Lack of government to enact austerity measures boosts Belgium's economy

[muriel_volestrangler]

Belgian growth boosted by political paralysis

Belgium stood out as one of the strongest performers in Tuesday’s mixed bag of eurozone data – but it may have been for the wrong reasons.

Economists say that its 0.7 per cent quarter-on-quarter boost in gross domestic product was caused at least in part by the political paralysis that has gripped the country in the past 15 months, during which it has been run by a caretaker government.

In the absence of political leadership, Belgium has been among the few European countries not to enact meaningful austerity measures, despite a public debt which is just short of 100 per cent of its GDP.

By contrast, neighbouring governments have cut large swaths of public spending or pushed through tax rises, which stymie domestic demand and slow the economy down in the short term.

http://www.ft.com/cms/s/0/4267fb00-c819-11e0-9501-00144feabdc0.html

It is, of course, a matter of opinion if it is 'for the wrong reasons'. But it's a simple demonstration of how austerity harms an economy only just out of recession.