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UNCLAS BRUSSELS 002203 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: MARR MCAP MOPS PREL BE
SUBJECT: BELGIUM: 2005/2006 REPORT TO CONGRESS ON ALLIED 
CONTRIBUTIONS TO THE COMMON DEFENSE 
 
REF: 2005 STATE 223383 
 
¶1. SUMMARY: Belgium continues to provide important 
contributions to the common Transatlantic defense, by 
assisting resident and transiting U.S. forces and with its 
own forces supporting stability in Afghanistan, the Balkans 
and the Congo. The Belgian military is hobbled by an aging 
force structure and the fact that a dominant share of its 
budget is consumed by personnel costs.  It is also 
constrained by a diminishing real budget.  In 2005, the MoD 
was authorized to keep the proceeds of asset sales.  It used 
these off-budget funds to supplement its transformation 
procurement program.  Deployment spending also increased a 
bit, due to some efficiency in other areas, and to reduction 
of training, which may hurt in the medium term.  The Vision 
2015 project aims to reduce the total personnel strength from 
its current 44,000 to 39,500 by 2015.  At the same time the 
plan seeks to reverse the ratio of combat forces to support 
personnel (currently estimated at 46%:54%), and reduce the 
average age from 36 to 33. 
 
¶2.  In 2004, Belgium was the first ally to volunteer F-16 
aircraft for the air policing mission over the Baltics.  In 
2005, it sent a limited contingent to the UAE to train Iraqi 
troops alongside the Germans. It also participated for a time 
in EU Operation Althea in Bosnia and made a maritime 
deployment to Operation Enduring Freedom.  For 2006, Belgium 
planned limited increases in Afghanistan and Congo, and a 
small reduction in Kosovo.  Belgium continued to provide 
crucial support for U.S. military transit through Europe to 
Iraq, and made substantial contribution as host of both 
allied and U.S. facilities.  It has committed forces to the 
NATO Response Force (NRF 6)and to the NRF live exercise in 
Cape Verde.  Belgium has tried to limit the growth of NATO 
common funding, which must be paid by MOD out of its budget. 
Although the Belgian contribution to NATO has grown in this 
period, it will remain constrained by tight budgets.  This 
general survey of the Belgian Military also responds to 
reftel -- paragraph references in parenthesis refer to paras. 
reftel, reformatted for narrative consistency.  End Summary. 
 
THE ECONOMIC AND POLITICAL ENVIRONMENT (8.A) 
-------------------------------------------- 
¶3.  Over 2004-5 Belgium renewed its Transatlantic commitment 
on the political level, becoming more supportive of U.S. 
policies, although some differences persist, particularly on 
NATO.  The landmark visit of President Bush in February 2005 
was paralleled by other high level bilaterals, including both 
Secretaries of Defense and State- the latter for multiple 
 
SIPDIS 
visits - and several Belgian ministers went to Washington. 
The Belgians used these high level meetings to offer forces 
for Afghanistan and to outline plans for participating in a 
German-led training program for the Iraqi military and to 
provide modest funding for the NATO Training Mission in Iraq. 
 The Belgians remained strong supporters of a European 
Defense, which they believe can become a bulwark of a 
"Two-Pillar" NATO.  Marrying their transatlantic and European 
orientations, the Belgians proposed and eventually hosted the 
second of a series of informal meetings between all EU AND 
NATO Foreign Ministers, sometimes called "Gymnichs". 
 
¶4.  Belgium is run by a left-right coalition of four parties, 
Flemish and French-speaking Liberals (conservatives, 
including Prime Minister Verhofstadt and Foreign Minister De 
Gucht) and Socialists (including Minister of Defense 
Flahaut), which harbor differing views on defense issues and 
sometimes have difficulty coming to a decision, particularly 
where resources are involved.  These contradictions are 
sometimes magnified by the historic strength of pacifist 
sentiment in Flanders, dating back to the First World War. 
 
¶5.  Belgium continues to maintain a balanced budget.  This 
fiscal policy continues to constrain its military 
expenditures and hinder modernization of its military force. 
Fiscal austerity and innovative revenue sourcing to reduce 
past excessive debt enabled Belgium to achieve a balanced 
budget in 2005, its sixth in a row.  Belgium's cumulative 
public debt/GDP ratio fell to 94.3 percent by the end of 2005 
from 134 percent in 1999, but is still one of the highest 
among EU member states. The government's fiscal program aims 
to reduce this ratio to the EMU Target of under 66 percent. 
Belgium's external trade-oriented economy helped it survive 
the 2002-2003 global economic downturn better than other EU 
member states, and GDP growth in 2004 was a strong 2.4 
 
percent. 
 
