Belgian budget minister optimistic about economic recovery

Belgian budget minister optimistic about economic recovery
Belgian budget minister Eva De Bleeker, credit: Nick Decombel

After almost 500 days since the elections in May 2019, a new Belgian government took over after the care-taker government which had managed the country during the first phase of the coronavirus crisis and was sworn in on 1 October 2020, with Alexander De Croo, from the Flemish liberal party Open Vld, as prime minister.

The government is a coalition of seven Flemish and Francophone parties and include socialists, liberals, greens and Christian democrats. Eva De Bleeker (open Vld) was appointed to secretary of state for budget and consumer protection, a critical post during the economic crisis and the post-COVD recovery.

“Managing the budget and protecting the consumers fits perfectly my background,” she told The Brussels Times in an interview. She has studied commercial engineering and international political economy and worked in the European Commission and the European food and drink industry, the biggest manufacturing sector in the EU.

She is well aware that a gigantic task lies ahead of her but stressed that it was not the time to stand idly on the side-line. In fact, she became interested in politics a long time ago.

“When I was 16 – 17 years old, I used to read articles by liberal politicians. I was inspired by Lucienne Herman-Michielsens, who fought for gender equality and the right to abortion in Belgium. I remember that I saw her in TV with tears in her eyes when the law on abortion rights passed in the parliament in 1990. This made me realise that political action could change society.”

As chairperson of the women association of Open Vld, she is a keen supporter of gender equality. What do you think about the participation of women in Belgian politics?

“This is an important issue for me,” she replied. “Both men and women benefit from equal representation. In politics, there is a rule that party lists should be made up 50/50 by women and men. Overall, the figures in Belgium are quite promising but there is still some way to go.”

With 41 % of the members of the federal parliament women, Belgium has one of the highest figures in the EU (50 % in the Flemish parliament). On the local and municipal level, women are still lagging behind and only about 14 % of the mayors are women. There the old networks are still biased in favour of men’s political carriers.

She believes in transparency and became known to the public when she in a tweet last December disclosed the prices of the vaccines that the European Commission had negotiated with the vaccine producers on behalf of the EU member states. The opposition had claimed that there was no money in the budget for the vaccines. However, the figures were confidential and the tweet was deleted.

“Because the [budget] story was being kept alive on social media, we wanted to offer full transparency, but we have been a bit too generous,” her spokesperson admitted. “Technically, those prices should not have been released, so we removed the tweet. A number of prices had already surfaced in the media in recent weeks.”

Optimistic forecast

As all other countries, Belgium was severely hit by the COVID-19 outbreak in 2020. According to the European Commission’s Winter 2021 economic forecast, Belgium’s GDP fell dramatically by 6.2 %, a figure which corresponds to the EU average. The most affected sectors were leisure, restaurants, hotels and transport.

In February, when the Commission published its forecast, there was reason for cautious optimism because of the rollout of the vaccination programmes in the member states that would enable the economies to reopen. The Commission wrote about light in the tunnel. For Belgium, it predicted that annual GDP growth would reach 3.9% in 2021 and 3.1% in 2022, reflecting Belgium’s position as a trade hub.

But since then, vaccine deliveries have not kept pace with the vaccination goals and only a fraction of the adult population has been vaccinated with the required two doses.

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Eva De Bleeker is still optimistic. “We have lost economic growth but that also means that there are pent-up needs and money that hasn’t been spent because of the lockdowns. People’s saving accounts have increased by €23 billion. I believe that private consumption will stimulate the economy. To this can be added to the financial assistance from EU’s recovery and resilience facility to support investments.”

She admits that the Belgian economy suffered from structural problems already before the corona crisis. The national debt to GDP ratio was 100 % and increased to 116 % during the crisis. “We need to tackle this.”

During the coronavirus crisis, the social security budget amounted to €115 billion, of which only €64 billion was covered by social contributions and most of the rest by the federal budget. To stimulate economic growth and increase public revenues, the government aims at raising the employment rate from 70% to 80%, something which will require a reform of the labour market.

During the previous care-taker government not much could be done to tackle the structural problems in the economy. Has the crisis resulted in any lessons learned about the need for more coordination between the different levels of the political system?

“The new government has a lot in common and is not bound by previous perceptions. We’ll take a pragmatic approach to the problems and move ahead to solve them,” she assures. Two ministers have been charged with Institutional Reform & Democratic Renewal. They are currently working on a digital platform to enable citizens to participate in the debate on how our federal system should evolve.

Eva De Bleeker has studied and worked in the UK. How will Belgium’s economy – with its close trade relations with the UK - be affected by Brexit?

“I strongly regret Brexit but respect their decision to leave the EU,” she replied. “Flanders in particular is badly affected by Brexit since many SMEs, in for example the food and textile sectors, are dependent on trade with the UK. In the long run, we’ll have to develop our trade relations with the neighbouring countries in the EU to compensate for the loss in trade with the UK.”

More to health care

Many countries under-financed their health care systems before the crisis and today there are demands to fill the gaps. Do you foresee any significant increases to the health sector as a result of the crisis?

“Our health care system had a very good capacity before the crisis with a much higher per capita number of ICU beds than other EU countries. Although the hospitals at times were overwhelmed, not all beds were occupied.”

Belgium made a strong effort to support the health care sector during the corona crisis with new budget reinforcements, such as more funding to the health care personnel fund (€402 million) and to mental health care (€200 million). The new government aims at increasing the total health care budget by 2.5 % (besides indexation) each year, compared to 1.5 % in the past.

One of the best-known EU measures to help the member states to weather the economic crisis during the pandemic was the so-called “SURE” instrument for loans to fund national short-term work schemes. The European Commission published its first preliminary assessment of the impact of SURE evaluation last week. How did it work out in Belgium?

“Although these measures are a burden on the budget, we have decided to extend them to the end of 2022, giving employees who were laid off 70 % of their salary, without that the employers have to top up with more,” she replied. “During the crisis, the unemployment rate fluctuated and reached at most 1,1 million in the third quarter of 2020. Since then, the number has decreased to 330,000.”

Most companies in the old sectors will survive but inevitably some will go bankrupt despite all financial support to them, she added. She expects that most people will return to their previous jobs. Some will be offered retraining for new jobs in the digital and green sectors of the economy.

The use of vaccination passports (“Digital Green Certificate”) to facilitate travel and perhaps other benefits has become a divisive issue among EU member states. The European Council stated last week that “legislative and technical work on COVID-19 interoperable and non-discriminatory digital certificates, based on the Commission proposal, should be taken forward as a matter of urgency.”

At the press conference following the meeting, European Council president Michel added that EU will continue to discuss how the certificates could allow people to move freely. Belgium has expressed its opposition against this as long as not all people have been vaccinated. Could the certificates become an incentive to get more people vaccinated and stimulate the recovery of the economy?

“The original proposal was seen a discrimination of those who haven’t yet been vaccinated as it depends on which priority group you belong to,” De Bleeker replied. She defended the government’s position but added that changes in the certificate, to include also those who have recovered from the disease and developed anti-bodies, could be a way forward and make it acceptable to Belgium.

M. Apelblat

The Brussels Times

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