by the bilingual population and the region Halle-Vilvoorde where only Dutch-speaking representatives can be chosen by the dominantly Dutch-speaking population. The French-speaking minority of Halle-Vilvoorde can’t anymore choose for French-speaking representatives. Thus, the mentioned assimilation of Halle and Vilvoorde with the French-speaking part of the country is prevented.

Belgian Luc van der Kelen of the Flemish newspaper Het Laatste Nieuws (‘the latest news’) stated on Business News Radio (www.bnr.nl)  this morning that there might now be a new government before 11 October, as this is an important day in the Belgian parlementary year.

The deal around Brussels-Halle-Vilvoorde surely doesn’t sound like an easy deal. However, you should remember that nothing is easy in this extremely divided and very politicized land. And as this deal frees Belgium from its 50-y millstone, I applaud it.

New cutbacks in  The Netherlands

While better times seem to be ahead for Belgium, in its neighbor country The Netherlands the government must be preparing for economic headwinds.

In the latest data of the Central Planning Bureau (http://www.cpb.nl/) that are stored in the Macro-Economic Outlook (MEV) and that were not disclosed yet by RTL News, the CPB sends the following message to the cabinet:

In case of a new economic crisis (‘double dip’), the Cabinet of Prime-Minister Mark Rutte has to carry through €5 bln in extra cutbacks on top of the €18 bln in cutbacks that were already planned.

This was stated today by Dutch newspaper De Telegraaf (www.telegraaf.nl).

Where the United States try to save the economy by letting the money printing press roll and hoping for the best, the Dutch government always tries to save the economy by choking it almost to death with cutbacks upon cutbacks. This leaves the Dutch citizen no other choice then to put their savings at the bank for a rainy day, instead of spending it.

The result of this politics in The Netherlands is anemic growth of domestic consumption that can only be compensated by the soaring exports of products. This policy makes The Netherlands a copy of ‘China’ in the Euro-zone.

It leaves no doubt that both the US and Dutch policies are failed policies. In general, the US spend too much money and the Dutch spend too little. As the US cannot spend its way out of a crisis, the Dutch cannot cutback their way out of a crisis. But unfortunately, these are exactly the policies that will be followed to the last letter by both countries.

Costs of healthcare will soar in The Netherlands

As a textbook example on the last paragraph, the following news came through in the Dutch newspaper Het Algemeen Dagblad (www.ad.nl) writes on soaring healthcare costs in 2012. Here are the pertinent snips:

In 2012 healthcare costs will soar for the medium and higher incomes (link in Dutch)

The height of the healthcare subsidy will decrease substantially next year. The lower incomes will be spared, while medium and higher incomes must pay hundreds of extra Euro’s in healthcare premiums. This is disclosed in the cabinet plans for ‘Prinsjesdag’ (third Tuesday of September; opening Dutch parliamentary year).

Families with a modal income would in 2012 receive €160 less in healthcare subsidy. Singles would receive €100 less. Pairs with a minimum income would jointly receive €100 less and singles with a minimum income €40 less.

Besides that, medium and higher incomes will probably pay hundreds of euro’s more in healthcare premium in 2012. Who earns more than €37,000 in gross salary per year, must pay up to €1000 extra in healthcare premium.

The old Dutch healthcare system (before 2006) existed of semi-government health insurance funds for low and medium incomes and commercial insurance companies for higher incomes.  5 years ago this adequately working system reformed to a system where commercial insurance companies offered health insurances for everybody. All different medical therapies and treatments were accounted for by means of diagnosis-therapy-codes (DBC’s), that would make the costs of healthcare more transparant and eventually less expensive: the so-called Swiss Model. Experts warned at the time that the premiums would soar in a number of years.

Now we are five years further in time and the premiums have… soared. And of course you can righteously say, that this is also due to the strongly aging population that brings soaring costs of health.

However, a strong influence of the new healthcare system is clearly visible in the increased healthcare costs. This is due to the need of commercial insurance companies to heavily invest in advertisements and to make profits and also due to the failing system of the enigmatic and opaque diagnosis-therapy codes.

In The Netherlands attempts to save costs by reorganizing existing policies, often culminate in an explosion of extra costs. The healthcare is sadly no exception. And the final result will be that the Dutch citizens have even less money to spend for consumption.

Opel and General Motors: you can’t teach an old dog new tricks

The German car brand Opel, a full subsidiary of US-based General Motors, is like an old dog that you can’t teach new tricks.

The brand was clinging on to life by the skin of its teeth in 2009. Hundreds of millions in German government subsidies were necessary to keep the brand Opel afloat, combined with the billions of US government subsidies to keep General Motors and GMAC afloat.

You would think that the business model of Opel, GM and GMAC, where zero interest loans, all sorts of discounts and all kinds of free extra’s were offered to potential customers, was not a succesfull business model.

But this morning I heard the new radio commercial of Opel on Business News Radio (www.bnr.nl).

“Buy now an Opel and receive a 5-yr zero interest loan and 5 years of no charge-maintenance for free on all models”. 

You can’t teach an old dog new tricks indeed… Think of this when you consider buying shares or bonds in GM and GMAC. You can’t say I didn’t warn you!