VAT falls from 21% to 6%, a measure that will stay in place at least until the end of 2015, when the impact of the reduction will be evaluated. The measure is intended to shore up the competitive position of Belgian industry because at the minute businesses pay a higher VAT rate on electricity than most of their foreign rivals.
Wage costs will be cut by 450 million euros in 2015, 2017 and 2019. A third of the reduction will be achieved by a general measure affecting all workers; a further third will benefit low earners, while the remainder will be cut in industries that are struggling like car assembly.
The regions will now have to examine how they too can contribute to the recovery.