France may fudge its pensions, Germany may quibble over the value of its gold, but Belgium has come up with a unique solution to meeting the Maastricht criteria: selling its embassy in Tokyo.
One Tokyo property agent thinks the embassy, or more particularly the site, could net the Belgians $200 million, knocking anything between 1.6% and 2.8% from the budget deficit. This could knock 0.1% off the Maastricht deficit to GDP ratio at a single stroke.
The land, given to the late King Bouwdewign by Emperor Hirohito, nestles at the heart of Niban Cho, an expensive residential and business district. Although the building itself is considered unexceptional, it has a fine traditional Japanese garden. "The garden is very popular with our guests," says one embassy employee. "It would be a great shame if we were thrown out. Besides, reception rooms in city hotels are expensive to hire and its nicer to hold functions at home."
But the garden is of no importance to one developer, who says he would spend a further $200 million converting the property into prime residential apartments. "The garden would have to go. It's a large plot, perhaps 8,000 square metres and it is hard to get land in this area. It would be perfect for housing expats, perhaps the Belgian ambassador, or TV stars. Nippon TV is just a couple of minutes by foot, and the Vatican embassy is close by."
If the market bottoms out, it might tempt the government to part with the embassy. But there is another reason for holding back. An analyst at a US investment bank in Brussels points out that, under the current Maastricht rules, embassy building sales count as privatization. So while it would improve Belgium's debt ratio, it would not help to reduce the budget deficit. "Since the impact on the debt ratio would be minimal, I think they should wait until the European system of national accounts becomes effective in 1999, and then do it."
And it seems unlikely that the sale will go ahead just yet. According to government sources, a recent report concluded that the Tokyo property market is too quiet to justify the sale, and one property analyst in Tokyo suspects the market may have another 10% to fall.
Since it's not a new idea, it can probably wait a few more years. "It appears each summer when we sit down to discuss next year's budget," says the budget minister's spokesman, Dirk Debacker. "We talk about it but it always disappears. We call it the Loch Ness monster." Treasury officials probably wished they had acted when the idea was first mooted in the mid 1980s, when Tokyo real estate hit the roof. But back then Bouwdewign was still alive. Charles Piggott