The chief economist of BNP Paribas Fortis warns of the situation in Belgium. Bart De Wever, preformer, will have to quickly dispel doubts about the path to reform. And overcome resistance within its future majority.
This is the kind of interview that sounds like a warning. “Belgium risks finding itself in a perfect storm scenario,” says Koen De Leuschief economist of BNP Paribas Fortis, Free this Thursday. Subtitle: “In the absence of rapid reforms launched by the future government, there is a great risk that our country will be targeted by the financial markets.”
Structural weaknesses
His observation goes beyond the usual observation of “resilience” of the Belgian economy. Of course, our country has experienced slightly better growth than its neighbors in recent years. But it owes this above all to the automatic indexation of wages which supported demand and to business investments. This masks, says the economist, structural weaknesses.
Koen De Leus cites his bank’s Futureproof index as proof, which analyzes the extent to which a country is able to face the challenges of the future. Belgium is only in 21st place among the 27 of the European Union.
The budget deficit, currently 4.7% of GDP, is the first point of attention: “Belgium is in the worst 20% of countries on this criterion. If we do not implement reforms quickly, Belgium’s budget deficit should reach 5.6% of GDP in 2029. We should reduce, during the next legislature, this deficit by 0.5% per year to return to below the 3% threshold. It will be very difficult but necessary.” Translation, you have to save “almost everywhere” and “no longer play Saint-Nicolas”.
Another subject of concern: work: “Increasing this employment rate from 72% to 82%, the level of the best-ranked countries, will be one of the major challenges of the next government. This will be essential to reduce social spending and reduce the cost of aging.” All is not lost, particularly because our country remains a land of innovation, but there is work to be done.
De Wever’s obstacles
All this is on the menu for Arizona, this coalition that the now federal “preformer” Bart De Wever is trying to put in place by combining his party, the N-VA, with the CD&V, Vooruit, the MR and the Engagés. This coalition aims to make the socio-economic the priority issue, with budgetary consolidation as a major constraint. The result of the vote demonstrated the concern of Belgians for the health of our economy.
The maturation of the project, however, risks being delayed precisely by the scale of the savings to be made.: some 5 billion per year during the legislature. Flemish social Christians and socialists have unanimously expressed their concerns about the health care budget. There is no question of affecting the growth standard too significantly. A form of squaring the circle.
The other thorn in the preformer’s side concerns his party: how to obtain commitments in terms of institutional reforms or regional accountability? “The risk is losing momentum“, comments political scientist Jérémy Dodeigne, in Litter.
Maxime Prévot, president of Les Engagés, underlined how the formation of a federal government before the national holiday of July 21 was a “fantasy” of journalists. However, we can bet that we won’t have to wait too long.
