Belgium battles highest inflation in EU

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Inflation in Belgium peaks at 5.2 percent and is way above the 3.6 percent average of the Euro zone countries.

4 June 2008

BELGIUM – The 5.2 percent inflation rate in Belgium is the highest among the European Union member states, as euro-zone inflation bounced back to a peak of 3.6 percent in May.

At the celebrations in Frankfurt, Belgian Finance Minister Didier Reynders said he would make fighting inflation one of his top priorities.

The chairman of the European Central Bank (ECB), Jean-Claude Trichet was clearly surprised to hear inflation in Belgium is 5.2 percent  – Belgium’s highest in 23 years.

The ECB has a strict mandate to fight inflation. The Flemish daily De Morgen writes that the head of the ECB was 'not amused' regarding Belgium's high inflation.

The European Central Bank was founded on 1 June 1998 and six months later launched the euro. Three years after the euro was introduced on financial markets, euro bank notes and coins were introduced in 2002 in Germany, France, Italy, Ireland, Belgium, Netherlands, Luxembourg, Greece, Austria, Portugal and Finland. Slovenia joined the single currency in 2007, followed by Malta and Cyprus this year, bringing the total number of nations using the Euro to 15 with a population of some 320 million.

Belgian employee is fourth most expensive
Wages are linked to the inflation rate as the salaries in Belgium are indexed based on inflation. A Belgian employee costs more than an employee in all the other EU countries after Luxembourg, Denmark and Sweden.

According to calculations by Eurostat (the statistical office of the European Communities), a Belgian employee cost his or her employee EUR 31.58 on average in 2006. In Sweden an employee costs the employer EUR 32.16.

A French employee costs the employer EUR 1 less than a Belgian employee. Dutch and German employees cost EUR 3 less than their Belgian counterparts.

The cheapest employees are in Bulgaria and Rumania.

[ / Expatica]

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