Prime ministers meet to discuss ‘Marshall Plan’

2 September 2005

BRUSSELS — Flemish Prime Minister Yves Leterme and his Wallonian colleague Jean-Claude Van Cauwenberghe will meet on Friday to discuss the Francophone region’s economic recovery plan, but a spanner has already been thrown into the works.

The Wallonian government unveiled on Tuesday a four-year EUR 1.4 billion economic recovery plan to regenerate the stagnating economy in the French-speaking region. The scheme has been ambitiously dubbed the ‘Marshall Plan’.

It centered on five points: the creation of competition, the stimulation of new activities, tax cuts for companies, support for research and development and improving job skills for employment purposes.

The plan was widely welcomed, also across the linguistic divide in the more prosperous Flanders region which has long complained it is propping up the Wallonian economy.

However, problems are emerging over Wallonia’s plan to designate various municipalities where fiscal advantages will apply; benefits that will not be available in other municipalities or across the rest of the country.

In these tax-free zones, several regional taxes will be scrapped — which have already been scrapped in Flanders — plus several municipal taxes, newspaper ‘De Standaard’ reported on Friday.

“But Wallonia is also asking the federal government to reduce company taxes in these municipalities. But it was also said that no federal money would be requested?” Flemish Prime Minister Yves Leterme asked.

“And what is the equivalent for Flanders? More fundamental is the question whether it would be more logical to back the Flemish demand for a (partial) transfer of company tax to the regions?

“Then every region can conduct its own policy. Up to now the French-speaking parties were opposed to this. I am going to try and convince my colleague.”

However, Flemish Deputy Prime Minister Fientje Moerman said this issue will not gather support, stressing that Wallonia will defend itself by referring to the tax-free zones that still exist in northern France.

“But it is not very certain whether the European Commission will accept them,” she said.

Moerman also said the Francophone parties should seek better inspiration in France, pointing out as example changes to French labour law last month which made making workers redundant easier.

“Because dismissal is so difficult and expensive for companies, they employ as few new people as possible.  It is time that Belgium also dared to discuss these labor law regulations,” she said.

“I say: discuss it. I am not for social destruction, but in favour of employment.”
On the positive side, Moerman praised the Marshall Plan’s investment in languages, stressing that the scheme recognised the importance of education.

“Wallonia is making large investments to promote language education and the language immersion method for students, teachers, employers and job seekers. In Flanders, we underestimate that key role,” Moerman said.

[Copyright Expatica News 2005]

Subject: Belgian news