COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Belgium Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Belgium
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Belgium, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, fiscal policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 601 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Belgium     Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Belgium {COM(2024) 601 final} - {SWD(2024) 600 final}  
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Growth remains resilient 

Pressure on public finances is 
rising 

The  Belgian  economy  continues  to  grow 
thanks  to  resilient  private  consumption 
and  strong  corporate  investment (1).  The 
automatic  indexation  of  wages  and  social 
benefits  helped  households  maintain  their 
purchasing  power.  Private  consumption 
is 
expected  to  increase  further  as  consumers 
face lower price  increases and employment is 
Investment  also 
rising. 
set 
recovered strongly on the back of a rebound in 
corporate investment. 

to  continue 

Inflation  and  wages  closely  track  energy 
indexation. 
prices  due  to  automatic 
Headline 
in  2023, 
inflation  fell  to  2.3% 
reflecting the fast impact of falling wholesale 
gas and electricity prices on retail prices, along 
with  the  effect  of  government  measures  to 
limit prices. The withdrawal of these measures 
is  expected  to  push  up  headline  inflation, 
resulting  in  a  projected  increase  to  4%  in 
2024.  As  energy  prices  are  expected  to 
increase at a slower pace in 2025, inflation is 
forecast to be 2.3%. 

Private  debt  remains  high,  even  though 
credit  growth  has  slowed.  High  financing 
costs  are  expected  to  continue  holding  back 
investment  in  residential  construction.  After  a 
sharp fall in 2023, exports and imports are set 
to  gradually  recover  and  return  to  robust 
growth  in  2025.  However,  net  exports  are 
expected  to  remain  a  drag  on  GDP  growth  in 
2024. Overall, GDP growth is forecast to reach 
1.3% in 2024 and 1.4% in 2025. 

(1)  The cut-off date for the data used to prepare the 27 

Country Reports was 15 May 2024. 

the 

since 

public 

finances 

have 
Belgium's 
deteriorated 
the 
structurally 
COVID-19  pandemic.  Although  Belgium  has 
progressively  withdrawn 
temporary 
measures taken  to  tackle the  energy  crisis by 
2024, the budget deficit is forecast to remain 
high  and  keep  rising,  from  4.4%  of  GDP  in 
2023  to  4.7%  of  GDP  in  2025.  The  Federal 
Planning  Bureau 
the 
deterioration  of  the  structural  deficit  in  2023 
at  2  percentage  points  compared  to  pre-
pandemic  projections  for  the  same  year.  This 
reflects  the  combined  effects  of  permanent 
discretionary measures taken since 2019 (e.g. 
to increase the minimum pension and increase 
public health-sector wages) and the structural 
impact of inflation on the budget deficit, which 
boosted  current  primary  spending  following 
multiple rounds of spending indexation (2). 

(2023)  estimates 

Spending  pressures  will  constrain  fiscal 
space  in  the  coming  years  at  a  time  of 
high public  investment needs.  In  the  years 
ahead,  the  government  will  grapple  with  the 
challenge  of  rebuilding  fiscal  space  and 
restoring 
fiscal 
sustainability  amid  rising  spending  pressures. 
rising  social 
The  pressure  stems 
spending  caused  by  demographic  ageing  and 
higher  average  borrowing  costs.  At  the  same 
time, public investment remains low compared 
with  other  EU  countries  and  stepping  up  the 

medium-term 

from 

the 

(2)  The automatic indexation of social spending and public 

sector wages concerns nearly half of all primary 
government spending. Most other items of primary 
spending are also adjusted to price developments. 
Between 2021 and 2025, the indexation of government 
spending is expected to have outpaced that of the GDP 
deflator, pushing the spending-to-GDP ratio (for a 
detailed discussion, see Cornille et al. 2023). 

2 

 
 
 
 
Box 1: 

Belgium’s competitiveness - in brief 

Belgium  is  taking  action  to  improve  its  performance  in  terms  of  competitiveness.  It 
performs well on trade integration, research and innovation spending, the circular economy and 
on the rate of digital technology adoption by companies. Belgium's recovery and resilience plan 
tackles some of the challenges related to improving the business environment. In particular, the 
measures  involve  digitising  the  public  administration,  improving  cybersecurity  and  connectivity 
and streamlining permitting to boost investment in renewable energy installations. 

However, the following competitiveness challenges remain: 

• 

• 

• 

labour shortages, notably in technical professions, in a context of a low employment 
rate and high disincentives to work, which curb productivity growth; 

innovation being highly concentrated in a few sectors and the low level of take-up 
of new technology, which is a drag on productivity growth; 

low  business  dynamism,  a  high  level  of  regulation  in  services  and  a  low  share  of 
high-growth enterprises, which are also potential drags on productivity. 

taken  measures  to  boost  employment  and  to 
improve  the  reintegration  of  the  increasing 
number  of  workers  in  long-term  sick  leave  in 
the  labour  force.  Nevertheless,  in  2023  the 
activity rate was low at 76.1% against the EU 
average  of  80.0%,  with  significant  regional 
disparities (see Annex 14). Belgium also has a 
high  level  of  inactivity  among  older  workers 
and disadvantaged groups. 

Wage  growth  remained  strong  in  2023, 
leading  to  a  significant  rebound  in  real 
wages  as  inflation  abated.  The  automatic 
indexation  of  salaries  helped  Belgian  workers 
maintain 
their  purchasing  power  despite 
moderate  labour  productivity  gains.  Nominal 
hourly  wages  increased  by  7.4%  in  2023 (3), 
well  above  the  5.3%  average  in  the  three 
neighbouring countries (DE, FR and NL). This is 
because  the  smoothed  health  index,  the  price 
index  wages,  captures 
measure  used  to 
volatile  components  of  the  consumer  price 
basket  (most  energy  and  food  products).  This 
leads  to  a  strong  responsiveness  of  wages to 
energy  price  shocks  (especially  large  negative 
terms of trade ones). 

