In its most recent Country Report, the European Commission is relatively positive about the progress Belgium has made with the structural reform of its economy. While the report was being compiled, the Federal Government and the governments of the communities and regions had the opportunity to add comments and further clarifications to the draft text. They considered this particularly valuable.
In this National Reform Programme, the various governments report on the structural reforms since the Country-Specific Recommendations of 2016, indicating which measures can be expected in the near future. The measures are complementary to the budget measures outlined in the Stability Programme. In the opinion of the governments, they are in line with the conclusions of the Country Report, the Country-Specific Recommendations 2016, the priorities of the Annual Growth Survey and the process for achieving the Europe 2020 objectives.
The most visible measure is the review of the Labour Cost Law of 1996. This review must ensure that the labour-cost handicap, which has grown since 1996 compared with the neighbouring countries, does not increase more, something for which the original law did not prove sufficiently effective. Under the new law the historic labour-cost handicap may even potentially be eliminated, achieving an approximately equal evolution in wages and productivity. As such, the country’s competitiveness will be strengthened, which in turn may give rise to further job creation.
The Country Report already indicated that the latter was robust, albeit with a side note that certain groups do not sufficiently reap the fruit of this situation. In 2016, a Federal Poverty Reduction Plan was launched to, among other things, address this issue. Moreover, the regions are granting reductions on the social security contributions of certain target groups and implementing a targeted activation policy for unemployed persons.
Two other important issues that Belgium is working on are the investment pact and the energy transition. In September 2016, the Federal Government announced a National Pact for Strategic Investments. This follows on from the European Investment Plan and must serve as an incentive for public and private investments in strategic sectors. The energy transition is part of the forthcoming phase-out of nuclear energy, but also serves the energy and climate objectives. In both cases, there will be strong interaction between the federal and regional levels.
Progress has been made in several areas thanks to a number of measures. This relates, among other things, to the tax shift, the promotion and funding of innovation, the single market for regulated professions, the modernisation of industry (Industry 4.0) and the promotion of entrepreneurship. Finally, initiatives have also been undertaken to reform education and increase competition in retail.
The communities and regions - both the governments and the parliaments - and the social partners are closely involved in the structural reform process. The reform plans of the communities and regions have been included in full in this report as Annexes 1 through 5. They offer a detailed explanation about their measures to implement the Country-Specific Recommendations. These programmes also highlight the progress in terms of the regional Europe 2020 objectives and the supporting measures. The advice of the social partners has also been included as an Annex.
