Federal Government reaches budget accord

Belgium’s Federal Government finally reached agreement on the 2017 budget on Friday evening. The news of the agreement was first announced on the Twitter accounts of Federal Prime Minister Charles Michel (Francophone liberal) and the Federal Deputy Prime Ministers Alexanders De Croo (Flemish liberal), Kris Peeters (Flemish Christian democrat) and Didier Reynders (Francophone liberal).

The issues of tax incentives to get people to invest their saving in the economy, capital gains tax on income gained the resale of shares and corporation tax will be discussed separately from the budget.

Speaking on leaving the budget negotiations on Friday evening, the Federal Deputy Prime Minister Kris Peeters (Flemish Christian democrat) told VRT News that “This is a balanced agreement that is supported by all parties”.

Prime Minister Charles Michel will present the budget to Federal Palement on Sunday afternoon.

Although agreement has been reached on next year’s budget, a number of political hot potatoes that were hindering an accord being reached will be the subject of new discussions.

"We have decided to take our time for these far-reaching reforms”, the Federal Deputy Prime Minister told VRT News.

"We need to look closely at what the impact of the reforms will be on companies and on people’s jobs”.

"As regards cooperation tax we have already gone a long way and capital gains tax on shares is being investigated”, the Flemish nationalist Deputy Prime Minister Jan Jambon said.

3 billion euro found

The budget negotiators had to find a total of 3 billion euro in order to comply with the EU’s budgetary demands for Eurozone countries. This is the equivalent of 1.2 of GDP in 2016 and 2017. The budget also provides for a buffer of 739 million.

A number of structural reforms are also contained in the budget. For example with regard to flexible working practices, a law from 1996 on competitiveness and the evolution of gross wages is to be reformed.

The Federal Government says that the measures won’t be detrimental to the purchasing power of those in work or receiving benefits. There will be no repeat on the one-off non-indexisation of salaries and benefits and VAT will not be raised.