The  strict  implementation  of  the  wage 
setting  framework  mitigates  the  risk  of 
lasting  competitiveness  losses  from  the 
increase  in  nominal  wages.  Enforcing  the 

(3)  Central Economic Council, 2024, Technical report of the 
secretariat on maximum margins available, 2023. 

level  of  public investment  will  be  a priority  to 
finance the green and digital transitions. 

in 

to 

government 

To  stabilise  the  debt-to-GDP  ratio,  it  is 
crucial 
government 
consolidate 
finances.  Reducing  Belgium’s  high  debt-to-
GDP  ratio  will  require  consolidation  in  the 
years  ahead.  Although  high 
inflation  has 
enabled  the  government  debt  ratio  to  fall  in 
2022,  maintaining  unchanged  policy  would 
result 
increasing 
continuously  over  the  next  decade  from 
105.2% in 2023 to 119% of GDP in 2034 (see 
Annex 21). Revenue and expenditure measures 
should  be  flanked  by  action  to  improve  fiscal 
coordination,  to  strengthen  the  medium-term 
framework  and  to  review  the  design  of  fiscal 
rules 
tackle  enduring  pressures  on 
government  finances.  Boosting  productivity 
growth  and  employment  could  also  help 
restore fiscal sustainability. 

debt 

to 

Structural challenges remain 

labour  market  participation  and 
Low 
labour  market 
in 
regional  disparities 
outcomes  persist.  Although  overall  Belgium 
performs  well  on  implementing  the  European 
Pillar  of  Social  Rights  (see  Annex  14),  the 
employment  rate  in  2023  (72.1%)  is  still 
below  the  EU  average  (75.3%)  and  the  gap 
has widened since 2019. The government has 

3 

 
 
 
Box 2: 

UN Sustainable Development Goals (SDGs) 

Belgium  performs  above  the  EU  average  and  is  making  further  progress  on  all  SDGs 
on  competitiveness  and  productivity  (SDGs  4,  8  and  9).  Despite  having  good  quality 
education systems, improving young people's basic skills remains a challenge.  Job creation has 
increased  in  recent  years  but  the  employment  rate  is  low.  R&D  intensity  is  well  above  the  EU 
average, but the sizeable R&D tax reliefs could be  more efficient. Challenges remain in certain 
areas such as affordable and clean energy (SDG 7) and the country lags behind on SDG 15 (life 
on  land).  Belgium  also  made  progress  on  several  indicators  related  to  employment  (SDG  8). 
However,  it  also  lags  behind  on  reducing  inequalities  (SDG  10),  in  ensuring  that  people  with  a 
migrant background  participate in the labour market and  in tackling inequalities in educational 
outcomes linked to students' socio-economic and migrant background (see Annex 1). 

Out  of  17  indicators,  Belgium  is  below  the  EU  average  on  9  SDGs.  In  addition  to  those 
mentioned above, it underperforms on environmental goals (SDGs 2, 6, 11, 12 and 13) and on 
macroeconomic stability (SDG 17). 

investment needs to ensure that the electricity 
grids and distribution networks keep pace with 
the  decarbonisation  of  electricity  production 
and  of  industry  and  with  the  twin  green  and 
digital transition. 

will 

require 

Contributing  to  EU  climate  neutrality  by 
2050  and  achieving  Belgium’s  2030 
targets 
significant 
investments  in  the  green  transition.  Even 
taking  into  account  the  planned  policies  and 
measures,  Belgium  is  4.4  percentage  points 
away  from  its  2030  effort  sharing  target  to 
reduce emissions by - 47% below 2005 levels 
(Annex  6).  Closing  this  gap  will  require  extra 
measures and significant efforts. Furthermore, 
Belgium’s  projected  renewable  energy  and 
energy  efficiency  are  significantly  below  the 
contribution  needed  under  EU 
national 
legislation (see Annex 6). 

is 

expected 

competitors) 

wage  rules  (which  limit  real  negotiated  wage 
increases  to  avoid  cost  differentials  with  key 
export 
to 
progressively  offset  the  swift  reaction  of 
nominal wages to changes in consumer prices. 
According  to  the  Central  Council  of  the 
Economy,  the  gap  in  hourly  nominal  wage 
costs  from  Belgium's  three  neighbours  is  set 
to  narrow  from  2.9%  in  2023  to  1.8%  in 
2024 (4). This implies that, after no negotiated 
real  wage  increases  over  2023-2024,  there 
will  be  no  room  for  real  increases  in  the  new 
wage  norm  (extent  to  which  the  average  real 
salary  cost  of  a  company  may  increase)  until 
2025-2026  (see the  2023  Country  Report  for 
Belgium).  In  recent  years,  real  wage  growth 
has  remained  broadly  in  line  with  the  limited 
productivity growth. 

the 

Belgium ranks high on labour productivity 
compared  with  the  EU  average,  although 
growth has been below average since the 
2000’s (5).  The  reasons  behind 
low 
productivity  growth  include  labour  and  skills 
shortages,  the  low  take-up  of  innovation  and 
workers  not  moving  to  more  productive 
sectors. The lack of business dynamism and a 
comparatively  high 
in 
services  also  hold  back  productivity  growth 
(see Box 1 and Annex 12). In addition to these 
Belgium’s 
factors, 
country  has  huge 
competitiveness, 

level  of  regulation 

weaken 

which 

the 

(4)  Idem. 

(5)  2023 Report from the National Productivity Board. 

4 

 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility  (RRF)  and  cohesion  policy  is 
mutually reinforcing  Belgium’s  efforts to 
boost 
its  competitiveness  and  foster 
In  addition  to  the 
sustainable  growth. 
EUR 5.3  billion  of  RRF  funding  described  in 
Annex 3, cohesion policy provides Belgium with 
EUR 2.5  billion  for  the  2021-2027  period. 
Combined support from these two instruments 
is equivalent to around 1.33% of the country’s 
2023  GDP,  against  the  EU  average  of  5.38% 
of GDP (see Annex 4). 

