Budget deals will start tonight
Formateur Elio Di Rupo PS and the six party presidents have been engaged in talks on socio-economic reforms since Monday evening. The gap between the liberals and socialists continues to widen. Open VLD president Alexander De Croo called for a further reduction in the waiting allowance for school leavers, while Laurette Onkelinx PS said that the liberals will “drive the people to poverty” with this measure. The Francophone PS repeatedly showed their resistance to move ahead with reforms cuts while the liberals were insisting on more radical cuts. The latter initially called for the payment period of unemployment benefits to be limited, but now suggest that benefits should be gradually reduced during the second phase of unemployment and after that phase an inquiry into the income of the recipient should be decisive about further payment. Di Rupo, on the other hand, wants to increase unemployment benefits during the first period by increasing the wage limit that determines the level of the unemployment benefit. During a second phase he wants to drop benefits by a third before reaching the current minimum during a third phase. The same differences are apparent in discussions on pensions, with Di Rupo proposing to increase the age for early retirement to 62 by 2020 and increasing the required working years for a full pension to 40. Open VLD feel the early retirement age should be increased before 2020 and employees should work for longer than 40 years to enjoy full pension benefits. Di Rupo further intends to increase the minimum term for early retirement schemes among companies in trouble from 50 to 52, but the liberals feel that is much too early. Moreover they insist that pensioners should be entitled to earn an additional income. Talks on health insurance did not progress much further than a number of smaller measures with regard to social security. The Flemish Christian Democrats and socialists made their own demands, with the CD&V calling for the equivalent periods such as illness, career interruption or unemployment to be included when pensions are calculated. The SP.A would like to see another a pension structure in addition to the general low legal pension. As far as the battle between the liberals and PS is concerned, it seems the latter is now in the minority. Final decisions may not yet be forthcoming, but at least all is not completely lost. At least there seems to be consensus among the other parties that agreement on the budget is a matter of urgency; especially in view of the bond market crisis which has caused the ten-year interest on Belgian bonds to increase to a record 4.9%. In short, the end game is set this evening. Deals will result from a game in which one party’s demands are exchanged for a set of demands of the other party.