¶6.  Belgian GDP in 2005 was euro 267 billion, and real 
economic growth, was 1.4 percent in 2005, just at the 
Eurozone average rate.  Inflation in Belgium remained low at 
2 percent in 2005, and is not expected to rise in 2006. 
Belgian GDP is projected to reach about euros 273 billion in 
2006, a growth of about 2 percent measured at constant 
prices.  The exchange rate of the dollar against the euro 
fell in 2004 and 2005, though recovered at the end of this 
period.  Average pooled exchange rate for 2005 used 
throughout this report is: $1.20 = 1 euro  All Belgian 
figures are Calendar Year. 
 
Military Transformation (8.C) 
----------------------------- 
¶7.  Belgium is slowly continuing to transform its military in 
the face of very tight budget constraints.  The MOD Strategic 
Plan for Defense (2015 Plan), updated in 2005, is designed to 
achieve a force that is smaller, more modern, flexible and 
deployable although also less robust.  The high average age 
of Belgian service members continued to be the major 
challenge to the reform.  Personnel costs increased from 
59.7% of total budget in 2003 to 61.7% in 2005. The Belgians 
intend to address the personnel problems by recruiting more 
young people while moving older personnel to less costly 
civilian positions in the Defense Ministry, other 
governmental agencies and the private sector, while retiring 
a certain number of older soldiers.  Full implementation of 
this plan, negotiated with the military's unions, will not 
occur before 2008.   A reduction in force is projected to 
continue through 2013-2015. The MoD maintains that its 
reforms are working; both the age and personnel share, though 
still far to high, began to turn around 2005 for the first 
time in years.  Annual budget allocations are shown below. 
 
BUDGET FOR PERSONNEL, OPERATIONS, AND INVESTMENTS 
 
2003  2004  2005  2006 Proj.2015 2006 EUROS(mn) 
 
Personnel    59.7 60.9 61.7 60.4    52.8  1,651 
Operations 28.4 26.9 25.4 25.0      25.4    683 
Infrastr.     3.2  3.2  3.4  3.8     3.2    103 
Investment  8.7  8.9  9.5 10.9      18.7    298 
Total                                     2,735 
 
¶8. The transformation of the military, refined in 2004, and 
increasingly put into play in 2004 and 2005, is in accord 
with NATO goals for a more deployable force, configured to 
meet the challenges of new, frequently out of area missions. 
For example, Belgium is giving up its tanks for a new 
generation of lighter armored vehicles and reducing its 
artillery to nothing larger than 105mm.  In 2004, it 
restructured some units for enhanced flexibility.  The 
transformation plan placed special emphasis on Humanitarian 
missions and Chapter VI peacekeeping.  One consequence has 
been a diminution of capability in the high-end of combat, 
for which it has preserved roles principally for its Air 
Force's F-16's, land reconnaissance, and some naval 
specialties. 
 
¶9. The Belgians had already embraced jointness, by formally 
abolishing their separate Army, Navy, and Air Force, although 
the services retain much of their identity (including ranks 
and uniforms) in the form of Land, Sea, and Air Components of 
the single Armed Forces.  Structures such as planning and 
procurement are shared.  Over the 2004-2005 period these 
changes appeared better digested.  As with other militaries, 
many of these transformational changes have proved 
controversial within the ranks and in the political arena. 
Another result of the reorganization was the revelation of 
scandals and other problems buried in the old system, such as 
a 2004 discovery of widespread procurement fraud.  Over the 
2004-2005 period, internal controls appear to have increased. 
 
 
BUDGET AND TRANSFORMATIONAL PROCUREMENT 
--------------------------------------- 
¶10.  The Belgian military budget continues to be 1% of the 
GDP, in line with many other Western European countries.  The 
budget total was projected to increase from 2.59 billion 
euros in 2003 to 2.73 billion euros in 2006, less than the 
rate of inflation, but this understates their real 
expenditure.  The budget remains a domestically contentious 
 
issue, with one of the socialist members of the governing 
coalition calling for major additional cuts in military 
spending and complete integration of Belgian forces in a 
larger European force. 
 