Under  its  recovery  and  resilience  plan 
(RRP),  Belgium  has  launched  important 
policy  measures  that  are  expected  to 
improve the country’s competitiveness. In 
particular, the plan envisages major reforms to 
digital  connectivity,  lifelong  learning  (see  Box 
3),  sustainable  transport,  renewable  energy 
and  spending  reviews  to  boost  the  efficiency 
and  sustainability  of  public  spending.  Belgium 
has  also  made  substantial  investments  in 
digitalising its public administration and justice 
systems,  in  an  offshore  energy  island  to 
connect 
charging 
infrastructure for electric vehicles, in education 
and in housing for vulnerable people. 

renewable  energy, 

in 

of 
resilience 

implementation 
and 

Belgium’s 
The 
is 
plan 
recovery 
has 
significantly 
submitted 
request, 
corresponding to 20 milestones and targets in 
the  plan  (see  Annex  3).  The  Commission 
assessment is ongoing.  

delayed. 

payment 

Belgium 

one 

Cohesion  policy  funding  helps  tackle 
Belgium’s  growth  and  competitiveness 
challenges  and  reduce  the  country’s 
territorial and social disparities. Under the 
2014-2020  cohesion  programming  period, 
support  focused  on  research  and  innovation, 
business  development,  energy  efficiency, 
access to the job market, lifelong learning and 

5 

the 

social  inclusion.  For  the  current  2021-2027 
programming  period,  the  support  focuses  on 
promoting 
green 
competitiveness, 
transition  and  social  cohesion.  For  example,  it 
will  help  fund  building  renovations,  circular 
economy projects, the shift away from carbon-
intensive  activities  (under  the  Just  Transition 
Fund), research and innovation, and  measures 
for 
to 
vulnerable groups of people. 

employment,  notably 

stimulate 

Investing in people to boost 
economic growth and resilience 

the 

into 

job  market, 

RRF  reforms  and  investments,  together 
with  cohesion  policy  funds,  focus  on 
social  inclusion  for  vulnerable  groups. 
Under  the  RRF,  the  Brussels  Capital  Region 
adopted  a  reform  that  seeks  to  promote  the 
sustainable integration of vulnerable groups of 
including 
people 
jobseekers  with  a  disability.  The  reform  is 
complemented  by  an  RRF  investment  setting 
out  a  path  to  sustainable  integration  for 
workers  and  jobseekers  with  disabilities.  This 
sustainable integration pathway is taken up in 
the disability project run by the Brussels public 
employment  service.  It  will  involve  creating  a 
legislative  framework  with  funding  from  the 
European  Social  Fund  Plus  to  help  match 
jobseekers with disabilities with employers. 

Investing in energy efficiency 

The  RRF  and  cohesion  policy  funds 
support measures  to accelerate  the pace 
of  energy-efficient  building  renovation. 
For instance, Belgium’s RRP includes a reform 
amending  the  Brussels  code  on  air,  climate 
in  new 
and  energy 

(COBRACE)  to  bring 

 
 
Box 3: 

Combined action for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  Belgium’s  RRP  includes 
reforms that support investments under other EU instruments and vice versa, creating important 
synergies and complementarities between the various funds. For example, to stimulate lifelong 
learning and to reduce skills mismatches, Belgium adopted an RRP reform giving all workers an 
individual  right  to  training  and  providing  incentives  for  firms  to  offer  additional  training.  The 
European  Regional  Development  Fund  and  the  RRF  help  finance  investments  in  training 
infrastructure and equipment to support the reform (see Annex 4). 

Fund 

helps 

achieve 

obligations on the energy efficiency of existing 
and  new  buildings.  The  European  Regional 
Development 
the 
ambitions  of  this  reform  by  co-financing  the 
energy-efficient  renovation  of  public  buildings 
in  the  Brussels  Capital  Region  (see  Annex  4). 
More  broadly,  the  RRP  provides  extensive 
support for energy efficiency improvements to 
both  public  and  private  buildings  through 
level. 
actions  at 
Nevertheless,  significant  action  is  still  needed 
to decarbonise the building stock. Heating and 
cooling  account  for  over  85%  of  Belgium’s 
final  energy  consumption  in  the  residential 
sector,  of  which  only  9%  is  generated  by 
renewable energy (see Annex 7). 

federal  and 

regional 

infrastructure  creates  important  links  to  give 
cyclists easier and safer access to the growing 
bike network in the region (see Annex 4). These 
measures  will  need  to  be  stepped  up  and 
sustained,  given  that  the transport  sector  still 
accounts for a large share of oil consumption. 
Final  energy  consumption  in  the  transport 
sector  increased  by  3.7%  in  2022  and  traffic 
congestion  is  above  the  EU  average  (see 
Annexes 6 and 7). 

Boosting the green transition with 
action through REPowerEU 

in 

for 

energy 

rooftops 

includes  a 
Belgium's  RRP  now  also 
REPowerEU  chapter  containing measures  to 
boost 
buildings, 
efficiency 
decarbonise 
industry,  develop  a  transport 
network  for  hydrogen  and  accelerate  the  roll-
out  of  renewable  energy.  Examples  are  the 
reform of the appeal procedures of the Council 
of  State,  a  new  obligation  to  install  solar 
large  electricity 
panels  on 
consumers  and  public  buildings  in  Flanders 
and a reform promoting onshore wind turbines 
in  Wallonia.  However,  Belgium  will  need  to 
further  accelerate  investments  in  this  area  to 
keep pace with EU climate and energy targets 
(see Annexes 6 and 7). For instance, although 
action  is  foreseen  to  reinforce  the  electricity 
distribution  network 
further 
modernisation  will  be  needed  to  tackle  the 
delayed  roll-out  of  smart  meters  in  Wallonia 
and  Brussels.  Additional  investments  in  the 
capacity  of  Belgium's  onshore  electricity 
network are needed to cope  with the surge in 
electricity demand, accommodate the increase 
in  renewable  energy  sources  and  avoid  grid 
congestion (see Annex 7). 

in  Wallonia, 

Promoting better and greener 
mobility 

RRF  measures  support  a  shift  to  more 
sustainable  forms  of  transport  with  the 
aim  of  reducing  congestion  and  pollution.  For 
example,  the  revision  of  the  federal  ‘mobility 
budget’  scheme  makes  it  easier  (through 
for 
simplification  and  more 
employers  to  offer  their  employees  a  budget 
to  spend  on  a  range  of  sustainable  forms  of 
transport  to  the  workplace  in  exchange  for 
giving  up  their  right  to  a  company  car. 
Investments in bike storage in railway stations 
will  help  people  combine  different  forms  of 
transport. 

flexibility) 

several 

investments  under 

The  effect  of  these  measures  is  boosted 
by 
the 
European  Regional  Development  Fund, 
which  co-financed  the  construction  of  bridges 
and  tunnels  to  eliminate  barriers  on  cycling 
in  Flanders.  Building  bike-friendly 
routes 

6 

 
 
FURTHER PRIORITIES AHEAD 

Belgium 
faces  additional  challenges 
related  to  the  tax  and  benefits  system, 
skills  mismatches,  fiscal  sustainability 
and  the  green  transition.  Tackling  these 
challenges will help boost Belgium’s long-term 
competitiveness  and  ensure  the  resilience  of 
its  economy.  It  will  also  help  achieve  the  UN 
Sustainable Development Goals (see Annex 1). 

