Because of the limited extent of its war damage, estimated at only 8 percent of the national wealth, and the implementation of a vigorous government policy, Belgium experienced a remarkable economic resurgence in the early postwar years. Monetary reform kept inflation under control, and liberalization of the domestic economy quickly returned the market mechanisms to the centre of the industrial, agricultural, and commercial activities. In the climate of recovery, social legislation won the support of both unions and employers.

The investigation of wartime economic and especially political collaboration with Germany resulted in large-scale purges and the detention of many citizens. The extreme rightist parties disappeared from the political scene. The Communist Party, having identified very early with the resistance movement, experienced a short-lived growth, taking part in coalition governments between 1944 and 1947; the anticommunist reflex during the Cold War brought this interlude to an end.

Despite the economic revival, political stability deteriorated, notably over the “royal question.” In 1944, at the time of the Allied offensive, the Germans had transferred King Leopold III to Austria, where he was held until 1945. The government, upon returning to Brussels in early September 1944, conferred the regency on the king’s brother, Prince Charles. After the war Leopold remained in exile in Switzerland until the “royal question” could be resolved. Generally speaking, the Flemish were the king’s partisans and the Walloons his opponents. The Christian Democrats favoured the king’s return, while the Socialists and Liberals opposed it. In 1950 a referendum showed that nearly 58 percent of the voters approved of the return of the sovereign, but the king’s arrival that year signaled virtual civil war in the Walloon country. In August 1950 Leopold appointed his eldest son, Prince Baudouin, to rule temporarily in his place. In July 1951 he abdicated, and Baudouin officially assumed the title of king.

The composition of the government continued to fluctuate, although from the 1950s onward the Christian Democrats maintained a continuous presence, often in coalition with the Socialists. Various nationalist parties emerged—a Flemish one in 1954 and two French-language parties in the 1960s. Eventually the three traditional parties—the Social Christians, the Liberals, and the Socialists—each split along linguistic lines, rendering the political decision-making process increasingly complicated.

The policy of the postwar Belgian governments, apart from the “royal question” settled in 1951, was dominated by five major issues: consolidation of the mixed economy, the ideological controversy concerning education, the process of decolonization, the matter of language and regional autonomy, and Belgium’s role in the new postwar supranational organizations. In 1948 Belgium joined with the Netherlands and Luxembourg in the Benelux Economic Union, which had been conceived in 1944 in London. The country became a signatory of the North Atlantic Treaty Organization (NATO) in 1949 and three years later joined the European Coal and Steel Community. In 1957 Belgium signed the Treaties of Rome, which it had helped to formulate, becoming a member of both the European Economic Community (later the European Community, which was embedded in and ultimately replaced by the European Union [EU]) and the European Atomic Energy Community.

During the late 1950s, growing opposition to colonial rule in the Belgian Congo led to large-scale demonstrations in Léopoldville. The Belgian government accelerated the process of political emancipation of its colonies, granting independence to the Congo (now the Democratic Republic of the Congo) in June 1960 and to Ruanda-Urundi (now the countries of Rwanda and Burundi) in July 1962.

The education controversy became critical once again in the second half of the 1950s. The Socialist-Liberal coalition simultaneously cut subsidies to private (mainly Catholic) secondary schools and promoted a major extension of the state’s secondary education system. After the defeat of the Socialists and Liberals in the 1958 election, a “School Pact” was signed under the initiative of the new Social Christian prime minister, Gaston Eyskens. This compromise measure, which authorized extension of the state secondary schools while guaranteeing conditional state subsidies for their private counterparts, marked the onset of an enduring ideological pacification in the country.

Following the “miracle recovery” of the late 1940s, Belgium’s economic surge subsided. The consolidation of the mixed economy, aimed at linking economic growth with a more equitable distribution of income and with an increase in the supply of public goods and social benefits, had been successful, but at the cost of rising wages and a heavier tax burden. Continued reliance on the aging Walloon heavy industry, coupled with a declining investment rate, seriously compromised the competitive power of the Belgian economy, reducing its growth rate to a level near that of Britain’s.

Participation in the European customs union from 1958 gradually reversed the unfavourable economic trend by enlarging the market for Belgian products. An explicit expansion policy by the government was also a contributing factor. Prime Minister Eyskens reformed the state finances and launched an active policy of regional economic development in 1959. The Flemish sector, unencumbered by the rigid industrial structure that characterized Wallonia, attracted foreign investment on a large scale from the United States, from Belgium’s European Community partners, and subsequently from Japan. Meanwhile, it was generous state subsidies that kept Walloon heavy industry alive.

The growing economic disparity between the two regions intensified dissatisfaction with the unitary state system. The Flemings opposed subsidizing an ailing regional economy that lacked any prospect of structural industrial reform. The Walloons, in turn, feared that the more numerous and prosperous Flemings would soon dominate the state. Linguistic and economic tensions were now inextricable. As a consequence of massive strikes in Wallonia in early 1961, an immovable linguistic border was defined by an act of parliament in 1962–63, and a new special arrangement was elaborated for the bilingual area around Brussels.