¶11.  In 2005 the MoD got long term extension of a 2004 
one-shot deal with the government and Parliament to keep the 
proceeds of its asset sales, including surplus real estate on 
the condition proceeds are used solely to buy equipment. 
While precise figures are not available, estimates of net 
proceeds for 2005 reach or exceed 30 millions, enough to 
produce in effect a real net increase in the military budget. 
 The Belgian Ministry of Defense has predicated funding for 
parts of its transformation on such sale of excess military 
equipment and the conversion of property to civil uses. 
Belgium,s creative approach to financing transformation has 
also included saving money by decommissioning and selling 
frigates, tanks, fighter aircraft and helicopters and by cuts 
in personnel and administrative costs.  For example, Belgium 
is endeavoring to sell F-16s and F-16 parts, and has sold 
three frigates and other older equipment.   As some of this 
equipment is U.S. origin, the asset transformation strategy 
sometimes depends on USG concurrence and/or cooperation. 
 
¶12.  In June 2004, the Belgian Council of Ministers approved 
761 million euros for defense investment.  The majority of 
the money was spent in transforming the land component.  By 
the end of 2004, a 350.7 million euro ($420 million) contract 
was signed for the purchase of 352 DINGO II Multi Purpose 
Protected Vehicles (MPPV) made by the German company 
Krauss-Maffei-Wegmann.  In addition, 41 million euros ($ 49 
million) was spent on F-16 upgrades program.  The upgrades 
include the Operational Flight Program Update, purchase of 
precision improvement sensors (JDAM,s) and the update of the 
Operational Flight Trainer. 
 
¶13.  In July 2005, the Belgian Council of Ministers approved 
a 1.2 billion euro ($1.44 billion) investment.  The focus of 
the investment is on armored vehicles, but also includes two 
frigates and 10 NH-90 helicopters.  The centerpiece of this 
aggressive program is the acquisition of 242 Armored Infantry 
Vehicles (AIVs) valued at 700 million euros or $840 million. 
The Belgians expect to use the platform in several different 
configurations as the United States Army plans to do with the 
Stryker combat vehicle.  On 27 January 2006, the Belgian 
government awarded this contract to MOWAG, a Swiss company 
that belongs to General Dynamics Corporation. 
 
¶14.  A second important piece of this program is the purchase 
of two Dutch built, M-type frigates (valued at 260 million 
euros $312 million).  These will replace three Belgian 
frigates, one of which has already been sold to Bulgaria 
(note: Bulgaria has taken an option out on the other two, so 
it's very likely they'll purchase those, also).  While this 
represents a reduction in the number of Belgian frigates, the 
two Dutch built frigates are more modern, larger, and more 
capable than the older Belgian ships.  As the Belgian Navy 
operates under a joint Belgian-Netherlands command, sharing 
similar ships will enhance interoperability.  The contract 
between the Dutch and Belgian Ministers of Defense was signed 
on 22 December 2005.  The delivery of the first frigate is 
projected for 2007; the second will follow in 2008.  The 
third major piece of the program is the purchase of 10 NH-90 
multifunctional support helicopters valued at 300 million 
euros or $360 million.  These will replace the aging Sea King 
and Alouette III helicopters. 
 
Defense Policy Orientation and Operations 
----------------------------------------- 
¶15.  Already in 2004, Belgium had moved away from its earlier 
efforts to focus attention and resources on duplicative EU 
military structures and capabilities.  It has nonetheless 
continued to support ESDP. In 2005, Belgium provided a 
building for EU Military Staff and its small planning core, 
and sent a small number of personnel to the EU logistic 
mission in support of AU peacekeeping in Darfur (not to the 
parallel NATO effort).  The focus was more as a complement to 
NATO than, as previously, an alternative.  It plans to supply 
forces to the newly-organized EU battle groups, as well as 
NRF. 
 
 
GRANT AID, PKO, NONPROLIFERATION (12) 
------------------------------------- 
 
¶16.  Nonproliferation:  In 2004, Belgium sent a frigate to 
join Operation Active Endeavor, a NATO counterterrorism 
deployment in the Mediterranean, which has also acquired a 
counterproliferation mission.  Politically, Belgium has 
worked in the IAEA Board of Governors to block proliferation 
efforts of Iran, and has instituted tight export control 
policies.  It also agreed to support the Proliferation 
Security Initiative and has participated in PSI exercises in 
Northwest Europe. Military involvement has so far been 
limited. 
 
