Bloomberg News

Geens Moves From Banking World to Tackle Belgium’s Budget

March 06, 2013

Koen Geens was thrust into the role of Belgian finance minister just as the stagnant economy forces another round of budget cuts to bring the deficit down to European targets.

Geens, 55, a lawyer, corporate governance expert and director at BNP Paribas Fortis SA, took over yesterday after the sudden resignation of Steven Vanackere amid controversy over a securities transaction by a state-owned bank.

“I learned from the prime minister that we will be having a first budget meeting on Friday,” Geens said late yesterday on Flemish television. “I will study hard in the coming days.”

Belgium’s economy is heading for 0.2 percent growth in 2013 after shrinking 0.2 percent last year, the European Commission forecast on Feb. 22. Its budget deficit is likely to remain stable at 3 percent of gross domestic product. While that number grazes the European limit, Belgium needs to find as much as 3 billion euros ($3.9 billion) in savings to get the deficit down to a goal of 2.15 percent of GDP, Le Soir reported on March 2, citing unnamed officials.

Geens is a Christian Democrat from the northern Flanders region, like his predecessor. Geens didn’t assume Vanackere’s second title as deputy prime minister. That post was assigned to Pieter De Crem, the defense minister.

Legal Faculty

With law degrees from the University of Leuven and Harvard University, Geens has served on the legal faculty in Leuven, on a commission of corporate governance experts and on the Flemish science and innovation council, according to a biography on the BNP Paribas Fortis website.

“I have some political experience and the knowledge given my academic background in fiscal law,” Geens said on Flemish TV. “I hope I am in a position to get the work done rather quickly.”

Wouter Beke, president of the Flemish Christian Democratic CD&V party, praised Geens’ knowledge of Belgium’s fiscal system and the banking industry. “Moreover, he was available immediately,” Beke told Flemish TV yesterday.

Vanackere was the first high-ranking departure from the government of Prime Minister Elio Di Rupo, which took office in December 2011 after an unprecedented 541-day post-election stalemate.

Dexia Rescue

Vanackere’s fall dates to Jan. 31, when Belfius, a bank that emerged from the state’s rescue of Dexia SA (DEXB), bought back 110 million euros of profit-sharing certificates from two Christian labor organizations, one from each Belgian region. The labor organizations reinvested the proceeds in a 6.25 percent Belfius perpetual bond, drawing criticism from opposition parties in Flanders that they profited from a government- brokered deal at taxpayer expense.

Vanackere, 49, quit after 15 months on the job, saying on his website that he was the target of “unjustified insinuations and malicious accusations” over his handling of the Belfius deal.

While Vanackere said he wasn’t involved in the transaction, he was caught up in the fallout because his political roots are in the Flemish labor organization, known by its initials ACW.

Geens stepped down immediately from the board of BNP Paribas Fortis, in which the state holds a 25 percent stake, De Tijd reported, citing an interview. Geens’s law firm will also stop representing the labor organization’s investment arm, the newspaper said.

To contact the reporters on this story: John Martens in Brussels at jmartens1@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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