It  is  important  to  tackle  the  challenges 
both  at  national  and  regional  level  to 
reduce  regional  disparities  and  improve  the 
administrative  and  investment  capacity  in  a 
balanced  way  across  the  country.  Regional 
differences 
labour  market 
terms  of 
outcomes  and  education  (see  Annex  17) 
hamper  long-term,  sustainable  and  inclusive 
growth. 

in 

Tackling competitiveness 
challenges 

Innovation  is  concentrated  in  only  a  few 
sectors and large companies, which curbs 
widespread  take-up  and  productivity 
growth.  Belgium  ranks  as  one  of  the  EU's 
innovation  leaders  according  to  the  European 
Innovation  Scoreboard (6).  Business  spending 
on R&D is the highest in the EU (2.53% of GDP 
in  2022)  but  it  is  highly  concentrated.  A 
breakdown  by  company  size  reveals  that 
companies  with  500  employees  or  more 
account  for  almost  half  of  all  R&D  spending, 
while  companies  with  fewer  than  10  workers 
(95% of all companies) account for only 5% of 
this  spending (7).  In  addition,  spending  on 

(6)  See the European Innovation Scoreboard (europa.eu). 

(7)  Belgian Science Policy Office, Monitoring and Evaluation 

of Research and Innovation (MERI) database, 
https://meri.belspo.be/site/research_development_group
s_en.stm. 

innovation is focused in a few sectors, such as 
the pharmaceutical sector. This may be due to 
the  design  of  R&D  tax  incentives  in  Belgium 
(see  sub-section  below).  Another 
factor 
limiting the spread of innovation to the rest of 
the economy is low job mobility in Belgium (8), 
which may be due  – among other elements  – 
to  high 
low  pay 
seniority  pay  and 
transparency (9). 

Low  business  dynamism  and  high  trade 
restrictions  in  the  service  sector  weaken 
productivity.  Belgium  has  one  of  the  lowest 
levels  of  business  dynamism  in  the  EU  (see 
Annex  11).  In  spite  of  a  recent  increase,  the 
rate  of  new  businesses  starting  up  remains 
low,  notably  for  firms  with  employees. 
Moreover,  the  share  of  high-growth  firms  in 
Belgium is significantly below the EU average. 
Likewise,  the  exit  rate  of  Belgian  businesses 
and  the  number  of  bankruptcies  are  low, 
indicating that structurally unviable companies 
may stay in business too long (see Annex 12). 
High  trade  restrictions  in  the  service  sector 
in  weakening  business 
may  play  a  role 
dynamism.  The  country  shows  one  of  the 
highest  services  trade  restrictiveness  indices 
for architecture, courier services, telecoms (10), 
(customs  brokerage  and  freight 
logistics 
forwarding)  and  air  transport.  It  also  ranks 
high  on  service  restrictions  for  construction, 
commercial  banking,  accounting  services  and 
to  a  lesser  extent  on  engineering  services. 
Lifting  restrictions  on  regulated  professions 
would also need to be addressed, in particular 
for architects, accountants, lawyers and estate 
agents (see Annex 12). 

(8)  https://economie.fgov.be/fr/themes/entreprises/tableau-
de-bord-de-la/determinants-de-la/innovation/european-
innovation-scoreboard. 

(9)  Low pay transparency because of the relatively large 
share of fringe benefits and alternative wage forms. 

(10)  The arrival of a fourth player in the telecoms market in 
summer 2024 may improve competition in this sector. 

7 

 
 
 
 
A  high  regulatory  burden  and  complexity 
impairs  Belgium's  business  environment. 
The  administrative  burden  on  firms  is  heavy, 
notably on tax and labour law. The compliance 
costs  that  SMEs  face  for  labour  and  tax 
systems  are  comparatively  high  in  Belgium 
(see  Annex  19),  in  particular  companies  that 
need to manage multiple regional systems. 

Belgium  has  a  high  level  of  dependency 
on  imported  fossil  fuels,  which  dents  its 
competitiveness  and  makes  it  particularly 
vulnerable  to  energy  price  hikes.  Remedying 
this situation requires accelerating the pace of 
action on the energy transition. It would merit 
charting  a  pathway  to  reach  the  2030  and 
including 
2050  climate  policy  objectives, 
support  to  decarbonise  industry  and  to  help 
businesses  transition  to  a  net-zero  economy. 
At the same time, measures will be needed to 
identify and phase out fossil fuel subsidies. 

its 

The  Belgian  economy's  vulnerabilities  to 
the effects of climate change hamper the 
business  environment.  For  instance,  the 
transport,  energy  and  agriculture  sectors  are 
exposed to risks of water scarcity  or flooding. 
comprehensive 
Belgium  will  update 
national  climate  and  vulnerability  assessment 
in  2024.  Water  quality  is  highly  affected  by 
pollution from nutrients and pesticides and the 
conservation  status  of  protected  habitats  and 
species  in  Belgium  is  a  cause  of  serious 
concern. Both issues require action to meet the 
agreed  EU  goals.  Nature-based  solutions  and 
sustainable  water  management  are  key  to 
building climate resilience and to shielding the 
economy  from 
impacts  of  extreme 
the 
weather events (see Annexes 6 and 7). 

The tax and benefits systems need 
reform to boost competitiveness 

to  the  highest  income  tax  rates  (45%  and 
50%).  Although  personal  income  taxes  are 
already  high  compared  with  other  countries, 
local  authorities  levy  surcharges  on  personal 
income  taxes,  adding  to  the  high  tax  burden. 
Some measures to increase the net income of 
low  wage  earners (11)  also  increase  the  high 
marginal  tax  rate  for  people  earning  between 
60%  and  80%  of  the  average  wage  (up  to 
75%  of  income  is  taxed  away;  see  peak  on 
Graph  3.1).  The  High  Council  of  Finance 
estimated that extending the in-work tax credit 
and social security contribution reduction to all 
private-sector  employees  would  substantially 
reduce  the  ‘low  wage  trap’ (12).  For  second 
income earners, taxes on earnings and specific 
tax features such as the ‘marital quotient’ also 
greatly reduce the incentives to work. 

