Dermine’s recovery plan lacks reform ambition

The assessment of the “Vlaamse Veerkracht” recovery plan was released on Tuesday. It shows that 93% of the Flemish projects have already started. It is a different picture for the federal recovery plan, the first version of which was only outlined in the House today by the competent State Secretary Dermine. The Federal Planning Bureau The Federal Planning Bureau (FPB) is a Belgian public agency which carries out studies and projections about economic, socio-economic and ecological policy issues. Its scientific expertise is at the disposal of the Government, Parliament, the social partners and the national and international institutions. Federal Planning Bureau calculated that only 3,900 jobs would be directly created by 2022, a total of just under 14,000 by 2026. MP Sander Loones: “We already know that the Vivaldi government is good at spending money. Whether it can reform the labour market is something it urgently needs to prove.”

In recent weeks, a lot of information about the recovery plan has been available in the media. “Secretary of State Dermine appeared to prefer to give his plans to the press first. A tendency that we also see with other Vivaldi government ministers,” Sander Loones notes. “I am calling on the Vivaldi coalition to put parliament above the press. Surely a minimum of respect for democracy is appropriate.”

Federal Planning Bureau warns of a moderate impact

The Federal Planning Bureau made a simulation of the impact of the Dermine Plan. Increasing productivity is calculated at only 0.19%, economic growth at 0.23% and a reduction in the debt ratio of 0.52%. And at its peak in 2022, the plan would therefore directly generate only 3,900 jobs, a series of which would also disappear in the years that followed.

State Secretary Dermine clarified the figures. It would only concern the jobs directly linked to concrete projects. The indirect effects should also be taken into account, as should a multiplier effect because all EU countries invest at the same time.

“Dermine was right to clarify it, but it was not at all convincing,” Sander Loones says. “The Planning Bureau uses calculation models that have been built to model mainly Keynesian policy. Normally, I always take these with a grain of salt, but here they just simulate the impact of Keynesian Vivaldi government measures. And even then, the result is poor. And that is while we need about 700,000 extra jobs to achieve the much-needed 80% employment rate. The rescue should come from a strong labour market and pension reforms, but the plan remains vague and underdeveloped in that respect, too.”

European concerns

Earlier, the Federal Planning Bureau also revealed that Belgium was underfunded in the allocation of European recovery funds. It is also clear today that the risk of abuse in some European countries is not excluded. For example, Greece, which is being allocated some EUR 30 billion in EU recovery aid, is being viewed with suspicion.

“That’s about 20% of their GDP The gross domestic product (GDP) is the total monetary value of all goods and services produced within a country, both by companies and the government. This term is usually used as a benchmark for a country’s prosperity. This is why the N-VA closely follows the evolution of the Belgian GDP. GDP ,” Sander Loones notes. “Greek economists themselves doubt whether the Greek administration is capable of properly managing such a huge sum of money. It is the task of State Secretary Dermine and Finance Minister Van Peteghem to ensure that Belgium’s recovery money is well spent, but also that other countries do their work properly.”