… a crucial instrument to guarantee a fair contribution from the financial sector to the cost of the financial crisis.

The initiative is not unprecedented. The European Commission already proposed a duty on transactions involving shares, derivatives and other financial products last September, which met with immediate opposition from the United Kingdom and Sweden. This time around, the ministers point out that they are willing to seek “alternatives” if a solution has not been planned within the next six months – a remark, which SZ believes is evidence of an important development "if you read between the lines” –

The nine signatories send a very clear message: we can go it alone. [According to the provisions of EU treaties] states can enter into agreement for reinforced cooperation if they come together in a group of no less than nine. That is why this short letter reads almost like a heavy-handed threat to colleagues who have yet to make up their minds. All those concerned have been warned: the overwhelming likelihood is that the tax will be introduced.

Finally the daily notes that the letter will also have an internal impact on signatory countries, notably France and Germany: it will enable Nicolas Sarkozy to aspire to more votes in presidential elections in April and May, and give Angela Merkel something to offer the Geman opposition, which made the introduction of a Tobin tax a condition for its endorsement of the fiscal compact.

Le Soir reports that the liberal Belgian representative believes that this “invitation to act as an informer” is in breach of the EU Charter of Fundamental Rights and the Belgian constitution. The Brussels daily evokes the anger of Francophone politicians, who deplore:

... the linguistic intransigence of Flemish authorities (Grimbergen is one of many cases) that, in their bid to combat a decline in the use of Dutch in municipalities around Brussels, have resorted to measures that are anti-constitutional. Article 30 of the country’s constitution stipulates that outside of matters involving public administration and the law, the choice of language is determined by individual preference.

What appears to be a majority of the members of the Flanders regional parliament supports the measure established by Marleen Mertens, Grimbergen’s CD&V burgomeister. In an interview with Le Soir, she argues that the initiative is “absolutely normal” :

If I travel to Wallonia, I use French when shopping. The same applies in Flanders. It’s a language exercise. It encourages people to use Dutch to facilitate their integration.

Rival daily De Morgen enthusiastically remarks that Belgians will no longer “have to explain an incomprehensible situation to non-Belgians: why, in the heart of Europe,  so much energy has been wasted on an ‘excessively charged’ linguistic conflict.” As for the Prime Minister, “the least that can be said is that hopes in Di Rupo are not riding high,” because the new government leader “will do more than any other to put the brakes on socio-economic reforms.”

In the Francophone press, La Libre Belgique shares the point of view voiced by De Standaard, while Le Soir welcomes with “hope but also with realism” the new government made up of 12 ministers (6 Flemings and 6 Francophones) and nine secretaries of state, which is mainly composed of liberals:

The initial reaction is an immense sigh of relief, now that Belgium has found a way out of the most profound crisis in its history. However, this is followed by a touch of annoyance: how did it take them 20 hours to share out 18 ministerial portfolios? [the final count is: one Prime Minister, six Francophone ministers, six Flemish Ministers and six secretaries of state] [...]

Do we have to remind these 13 men and six women who are going to reform the country that time is running out. Two and half years is a very short period in which to clean up public finances, adapt our socio-economic model to the realities of the 21st century and implement the reform of the state. Suffice it to say that if each decision results in a one or more sleepless nights for the Di Rupo government, failure will be inevitable.

Last week, the Belgian government, which has had to contend with an abrupt increase in the cost of obtaining finance from the markets, launched a well-advertised campaign to sell government bonds to the country’s population. […] At the height of the political crisis, the main goal of the exercise was to demonstrate the unity of the Belgian population to the markets.

For La Libre Belgique, which leads with the front-page headline, “Government bonds: everyone wants the five-year issue,” the initiative has been a “heaven-sent” success. The newspaper enthusiastically points out that the threshold of two billion invested is now in sight, and notes that it is the five-year government bond, offering a 4% rate of interest, which has proved to be the most successful. La Libre adds that the issue, launched on the 24, 25 and 28 of November “was boosted by a call for Belgians to save voiced by Prime Minister Yves Leterme who tendered his resignation in 2008.”

