Belgium: Selected Issues

International Monetary Fund

No 2007/088, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper focuses on the fiscal challenge for Belgium in coping with population aging, including the sustainability of prevailing fiscal federalism arrangements across all levels of governments. The analysis demonstrates that the current strategy of upfront consolidation is likely to fall short of achieving sustainability. Further reductions in aging-related spending and growth and productivity-enhancing reforms beyond those assumed under the authorities’ strategy appear to be necessary. The paper also assesses whether the wage bargaining framework, a key labor market institution, is conducive to preserving external competitiveness and raising employment rates.

Keywords: ISCR; CR; cost; Belgium; government; nominal wage; wage norm; fiscal policy recommendation; adjustment mechanism; government entity; indexation rule; policy objective; widening wage gap; Labor costs; Wages; Wage adjustments; Aging; Fiscal stance; Europe (search for similar items in EconPapers)
Pages: 32
Date: 2007-03-05
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