VZCZCXRO7520
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHBS #0170/01 0321647
ZNR UUUUU ZZH
R 011647Z FEB 08
FM AMEMBASSY BRUSSELS
TO RUEHC/SECSTATE WASHDC 6958
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 BRUSSELS 000170 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/OIA, EB/TPP/IPE AND EUR/WE 
TREASURY FOR OASIA/ICN - ATUKORALA 
USDOC FOR 4212/OECA/JLEVINE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN SENV BE
SUBJECT: BRUSSELS BILAT BREW: FEBRUARY 1 
 
(U) Summary:  This issue of the Bilat Brew looks at the local 
impact due to subprime troubles of the US, blood diamond 
smuggling in the region, federal budget struggles, the 
possibility of a national cancer plan, and excessive mercury 
levels polluting the air.  End Summary. 
 
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Fortis Continues to Suffer from Subprime Fallout 
--------------------------------------------- --- 
 
¶1.  (U) Persistent rumors that Fortis faces additional 
write-offs on its subprime exposure has caused its share 
price to fall by as much as 10 percent during one day of 
trading (January 22), alarming the Belgian financial watchdog 
CBFA to the extent that it forced Fortis to issue a statement 
alleging that rumors of its subprime exposure were greatly 
exaggerated.  Fortis' share price subsequently recovered, 
only to be hit again by an announcement from Standard and 
Poors that it might give a negative, instead of a stable, 
appraisal of the Belgian bank.  Most observers agree that 
while Fortis may be not itself have trouble with subprime 
issues, there is still a lot of uncertainty regarding the 
exposure of ABN Amro, the Dutch bank that Fortis, Banco 
Santander and Royal Bank of Scotland bought last summer. 
 
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Blood Diamonds 
-------------- 
 
¶2.  (U) The Antwerp Judicial police are have four different 
diamond trading firms in Antwerp under investigation.  They 
are accused of trading up to 60 million dollars in blood 
diamonds from Angola, in violation of the UN embargo.  Up to 
December 2002 (when the embargo was lifted), these companies 
allegedly smuggled Angolan diamonds via Guinea and South 
Africa to Antwerp.  They are accused of deliberately 
revaluing the stock of other - legal - diamonds so that the 
conflict diamonds could pass under the radar screen.  As a 
result, their entire accounting system up to 2003 had to be 
fraudulent.  Six years ago, when the news of this case first 
broke, Belgian authorities asserted that the allegations were 
mere slander and part of a plan to give the Antwerp diamond 
trading center a bad name. 
 
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Budget Minister Struggles with 2008 Budget 
------------------------------------------ 
 
¶3.  (U) Budget minister (and PM hopeful) Yves Leterme has 
begun a round of so-called budget controls, as a series of 
yearly assessments to see whether the 2008 budget is still on 
track.  In order to have a break-even result at the end of 
this year, he will have to find nearly 3.5 billion euros in 
savings and /or extra revenues.   He claims to have already 
found 2 billion euros, but the remaining 1.5 billion seems to 
be the real challenge.  Leterme has already hinted that the 
regions should take on some of the pension burden of the 
federal government, but has not found a sympathetic ear so 
far.  It does appear, however, that the notional interest 
deduction will be made more restrictive.  Many sources claim 
that this fiscal incentive is too costly to the GOB in the 
short term. 
 
--------------------------------------------- -- 
National Cancer Plan - A Health Policy Priority 
--------------------------------------------- -- 
 
¶4.  (U) Minister for Health and Social Affairs, Laurette 
Onkelinx, announces a cancer plan - almost.  Onkelinx 
announced that she will hold a three-day debate in February 
among cancer experts to determine the best national cancer 
plan for Belgium.  A national cancer plan had been part of 
the French-speaking Socialist party plank, but Onkelinx will 
not just take the PS plan as it stands.  By March 10 she 
hopes to announce a far-reaching plan that will include 
federal leadership on cancer research, prevention, screening, 
and patient care, including longer-term patient studies.  She 
will seek federal government and parliamentary approval 
before the current government ends on March 23. 
 
¶5.  (U) Onkelinx stressed at a recent press conference that 
she seeks a national plan, with participation from regions 
and communities.  Onkelinx anticipates having one central 
coordinating hospital in each region, the Bordet Institute in 
Wallonia, and the University Hospital of Leuven in Flanders. 
She already has been in touch with regional ministers of 
health to start discussion of her plan. 
 
BRUSSELS 00000170  002 OF 002 
 
 
 
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Mercury Levels High in the Brussels Region 
------------------------------------------ 
 
¶6.  (U) Starting January 24, the Interregional Environment 
Unit measured high concentrations of mercury, especially in 
the air in the north Brussels suburb of Neder-Over-Hembeek. 
Levels of mercury concentrations reached 250 nannograms per 
cubic meter, ten times more than the normal levels of between 
two and six nannograms per cubic meter.   Officials 
downplayed the possible effect on public health, while at the 
same time searching for the source of the mercury emissions. 
 
¶7.  (U) By the end of January, Brussels environmental 
officials had checked factories in the region and pointed the 
finger at FMM, a company that reprocesses old automobile 
batteries.  The case is now with the environmental crimes 
unit of Brussels.  Investigators are making a thorough search 
of administrative records, batteries not yet processed, and 
waste at the FMM factory site, including taking soil samples. 
 The Brussels region asserts that combating environmental 
crime is a priority for its legal system.  Brussels had asked 
for assistance from Flemish and Walloon authorities to 
examine the cause of the pollution, leading many to question 
again why environmental issues are a regional responsibility 
in Belgium and not under the full purview of the federal 
government. 
 
FOX 
.