Partly thanks to a food scandal that broke out just before the 1999 elections, the VLD became the largest party in the country, obtaining over 22% in Flanders. He quickly formed a coalition with the socialists and the green parties, and was appointed Prime Minister on July 12 1999. It was the first Belgian government without the christian-democrats since 1958, and the first one with the green parties.
Thanks to the economic situation in the beginning of his term, he managed to raise the lowest social alimonies and lowered taxations. After 2001, the economic situation began to get worse. The 'Ageing Fund' or 'Silver Fund' was set up, in order to ensure the maintenance of the retirement pays until 2030. But despite his efforts to boost the economy while in the same time maintaining the social benefits system (lowering of employer's contributions, encouragement of career interruptions,...), the unemployment began to rise, after having dropped during the second Dehaene cabinet.
Much to the disapproval of his coalition partners, Verhofstadt and his VLD opposed granting the right to vote to non-EU-residents. Instead, they proposed and obtained a flexibilisation of the procedure for obtaining Belgian citizenship.
During the prelude to the Iraq crisis of 2003, Belgium joined France, Germany and Russia in their opposition against the invasion.
Following the 2003 general elections, Verhofstadt formed his second cabinet without the green parties, who were practically annihilated. For various reasons, the formation of this government took much longer than the previous one: the economic situation was not as good as it was in 1999, and both political families (liberals and socialists) were approximately the same size. The American government pressured for the abolishment of the law of universal competence (also known as the "genocide law"), which gave Belgian judges the authority to sentence non-Belgians (including American citizens) accused of crimes against humanity. Unofficially there were threats to remove NATO headquarters from Brussels, which was widely seen as a vengeance for Belgium's opposition against the invasion of Iraq.
Nevertheless, Verhofstadt's second government was sworn in on July 12, 2003, with both coalition partners having agreed to abolish the so-called "genocide law" and replace it with a much weaker one.
|Preceded by :
|Prime Minister of Belgium|