CONTINGENCY OPERATIONS (12.A) 
----------------------------- 
¶17.  Belgian forces, coordinated through the MFA-led 
interagency Belgian First Aid and Support Team (B-FAST) take 
an active role in disaster mitigation around the world.  They 
were deployed in 2004 to Morocco for Earthquake relief and in 
2005 participated in Tsunami relief efforts, particularly in 
Sri Lanka.  Belgium was one of the first international 
responders to Hurricane Katrina; they sent a small medical 
and logistics team to the U.S. Gulf coast within days of the 
disaster. 
 
MILITARY ASSISTANCE (12 B) 
 
PEACEKEEPING AND OTHER HUMANITARIAN ACTIVITIES (12.C) 
--------------------------------------------- -------- 
¶18.  Limited deployments in support of UN operations are 
sometimes reimbursed.  The Defense Ministry is striving to 
keep out-of-country deployments, which are almost exclusively 
for PHO or related training programs, below a total of 1,000 
personnel, principally for budgetary reasons.  The Minister 
of Defense has stated that he has sufficient funding to 
deploy 500 soldiers for a year or 1,000 for six months. 
However, actual deployments during 2004-2005 have usually 
ranged closer to 1,000 than 500.  Post estimates average 
deployment in 2005 may exceeded 800; slightly above 2004 and 
a significant increase over 2002-2003, which were under 600. 
Deployments of more costly assets such as ships or aircraft 
must come from the total deployment budget.  In 2005, Belgium 
rationalized its former deployments, withdrawing a tiny 
contingent from Cambodia and reducing participation in UN 
Mideast missions. 
 
¶19.  Most costs for Peacekeeping Operations are covered in 
the MOD budget.  In the cases of deployments in support of UN 
operations, operating costs are sometimes borne by the UN. 
Other UN and multilateral operations and some others, such as 
the Belgian First Aid Support Team (B-FAST) receive budget 
support from other elements of the Belgian government, e.g., 
Ministry of Foreign Affairs.  The MFA financed most of the 
cost of deployment of the B-FAST for humanitarian assistance 
following a earthquake in Morocco, and for the deployment o 
New Orleans. 
 
¶20. AFGHANISTAN:   Belgian roops provided security at Kabul 
Internationa Airport throughout the period.  In addition, 
when Eurocorps took over ISAF lead in 2005, Belgium doubled 
its contingent to over 600 troops, providing additional 
headquarters staffing, an 8-person Intelligence cell and a 
maneuver company which patrolled Kabul North.  In addition, 
it deployed 4 F-16's to Kabul along with a C-130 transport 
and support personnel, whose deployment was extended through 
the period of the Parliamentary elections.   These additional 
deployments departed by the end of 2005, bringing the force 
level back to about 300.  Belgium provided up to 40 personnel 
to the German-led PRT in Konduz, in Northern Afghanistan and 
offered 2 personnel as part of ISAF command north, in 
Mazar-i-Sharif.  The Belgian government decided in December 
2005 to provide at least an additional 40 troops and a C-130 
in 2006, with the possibility of additional deployments up to 
the level deployed for Eurocorps under study. 
 
¶21.  BALKANS:  Belgium maintained, but reduced its presence 
in the Balkans.   At the end of 2005, the majority of 
personnel (220) were assigned to BELMOKOS 
(Belgium-Luxembourg-Mongolia) in Kosovo, part of KFOR.  The 
numbers were projected to drop to about 180 in 2006.  The 
Belgians also served in the EU mission in Macedonia, which 
closed out in 2005.  Belgium was represented in a number of 
Balkan missions, including serving in KFOR/SFOR and joint 
headquarters positions.  Belgium also supported the European 
Union Monitoring Mission (EUMM) with 4 personnel (funded 
outside the defense budget).  In 2005 Belgium participated in 
 
the EU Operation ALTHEA with 4 helicopters and 47 personnel 
as part of MNTF-N, along with 53 personnel in a UAV squadron. 
 These were withdrawn in November 2005, reflecting the 
seasonal lull in operations, but were expected to at least 
partially redeploy during 2006. 
 
