Koen Geens to Succeed Vanackere as Belgian Finance Minister

Koen Geens was named Belgian finance minister to succeed Steven Vanackere, who unexpectedly resigned today over the handling of a bank securities deal.

Geens, a lawyer and director at BNP Paribas Fortis SA, takes up the position as Belgium grapples with demands for fresh budget cuts. A former economic adviser to Flemish regional government leader Kris Peeters, Geens will be sworn in at 7 p.m. in Brussels, the Royal Palace said in a statement.

Vanackere, 49, quit after 15 months on the job, saying he was the target of “unjustified insinuations and malicious accusations” over his role in a transaction involving state-owned Belfius Bank and a workers’ organization. Vanackere succumbed to attacks from a party that has called for the northern region of Flanders to break away from Belgium, a reminder of the political tumult that haunts the country’s coalition government.

“Some people apparently couldn’t imagine that I could serve impartially as finance minister,” Vanackere said in a statement on his website. “This climate of mistrust hinders my work. It is time for this to cease.”

Geens, who has degrees from Harvard University and Belgium’s Leuven University, teaches corporate law at Leuven. Geens, born in 1958, served as legal adviser on the initial public offerings of Belgacom SA and Elia System Operator SA, according to the BNP Paribas Fortis website. He was economic adviser to Peeters in Flanders from 2007-2009.

Belgium’s Economy

He takes over the reins at the Finance Ministry as Belgium’s economy is heading for 0.2 percent growth this year, after shrinking 0.2 percent in 2012, according to European Commission forecasts on Feb. 22. The nation’s budget deficit is likely to remain stable at 3 percent.

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, Le Soir reported on March 2, citing unnamed officials.

Vanackere, a Christian Democrat from the Flanders region, is 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.

With Di Rupo becoming the first native of the French-speaking southern region to run Belgium since the 1970s, the job of finance minister went to the Dutch-speaking Vanackere, who was foreign minister previously. Di Rupo accepted the resignation “with regret,” his office said in a statement.

Sudden Resignation

The sudden resignation offered a window on the unsettled politics of Flanders, the wealthier, Dutch-speaking northern region. The separatist N-VA party scored 39 percent in a poll published by La Libre Belgique newspaper last month, equal to the three next-most-popular parties combined.

Led by Bart De Wever, operating from a power base as mayor of Antwerp, Belgium’s second-largest city, the N-VA is biding its time after failing to block the formation of Di Rupo’s federal government. The next elections are in 2014, raising the specter that an emboldened N-VA will sow renewed doubts about Belgium staying intact.

Vanackere’s fall dates to Jan. 31, when Belfius, a bank that emerged from the state’s rescue of Dexia SA, bought back 110 million euros of profit-sharing certificates from two Christian labor organizations, one from each Belgian region.

Taxpayer Expense

The labor organizations reinvested the proceeds in a 6.25 percent Belfius perpetual bond, drawing criticism from the N-VA that they profited from a government-brokered deal at taxpayer expense.

While Vanackere said he played no role 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.

In a statement, the N-VA said it never called on Vanackere to quit or suspected him of wrongdoing. All it did was call for a parliamentary probe to deliver “clarity and transparency” on the Belfius deal, the statement said.

Vanackere worked as a bank clerk before entering politics. His climb up the ladder included stints as manager of the Brussels port and the transport authority. As foreign minister, he played a role in the Belgian decision to dispatch fighter jets to support the rebellion against Muammar Qaddafi in Libya.

“I haven’t been accused of anything,” Vanackere said. “But this doesn’t save me today from having to devote too much of my energy to responding to false allegations.”

Before it's here, it's on the Bloomberg Terminal.