Belgium's employers' organisation, Voka, asked the Federal Government to prepare a temporary freeze on wage indexation on Monday, arguing that rising energy prices risk placing an unsustainable burden on businesses.
The proposal comes amid the economic fallout from the war in the Middle East, which has driven up energy costs and is expected to push inflation higher than previously forecast. As wages in Belgium are automatically indexed to inflation, companies face rising labour costs as the cost of living increases.
"For certain companies and sectors, that would be one shock too many," the organisation warned.
The employers' group is specifically asking that the first 2% wage increase not be applied during the next indexation round. As wage indexation occurs at different times depending on the sector, the measure would take effect at each sector's next scheduled adjustment.
Frank Beckx, the organisation's managing director, said the measure would provide much-needed relief. "This is crucial to give companies some breathing room in extremely difficult times," he told Het Laatste Nieuws.
He added: "If that does not happen, the bill for the crisis will fall entirely on companies, and we risk enormous damage to our economy with more bankruptcies and mass layoffs. Without competitiveness, the purchasing power of families is not guaranteed either."
A similar index freeze was introduced in 2015 under the Michel government, with the aim of reducing Belgium's wage cost gap with neighbouring countries and strengthening the competitiveness of its businesses.
'If prices rise, wages must rise'
Voka's proposal has since been rejected by the leaders of the Flemish socialist party Vooruit and the Flemish Christian Democratic party CD&V.
“No f*****g way,” said Vooruit's leader Conner Rousseau, in a post published on the party's Instagram account.
"The index is the best protection against the high prices caused by Trump and Putin. If prices rise, wages must rise. It’s that simple. With Vooruit in the government, the index remains guaranteed," reads the social media post.
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CD&V leader Sammy Mahdi also immediately rejected the proposal. "If this war continues, it will become a serious financial burden for a great many people. To consider implementing an index jump on people’s wages at such a moment is truly completely out of touch."
He added: "Taking money from retirees and working people to give a gift to companies, even though labour costs for companies in our country are no higher than in our neighbouring countries. Daens is turning in his grave,"
