With the budget agreement, Prime Minister Alexander De Croo wants to demonstrate that his government can ‘pry what has long been unshakable’. But with a landing crisis and much smaller reforms, it resembles a typical Belgian agreement.
The latest budget conclave was not only the first meeting marathon of the Vivaldi parties that was not entirely devoted to the corona crisis, it was also the first budget round that Vincent Van Quickenborne experienced where not a drop of alcohol was touched, noted the Open VLD deputy prime minister. when presenting the budgetary agreement. It fits in with the image of new-style politics that the liberals like to hang over the De Croo government. Exquisite wines are no longer discussed, but the filling on the pancake that the top ministers were served as a snack three times in the past week. Ice cream was apparently a favorite.
In keeping with the proclaimed new political culture, the budget agreement seemed to be coming without the usual crisis in Belgian politics, but that turned out to be a vain hope. “We were almost done just after midnight, but driven by the dislike that PS chairman Paul Magnette and MR chairman Georges-Louis Bouchez have for each other, the PS and the MR deputy prime minister continued to harass each other.” a person concerned.
A major bottleneck turned out to be the savings on the parafiscal exemption that employers receive for the first employee they recruit. This favorable regime is so interesting for companies that the Court of Audit notes that it is far too expensive for the jobs it produces. The socialists were eager to save, but the French-speaking liberals were on the brakes. Deputy Prime Minister Sophie Wilmès (MR) even briefly left the negotiating table because she thought the planned savings were too great.
We wriggled loose what seemed unshakable for a long time.
Companies sometimes abuse the system by designating their employees with the highest wages as their ‘first hire’, which means that they do not have to pay social security contributions for that wage. Initially, the plan was that companies would not have to pay the first 3,200 euros in contributions per quarter for their first recruitment, eventually that became 4,000 euros. The planned savings will yield 47 million euros next year, of the half billion that the system costs, at least 10 million less than the French-speaking socialists hoped.
Around four o’clock on Monday morning, the De Croo cabinet announced an agreement after all. Several deputy prime ministers went home to get some sleep. However, after a few phone calls, PS Deputy Prime Minister Pierre-Yves Dermagne indicated that he could not agree. The passage around night work in e-commerce turned out to be unacceptable for his party.
In our country, work performed after 8 p.m. is night work. In order to be able to work, companies have to conclude an agreement with the unions, who often pay high premiums for this. The Liberals had proposed to erase the union veto. The agreement of one instead of all unions should suffice to perform night work. In the absence of an agreement, night work should even be possible on an individual basis, they thought.
Those plans were unacceptable to the PS. A solution was found by shifting the file to the social partners, although it was unclear what should happen if the unions and employers’ organizations do not reach an agreement. According to the liberal reading, their solution would then be implemented. At dawn Dermagne asked and received guarantees that, in the absence of an agreement, a solution will be sought in mutual consultation.
After five hours of shuttle diplomacy by De Croo, an agreement was reached by nine o’clock. “It is a typical Belgian agreement in which every party can do something,” the government said. The socialists can show off a lower energy bill for the less fortunate, the greens with investments in the railways and a green tax such as the air tax. CD&V has a tax reform proposed by Minister of Finance Vincent Van Peteghem, and the liberals are shielding themselves with a series of labor market reforms and the reintegration of the long-term sick, which is linked to (limited) sanctions.
Yes, they are steps, but in this country it is no different.
According to Belgian tradition, it is an agreement of evolution, not of revolution. The fact that both the trade unions and the employers’ organizations are disappointed is significant in that regard. “Yes, it’s steps, but in this country it’s no different,” says a liberal source, pointing out that the budget deal contains reforms that the Michel government has gritted its teeth. The centre-right squad failed to introduce sanctions for long-term sick and was even less active around night work in e-commerce.
In light of the self-imposed ambitions, the criticism is that the agreement is meager. The labor market measures will not suffice to achieve an employment rate of 80 percent by 2030. Green investments are largely insufficient as a climate effort. And with the budget work we are not heading towards a balanced budget. A lot more work is needed to achieve those goals.