¶22.  ASIA:  The modest Belgian deployments in Asia changed 
over this period. Small demining support elements of under a 
dozen in total in Laos and Cambodia were phasing out. 
Belgium deployed 4 personnel to the EU mission monitoring the 
Aceh peace settlement.  From much of 2005 there was a 
detachment of some 75 personnel in Sri Lanka doing Tsunami 
relief.  Token participation in the India-Pakistan-Kashmir UN 
observer mission (UNMOGIP) was due to terminate in 2006. 
 
¶23.  MIDDLE EAST:  Belgium made a symbolically significant, 
but modest 9-person deployment to train Iraqi military in the 
UAE, under the aegis of a German training mission.  In 2004, 
Belgium offered to provide a C-130 to the UN for use in and 
around Iraq.  The U.N. did not respond to the offer until 
late 2005, by which time maintenance shortfalls and other 
deployment commitments forced the Belgians to temporarily 
suspend the offer, a situation not expected to change at 
least through 2006.  Belgian reduced to two the number of 
military personnel serving with the UN Truce Supervision 
Organization (UNTSO), in which Belgium has been involved 
since 1948. 
 
¶24.  AFRICA: Belgium remained active promoting peace and 
stability, principally in its former colonies in Central 
Africa.  Belgium maintains a small contingent working with 
the military in Burundi.  Belgium has a token number of 
personnel assigned to MONUC in the Democratic Republic of the 
Congo (DRC) (see under training).  Belgium also planned a 
modest participation in the EU elections support mission in 
¶2006. 
 
¶25.  A few Belgian peacekeepers have been deployed as 
observers in Sudan's Nuba Mountains, while several Belgian 
military logisticians are engaged in the EU 's effort to 
support the AU mission in Darfur.  Its long-term effort in 
Benin paid off in increased peacekeeping activities by the 
Benin forces, in Cote d'Ivoire and DRCongo.  Belgium has 
played a central supportive role in the African Crisis 
Response Initiative and is examining its potential role in 
the U.S. African Contingency Operations Training Assistance 
program (ACOTA).  Belgium has also set up a small detachment 
of military security personnel for its diplomatic missions in 
the region. 
 
CURRENT CONTINGENCY OPERATIONS (12.D) 
------------------------------------- 
¶26.  None. 
 
CAPACITY BUILDING GRANT AID (12.D) 
--------------------------------- 
¶27.  None outside the OECD guidelines. 
 
 
TRAINING AND ASSISTANCE (12.E) 
------------------------------ 
¶28.  DRC: Belgium remained a leader in security sector reform 
in the DRC through most of 2004-2005, in coordination with 
the EU.  Its priority was providing bilateral and mobilizing 
multilateral support for training the DRC integrated 
Brigades.  In 2005, Belgium established a training center and 
trained the first joint brigade, co-training the second with 
South Africa and coordinating a third brigade trained by 
Angola.  In January and February Belgian military personnel 
trained 250 additional Congolese cadre in Kinshasa.  These 
cadre were to become instructors for training additional 
brigades.  It also conducted a train-the-trainer program for 
Congolese mostly NCO's in Belgium, and followed up in Congo. 
Despite logistic and other problems, the first brigade has 
performed relatively well and the other brigades have also 
been a success.  From February to May, in conjunction with 
the South African Military, The Belgians conducted refresher 
training for the 3rd Integrated Brigade in Kamina. 
Throughout the year, the Belgians continued to work with the 
Congolese military authorities on strategic planning, 
personnel administration, budgeting and finance, training, 
and force structure.  The Belgians also provided significant 
logistic support to the Congo Army, particularly in-kind 
donations of military equipment.  Belgium provided the DRC 
 
military with an FSB bridge and associated training.  The 
bridge will be used by the DRC to support UN humanitarian 
programs. 
 
¶29.  Benin: Belgium's long-term program of military 
assistance and training with Benin began to yield payoffs. 
Belgium supported the participation, including with logistics 
of Beninois soldiers in the UN Ivory Coast peacekeeping 
Mission (supported by two Belgian liaison officers).  It also 
trained and equipped a Benin battalion to participate in the 
UN peacekeeping force in Congo, MONUC.   Additionally, over 
one hundred Benin soldiers were enrolled in Belgian schools, 
along with numerous soldiers from other francophone African 
counties.  The bulk of program costs for the efforts in Benin 
comes from Belgium's military budget. In 2005, Belgian 
Engineers assisted the Benin military with several 
humanitarian renovation and reconstruction projects. 
 
