Belgium's Federal Government formation enters a "crucial" phase this week as the five negotiating party leaders are discussing important reforms, such as on taxation, pensions and the labour market. Next week, discussions will be briefly put on pause.
This week, Federal 'formator' Bart De Wever (N-VA) is convening the five intended coalition parties (N-VA, Vooruit, CD&V, MR and Les Engagés), and the key negotiators are considering De Wever's so-called 'super-note' to form a "socio-economic relaunch government."
This 'super-note', which De Wever sent to the other negotiators before the weekend, will be an important test of his role as formator as it brings together all kinds of reforms in the labour market, taxation and pensions. While all five parties are committed to making "substantial reforms" in these areas, they have very different visions of what this would mean.
One anonymous negotiator, for example, told De Morgen that "much more will be needed" than the tax measures that De Wever has proposed to make the rich contribute more. In contrast, the liberal MR party was already squarely opposed to plans in the 'Vivaldi' government to introduce a capital gains tax on shares.
Indexation and wage norms
In the coming days, each proposal will be carefully considered to ensure political balance: in exchange for a larger contribution from companies and the very wealthy, for example, a time limit on unemployment benefits would also be introduced.
In terms of pensions, the right-wing N-VA would like to do away with some pension schemes, such as the favourable arrangement for civil servants. However, De Wever's plans to adjust Belgium's automatic indexation system (he wants only net instead of gross wages to be indexed in case of high inflation) will be difficult.
Making changes to the index system inevitably affects Belgium's wage norm, which determines how much wages can rise above the index. In recent years, changes were made near-impossible as socialists and liberals blocked each other when the index or wage norm came up for discussion.
Credit: Belga / Hatim Kaghat
However, by 20 September, Belgium must submit a budget plan to the European Commission. Of the €28 billion to be remediated, negotiators have agreed that €14 billion will be found through reforms, and the remaining €14 billion through additional taxes or savings.
This will also determine the course of the next government. All five parties agreed on the label of a "socio-economic relaunch" government: they want to implement reforms to get the country back on track, after the previous government was unable to do so following several successive crises during its legislature.