In Italy, Corriere della Sera reports that “BTP day” (government bonds day), which was held on 28 November, was a major success in the drive to combat speculation. With yields of more than 7%, the three- and ten-year bonds offered attractive terms, and the initiative was facilitated by the banks’ decision to cut commission costs. “The goal is to send a strong message of commitment,” commented the Italian bankers association (ABI), quoted by the Milan daily. The purchase of bonds by private individuals "can be seen as an important demonstration of the confidence Italians still have in their country." A further “BTP day” is planned for 12 December.

However, in France, which runs the risk of losing its AAA rating, the population appears reluctant to fly to the rescue of the country’s finances, reports La Tribune. According to a survey conducted by Harris Interactive JOL Press, less than a third of respondents said they were ready to buy French debt offered at rates equivalent to those available on the markets:

We might have assumed, amid an atmosphere of national crisis marked by the President and the Prime Minister’s constant references to 1945 and the "war" against the markets, that the French population would be more motivated. Exit the hope of a major bond sale to the people, which Nicolas Sarkozy momentarily seemed to favour last year...

The French business paper worries about the “difficult realities” of the country’s situation: “as a group the French spend more than they produce.”

The Brussels daily explains that the report deals with Europe in general and is not exclusively focused on Belgium. For example, it points out that "without a convincing response to the euro crisis, the economic situation of the EU will deterioriate rapidly" – an observation which highlights the fact that time is running out for Belgium, which has been without a government for almost 18 months.

The political crisis also affects the conomy, adds De Morgen: the yield on Belgian debt has continued to climb and now exceeds 5% – a situation judged to be “worrying” by Anne Leclercq of the national Debt Agency. According to Leclerq, "last month, we were pulled down by France. When the country came under pressure on financial markets, we were contaminated too."

This is a concern that is shared by columnist Yves Desmet, who wonders if a pure and simple form of European tutelage would not be the best the solution to the Belgian political crisis: "every day, our politicians demonstrate their incompetence in the fine art of taking democratic decisions: that is, making compromises. If no one in this country is able to see beyond the interests of his party, then it might be an idea to place Belgium under the tutelage of the European Commission."

Coming hard on the heels of the Dexia affair, the shut-down of Liège  is a “hard return to reality,” notes the editor of Le Soir, Béatrice Delvaux: “This Belgium, cut off from the world, was living as if our only problems on earth were how to split up a district [the BHV] and how to protect the Flemings from having to live with Francophones…. With Dexia, we are victims of a rogue financial capitalism that has lived off of bubbles, lies and deceptions and that has suddenly lost its footing.  With Arcelor, we are being hit by the polar shift in growth around the world: an Indian group, capitalist after our own fashion, decided to wipe us off its map of production plants. A country that is booming is bypassing a country sunk into decadence.”

We knew that Dexia was a zombie bank, which was faced with deep structural challenges. An unbalanced Franco-Belgian marriage that was too vulnerable to the vicissitudes of the interbank market to be safe. A bank whose healthier businesses […] would never have encountered any problems if the rules of the game had been respected. […] Dexia is only the tip of the iceberg. Since the start of the banking crisis, all we have done is to reassign financial institutions’ debts to governments. To avoid a systemic crisis, we tried to spare banks and their shareholders, in the hope that a massive influx of cheap money would give banks sufficent time to reinforce their capital structure. [...] We have come as far as we can with this, and the next part of the story is going to be written in blood red ink.

How did it come to this? Having borrowed on cheap short-term markets to offer more expensive long-term finance in the form of toxic financial products, Dexia embarked on "a frenzy of acquisitions, buying up business and even portfolios of businesses. In Spain, Italy, Japan and the United States… it bought wherever it could," points out Le Figaro. in so doing, Dexia created “a monstrous speculative position on lending rates.” In October 2008, Dexia, like "a hormone doped bullock, was taken by surprise," writes the daily. And the Eurozone crisis has finally caused the collapse of what was an extremely fragile edifice, but fortunately a “very rare” one.

For Les Echos, the restructuring of Dexia will have a major impact on the credibility of the member states concerned:

No matter how grave its past sins, the Dexia scandal could have been resolved three years ago. For that, the French and Belgian states would have had to take the knife out in 2008. But they preferred to give more and more time, and they were not alone in this approach. Several European states adopted a similar strategy. Three years down the line, most of these institutions (in countries like Spain, Germany, and Italy...) have yet to recover. They survive like zombies feeding on credit from the ECB, and undermine confidence in the entire European banking sector. . […] And the problem is that in the meantime, the financial crisis has become a sovereign debt crisis. Today we are not simply faced with need to restructure the banking sector, because the market credibility of sovereign states is now at stake.

