'The sting is in the tail': Tensions over tax cuts rise in Belgian Government talks 

'The sting is in the tail': Tensions over tax cuts rise in Belgian Government talks 
Antwerpen mayor Bart De Wever pictured during the oath taking ceremony for some of the new mayors of the Antwerp province. Credit: Belga/Dirk Waem

Several parties of Belgium's next 'Arizona' Federal Government have problems with the latest rewrite of federal formator Bart De Wever's (N-VA) socioeconomic 'supernote' – especially following the return of the tax cut and leaks to the press.

N-VA, MR, Les Engagés, Vooruit and CD&V met on Monday to work out non-socioeconomic sticking points. They are continuing this on Tuesday: the negotiators will not discuss the labour market, pensions and taxation, but rather the Regional and Community issues – which were also discussed last Saturday.

Despite revising his 'supernote' to incorporate the many amendments put forward by the coalition parties (Vooruit tabled around 500), there was little enthusiasm for De Wever's new programme of socioeconomic reforms when it was revealed on Friday. For Flemish socialists Vooruit, as well as for centrists CD&V and Les Engagés, the current text is not good enough to start "unfolding the landing gear", as De Wever put it on Sunday (ie. to nearly have a deal secured).

Tensions are said to be rising again after the net tax cut has resurfaced in the plans, according to reports by De Tijd over the weekend. A source also confirmed the divisions to Belga News Agency.

Vooruit's Frank Vandenbroucke (left) and Vooruit's leader Conner Rousseau pictured ahead of a meeting to discuss a possible coalition for the Federal Government. Credit: Belga/Benoit Doppagne

It concerns a €1 billion tax cut by the end of the legislature, which comes on top of the €23 billion savings with difficult reforms in pensions and the labour market. Just a few weeks ago, however, De Wever said he was working on a "fiscally neutral" reform, saying that the €20 billion savings operation and the search for €3 billion for new policies "is already hard enough as it is."

Without this net €1 billion tax reduction, however, it is feared that MR leader Georges-Louis Bouchez will not agree to the introduction of a capital gains tax.

While a national demonstration took place last Monday against the expected plans to save on pensions, the centre-left parties (Vooruit, Les Engagés and CD&V) are concerned that the tax cut money will have to come from social security, especially pension reform.

However, the proportions for the measures have long been fixed: one-third of the €23 billion savings effort would be done by cutting spending and tapping new revenues (such as a capital gains tax), while two-thirds would come from revenues as a result of the reforms.

Hard to digest

Vooruit feels that its leader Conner Rousseau has already shown a great deal of willingness to compromise and the party does not want to go any further. "This new supernote is hard to digest for Vooruit."

This means that there are still important sticking points to resolve before the parties agree on a deal. On Wednesday, the Arizona leaders will again discuss institutional reforms – something that N-VA is particularly is keen on.

"The sting is in the tail. At the end is where it all happens," De Wever said on Monday, repeating that he only wants to lead a government that "can do something useful. I am not going to compromise on ambitions."

When the socioeconomic supernote will be back on the table is not clear for now.

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