Sixth state reform may well be extended to January 2015

Flemish minister of public governance Geert Bourgeois N-VA yesterday made a surprise statement on his web site when he mentioned that the sixth state reform will not start on 1 January 2014 as was initially scheduled, but only on 1 January 2015. An earlier implementation of the reform seems impossible. Still Bourgeois’ statement is hard to comprehend if one considers that his party intends to dedicate its 2014 election campaign on a further division of powers and government between Flanders and Wallonia in the shape of a seventh state reform. It now looks as if Bourgeois will first focus on the implementation of the sixth round, which is favouring the traditional parties in the federal government. Technically, everything will be rounded up, but the regional governments will then have too little time to realize a policy with their new powers in the runup to the elections. The newly inherited budget will not be sufficient to prevent painful cutbacks either. The N-VA could use this in its campaing as a proof that the Butterfly Agreement, closed by socialists, greens, liberals and christian democrats, doesn’t work. Bourgeois, however, doesn’t want to play that game and he’s fundamentally right, as the implementation of the agreement will be an enormous challenge. The transfer of competences such as family allowances, tax deductions on mortgage loans and job market policy remains an impressive operation. It is nevertheless still hoped that all texts will be submitted to Parliament before the Easter break for approval by summer, with the only possible obstacle being the financing act. Technically the act is not really a problem, but the figures will need to be updated in line with implemented federal cutbacks, and in addition the regions will have to take over some of the federal savings efforts. Debate on this matter will probably be tough and only be rounded up by May at the earliest, with the drafting of the 2014 budget following in September. As this will leave too little time for the federal government and the regions to include the Butterfly Agreement in their budget, consensus is growing to report the implementation another year. Transitional measures will be unavoidable as the entire staff complement cannot possibly be transferred in one go. In fact, it could take years before the regions will have successfully implemented their new powers.