National Reform Programme 2018

In this National Reform Programme (NRP), the various governments report on the structural reforms that have taken place since the country-specific recommendations of 2017 and indicate which measures may be expected in the near future. The measures are complementary to the budgetary measures developed in the Stability Programme. According to the governments, the reforms meet the findings contained in the Country Report, the country-specific recommendations for 2017, the priorities of the Annual Growth Survey, the path towards achieving the Europe 2020 goals, and contribute to the implementation of the European Pillar for Social Rights. This year’s NRP is presented in a context of particularly good macroeconomic results for the Belgian economy. Those results are detailed in Chapter 2 and come from an environment with relatively stable income inequality which is rather low compared to other EU Member States.

The most striking of these reforms is the ‘summer agreement’, which was concluded within the federal government on 26 July 2017. The Agreement is the first step in a series of reforms that will be developed and implemented during the remainder of the government’s mandate. Among the measures with a significant effect on economic potential are lower corporate tax, an exemption on dividend taxes, and increased flexibility in the labour market.

Other measures were implemented outside the framework of the summer agreement. For example, the second phase of the tax shift was implemented with a reduction in employers’ social security contributions, and adjustments to the personal income tax system. The third and final phase will take place in 2019-2020. Furthermore, the fight against social dumping in the construction industry was stepped up, including with a phased reduction of wage costs for shift work on construction sites. In 2020, this reduction will have reached cruising speed and amount to 604 million euros.

Progress was made in the areas of infrastructure and investments with the ‘investment pact’ and the launch of an ‘energy pact’. The national pact on strategic investments is in line with the European Investment Plan. It is intended to be an incentive for public and private investments in strategic sectors, such as transport and communication, as well as education and healthcare. The federal and regional governments aim to provide a stimulus of 60 billion euros by 2030. The federal and regional Ministers of Energy presented their vision for an interfederal energy pact to their respective governments in December 2017. Each of those governments have since given their agreement, although the federal government’s agreement came with reservations. The pact lays down a vision for the Belgian energy system by 2050 and clarifies the various goals, including those relating to the climate. It lays down the foundation for a coherent medium and long-term strategy for adjusting the energy system by formulating a number of important measures aimed at accelerating the energy transition.

In the process of structural reforms, there is close cooperation between the communities and regions – including both the governments and the parliaments – and the social partners. The reform plans of the communities and regions are attached in full to this report as Annexes 1 to 5. They provide a detailed explanation of their measures for the implementation of the country-specific recommendations. Those programmes also identify progress in the regional Europe 2020 targets and the measures that support the achievement of those goals. The opinion of the social partners is also attached to this report.

In the framework of the European Semester, an intensive dialogue is taking place – both in the fact-finding mission and in bilateral meetings – between the departments of the European Commission and the respective levels of government in Belgium. Each of those levels (federal, communities, regions) brings up its measures in the framework of the European Semester.