Almost five months after parliamentary elections saw huge gains for Flanders’ nationalists, Belgium’s right-wing parties are expected to finalize a coalition deal later this week.
Among the most notable policy changes they are likely to enact is a two-year increase in the retirement age. None of the Flemish parties in the prospective coalition had promised such a raise in their election manifestos. It would be planned for 2030.
The Christian Democrat, liberal and nationalist parties that are negotiating a government deal also say they want to liberalize the labor market and reduce Belgium’s high labor costs relative to neighboring countries.
A Belgian worker costs more than €37 per hour on average with social contributions accounting for 27 percent of his or her salary. In Germany, average labor costs are just €30 per hour with nonwage costs making up 22 percent. In the Netherlands, the figures are €32 and 24 percent. In both countries, unemployment is lower than in Belgium where 8.5 percent of the working population is out of a job. In both Germany and the Netherlands, joblessness has also gone down in the last year whereas in Belgium it has remained unchanged.
Concrete proposals coming out of the talks are nevertheless underwhelming. The incoming government would allow students to work and allow bar and restaurant staff to work more overtime. Those measures alone are unlikely to make a dent in the unemployment statistics. A proposal from the Flemish nationalists to limit unemployment benefits and reduce the minimum wage for young workers were rejected by the other parties.
Although the Flemish nationalists have most seats in the federal parliament, winning 20 percent support in the last election nationwide, far ahead of outgoing prime minister Elio Di Rupo’s Socialist Party, which got only 12 percent support, the coalition is likely to name Charles Michel from the liberal party Mouvement Réformateur as prime minister. His would be the only Walloon party in the government.
The Socialists on Tuesday immediately denounced the planned pension age increase as a “frontal assault on workers.”
Earlier, at a party conference in Tubeke, Di Rupo had fulminated against what he described as an “ultraright” government under which “the rich will get richer and the poor will get poorer.”
There is no indication that the new government’s policies would disproportionately affect the poor. But some changes in welfare are inevitable. De Tijd, a business daily, warns that without reform, “social progress will consume itself.”
Our welfare state is based on the assumption that enough Belgians are in work — which is not the case — and that the economy will grow — which is not the case either.
“At some point,” the paper argues, “a reality check is needed and that moment is now here.”
Moreover, generous welfare spending and high welfare dependency especially in the French-speaking south at least partially explains the increasing divergence of identity between the two parts of the country.
Flanders is Belgium’s economic powerhouse, accounting for almost 60 percent of its economic output. The south is relatively impoverished and subject to higher unemployment. Di Rupo’s Socialists have a virtual lock on power there, allowing them to sustain an otherwise unsustainable welfare state with money from the north — which fuels support for the Flemish nationalists they now denounce as extremists.