Graph 3.1: Marginal effective tax rate by wage 
level, single earner, 2020 

Source: High Council of Finance (2020) 

Moreover,  the  design  of  social  benefits 
discourages  recipients  from  taking  up 
work or from working more hours. Several 
non-cash  benefits  are  not  means-tested  and 
the  unemployment  status  of 
linked 
beneficiaries,  increasing  the  disincentives  to 
work.  Although  unemployment  benefits  taper 
off  over  time,  Belgium  is  the  only  Member 
State  in  which  they  are  unlimited  in  time. 

to 

Belgium  levies  high  taxes  on  labour, 
which is a brake on the employment rate. 
The tax burden on labour (social contributions 
and  income  taxes)  is  well  above  the  EU 
average at all wage levels, except for very low 
wage earners (50% of the average; see Annex 
19). Even average income earners are subject 

(11)  These measures include the job bonus in Flanders and 
in-work benefits for the long-term unemployed or 
interregional mobility at federal level. 

(12)  Adopting a general employment bonus (budgetary cost 
of 2.5% of GDP) would bring the tax burden on labour in 
Belgium close to the euro-area average. High Council of 
Finance, 2020, Reducing the tax burden on labour and 
financing options. 

8 

 40 45 50 55 60 65 70 75 80 40 50 60 70 80 90 100 110 120 130 140 150 160 170Marginal effective tax rate (%)Wage level (% average wage)Current systemGeneral employment bonus 
  
 
Moreover,  unemployment  benefits  for  the 
long-term  unemployed  are  not  means-tested. 
This may reduce the effectiveness of regional 
activation  policies  when  combined  with 
eligibility 
relatively 
conditions (13). 

benefit 

lenient 

The heavy tax burden on labour is offset 
leading  to 
by  many  wage  subsidies, 
distortions.  Special  tax  schemes  such  as 
meal vouchers, commuter subsidies, flexi-jobs 
or  withholding  tax  exemption  for  overtime, 
R&D  work and night/shift work (0.6% of GDP) 
are  costly  for  the  budget  and  tend  to  create 
inefficiencies,  but  their  use  has  increased. 
Wage subsidies and other tax expenditure also 
make  the  tax  system  complex,  which  weighs 
on  the  business  environment.  Some  income 
tax  deductions  (e.g.  deductions  for  service 
vouchers  to  pay  for  household  services  such 
as  cleaning)  disproportionally  benefit  high-
income  earners.  Moreover,  there  are  tax 
incentives  for  several  types  of  assets,  like 
immovable  property,  which  risk  distorting 
resource  allocation  and  potentially  generates 
tax-induced  over-investment (14)  (see  Annex 
18). 

High levels of R&D tax relief fail to reach 
companies  with  the  highest  growth 
potential.  Belgium  has  one  of  the  highest 
levels  of  government  support  for  business 
R&D,  mainly  through  tax  relief.  Studies (15) 
show  that  direct  subsidies  –  rather  than  tax 
relief  –  would  boost  R&D  spending  in  small 
start-ups  and  that  the  multiple  R&D  tax 
schemes (16)  are  not  conducive  to  investment 
and innovation. Reforming the federal R&D tax 
schemes could improve the efficiency of public 
support  (0.4%  of  GDP)  and  better  allocate 
resources  to  high-growth  businesses.  The 
corporate  tax  system  also  includes  other 
special  tax  schemes  (e.g.  tax  shelter  for 

(13)  OECD, 2018, How demanding are activation 

requirements for jobseekers? 

(14)  OECD, 2018, Taxation of household savings, OECD Tax 

Policy Studies, 25 

audiovisual  and  film  productions),  which  do 
not seem to be the most cost-efficient means 
of supporting specific sectors. 

Graph 3.2: Average price of household heating 
products, 2023 (EUR/MWh) 

Source: FPS Health and environment (2023) 

Electricity  prices  are  comparatively  high 
for  industry  and  households.  Excise  duties 
on  gas  and  electricity  were  linked  to  market 
price levels (under the cliquet system), but gas 
and  heating  oil  prices  for  households  remain 
lower  than  electricity  prices.  In  combination 
with high electricity network costs, this creates 
high price  differences,  hindering the  switch  to 
greener  heating  systems.  A  recent  study (17) 
shows  that,  to  encourage  the  use  of  heat 
pumps, the electricity price should not be more 
than  2.1  and  2.5  times  the  price  of  gas  and 
heating  oil  respectively.  The  electricity  price 
ratios  are  below  these  thresholds  in  France 
and  the  Netherlands,  but  well  above  them  in 
Belgium  (see  Graph  3.2),  despite  several 
measures  adopted  by  the  Belgian  authorities 
to 
the  electricity  bill.  The  high 
administrative  costs  charged  by  electricity 
providers in Flanders and Wallonia also hinder 
energy  sharing (18).  The  federal  government 
has 
from 
shifting 
electricity  to  gas  as  of  2028  but  keeping  the 
price  of  heating  oil  unchanged.  This  would 
keep  contributing  to  the  already  high  level  of 
fossil fuel subsidies. 

considered 

charges 

reduce 

(15)  Schoonackers, R., 2020, Tax incentives for R&D: Are 

(17)  FPS Health and Finance, 2023, The landscape of carbon 

they effective? NBB Economic Review. 

and energy pricing and taxation in Belgium. 

(16)  Partial exemption for private companies from paying 
the withholding tax for R&D work and R&D tax credit. 

(18)  In Brussels, energy sharing is managed by the 

distribution system operator, Sibelga. 

9 

 
 
 
 
Fossil  fuel  subsidies  are  high  and  often 
take the form of tax relief. A recent report 
estimated  federal  direct  fossil  fuel  subsidies 
to  amount 
(2.4%  of 
to  EUR 12  billion 
GDP) (19) and  indirect  subsidies  to  more  than 
EUR 2.6  billion  in  2021  in  Belgium.  This 
persistent  support  for  heating  oil,  natural  gas 
and  coal  contradicts  Belgium’s  commitments 
to  reduce  greenhouse  gas  emissions  and 
improve  air  quality.  So  far,  a  plan  with 
concrete  actions  to  phase  out  fossil  fuel 
subsidies is lacking. 

the 

recent  measures 

The  tax  system  still  favours  road 
transport,  creating  traffic  congestion. 
Despite 
taken, 
professional  transporters  still  benefit  from 
reduced  excise  rates  on  diesel.  The  design  of 
vehicle  registration  and  circulation  taxes  also 
creates  adverse  incentives  in  terms  of  car 
ownership  and  use.  These 
tax  features 
exacerbate  congestion,  especially  in  Brussels, 
one of the EU cities with the highest time lost 
in  traffic.  A  recent  study (20)  shows  that  – 
unlike  increased  road  infrastructure  –  smart 
road pricing (differentiated by time and place) 
reduces traffic volumes, saves travel time and 
delivers  major  environmental  benefits.  Policy 
options such as smart road pricing for private 
vehicles  (already  in  place  for  lorries) (21)  and 
improving suburban public transport could help 
reduce  road  congestion  and  boost  the  supply 
and use of other forms of transport. 