"Dexia shows what's in store for European banks," writes Cinco Días. For the Spanish business daily:

Far from being an isolated case, Dexia has become the first visible victim of the serious structural damage to European financial institutions caused by the sovereign debt crisis. The fact that it passed last summer’s stress tests without incident is not only proof of the unreliability of the tests, but also — and more importantly — of the major changes that have emerged in the “photo portrait” of the banking system since then. This is not really surprising, if you consider that the tests never took into account the possibility of default [by a sovereign state], not even Greek default. […] The road taken by Dexia is one that it should not walk alone. This is the first step in a process of bailing out, cleaning up and restructuring of the financial system that can no longer be postponed.

As for the French language press, it also unanimously hails the agreement. “Historic? Historic!” gleefully says the editor in chief of Le Soir, Béatrice Delvaux. “French and Dutch speaking parties have concluded an agreement on the division of a voting district that felled governments, Prime Ministers, that led to the crushing birth of a nationalist party [New Flemish Alliance or N-VA, excluded from the talks] and which brought the country to the brink of implosion,” she says, adding, “So yes, the fact that these parties have finally found that famous ‘deal’ on BHV is history”. But Francis Van de Woestyne, leader writer for La Libre Belgique is more cautious. “It’s now time to move on to the following issues,” he stresses and warns that “This accord on BHV, it will be easy to repudiate it”.

“The flight mechanism” is triggered when the threshold of 30% students from foreign backgrounds is exceeded, and this threshold is 50% for the parents of allochtoons,” explains Paul Mahieu. The researcher believes that the issue is first and foremost a psychological one, because “parents are convinced that teaching is of a higher standard in schools with a high proportion of students from the indigenous population.” He further warns that the phenomenon of flight from schools, which is set to continue, could contribute to social problems. For its part, De Morgen argues that “diversity” in schools does not necessarily amount to a problem. “If we believe that education should act as a driving force in social mobility, schools with a socio-economic mix will continue to be necessary."

Another "bizarre" fact highlighted by the statistics is that 84% of euthanasia cases are reported in Flemish, "which indicates that Francophone doctors are 'declaring' fewer cases or are less likely to 'practice' euthanasia." The state monitoring agency is reluctant to draw conclusions, but wonders about the impact of "information made available to the public and doctors, as well as socio-cultural differences, and differences in medical care for the terminally ill."

Although the companies concerned insist that there is "nothing illegal" in the way they manage their staff, the newspaper explains that the Belgian Transport Workers Union (UBOT) believes it has "sufficient grounds to go to court". In a bid to prevent companies from employing foreign workers, UBOT is demanding that "East Europeans benefit from the same pay scales as their Belgian counterparts".

Commenting on the high stakes for the country -- Belgium has spent 428 days without a government -- Le Soir remarks that the country's political leaders, with the exception of Flemish nationalist Bart De Wever who is refusing to participate, "are entering the final phase in a process that will prove crucial for Belgium: either it will succeed or it will break down definitively."

The talks are being held at "at a moment of serious crisis which is not confined to our small country." Citing the prospect of a US downgrade, the riots in London, and demonstrations by the indignados movement, the daily points out that “the leaders of the eight parties at the negotiating table will not only have to save the Belgian state: they will also have to play an active role in developing a global solution to reinvent a societal and development model that is visibly waning." In short, the talks amount to a "Churchillian rendezvous" for the country. The newspaper concludes: "It is our sincere hope that our leaders will be imbued with the seriousness of this call of history."

The Barcelona daily heartily approves of the ban, which may be extended if necessary, and deplores the “devastating impact” of short selling in falling markets, citing a recent “warning” to this effect in the ECB’s August bulletin.

On the evening of 21 July, Di Rupo reported to Albert II that “the eight political parties concerned had agreed to a working method.” However, the palace has decided that the negotiators should first take holidays, and that talks should begin in mid-August – an error according to a De Standaard columnist who points out: “If we do not take advantage of the current momentum, we will have trouble getting the mill started again."

