Peeters wants action from federal government on competitiveness pact

Summary

The federal government should present concrete proposals before the end of the year to realise the competitiveness pact proposed a few months ago, Flanders’ minister-president Kris Peeters said last week, speaking to the Flemish chamber of commerce Voka as the political world returned to work after the summer recess.

Flemish minister-president calls for concrete competitive proposals

“The Flemish government has already laid several concrete proposals on the table regarding incentives via corporation tax,” Kris Peeters said, “proposals that bring salary costs and, in particular, the employers’ contribution to social security down to a more acceptable level.”

According to Peeters, waiting until after next May’s elections – when both the federal and Flemish governments will have a new configuration – is not a solution. “It’s time for action,” he said. “Not next year and not under the next government. We need to get to work this autumn. I expect a positive response from the other governments.”

Meanwhile, Belgium has maintained its place at number 17 on a list of 144 countries ranked according to their global competitiveness. The list is compiled by the World Economic Forum from information collected from more than 13,000 business managers by national partners of the WEF –  in Belgium’s case, by Vlerick Business School.

Belgium’s highest-ever spot on the list was number 15 in 2011, and the lowest was number 20 in 2007. According to Vlerick professor Leo Sleuwaegen, the country has always occupied the same narrow band of places since the criteria for the list were changed in 2006 to take more of a long-term view of growth prospects.

Belgium’s border countries had differing fortunes. Germany rose from sixth to fourth place to land behind leaders Switzerland, Singapore and Finland. The Netherlands fell from fifth to eighth, and the UK from eighth to 10th. Luxembourg stayed steady at 22, while France fell from 21 to 23.

Restrictive labour market regulations

“The Global Competitiveness Report defines the long-run capacity for growth of a country,” explained professor Sleuwaegen. “Belgium has maintained its 17th position in the global ranking, but the growing gap with Germany, our main trading partner, has become a point of serious concern.”

It’s time for action

- Kris Peeters

A country’s competitiveness is determined by a wide range of indicators. Belgium scored highly on health care and primary education (third in the world) as well as higher education and training, the sophistication of the business climate, the efficiency of the goods market and both number and quality of local suppliers.

Belgium lost points because of its restrictive labour market regulations, punitive tax rates, the lack of financial market development and the inefficiency of government bureaucracy – all concerns that have long been stressed by business and industry.

“Belgium has markedly moved downwards for the pillars macro-economic environment and labour market efficiency, two pillars that also in the past pushed us down in the ranking,” Sleuwaegen said. “Heavy government involvement, the effect of taxation on incentives to work and the lack of flexibility in hiring and firing practices continue to appear as the most problematic factors. From the positive side, progress has been made regarding institutions, infrastructure and technological readiness.”

www.tinyurl.com/globalcompreport

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