NATO ISSUES (13) 
---------------- 
¶30.  Belgium has continued to place a priority on support of 
NATO efforts.  It launched the successful air policing of the 
newly accessioned Baltic states in 2004, and was preparing 
for a second deployment in 2006.  It participated at end 2005 
in a maritime mine clearance/exercise in the Baltic Sea.  It 
participated in Operation Active Endeavor, with 160 sailors 
from October-December 2005.  It continues to maintain 
NATO-dedicated F-16 squadrons, although it has reduced the 
number of aircraft.  As noted above and has participated in 
NATO's International Security Assistance Force (ISAF) in 
Afghanistan throughout the period of this report.  It has 
also participated in NATO exercises.  The Belgian Military 
has committed a relatively substantial component (ground and 
air) to the next rotation of the NATO Response Force 
7(NRF7)with some forces also assigned for NRF8. 
 
¶31.  Belgium has also provided agreed common funding, 
including for NATO Training Mission in Iraq, although budget 
constraints have led it to seek wherever possible to minimize 
such demands on its resources.  As common funding now comes 
directly from the military budget, increased NATO assessments 
mean reduced transformational procurements or operations.  In 
addition, complicated political and budgetary decision-making 
linked to the four-party left-center right coalition have 
meant that responses on these issues sometimes require extra 
time, on funding for Iraq, for example.  Belgium, however, 
ultimately always has agreed to and provided the required 
funding. 
 
PROSPECTIVE CONTRIBUTION TO PfP and NATO OUTREACH (13.A/B) 
--------------------------------------------- -- 
¶32.  Belgium sold a used frigate to Bulgaria, which is 
considering purchasing the other two Belgian frigates.  It 
has offered to sell excess F-16's to Jordan or Romania, and 
was prepared to "mentor" any Air Force it supplies. 
Belgium's limited means otherwise restrain any potential 
contribution.  Belgium's direct contribution to PfP has been 
limited to its share of NATO costs.  Belgium attempts to 
maximize its impact and limited budget through bilateral 
exercises conducted in the spirit of PfP with like-sized 
states.  By the end of 2005, it was moving to expand 
considerably its engagement with partners in Ukraine, 
Moldova, the Caucasus and Central Asia due to its 2006 
Chairmanship of the OSCE.   Belgium is not significantly 
engaged in the Mediterranean Dialogue (but participates in 
parallel EU efforts) or ICI. 
 
CONTRIBUTIONS TO THE COMMON DEFENSE 
----------------------------------- 
Cost Sharing (Reftel Para 9). 
 
¶33.  The Government of Belgium does not provide direct 
financial contribution to the United States.  However, there 
are a variety of in-kind contributions, as noted below. 
 
¶34.  Direct Cost Sharing (Para. 10) 
 
¶A.  Rents.  Belgium continues to support the United States by 
providing, free of charge, the land and facilities occupied 
by the Supreme Headquarters Allied Powers Europe (SHAPE), 
Chievres Air Base (SHAPE,s support base), the Daumerie 
Caserne (Headquarters for the United States Army Garrison 
BENELUX) and Chateau Gendebien, the residence of the 
Commander of SHAPE and, finally, the support facilities for 
 
the 52d (USAF) Munitions Squadron at Kleine Brogel Air Base. 
In addition, Belgium provides the land for NATO Headquarters 
in Brussels, and is supplying additional land for a new 
Headquarters complex adjacent to the current site.   The 
Belgian military continued to provide a very low cost 
solution for a life support area at a military installation 
near Antwerp while the United States Army conducted logistics 
movements to and from the Central Europe/Persian Gulf Region 
through the port. 
 
Non-leased building space provided by the Belgian government 
for the use of US forces varied insignificantly from the FY 
03 report.  Total space provided amounted to 1,062,837 square 
feet.  The rate assumed to be in effect is still USD 8.50 per 
square foot resulting in a savings to the USG of $9,034,114. 
Non-leased land provided by the Belgian government amounted 
to 1,342 acres at a rate of 0.2965 per square foot.  This 
equals an approximate cost of $95.19 per acre.  Total 
estimated savings for the USG government amounted to 
$9,161,859.  With real estate costs in Belgium escalating 
rapidly (5-10%/year), actual savings may be much higher. 
 
