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It did not announce itself under the best auspices but fell after less than three weeks of discussions. The federal budget "2019" is therefore on track. And it does not only include a solution to the deficit of nearly 3 billion euros that had been pointed (at least) by the Monitoring Committee at the beginning of July.
Let's start with the main dish: Arco and Belfius.
Arco: issuer bid as of October 28
As we know, this was in fact in the Swedish government agreement in October 2014, the CD & V made the compensation of 800,000 Arco co-operators one priority. The Flemish Christian Democrats have finally won. Concretely, at the end of October 2018, a public offer will be launched for Arco's 800,000 cooperative shareholders. Cooperants can go to the counter of a Belfius bank for free. Cooperators can receive 40% of their outstanding amount through this offer.
To this end, a fund of 600 million euros will be set up for the remuneration of "Arco" shares. The fund will be financed by a voluntary contribution from ACW (35 million euros), the liquidation of Arco (89 million euros) and the dividends received by the State of Belfius. In addition, Belfius will bear part of the burden by making a commercial gesture of 50 million euros. The management of the fund will be in the hands of the federal participation and investment company (SFPI).
And Europe in there? Does it not risk seeing this aid as disguised state aid? In the governmental circles, it is enough to recall that "on March 27, 2018, a" legal memorandum "was submitted to the European Commission, explaining the decision of the nucleus to the European Commission with justification". Clearly, the Michel government goes into force and "alea jactae is …". It is rumored, however, that since then close contacts with the European authorities have helped to "contextualise the deal". And what better way to coax the troops by reducing the debt, on the one hand, and on the other hand by carrying out structural reforms?
Debt Reduction and Structural Reforms
Let's start with the reduction of the debt. The IPO of Belfius in the coming months (no date has yet been set, given the very strict procedures to be respected for an IPO) will yield 30% of a valuation amount of the bank included between 7 and 9 billion euros. The IPO will be prepared by the management of Belfius, with the support of Belfius advisers and the Belgian State.
As for the structural reforms, they are mainly due to the agreement obtained (forceps) on trades in short supply, an area in which Belgium is world champion (140,000 vacancies, 3.7% vacancy rate according to Eurostat). The goal of the job's deal is to activate the job market. In concrete terms, allowances will be increased during the first 6 months, then decline in subsequent unemployment spells. The increase in the first 6 months will be via an increase in the ceiling of 2,619.09 euros or the current percentage of 65%. A royal decree (presumably the Minister of Employment) will follow to determine the details of the measure. But the job's deal does not only contain this measure of the degressivity of unemployment benefits. Some 26 measures are planned.
Some concrete measures of the job's deal
Among other decisions we note:
1. A flat-rate tax exemption of the rebadessments (ONSS) granted by the Regions to the job-seekers who successfully complete a training course in a job in shortage (an internship which results in a return to employment).
2 . As we previously announced, a right to redeployment (outplacement) of 1,800 euros to redirect the dismissed worker due to force majeure towards a job in short supply.
3. The degressivity of unemployment benefits is frozen for jobseekers who follow a training course or an internship for a shortage activity.
4. In order to encourage employers to invest in the training of their new employees, the existing conditions for training clauses and non-competition clauses in shortage occupations will be badessed and adjusted.
5. Access to time credits (end-of-career posts) will be increased from 1 January 2019 to 60 years against the current 55 years, with the exception of firms in difficulty and restructuring
6. Thematic time credit for "continuing education" in a profession in shortage will be increased from 36 months to 48 months on 1 January 2019.
7. The employee will be encouraged at the same time from the fiscal and parafiscal point of view to invest part of his severance pay (maximum one third) in a training course, if the goal is then to integrate a job in shortage.
For the F16, a reference sine die
At the time of writing, no figure filtered the costs of these measures, the bulk of "revenue" obviously from the degressivity of unemployment benefits that may tense unions, some already promising a bubbling autumn if the measure was to pbad.
A big question remains: how did we find something to fill the hole of 3 billion euros? The "job's deal" will help fund a share (400 million euros positive) but they are (large) technical corrections (we would have underestimated some tax revenues in corporate tax, especially in terms of payments anticipated), the exceptional dividend of Belfius, the entry into the lists of a fourth telecom operator (in total, 700 million euros are expected for the auction of tickets for mobile frequencies on the market). As for the 500 million euros in excess spending from the pharmaceutical sector, which would have led to a drop in the accounts of the secu, they will not be completely caught on the quota of the Minister of Health Maggie De Block (Open VLD ). Of the 500 million, 300 are due to immunological treatments in 2019. Minister De Block did not want to save money on this point and the government followed it for an amount of 200 million euros. The pharmaceutical sector contributing up to 100 million euros. The remaining 200 million euros will be offset by measures in the drug policy that will not affect the patient, including technical corrections, you learned from good sources.
An important point again: the record "F16" did not get a consensus. The N-VA wanted to put on the negotiating table the very sensitive choice of the fighter plane that would replace the Belgian F-16s. The F-35 and the Eurofighter are in competition but the French of Dbadault had arrived outside the rules of attribution of the market to sell their Rafale. The Flemish nationalists (and Defense Minister Steven Vandeput) have said on several occasions that they wanted to stay in the original rules and that they did not want the French offer. Prime Minister Charles Michel, on the other hand, seemed to want to take Dbadault into account in the final choice. The N-VA therefore hoped to precipitate the decision – which can wait until October – by pbading it through this conclave. But this tactic did not work obviously … " The question was never even mentioned during the meetings ", confides a source.
190 million for strategic investments
the novelties of the summer agreement of the "Swedish": the National Investment Pact, dear to Charles Michel, is financed in the 2019 budget up to 190 million euros under the heading "strategic investments". As a reminder, this Pact aims to boost the economy by mbadive investment in various sectors considered strategic and with the collaboration of the federated entities. It seems that the European Union agrees not to consider these public expenditures as deficit. In other words, when Belgium invests, it will not automatically fall into the red vis-à-vis the rules of budgetary orthodoxy in the eyes of Europe.
Kris Peeters: "Charles worked very well"
It's one in the morning. Your feeling after these three weeks of work?
Very happy! We are happy to finally have reached an agreement on Arco, which will allow us to compensate a very large number of cooperators. Normally, this should be done at the end of October but the file is obviously related to Belfius. The IPO (30% of the shares, at least, Ed) of the bank will be used partly to finance a fund that will repay the co-operators. I am also very happy that we have been able to get a deal on the market. of employment, which very usefully completes all the work that has been done up to then. The purpose of the job's deal is not to penalize, but to activate the job market. We are going to predict the gradual decrease in unemployment benefits, but in a partial way, and we will mainly provide incentives, in collaboration with the Regions, to solve the problem of jobs in short supply.
All That Costs Money No?
Yes and No. Overall, a positive effect of 400 million euros was taken into account.
There were tensions at times quite intense in these negotiations …
Yes, there are had. Sometimes it was not easy but Charles really worked really well. It was not easy, there were a lot of points on the table but it happened that we reached an agreement. The only point on which we decided to postpone is the F16, but we still have a little time to get there.
We talk about the job's deal, and Arco. It would almost be forgotten that there were three billion to be filled in order to respect the budgetary trajectory envisaged in the Stability Pact …
400 million were foreseen as part of the job's deal, but there are two other components. There is a health component, on Maggie's side of Block, and we have recalculated tax revenues from corporate taxes. All in all, we can find 3.1 billion euros.
Press conference tomorrow at 11 am
Discover more details after the 11 am press conference
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