Flemish social partners warn against ‘budgetary shock’

While drafting the 2013 budget the Flemish government has decided to use all its reserved buffers against possible setbacks. “At present we assume that 0.7% of economic growth will be reached next year,” said Flemish budget minister Philippe Muyters NV-A in September last year. As this rate was not achieved, the Flemish government team will have to find at least 471 million euros in its budgetary control in February to make up for the shortfall. The Flanders Socio-economic council SERV, representing employer and employee interest groups, does not believe the government has been careless and understands its decision, especially considering the economic estimates that were made and the sluggish economy late last year. To provide the budget with a financial buffer would have meant that other expenses had to be scrapped as a result. However, the SERV has called on the government to prepare for financial challenges. The council believes the biggest challenge wil be the saving efforts demanded from the regional entities to reorganise the Belgian public financing. And its recommendations are clear: “As substantial efforts are clearly at stake here, we recommend that these expected budgetary shocks will be taken into account when the 2013 budget is drafted. If not, Flanders runs the risk of facing huge cutbacks in 2015.” It seems, however, that no clarity has yet been reached on the future challenges, and so far the Flemish government has not yet made any commitments. Against this background, the SERV urged the Flemish government to actively engage in preparations for the stability programme which the federal government must submit to Europe. Therefore the council suggests that when the High Council for Finance, advisory body to the federal government, provides more clarity on the matter in April, the Flemish government would take the necessary steps in its budget control.