After seven months of negotiations, Belgium has formed a new government, with Prime Minister Bart De Wever set to outline policy plans in parliament. A vote of confidence is scheduled, with the government holding a comfortable majority. Unlike some countries, Belgium negotiates detailed policy agreements before forming a government, meaning the direction for the next five years is largely predetermined.
Photo: Dreamstime.
The coalition aims to stimulate economic growth through industrial, energy, labour market, pension, and tax reforms. A "2030 plan" seeks to revitalise industry and encourage innovation. In energy, nuclear power is set to play a greater role, with negotiations planned to restart two reactors in 2026 and explore the construction of new plants. Offshore wind and hydrogen remain key priorities to ensure energy affordability and availability.
Labour market reforms include limiting unemployment benefits to two years, except for those over 55, and addressing the rise in long-term sickness claims. Night work rules will be adjusted to make Belgium more competitive with neighbouring countries. Pension reforms aim to extend working careers and unify schemes for private sector workers, civil servants, and the self-employed.
A tax overhaul is planned, including a delayed reduction in labour taxes until 2027 and the introduction of a capital gains tax of 10% with exemptions for smaller amounts. Additionally, the government has committed to creating a minimum income gap of €500 between workers and social benefit recipients, aiming to incentivise employment. The agreement also seeks to strengthen public finances, with two-thirds of fiscal consolidation expected to come from controlled spending rather than new revenue measures.
Beyond economic policies, the government agreement covers a broad range of areas, including healthcare, justice, migration, and national defence. However, compromises made during negotiations have resulted in gradual rather than radical changes. While the government appears more politically coherent than its predecessor, internal differences remain a challenge.
The economic and budgetary impact remains unclear, with further details expected in Belgium's 2025 budget submission to the European Commission. While immediate budget tightening may slow short-term growth, structural reforms could improve long-term prospects. The government's ability to implement its agenda will determine whether Belgium can balance economic growth with fiscal stability.
More information:
ING
www.think.ing.com