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The ambitious targets set in the 2011 NRP are confirmed, despite challenging economic conditions. According to most of the latest observations, the trends are moving in the right direction and several of them are even outperforming the very ambitious targets. This is the case, for instance, for indicators for R&D expenditure, greenhouse gas emissions, renewable energy and higher education. On the other hand, it should be said that the trends reflected by other indicators, for example in the area of poverty and social inclusion, are rather disappointing, and that is certainly due to the challenging economic conditions. Moreover, fiscal consolidation is essential to maintaining our wealth and our social security system.

Furthermore, the federal and regional governments agreed on a Pact for competitiveness, employment and recovery at the end of November 2013. It contains several measures to increase the competitiveness of businesses and to boost households' purchasing power. The federal government will thus take measures to reduce labour costs, increase the employment bonus for low wages, further develop continuing vocational training and cut VAT on electricity. Moreover, the link to well-being of social security payments has been confirmed. The authorities have also agreed to develop free zones.

In this regard, the Flemish government is focusing on the following measures. The competitiveness-related provisions and measures are primarily aimed at lowering social security levies. It also seeks to reduce energy costs, to support R&D and innovation and to back business investment, investment in human capital and public investment. Finally, it wishes to provide transversal budgets for boosting the economy and competitiveness.

Together with all the relevant stakeholders, the Walloon government engaged in an in-depth reflection to identify long-term priorities for Wallonia, resulting in the adoption of “2022 Marshall Plan” in December 2013. This paves the way for Wallonia to respond to its challenges in the following areas: competitiveness, fiscal and environmental sustainability, demographics and health, as well as the transfer of powers. The first concrete actions have already been taken, including setting up a group of Walloon social partners. This plan also operates in connection with the recovery plan.

In May 2013, the Brussels government decided, in agreement with all the Brussels social partners, to concentrate on four fundamental areas. In this respect it took 29 key measures to enable it address the following major challenges by 2020: demographic expansion, the interlinked employment, training and education policies, the fight against the growing two-tier nature of the city and its internationalization. The Brussels committee on social and economic concertation regularly monitors the implementation of these measures, eleven of which are levers to boost competitiveness.

The governments are convinced that the measures they have taken address the country-specific recommendations made to Belgium during the Council of July 2013.

This NRP intends to provide a balanced treatment of the EU2020 targets and the answers to the countryspecific recommendations. Simultaneously, attention is paid to Belgium's commitments in response to the Euro Plus Pact and the priorities of the European Commission, which are supported by the Council and are described in the Annual Growth Survey of November 2013. The Belgian governments are also convinced that the European Semester should deal with all aspects of sustainable development (the economy, social aspects and the environment) on an equal basis. As the programme indicates, fulfilling the European commitments requires a strong involvement of the different entities in the European procedures and projects under the EU2020 Strategy’s flagship initiatives.

In its in-depth review, the European Commission calls on Belgium to undertake an ambitious policy to remedy the economic imbalances noted. The Belgian governments are convinced that this programme is consistent with this essential requirement.

This programme is the result of a close collaboration between the federal government and the governments of the Regions and Communities. The reform programmes of the Communities and Regions are attached to this document and describe in detail the specific measures they have taken. On several occasions, the social partners and civil society were also involved in drafting the programme and monitoring its progress. Belgium is known for its dialogue-based approach, which is central to the constructive relationship between employers' and workers' organizations. This constant dialogue and the cooperation with the various sectors of our economy are a priority for the different governments. Maintaining and attracting investment is a major asset.

In 2013, the Belgian governments also agreed on major institutional reforms, i.e. the sixth state reform, which will enter into force as from 1 July 2014. The aspects related to these structural reforms are addressed in subsequent chapters. This reform increases the weight of the Regions and Communities and consequently the importance of sound cooperation between the federal authorities, the Regions and the Communities. Every effort is made to ensure smooth cooperation, while respecting the competencies of each entity, to increase the country’s efficiency.

The (inter)federal authorities and the Regions and Communities have taken the necessary steps for a smooth transfer of powers. For instance, the Interfederal Taskforce has established protocols organizing the cooperation between the federal, regional and community authorities during the transition period. These protocols are due to be adopted by the federal and Flemish governments in April 2014.

2014 is a landmark year as parliamentary elections are to be held on 25 May. To prepare the post-electoral period in the best possible manner, much work has been done in recent months to define the structural reform options. These initiatives are also dealt with in subsequent chapters.