Belgium

Belgium

Through BLEU, Belgium and Luxembourg linked their currencies in 1921. Although the

Belgian franc has declined in relation to the U.S. dollar, it has maintained its

value against major European currencies. In 1995, 1 U.S. dollar was equal to 29.48

francs, but by 1999, 1 dollar equaled 34.77 francs. In 1999, Belgium joined the EMU

that created a single currency, the euro, for all of the EU nations. The euro is fixed

at a rate of 40.3399 francs per euro. Since its introduction, the euro has been weak against

the dollar. In 2000, 1 U.S. dollar equaled 0.9867 euros (when the euro was introduced it was

equal to $1.1789). The euro was only used in non-cash forms

(such as electronic payments and transfers) until January of 2002, when euro coins and

notes were issued and national currencies were phased out.

The Belgian National Bank acts as the state bank. It prints and issues the nation's

currency and acts as the lender of last resort in certain credit operations. The bank

also manages monetary policy by controlling interest rates. The Banking Commission oversees

the operations of the nation's banks while the Finance Ministry regulates credit institutions.

In September of 2000, the Brussels stock exchange merged with the exchanges of Amsterdam and

the Paris Bourse exchange to form Euronext. The new stock exchange is the first truly

transnational exchange that combines stock, derivative, and commodity trading. The new

exchange lists 1,861 different companies and has a value of 1.1 trillion euros. The merger

will streamline trading and reduce transaction costs. It will also save approximately

50 million euros per year. The exchange also increases the transparency of stocks and

gives investors greater cost comparisons. The stock-trading component of Euronext is

divided into 3 broad areas: blue

Exchange rates: Belgium

euros per US$1

Jan 2001 1.0659

2000 1.0854

1999 0.9386

1998 36.229

1997 35.774

1996 30.962

Note: Amounts prior to 1999 are in Belgian francs per US dollar.

SOURCE: CIA World Factbook 2001 [ONLINE].

GDP per Capita (US$)

Country 1975 1980 1985 1990 1998

Belgium 18,620 21,653 22,417 25,744 28,790

United States 19,364 21,529 23,200 25,363 29,683

Germany N/A N/A N/A N/A 31,141

France 18,730 21,374 22,510 25,624 27,975

SOURCE: United Nations. Human Development Report 2000; Trends in human development

and per capita income.

chip traditional industrial companies, high tech stocks, and traditional securities.

The new multinational exchange is actively seeking further integration and consolidation

and may merge or absorb additional national exchanges.

In order to become a member of EMU, Belgium had to maintain low inflation. The government

took steps that kept inflation low—as low as 1 percent in 1999. Low prices on imported

goods are likely to aid efforts to keep inflation low for the foreseeable future.