High labour shortages and falling 
educational outcomes 

Although  job  creation  has  increased,  the 
employment  rate  is  held  back  by  an 
overall  subdued  and  stagnating  activity 
rate  (76.1%  vs  the  EU  average  of  80.0%  in 
(aged  20-64)),  particularly  among 
2023 

(19)  FPS Finance, 2024, Inventory of federal fossil fuel 

subsidies. 

(20)  Boussauw, K., 2023, Expanding the Brussels ring road 

and the myth of travel time savings. 

(21)  OECD, 2021, OECD Environmental performance reviews: 

Belgium 2021. 

jobs  created 

(see  Annex  14). 
disadvantaged  groups 
Unemployment is at an historical low (5.3% of 
the  labour  force  in  2023),  but  there  are 
significant regional  disparities (see Annex 17). 
in  2022 
Despite  numerous 
(around  100 000)  and  Belgium  having  the 
second highest job vacancy rate in 2023 in the 
EU,  the  employment  rate  is  well  below  the 
national  target  of  at  least  80%  of  adults  in 
employment  by  2030.  The  transition  rate  to 
employment  is  below  the  EU  average  (see 
Graph  3.3),  questioning  the  efficiency  of 
activation measures. 

Graph 3.3: Job vacancy rate and transition 
from unemployment to employment, 2023 

Note: (1) For FR and DK: data on 10 employees or more 
in business economy 
Source: European Commission 

in 

technology, 

Labour  shortages  remain  a  pressing 
challenge,  especially  to  achieving  the 
green  transition.  Labour  shortages  are 
among  the  highest  in  the  EU,  with  the  job 
vacancy rate at 4.6% in 2023. Most of the job 
vacancies  are 
technical  occupations, 
including healthcare (see Annex 16) and STEM 
and 
(science, 
mathematics)  related  jobs,  which  are  needed 
for  the  accelerating  green  transition  (see 
Annex  8).  Labour  shortages,  which  undermine 
Belgium’s  potential  to  boost  competitiveness 
(see Annex 20), could be tackled by increasing 
the  number  of  STEM  graduates  (16.4  per 
1 000  inhabitants  aged  20-29  vs  21.9  in  the 
EU)  and  by  strengthening  the  labour  market 
relevance of vocational education and training 
(VET) in technical professions. 

engineering 

Effective  activation  policies  are  needed 
to better integrate disadvantaged groups. 
Given  the  high  labour  shortages,  sizeable 

10 

EUBEBGCZDEEEIEELESHRITCYLVLTHUMTNLATPLPTROSISKFISE01020304050607000,511,522,533,544,55Vacancy rateDKFRTransition rate (% of unemployment) 
 
   
Graph 3.4: Share of underachievers in mathematics, by Community, socioeconomic and migrant 
background (PISA 2022) 

Source: OECD (2023) PISA 2022 

hiring  and  wage  subsidies  do  not  seem  to  be 
the  most  cost-efficient  policy  to  increase 
labour  market  participation.  The  efficiency  of 
public employment services could be improved 
by  refocusing  support  on  helping  jobseekers 
find  a  job (22).  In  addition,  targeted  measures 
are  needed  to  better  integrate  disadvantaged 
groups  in  the  labour  market  (including  older 
people,  people  with  disabilities,  with  low  skills 
or  with  a  migrant  background).  After  the 
number  of  workers  on  long-term  sick  leave 
increased  markedly  between  2013-2021,  the 
federal  government  took  measures  to  help 
them reintegrate into the labour force. 

Strengthening  participation  of  adults  in 
upskilling  and  reskilling  could  boost 
productivity.  With  only  34.9% (23)  of  adults 
participating  in  learning  activities  in  2022, 
Belgium  is  still  far  from  its  target  of  at  least 
60.9% by 2030. The share of adults in training 
is particularly low among low-qualified people 
(12.5%  against  the  EU  average  of  18.4%). 

(22)  VDAB external audit: 

https://www.vlaamsparlement.be/nl/parlementaire-
documenten/gedachtewisselingen-
hoorzittingen/1809473. 

(23)  Eurostat - adult education survey (AES) in % of people 

Incentives for adults, especially disadvantaged 
groups,  are  key  for  their  activation  on  the 
labour market and to tackling labour shortages 
and skills mismatches. 

skills  worsened 

Like in other EU countries, young people's 
basic 
in  Belgium, 
particularly  for  disadvantaged  students. 
Despite  Belgium  spending  more  on  education 
its  neighbouring  countries,  education 
than 
outcomes  are  no  better (24).  The  2022  PISA 
study  results  show  that  25%  of  15-year-olds 
underperformed  in  mathematics,  25.3%  in 
reading and 22.4% in science (see Annex  15). 
low-achieving  students 
The  share  of 
in 
mathematics 
increased  significantly  since 
2018  (19.6%) (see  Graph  3.4),  while  the  drop 
in  performance  in  reading  and  science  has 
been  more  gradual  since  2012.  The  share  of 
students 
by 
Community,  with  the  widest  performance  gap 
registered  in  mathematics.  In  2012,  Belgium 
had  the  highest  share  of  top  performers  in 
mathematics 
(19.5%),  but 
performance  has  declined  noticeably  in  all 
Communities  over  the  last  10  years  (11.5%). 
Since  2000,  performance  in  mathematics  has 
declined  more  among  high-achievers  than 

underperforming 

the  EU 

varies 

in 

aged 25-64. 

(24)  OECD, 2022, Economic Surveys: Belgium. 

11 

BEflBEfrBEdeBE 2018BEEU-27AdvantagedDisadvantagedAdvantaged 2018Disadvantaged 2018BEfl advantagedBEfr advantaged BEfl disadvantagedBEfr disadvantagedEU-27 disadvantagedEU-27 advantagedNative-bornForeign-bornNative-born with immigrant parentsEU Target EU Target TotalSocio-economic backgroundMigrant background0%5%10%15%20%25%30%35%40%45%50%% of underachievers in mathematics 
 
 
  
and 1.7 pps respectively over the period 2022-
2070, while spending on education is projected 
to  fall  by  0.8  pp.  By  2030,  age-related 
spending is projected to increase by 0.9 pps of 
GDP,  which  indicates  that  age-related  costs 
add on average 0.1 pp to the deficit each year. 
The projected increase in age-related costs will 
make it challenging to consolidate government 
finances and bring down the high level of debt. 

