Belgium – Bright Spot in the Eurozone

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Just because the Mediterranean part of Europe is finding things tough at the moment, doesn’t mean that circumstances are the same across the euro currency bloc. In Belgium in particular, the situation has improved markedly in the last six months. Indeed, out of any time in the last two years, now is probably the best time to relocate to Belgium. So just why is that?

1. Belgium has a government.

You might find it hard to believe, but up until last December Belgium didn’t have a government. In fact, it had been that way for 578 days, as political divisions between the Flemish north and Walloon south prevented agreement.

 

Back in 2011, being without a government had a significant impact on both domestic confidence (the Belgian economy contracted -0.1% in the last three months of 2011) and international investment (the credit rating agency Standard and Poor’s downgraded Belgium to AA from AA+.) But since the formation of the 6-party Coalition led by Elio di Rupo on December 1st 2011, the situation has improved markedly.

2. Belgium is expanding.

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Unlike much of Europe, Belgium’s economic future is bright. The economy expanded a solid 0.3% in the first three months of 2012, reversing its own Q4 contraction, at a time when much of the Eurozone is shrinking. This tells us Belgium can not just outlast the debt crisis, but thrive in spite of it.

3. Belgium has the confidence of the markets.

The Belgian government forecasts a budget deficit of 2.8% in 2012, which (impressively) is already beneath the 3.0% required by the Eurozone fiscal union. Furthermore, it hopes to produce a balanced budget in 2015, putting it shoulder to shoulder with crisis-resistant countries like Australia.

Given this strong performance, the markets trust Belgium, as reflected in its low borrowing costs. For Belgium to borrow for two-years costs just 0.24% at the moment, compared to an enormous 5.75% in Spain. This means it’s a county that, unlike the Mediterranean bloc, will face no problems with its public debts.

4. The euro is cheap.

Say what you will about the debt crisis, but there’s no doubt it’s produced marked benefits for people who want to relocate to the continent. Today, the pound is close to its highest rate against the euro since March 2008, at 1.2850. That means, if you change currencies today, you get more euros for your pounds than almost any time in 4 and a half years.

It’s a similar case with the US dollar, which is higher today against the euro than an time since 2010. If you wish to relocate to Belgium then, you’ll get a lot more for your money.

Get in Touch

I do hope this article has been of use. To find out more about sending money to Belgium when you relocate, visit us at foreign exchange broker Pure FX.