Another historic agreement for the country

Another historic agreement for the country

 

-          Elio Di Rupo and the eight party presidents concluded institutional negotiations on Tuesday evening.

-          The regions will receive 20 billion in responsibilities and 12 billion in fiscal autonomy.

-          They must contribute to the budget: 2.5 billion between now and 2016.

 

It took 21 months to translate the October 11, 2011 political accord into a legal agreement. In the end it contains over a thousand pages of text that will radically transform Belgium. Tuesday, the prime minister, the two secretaries of state in charge of institutional reforms and the eight party presidents settled the last issues at Lambermont. A definitive agreement on the sixth State reform was clearly in view. Monetary and scheduling issues were the last questions on the table.

 

The regions will have to tighten their belts in 2014. The finance law modifies the relative weight of the federal state and the regions. That is why the contribution of each level of power to the stability of the budget had to be reviewed. Belgium, in all its parts, must have a balanced budget in 2016. This is a particularly sensitive topic, especially for liberals (the opposition in the regions) and the Greens (the opposition at the federal level). The agreement anticipates that in 2014 the federal state will make 2.8 billion in budget cuts (2.4 billion began at the end of June with 400 million to be found by the end of summer). The second entity (regions and local authorities combined) must show a surplus of 0.1% of GDP. In addition the three regions must make extra provision of 250 million, “to balance all accounts.” This agreement clearly ends, in one stroke, all the differences that “poisoned the relationships between the federal government and the regions,” Charles Michel explains that they promise (?) there will be no more talk about hijacked responsibilities and other sore points. For the regions it is a colossal effort to get to a bonus of 0.1% of GDP. The three regions together must agree to a sum of a billion euros (to be divided). It’s important to note that the consultation committee (which includes the prime minister and the minister-presidents) must still ratify this agreement on July 17th. “However, since the party presidents have said yes, we can’t see who might protest it,” a negotiator says with a smile.

 

In 2015 and 2016 as well. The regional contribution does not end in 2014. The regions must make provision for EUR 2.25 billion for 2015 and 2016. When combined with the 250 million for 2014, that totals to 2.5 billion over the next three years for the regions. In 2015 and 2016, the amount will simply be deducted from the budgets transferred by the federal government to the regions for the exercise of their new responsibilities.

 

It takes effect July 1, 2014. The CD&V (and the other Flemish parties) wanted to be able to sell their 2014 voters on an almost immediate sixth State reform…The MR wanted to put on the brakes. In the end, the sixth State reform will take effect July 1, 2014. Symbolically, beginning next summer, the regions can make their own decisions on their new responsibilities. However, the transfers will not be fully effective until January 1, 2015.

 

VERONIQUE LAMQUIN

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