Measures  legislated  in  December  2020 
(not included in the 2021 Ageing Report), 
are  projected  to  increase  spending  by 
0.6%  of  GDP  in  2070.  In  the  2024  Ageing 
Report,  the  increase  in  spending  on  pensions 
between 2022 and 2070 is projected to be 1.2 
pps  of  GDP  higher  than  in  the  2021  Ageing 
Report  (rising  to  3.5%  of  GDP  from  2.3%). 
Measures legislated in December 2020 explain 
half  of  this  increase  in  pension  spending (27). 
The  remaining  half  is  explained  by  different 
underlying  assumptions,  notably  productivity, 
demography and labour market. 

Measures  legislated  in  April  2024  (not 
included in  the 2024  Ageing  Report)  only 
partially  offset  the  increase  in  pension 
in 
spending  by  the  measures 
legislated 
December  2020.  Although 
the  measures 
adopted  in  December  2020  are  expected  to 
increase spending by 0.6 pps of GDP by 2070, 
measures adopted in April 2024 are estimated 
to reduce spending on pensions by 0.2 pps of 
GDP  by  2070.  These  measures  include  the 
reintroduction  of  a  pension  bonus 
to 
incentivise  workers  to  remain  longer  in  the 
labour market, the introduction of a cap on the 
adjustment  of  civil  servants’  pensions  to 
changes  in  public-sector  wages  (significant 
savings are not expected before 2038) and the 
introduction  of  a  condition  of  years  of 
effective work to have access to the minimum 
pension.  Further  measures  will  be  needed  to 
put  the  pension  system  on  a  financially 
sustainable  path.  For  instance,  the  favourable 
conditions  under  some  special  regimes  in  the 

(27)  These measures include increasing the minimum 

pension, abolishing the correction coefficients used to 
calculate the new pension in the self-employed 
scheme, increasing the minimum non-contributory 
pension and raising the wage ceiling used to calculate 
pensions. 

to 

equity 

ensure 

low-achievers,  which 

indicates  the 
among 
need to maintain a focus on both performance 
and 
continued 
competitiveness  in  educational  outcomes.  The 
gap in underachievement between advantaged 
and disadvantaged students has also widened 
since 2018. A student's migrant background is 
also  associated  with  a  higher 
risk  of 
underachievement.  Belgium  has  the  highest 
share of students who self-reported repeating 
at  least  one  grade  during  their  school  career 
(primary  and  secondary  education)  in  the  EU, 
with  a  high  share  among  disadvantaged 
students. 

indicates  an 

the  profession, 

Teacher 
students’ 
shortages  affect 
educational outcomes. The sharp increase in 
the number of principals reporting problems of 
teacher  shortages 
increased 
awareness  and  acuteness  of  the  issue  (see 
Annex 15). The increasing number of teachers 
leaving  prematurely 
the 
difficult  working  conditions  and  the  decrease 
the  number  of  new  graduates  are 
in 
the  shortages (25).  To  keep 
exacerbating 
teachers  in  the  profession,  it  is  essential  to 
make  it  more  attractive,  for  example  by 
improving  mentoring  programmes  for  new 
teachers, providing job stability and continuous 
training  adapted  to  evolving  needs,  and  by 
pursuing the planned reforms. 

Increasing ageing costs put public 
finances under pressure 

The  2024  Ageing  Report  projects  age-
related  spending  in  Belgium  to  increase 
by  5.1  percentage  points  (pps)  of  GDP 
between 2022 and 2070 (26). This is 0.5 pps 
of GDP more than in the 2021 Ageing Report. 
Spending  on  pensions,  healthcare  and  long-
term  care  is  projected  to  increase  by  3.5,  0.6 

(25)  European Commission, 2023 Education and Training 

Monitor: Belgium. 

(26)  European Commission and Economic Policy Committee, 
2024 Ageing report, available at: https://economy-
finance.ec.europa.eu/publications/2024-ageing-report-
economic-and-budgetary-projections-eu-member-
states-2022-2070_en 

12 

 
 
 
public sector could be reviewed towards more 
convergence  of  pension  regimes  within  the 
public sector. 

In line with the ageing of the population, 
spending on long-term care is expected to 
increase substantially, as  confirmed  by the 
2024  Ageing  Report.  In  2022,  government 
spending on long-term care amounted to 2.3% 
of  GDP  (EU  average  1.8%),  which  made 
Belgium one of the countries with the highest 
long-term care spending in the EU (see Graph 
3.5).  Spending  on  long-term  care  is  projected 
to increase further by 1.7 pps of GDP by 2070 
(against an average increase of 0.8 pps in the 
EU). 

Graph 3.5: Gross government spending on 
long-term care, 2022-2070 (% of GDP) 

Source: European Commission, 2024 Ageing Report 

Despite the policy action taken, improving 
the  financial  sustainability  of  long-term 
care  remains  a  challenge.  The  Brussels-
Capital  Region  has  adopted  measures  to 
narrow the gap between the supply of elderly 
care facilities and the needs of the elderly, and 
to  limit  the  risk  of  a  budget  overrun  by 
recovering  unoccupied  beds.  Measures  in  the 
Walloon Region focus on improving the quality 
of  long-term  care  spending  rather  than  on 
tackling 
In 
recent  measures  have  started 
Flanders, 
improvements. 
targeting 
including  a 
Further  action 
spending  review,  which  is  expected  to  lead  to 
specific policy measures by  mid-2024 to help 
contain  long-term  care  spending  below  the 
threshold  set  in  the  spending  norm,  while 
ensuring a high level of quality services. 

the  expected  cost 

cost-efficiency 

is  underway 

increase. 

care, 

compared  with 

Evidence  suggests  a  possible  overuse  of 
residential  care  and  unnecessary  or 
premature 
institutionalisation.  Available 
data  suggest  that  there  is  a  high  level  of 
unnecessary  or  premature  institutionalisation 
(in a residential care facility), although this has 
decreased  in  recent  years (28).  The  overuse  of 
residential 
other 
countries, suggests that there may be room to 
improve  the  cost-efficient  use  of  different 
care  settings, 
including  by  strengthening 
community-based  services.  In  particular,  the 
share of individuals affected by this issue was 
high 
in  Brussels-Capital  and  the  Walloon 
Region.  Belgium  spends  less  on  public  health 
and  disease  prevention  than  many  other  EU 
(see  Annex  16).  An  effective 
countries 
monitoring  of  the  system  for  elderly  care  is 
paramount to improve the use of the different 
care  settings  and  notably  of  all  elderly  care 
related expenditure. 

