In 1996, Belgian politics centered around three major issues: the jobs contract, the 1997 budget and political fallout of the Dutroux affair (the four girls killed by a pedophile ring). During the first months of the year, Prime Minister Dehaene attempted to win support for a comprehensive jobs contract, but the draft agreement was turned down by the Socialist trade union militants. Nevertheless, the measures contained in the agreement were later implemented by the cabinet, without the consent of the employers and organized labor. Together with adjustments made to the social security system and implementation of budgetary measures needed to reach the conditions set by the EU for joining the Economic and Monetary Union, the jobs contract was implemented by means of special powers. The cabinet obtained these special powers from Parliament before the summer recess. After the summer, as a result ofthe Dutroux alfair, the cabinet dealt with legal reform, in the process trying to quell tensions arisen among the law enforcement agencies.

1996 was a y ear of both gridlock and reform for the European Union. The EU experienced one of its major institutional crises with the Mad Cow Disease. It was equally confronted with only minor progress in the ongoing Intergovernmental Conference for institutional reform as no major breakthroughs could be expected before the UK elections of May 1997. However, some major achievements occured as well. The adoption of the Stability Pact at the Dublin Summit in December increased the credibility of the EMU-project seriously. At the same time, the EU intensified its efforts to improve its trade relations with different parts of the world, especially South and South-East-Asia. At the same time however, the Commission bas been confronted with increasing disputes on the way in which it uses its prerogatives in competition policy and the enforcement of implementation.

The first general elections for the Flemish Parliament have given this institution a new dynamic. In its first session (1995-1996) several ambitious reforms were approved in order to modernise the internalfunctioning of the Flemish Parliament. It has become a place for debate beyond party borders. In its classic functions like voting laws and controlling government improvement is also visible. However, there are some disappointing results: the attraction of the plenary session stays low and the number of interpellations is still considerable. In its second session the Flemish Parliament was very active in trying to improve democracy in Flanders. Those innovations have still to be implemented in 1997 and 1998. The modernizing of Flemish Parliament in the last two years has structural characteristics. The end of 1997 and 1998 must show if that is sufficientfor a lasting change in mentality.

In the political field, Flanders experienced a very eventful year throughout 1996. The inauguration of the Flemish Parliament and the award for a 'Draft Constitution for Flanders ' made up two symbolic heights of the Belgian federalization. On the other hand, the deepening and the widening of the Flemish autonomy regularly led to tensions between the Flemish and the Walloon Community. In the policy fields as well, far-reaching changes took place. The most important ones are mentioned within the scope of this annual review article.

In 1995, the Flemish Government commissioned a two wave panel study on the citizens knowledge about the Flemish institutions, structures, and policy, and on the effect of an intensive information campaign held between the first and the second wave. 710 respondents co-operated in thefirst wave. In 1996 the study was repeated, following a simulated test-re-test design with 532 panel respondents and 455 new respondents. This study is based on the 987 respondents in the 1996 survey. After a discussion of the theoretical models for political knowledge, a model with eight latent variables and with a number of social-background variables is introduced and tested, using a structural modeling approach. The model has a strong predictive power for political knowledge (64% explained variance). The most important explanatory variables are education, and reading political news in newspapers. Other explanatory factors for the variation in political knowledge are generation, and membership of voluntary associations, gender, individualism, and reading local news. The 'consumption' of local news or sensational news about crimes or calamities has a negative effect on political knowledge. The lack of political knowledge clearly affects both trust in polities and the experience of a complex incomprehensible society. The less the knowledge the more distrust and feelings of uncertainty. These relationships clearly show the importance ofknowledge about politics for the quality of democracy.