The Belgian economic miracle (french: Le miracle belge, nl, Het belgische wonder, literally "The Belgian Miracle") was a period of rapid
economic growth in
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
after
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...
, principally between 1945 and 1948. It was characterised by parallel trends of rising employment and
real wage
Real wages are wages adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjusted wages.
Because it has been adjusted to account ...
s and low
inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
, leading to improvements in living standards. It formed part of the period of
rapid post-war economic expansion in
Western Europe
Western Europe is the western region of Europe. The region's countries and territories vary depending on context.
The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the ancient Mediterranean ...
in the late 1940s and 1950s but preceded many other "economic miracles" and was notably shorter in duration. The term itself has been criticised in relation to its possible contribution to the growing obsolescence of Belgian
heavy industry
Heavy industry is an industry that involves one or more characteristics such as large and heavy products; large and heavy equipment and facilities (such as heavy equipment, large machine tools, huge buildings and large-scale infrastructure); o ...
in the 1950s and 1960s and emergence of
deindustrialisation.
Economic miracle
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During
World War II
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...
, Belgium had been
occupied by Nazi Germany and had seen a deterioration in its
gross domestic product
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...
through war damage and the economic policies pursued by the occupiers, despite the efforts of
Alexandre Galopin and the
Committee of Secretaries-General who attempted to preserve Belgium's industrial capacity through a policy of limited compromise with the German occupation authorities.
From 1945, however, demand for Belgium's traditional industries (
steel and
coal
Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.
Coal is formed when ...
,
textile
Textile is an umbrella term that includes various fiber-based materials, including fibers, yarns, filaments, threads, different fabric types, etc. At first, the word "textiles" only referred to woven fabrics. However, weaving is not the ...
s, and railway machinery in particular) grew across Europe, boosting the recovery of the Belgian economy. In comparison with neighbouring countries, whose industries had been heavily damaged by fighting, the comparatively intact Belgian industrial base was able to restore its capacity to respond to the rise in demand. In 1946, the government announced its intention to increase production in Belgium's important coal mining industries by inaugurating a "Battle for Coal" (''Bataille du charbon''). At the end of 1947, Belgium became the first former belligerent in Europe to reach its pre-war level of industrial output.
The economic miracle was also greatly facilitated by the
monetary policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
of
Camille Gutt
Camille Gutt (14 November 1884 – 7 June 1971), born Camille Guttenstein, was a Belgian economist, politician, and industrialist who served as the first managing director of the International Monetary Fund (IMF) from 1946 to 1951. He was the arc ...
whose "Plan Gutt", begun in October 1944, reduced the
money supply
In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circul ...
which had grown hugely during the occupation. The effect of the policy, which reduced the amount of circulating currency by two-thirds, was to limit inflation sharply and facilitate a general rise in living standards.
Living conditions for Belgian workers improved rapidly during the economic miracle. Historically, Belgium's urban workers had been paid less and lived in poorer conditions than those in comparable countries, even while the Belgian economy grew rapidly during the
Industrial Revolution
The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
. This began to change during the economic wonder. In 1944, shortly after the Liberation, the Belgian government of
Achille Van Acker
Achille Van Acker (8 April 1898 – 10 July 1975) was a Belgian politician who served three terms as the prime minister of Belgium between 1946 and 1958. A moderate from Flanders, Van Acker was a member of the Belgian Socialist Party (PSB–BSP) ...
introduced a series of
social security
Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
reforms which began the rise in living standards. Labour shortages and demands for higher production, especially in coal mining, led to rising wages. By 1947 the wages of coal miners in the
Borinage were 40 percent higher than they had been in 1938. Birthrates also rose.
The economic miracle also demonstrated the national
labour shortage
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply (surplus).
Definitions
In a perfect market (one that matches a ...
, especially in coal sector. The Belgian government attempted to recruit labour abroad. It briefly employed 64,000
German prisoners of war as coal miners. In 1946, the Belgian government created a
guest worker program A guest worker program allows foreign workers to temporarily reside and work in a host country until a next round of workers is readily available to switch. Guest workers typically perform low or semi-skilled agricultural, industrial, or domesti ...
me in Italy which led to the first significant wave of immigration into Belgium.
Criticism
Some historians have criticised the use of the term ''
economic miracle
Economic miracle is an informal economic term for a period of dramatic economic development that is entirely unexpected or unexpectedly strong. Economic miracles have occurred in the recent histories of a number of countries, often those undergoing ...
'' to describe the period. According to historian Martin Conway, the term is "singularly inappropriate" to describe Belgian economic recovery during the period because "growth rates, salaries, and levels of investment lagged substantially behind, and production costs significantly above, those of Belgium's competitor economies". Government policy focused on
monetary stability rather than on investment. Taken by surprise by the speed of the country's economic recovery, the Belgian government claimed little of the
Marshall Aid
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
that was being used by its competitors to develop new industries. By 1953, Belgium's industrial production was 11 percent higher than its 1929 output, compared with a 70 percent difference in other Western European countries. The result was that Belgian heavy industry faced an "acute structural crisis" in the 1950s as Belgian industrial exports became uncompetitive. This led to the start of the deindustrialisation of
Wallonia
Wallonia (; french: Wallonie ), or ; nl, Wallonië ; wa, Waloneye or officially the Walloon Region (french: link=no, Région wallonne),; nl, link=no, Waals gewest; wa, link=no, Redjon walone is one of the three regions of Belgium—alo ...
and the start of regional economic divergence between Wallonia and
Flanders
Flanders (, ; Dutch: ''Vlaanderen'' ) is the Flemish-speaking northern portion of Belgium and one of the communities, regions and language areas of Belgium. However, there are several overlapping definitions, including ones related to cultu ...
which would become visible during the
general strike of winter 1960–61.
The study of the period was important in the formation of the economic thought of the economist
Alexandre Lamfalussy
Alexandre, Baron Lamfalussy (; 26 April 1929 – 9 May 2015) was a Hungarian-born Belgian economist who served as President of the European Monetary Institute (EMI) from 1994 to 1997, which was the forerunner to the European Central Bank (ECB). ...
, who wrote on the subject in the early 1960s.
See also
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Social Pact
The Social Pact (french: Pacte social, nl, Sociaal Pact), was an unofficial political agreement concluded between corporate, labour, and civil service representatives in Belgium which laid the basis for a political compromise after World War II. ...
, a 1944 Belgian agreement on social welfare reform
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Benelux Customs Union
The Benelux Union ( nl, Benelux Unie; french: Union Benelux; lb, Benelux-Unioun), also known as simply Benelux, is a politico-economic union and formal international intergovernmental cooperation of three neighboring states in western Europe: B ...
, agreed in 1944 and effective from 1948
*
Marshall Plan
The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
, effective from 1948
*
European Payments Union
The European Payments Union (EPU) was an organization in existence from July 1950 to December 1958, when it was replaced by the European Monetary Agreement.
With the end of World War II, economic depression struck Europe. Of all the non-neutral ...
, 1950–58
*
European Coal and Steel Community, which Belgium entered in 1952
References
Bibliography
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Further reading
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{{Economic miracle and tiger economy
Economic history of Belgium
1940s in Belgium
1940s economic history
Post–World War II economic booms