Parliament adopts controversial bill to scrap automatic pay rise

The federal Chamber of Representatives has passed a bill concerning the one-off skipping of the automatic wage indexation system. This happened majority against opposition, with 79 against 55 votes. Opposition members were bending over backwards to delay and sabotage the voting as much as possible, but had to give in in the end.

Several hours of debate preceded the voting. A decision by the right-leaning federal government to give businesses and employers more breathing space, the bill met with fierce resistance from left-wing opposition.

"This 'index jump' is bad news for people's incomes, for purchasing power and thus for the Belgian economy as consumers will be spending less in the long run", the socialists argued.

The liberals and Flemish nationalists explained it would help to reduce the wage handicap employers are facing compared to neighbouring countries as the cost for employing people will fall. The measure should create more jobs in the long haul.

The centrist Christian democrats, in the ruling coalition with liberals and Flemish nationalists, are not big fans of the idea. They have traditionally stronger links with trades unions. MP's of CD&V were not in for a round of applause after the bill had been accepted.

Belgium has a special position in Europe

Belgium's automatic wage indexation system is rather unique in Europe. It stipulates that wages and social benefits are automatically raised when life in general becomes more expensive due to inflation. Under the new bill, the next index hike will be skipped, but it will be just a one-off measure.

It will leave employers with the same wage despite life becoming more expensive. The index is calculated on the basis of a number of everyday products, such as food and oil products. The system was introduced to protect consumers and safeguard people's purchasing power.

The long discussion has been overtaken by reality at present. Inflation rates have been very low or even negative in past months. On the other hand, inflation rates will start to rise again sooner or later, as life will become more expensive at one stage. Employees will feel the measure only then. The present decision will have no impact now, but only at a later stage.