Peeters and Di Rupo discuss wage costs

Flemish minister-president Kris Peeters CD&V tabled a number of proposals to strengthen the country’s competitive power during his meeting with prime minister Elio Di Rupo PS yesterday. “I believe the debate on the competitive power of our economy is the next issue to tackle after the reform of secondary school educatin”, Peeters said on Sunday in support of his call to Di Rupo to address the wage cost issue in the short term.
This is not the first time Peeters raises the issue of wage costs. Following his warning from Volvo Sweden’s CEO about high Belgian wage costs two months ago, and desperate about the looming closure of Ford Genk in Limburg, Peeters approached Di Rupo on the subject but their talks failed to deliver any results. With a number of investment opportunities and consequently jobs lost in the province due to high wages, he was prepared to implement measures and called for dialogue on competitive power. The proposals he put before Di Rupo yesterday include a tax-free zone with certain exemptions. But Peeters doesn’t only have a tax-free zone in mind for Limburg, he would also like to see a general tax relief for Flanders. It will of course require a political agreement before the regional states are given this power.
Employers’ organizations do not want to lose any more time over the issue and Karel Eetveld, the CEO of the organization of small enterprises Unizo, goes as far as to say Flanders should co-finance the drop in wage costs. “Every percent in the relief of tax and social security contributions for employers costs 1 billion euros,” he said. “That is only attainable if the regions, the communities and the federal government all make a joint effort.” Van Eetvelt supports Peeters’ proposal to conclude a competition agreement with the federal government. The Federation of Belgian Enterprises VBO supports the idea.  “It will be a good sign if the country’s various authorities join hands,” says VBO’s CEO Pieter Timmermans. The Flemish employers’ organization Voka also support Peeters’ initiative and their CEO Jo Libeer feels it is justified that the Flemish government can implement direct measures, while calling for property tax on materials and machinery to be scrapped. “It costs Flanders 220 million euros, but it’s a direct tax cut.” According to Peeters, “steps will be taken” about competitive power within the next few days. He finetuned the points of view wiht his fellow party member, federal finance minister Koen Geens yesterday to put it high on the agenda during the federal governement’s budget control.