1Research dep.

Poverty overshadowed: the Belgian case

European sociale conferenceWorkshop on national reform programs

Brussels, 19th of September 2011

Chris Serroyen – Head research departmentChristian Trade Union Confederation of Belgium

2

OUTLINE

Social and economic situation in BelgiumPreparation of the national reform programNational programEuropean recommendationsFurther debate

3

Social and economic situation

Also Belgium was severely hit by the finincial marketsBut effects on labor markets and society were moderated:•automatic stabilizers: indexation, minimum wages, employment protection, temporay unemployment blue collar workers, progressive taxes, …•central agreement 2009-2010: indexation + 250 euro for employees; real increases for social benefits

4

• recovery plan + new crisis measures (esp. temporary unemployment for white collar workers)

• fiscal pathway to reduce deficit/debt (zero deficit in 2015) postponed painful measures to 2012-2015

Sooner exit out of the crisis: economic growth since 2008 stronger than in Germany:

• 2011 2.4%• 2012 1.6% (?)

Social and economic situation

5

Unemployment (Eurostat)• Belgium: 7.5%• Germany: 6.1%• France: 9.9%• Netherlands: 4.3%• EU27: 9.5%• EU15 (Eurozone): 9.5%

Social and economic situation

6

Poverty and exclusion (SILC)

Social and economic situation

Parameter (%) 2005 2007 2009

B EU16 B EU16 B EU16Income poverty 14.8 15.2 15.2 16.1 14.6 15.9Material deprivation

6.5 5.6 5.7 5.3 5.2 5.6

No jobs 15.1 9.6 13.8 9.6 12.3 8.9Total 22.6 21.3 21.6 21.7 20.2 21.1

7

Concentration of poverty

Social and economic situation

8

Income inequality

Statistical problems:• federal administration: worsening (based on

fiscal data)• OECD: improving (manipulation of data)

Social and economic situation

9

10

Preparation EU 2020

Three official contacts (preparation of the draft, preparation of the final programm, final programma), with:•National Labour Council•Central Economic Council•Federal Council for Sustainable Development

11

Preparation EU 2020

Formal exercise, without real interaction!Involvement anti-poverty organizations and social partners department Social EmancipationProblems: •difficult cooperation with Regions and Communities (disturbed by the political tensions)•caretaker government (no real commitments possible)

12

Preparation EU 2020

Platform text civil society (on the initiative of ACV/CSC and BAPN)Highlights (in general)– balanced objectives– precise, unambiguous objectives – not only objectives, but also tools/actions– not only objectives for 2020, but also intermediate

objectives– regional objectives– additional objectives for each main objective

13

Preparation EU 2020

Highlights (concerning poverty and exclusion):– 380.000 (= reduction with 17%) as an absolute

minimum– additional objectives:

• administration: child poverty, debt problems, households without work• platform: inequality (Gini), income poverty , working poor,

energy precariousness

– social policy is more than poverty reduction – maintaining open coordination method for social policy

14

Preparation EU 2020

National programActual situation 2020 EU-target

Employment rate 67.6% 73.2% 75%

Innovation 1.96% BBP 3% BBP 3% BBP

Unqualified school leavers

11.7% 9.5% 10%

Tertiary education 43.2% 47% 40%

Poverty and exclusion 2.200.000 -380.000 20.000.000

(-17.3%) (-17%)

Energy/climate p.m. p.m. p.m.

15

Preparation EU 2020

Remarks:• 17.3 %-target for poverty and exclusion is rather

ambitious: other countries don’t have a general target or have weaker targets (from CZ = 1.9% toFI = 16.5%); exception: LT: 18.3%

• additional objectives administration: postponed• additional objectives platform: no response• no actions• quid regional and intermediate targets?

16

EU recommendations

1. accelerate correction of fiscal deficit (below 3% in 2012), mainly on expenditure side

2. preventing early exit of labor market3. link statutory retirement age to life expectancy4. finalize restructuring of banks5. reform the system of wage bargaining and

indexation

17

EU recommendations

6. reduction high tax and social security for the low paid

7. shift tax burden from labor to consumption + more environmental friendly taxation$

8. target measures at older workers and vulnerable groups

9. boost competition

18

Fiscal policy (announcements)

Proposals for a new federal government (Di Rupo)1.preventing early exit2.lowering unemployment benefits for long term unemployed (minimum lower than European poverty thresholds)

19

Fiscal policy (announcements)

3. less assimilated periods for pensions4. less budget (60%) for the bi-annual

improvements of social benefits

At the other hand: new taxes, esp. on capital (incomes)

20

Further approach ACV/CSC

1. no opposition to the fiscal pathway (3% in 2012 and zero deficit in 2015)

2. shared responsibility of all policy levels3. first and foremost deficit reduction at the

income side

21

Further approach

4. strongest shoulders – strongest efforts5. protection of the weakest (no reduction of

social benefits)6. reduction of poverty ànd inequality as a first

priority

22

The worst has yet to come?

1. turbulences on financial markets2. economic governance: sixpack, scoreboard, dominance of

Ecofin3. further concretization of “flexicurity” and trend to more

precarious work4. weakening of the open method of coordination (or

concentration on poverty reduction?)5. growing pressure on national wage standards (esp. for

foreign workers/companies)6. uncontrolled increase of “social fraud”