VZCZCXYZ0007
RR RUEHWEB

DE RUEHBS #1843/01 1561520
ZNR UUUUU ZZH
R 051520Z JUN 07
FM AMEMBASSY BRUSSELS
TO RUEHC/SECSTATE WASHDC 5569
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNMEN/EU MEMBER STATES
RUEHRB/AMEMBASSY RABAT 2347

UNCLAS BRUSSELS 001843 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/OIA, EB/TPP/IPE AND EUR/UBI 
TREASURY FOR OASIA/ICN - ATUKORALA 
USDOC FOR 4212/OECA/JLEVINE 
RABAT for W. BUSH 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINT EINV SENV BE
SUBJECT:  BELGIAN STEWPOT: June 5, 2007 
 
Ref:  Brussels 00790 
 
1-2. PM Outlines Pro-Investor Strategy 
¶3. Google Finds a Home in Belgium 
4-5. "I am Googled, Therefore I am" 
6-7. IV Grantees Bring Home Ideas 
¶8.   Baxter Pharma Invests in Wallonia 
¶9. Zero-Emissions Belgian Bus 
 
--------------------------------------------- - 
PM Outlines Pro-Investor Strategy 
--------------------------------------------- - 
¶1. (U) On May 22, Prime Minister Guy Verhofstadt 
detailed his strategy to improve Belgium's 
investment climate over the past eight years, and 
his plans for the coming years in a talk to 
AmCham members.  In addition to prudent 
macroeconomic fiscal management (balanced 
budgets, paying down the federal debt), 
Verhofstadt touted a reduction in the real 
corporate tax rate from 41% to 34%, introduction 
of the notional interest rate deduction, revision 
of Belgium's double tax treaty with the US in 
2006, and a variety of measures to promote R&D. 
Future policy, he said, should focus on reducing 
the nominal corporate tax rate from 34% to under 
30%, which would allow the real effective rate to 
decline to under 20% (competitive with some flat- 
tax EU venues).  Another goal would be to further 
reduce personal income tax brackets from five to 
only two or three rates in the 25 to 50% range; 
the 55% top income bracket has already been 
dropped.  According to Verhofstadt, reducing 
taxes paid by R&D personnel puts Belgium on the 
forefront of innovation, ensuring high-value job 
creation and investment.  Questions from U.S. 
companies focused on improving education to 
produce the skilled personnel industry needs, and 
how to build Belgian entrepreneurial spirit. 
(Note:  Whether Verhofstadt will have a chance to 
pursue additional reforms depends on how his 
party fares in Belgian Federal Elections June 10. 
End note.) 
 
¶2. (U) One program in which Verhofstadt has 
invested his personal effort is structuring 
Belgium to be the most competitive venue for pan- 
European pension fund headquarters.  As cross- 
border, EU-wide business expands, EU-wide pension 
funds are growing rapidly, and Belgium wants to 
capture this profitable business niche, offering 
a tax-free corporate status and easy 
establishment procedures.  Belgium features 
strong financial services regulation, and is 
already home to major financial infrastructure 
players such as the Euronext stock exchange, 
Euroclear (bank clearing center), and SWIFT (the 
financial transactions router).  Belgium 
presently hosts 267 private and public sector 
pension funds.  In May, Verhofstadt co-hosted a 
seminar with Boston's State Street Bank lauding 
Belgium's virtues as a Pan-European Pension Fund 
management center.  Netherlands is reportedly the 
leading competitor in this niche field. 
 
--------------------------------- 
Google Finds a Home in Belgium 
--------------------------------- 
¶3. (U) In mid-May, the world?s leading internet 
search engine Google announced it will invest 250 
million Euros (US$340 million) in Saint-Ghislain 
in French-speaking Wallonia?s Hainaut province. 
Google had been prospecting for a site for a 
major data center in Europe for nearly two years, 
and chose the Belgian venue over options in 
Sweden and France.  The search engine giant found 
an 210-acre site with plenty of electricity and 
canal access for water to help keep all the 
Google computers cool in an environmentally 
friendly design.  Walloon authorities had 
additional power lines brought in to guarantee 
150 megawatts to the high-tech company.  The 
Walloon regional government also offered 12 
million Euros assistance to clinch the investment 
for Belgium.  The new facility should create 120 
positions during its initial phase, and Google 
claims it may eventually employ 500. 
 
