Verhofstadt: reform will safeguard prosperity

11 October 2005

BRUSSELS — Prime Minister Guy Verhofstadt stressed in his policy statement to Parliament on Tuesday that there were two challenges facing the country: globalisation and the aging population.

“What we must do is prepare the future. The goal of this government is clear: safeguard our prosperity for the future. The means to do this is to reform. Cautious, but resolute,” Verhofstadt said.

The Liberal VLD leader pointed to higher life expectancy and the fact that by 2015, one in five Belgians will be older than 65 years of age. He said this required a new approach.

Subsequently, the federal government has agreed on a “generation packet” on measures aimed at reforming social security, retirement and employment.

Due to the fact fewer workers are paying the social security provisions of a larger group of retired people, the emphasis is on boosting employment, broadcaster VRT reported.

Verhofstadt said by the end of this year 30,000 new jobs will have been created, and 115,000 jobs will have been created by the time new federal elections are held.

The prime minister also said the age at which workers may take early retirement will be raised from 58 to 60. Various exceptions to that rule will be allowed.

In future, social security will not be financed by taxes on labour. Instead, capital gains tax and taxes on tobacco will be directed to the social security system.

In order to export products rather than jobs, Verhofstadt also said tax on labour will be reduced by EUR 9 million.

He also confirmed promised increases in social benefits and said some increases would be doubled in 2007.

Verhofstadt said the reduction of Belgium’s national debt and targeted tax reductions remain a government priority.

He said Belgium was performing better than the eurozone average and forecast Belgian economic growth of 2.2 percent this year.

In other issues, the prime minister said he hoped Belgium would ratify the European Constitution by the end of this year.

Subject: Belgian news