“The surprise is not that De Wever was going to say no, but his way of saying it,” writes the editorialist at De Morgen. “There was nothing positive at all, zilch, in the proposal from Di Rupo, which has not only been completely demolished but downright buried several metres deep.” And now? This is the big question the Belgian press is asking. Di Rupo, who will report to the King on Friday, declined to respond, but seems “particularly concerned about the future of the country,” the Brussels daily concludes.

The recommendations are made within a particularly difficult economic framework, Deaglio notes. “If public debt is not reduced, there is no growth. Without growth, the reduction of public debt is enough to push the economy towards a new recession,” he explains. Yet Brussels has chosen to “come down hard on the brake of rigour,” he says. What the Commission is saying in substance, he added, is “we don’t want to impose austerity to the Europeans, but it is a fact that excessive public spending is limiting our growth potential”. The Commission deems that the government plans submitted “lack ambition” or are “too vague,” and it suggests a series of priorities: raise the retirement age; cut back on early retirements; link wages to productivity; cut red-tape for businesses and provide research and development aid. “It’s good in principle, especially for someone who isn’t accountable to the voters, but the application of these rather noble resolutions is very difficult for governments faced with rising unpopularity,” Deaglio says. He notes that the Commission is “particularly severe with Italy,” seen as “the key country for the strength of the euro”.

Another key country is Spain, where the Commission’s recommendations received a rather chilly reception. For Spanish daily La Razón, they “seem neither sound nor opportune,” because they would “unleash an inflationary process with lethal consequences for an economy in stagnation such as Spain’s”.

The Commission is harsh also with Belgium, which is asked to quickly reform nothing less than its economic structure, notes Brussels daily De Morgen. For the paper, the EU has squarely placed “another bomb under the formation of the government. Although, a year after the legislative elections the parties are still negotiating the formation of the executive, the Commission’s recommendations come and disrupt the talks. According to another daily, De Standaard, they have even “struck at the heart” of Elio Di Rupo, the Francophone Socialist charged with forming a new government. They also “widen the gap between the [Socialists] and the N-VA”, the main Flemish party, which shares Brussels’ approach. “There is no need for Di Rupo to come up with a programme, [EU Commission President José Manuel] Barroso has done it for him, De Morgen wryly notes.

Even less so on the Flemish side, where the Flemish daily De Morgen leads with a more definite “Mission Impossible” for Di Rupo. His appointment, De Morgen writes, “was not received with applause” and the Flemish party leaders reacted with some surprise to an appointment presented to them as a “fait accompli.” “It’s not known how Di Rupo will bring it off,” De Morgen adds, agreeing with Le Soir when it writes that the socialist “is heading out the starting gate without any resolution of those fundamental differences of opinion with the N-VA.”

Royal families, who “like to present themselves as in touch with ordinary people, still have much greater privileges than their subjects,“ points out the magazine. And taxpayers continue to pay “110 million euros per year, according to a Dutch 2009 study,” to keep them in the style to which they are accustomed. In return, Der Freitag argues that countries with royals benefit from a stronger national identity: Juan Carlos I is considered to be “the father of Spanish democracy,“ Albert II is “a symbol of Belgium’s much-threatened unity.” And lets not forget the Grimaldi family “without whom Monaco would have long been a French province.”

Only one of the country’s dailies devotes its front page to the shabby anniversary. “Nonetheless it still works,” announces Le Soir. However, the French daily regrets that “a new more efficient, structured and pacified Belgium has not been born out of this chaos. In acknowledging that this is not the case today, we feel scornful, disappointed and even disgusted." De Standaard, which contents itself with an editorial on the issue, remarks “we have missed out on 365 days of politics.” The Flemish daily goes on to point out that “the belief that this political Twilight Zone can continue indefinitely is a dangerous illusion."

Spain will also have to contend with high interest rates when issuing treasury bills, and El País is concerned that "doubts about Greece will punish Spanish debt." According to the Madrid daily, fears of the restructuring of Greek debt "have resulted in more market doubt and once again demonstrated that although Spain is not subject to the same scrutiny as the group of economies that have fallen behind, it could still be subject to turbulent conditions.”