--------------------------------- 
"I am Googled, therefore I am" 
--------------------------------- 
¶4. (U) The French language daily La Libre 
Belgique (circ. 46,900) reports that Belgian 
French-language newspapers are back on Google 
after agreeing that the search engine can link to 
their Web sites, signs of thaw in a bitter 
copyright dispute.  Copiepresse, a group 
representing 17 Belgian newspapers including Le 
Soir and La Libre Belgique, accused Google of 
violating copyright, particularly through cached 
story links that allowed "googlers" to see older 
material without having to pay for access to 
publisher web archives.  (See reftel for 
details.)  Google has stated all along that it 
honors any and all requests by publishers to 
exclude their sites from this automated archival 
process.  Nonetheless, in response to a February 
ruling by a Belgian court, Google removed all 
links to the Belgian papers.  It appears 
Copiepresse thought the better of its complaint 
once commercial reality dawned.  La Libre admits 
in its coverage that its internet site 
www.lalibre.be, lost 30 percent of its visitors 
after Google stopped linking to it. 
 
--------------------------------------------- -- 
International Visitor Grantees Bring Home Ideas 
--------------------------------------------- -- 
 
¶6. (U) Two newly returned International Visitor 
grantees were profiled in the leading Belgian 
business weekly Trends/Tendances May 10.  The 
article about Rudy Aernoudt, Secretary General of 
Economics, Sciences & Innovation of the Flemish 
Government, and Karel Van Eetvelt, Managing 
Director of employers association UNIZO, 
highlighted five good ideas from the United 
States they believed Belgium should copy.  These 
ideas were: "401K" supplementary retirement plans 
to decrease the burden on government pensions; 
facilitating volunteer work by retired senior 
entrepreneurs who want to put their experience at 
the disposal of younger ones; encouraging public 
authorities to promote innovation by simplifying 
requirements that small companies/individuals 
need to fulfill to get government support and by 
purchasing innovative products; trade unions that 
impose training and aptitude tests for membership 
and become sought-after sources of workers (would 
require "a drastic change of mentality"); and 
promoting Belgium rather than its regions, 
similarly to how the USG promotes America as a 
whole, not individual States, overseas. 
 
¶7. (U) While both men saw negatives in the 
American work place such as the cost of health 
insurance to entrepreneurs, they were favorably 
impressed by their American experience.  Both 
remarked on the U.S. public administration 
positive view of entrepreneurs.  "Entrepreneurs 
are considered heroes who create value added and 
should be helped, supported, and given advice," 
Van Eetvelt said.  "It is quite different from 
Belgium, since according to a Delta Lloyd study, 
63 percent of civil servants in Belgium have a 
negative opinion of entrepreneurs," Aernoudt 
added. 
 
--------------------------------- 
Baxter Pharma Invests in Wallonia 
--------------------------------- 
¶8. (U) U.S. pharmaceutical and healthcare product 
manufacturer Baxter announced plans to invest 83 
million euros (US$120 million) in new production 
facilities in southwestern Belgium.  Products to 
be manufactured include human plasma transfusion 
products, such as immunoglobuline used in immune 
system therapies.  The company, present in 
Belgium since 1954, has invested US$ 136 million 
since 1996, and already produces at three sites 
and employs over 1700 persons.  The new 
investment will add 150 more positions, and take 
four years to fully implement.  Incentive aid 
totaling 7.35 million Euros (US$10 million) from 
the Walloon regional government helped attract 
the investment. 
 
-------------------------- 
Zero-Emissions Belgian Bus 
-------------------------- 
¶9. (U) One of Europe?s leading bus manufacturers, 
Van Hool of Lier, Belgium, near Antwerp, is now 
producing a zero-emission public transport 
vehicle ? with help from U.S. technology.  The 
43-foot hybrid electric bus uses a fuel cell 
power system from Connecticut-based United 
Technologies Corp.  The experimental vehicle will 
be used by Belgium?s largest transit system for 
six months before orders will be accepted from 
other transit systems for the vehicle.   The bus 
can hold 104 passengers, rides on three axels, 
and produces practically no noise.  Van Hool 
claims the vehicle is two times more fuel 
efficient than standard diesel-powered buses, 
which should appeal to European transit companies 
who confront the highest fuel prices in the 
world. 
 
FOX