¶B.  LABOR:   Additionally the Belgian government provided 
significant support throughout FY 04 and FY 05 to Operations 
Iraqi Freedom and Enduring Freedom by providing security 
support for Fort-to-Port operations at the Port of Antwerp. 
This is in line with the support that Belgium has 
consistently provided since 2002.  The U.S. contracted and 
reimbursed Belgium through military to military contracts for 
the amount of 517,943 euros  ($621,543).  This support was 
provided under the Acquisition and Servicing Agreement 
between Belgium and the United States. The estimated average 
hourly rate for this support comes to 6.25 euros  However, 
the U.S. (in line with previous years) received more support 
than what was billed.  The Belgian MOD often provided support 
without charge ) when feasible.  Examples include police and 
fire support to U.S. port operations, relieving U.S. forces 
of the requirement to do that vital mission. 
 
¶C.  KATUSA Labor.  Not applicable. 
 
¶D.  The United States paid $2,161,061 for utilities to 
support its activities in Brussels and at Chievres AB during 
FY 05.  This is an increase of $40,470 from FY 03.  The total 
increase in costs is less than two percent over the last two 
fiscal years. 
 
¶E.  Facilities Planning and Design.  No significant changes 
since FY 03. 
 
¶F.  Facilities Improvement Program.  Belgium does not 
participate in the funding of maintenance, construction or 
renovation projects.  However, the Belgian government has had 
a flexible requirement that the United States, for certain 
high cost projects, conduct the contracting through their 
offices, which charge a fee to do so. 
 
¶G.  Relocation and Construction.  No significant changes 
since FY 03. 
 
¶H.  Vicinity Improvement.  Nothing significant to report. 
 
¶35.  Indirect Cost Sharing. (Para. 11) 
 
      ¶A.  Rents.  The USG/DOD continues to pay for many 
market rate leases both in Brussels and in Chievres in 
support of SHAPE and the three embassies.  The details of the 
amount of square footage leased were not available for this 
report.  However, Operations and Maintenance funds and Army 
Family Housing funds paid a total of $7,095,194 during FY 05 
for these leases.  This is a decrease of $271,768 from FY 
03,s report. 
 
¶B.  TAX CONCESSIONS.  Belgium applies an uneven approach to 
tax relief, due in part to the competing goals of the various 
Belgian government ministries.  US personnel continue to pay 
Value Added Tax on many services and utilities (electricity, 
fuel oil), increasing the cost to the individual by 21 
percent.  Belgian tax authorities continue their attempts to 
impose a tax on services provided by local vendors on 
military bases, but have not done so.  The previously 
unlimited ability to purchase tax free vehicles has been 
changed to allow service members to purchase only one vehicle 
per tour. The Belgian Ministry of Defense continues to push 
 
for an indirect contracting process for US construction 
projects, under which their internal contracting division 
would contract on the US Forces' behalf for all construction 
needs, in return for a 3-5% administrative fee. 
 
The above concerns are counterbalanced in large part by the 
Belgian authorities' uniformly favorable response to US 
requests for relief in certain areas. For example, the 
Belgian government routinely waives visa, work permit, and 
taxation requirements for US contractor personnel who work 
solely for the US Forces on certain types of contracts. This 
results in a substantial cost-savings for the US Forces, 
since it keeps contract prices artificially low. In addition, 
Belgium continues to provide VAT tax relief for military 
operations on contracts for materials, supplies, services, 
and for the purchase of petroleum, oil, and lubricants. 
U.S. forces have full access to the APO postal services, 
representing significant foregone revenue to the Belgian 
government. 
 
¶37.  Additional information, including a map showing 
worldwide deployment of Belgian forces is available on 
Embassy Brussels SIPRNET website in the POL/MIL folder, 
Reporting and Analysis portal--: 
www.state.sgov.gov/p/eur/brussels/index.cfm 
 
POC 
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¶38.  POCs are Political-Military Officer Craig Karp; Col. 
John Gagnon, Defense Attache; and LTC Andrew Johnson, Office 
of Defense Cooperation.  Karp email: karpcm@state.gov.  All 
can be reached via embassy switchboard:  322-508-2111. 
KOROLOGOS 
.