Improving the quality of the fiscal 
framework 

Belgium’s 
budgetary 
medium-term 
framework  ranks  among  the  weakest  in 
the  EU  (see  Annex  13).  Belgium  is  the  only 
euro-area country that lacks a fully developed 
fiscal  planning  at  national 
multiannual 
level (29) beyond 
the  stability  programme, 
despite  some  multiannual  fiscal  planning  at 
local authority level and to a certain extent for 
some  regions  and  communities (30).  Belgium’s 
stability  programme  sets  multiannual  fiscal 
targets  (T+3)  for  the  different 
levels  of 
government but the budgetary trajectories are 
of indicative nature, described in limited detail, 
targets  are  frequently  missed. 
and 

the 

(28)  Available at https://www.healthybelgium.be/en/health-

system-performance-assessment/specific-
domains/care-for-the-elderly#ELD-1. 

(29)  National Bank of Belgium, 2020, ‘Belgium’s fiscal 

framework: what is good and what could be better?’, 
Economic Review. 

(30)  Flanders has a multi-annual budgetary framework 
which since 2022 includes a non-binding spending 
norm. It is expected to apply a binding expenditure rule 
from the 2025 annual budget onwards. 

13 

2,32,53,03,53,84,11,71,92,12,32,52,60,00,51,01,52,02,53,03,54,04,52225303540455055606570% of GDPBEEAEU 
   
 
Box 4: 

The mid-term review of cohesion policy funding for Belgium 

The  mid-term  review  of  cohesion  policy  funding  is  an  opportunity  to  assess  cohesion  policy 
programmes and tackle emerging needs and challenges in EU Member States and their regions. 
Member  States  are  reviewing  each  programme  taking  into  account,  among  other  things,  the 
challenges  identified  in  the  European  Semester,  including  in  the  2024  country-specific 
recommendations,  as  well  as  progress  in  implementing  the  integrated  national  energy  and 
climate plans. This review forms the basis for a proposal by the Member State for the definitive 
allocation of 15% of EU funding included in each programme. 

Belgium  has  made  progress  in  implementing  cohesion  policy  programmes  and  the  European 
Pillar  of  Social  Rights,  but  challenges  remain  (see  Annexes  14  and  17).  In  particular,  intra-
regional disparities in economic and social development remain high in Belgium and differences 
persist in terms of R&D intensity between provinces. Against this background, it is important to 
continue implementing the planned priorities, focusing on:  

(i) 
(ii) 
(iii) 

(iv) 

(v) 

enhancing research, innovation and digitalisation;  
the green transition, climate change adaptation and energy efficiency;  
improving access to employment and training measures, particularly for vulnerable 
groups, long-term unemployed and young people;  
supporting  lifelong  learning,  and  in  particular  upskilling  and  reskilling  for 
professional mobility and for anticipating change;  
fostering active inclusion and the employability of disadvantaged groups. 

Belgium  could  benefit  from  the  opportunities  available  under  the  Strategic  Technologies  for 
Europe  Platform  (STEP)  initiative (31)  to  support  the  transformation  of  industry,  to  develop 
advanced digital technologies and services, circular and advanced materials and to build capacity 
related to sustainable clean energy, resilient housing and innovation in the health sector. 

Frequent  target  revisions  are  not  envisaged 
under the reformed economic governance. 

is 

the 

fiscal 

Strengthening 
framework 
requires  commitment  from  the  different 
levels  of  government.  Other  than  the 
targets  set  in  the  stability  programme,  the 
number  and  coverage  of  fiscal  rules 
in 
Belgium 
limited  compared  with  other 
Member States. Fiscal rules include healthcare 
spending  targets  at  federal  level  and  strict 
rules  set  for  local  authorities.  Despite  the 
federal level and the regions accounting for a 
high  share  of  general  government  spending, 
there  are  few  formal  rules  governing  these 
levels, with the main exception being Flanders’ 
recent  spendings  target.  Belgium  also  lacks 
green budgetary practices to help increase the 
accountability and transparency of the budget 
in  contributing 
the  country’s  green 
objectives. 

to 

It  is  essential  to  fully  implement  the 
2013  cooperation  agreement.  The  federal 
government  and the  federated  entities  signed 
an  agreement  in  2013  to  ensure  effective 
budgetary 
its 
implementation  remains  limited.  The  absence 

coordination. 

However, 

of  agreement  on  the  multiannual  targets 
proposed  at  each  level  of  government  by  the 
(HCF)  prevents 
High  Council  of  Finance 
effective  monitoring  of  compliance  and 
increases  the  risk  of  deviating  from  the 
medium-term  fiscal  trajectory.  At  the  same 
time, it is essential to boost the autonomy and 
staff  capacity  of  the  secretariat  of  the 
Borrowing  Section  of  the  HCF  to  ensure  it  is 
able  to  fully  perform 
its  main  task  of 
monitoring  compliance  with  the  fiscal  rules. 
The  government  also  plays  a  large  role  in 
nominating  members  of  the  HCF  and  the 
investment 
secretariat  staff.  With  many 
responsibilities  delegated  to  the  regions  and 
language  communities,  there 
is  scope  to 
improve coordination to increase the level and 
efficiency of public investment. 

(31)  Regulation (EU) 2024/795 

14 

 
 
 
KEY FINDINGS 

Belgium’s  recovery  and  resilience  plan 
(RRP)  includes  measures  to  address  a 
series of structural challenges in synergy 
with  other  EU  funds,  including  cohesion 
policy funds, by: 

by 

reforming 

•  Accelerating  the  roll-out  of  renewable 
regulatory 
energy 
in 
frameworks 
renewable  energy  installations,  building  an 
energy 
offshore 
windfarms  and  phasing  out  the  use  of 
fossil fuels in new buildings; 

investment 

to  boost 

connect 

island 

to 

•  Investing 

in 

the  energy-efficient 
renovation  of  buildings,  in  clean  mobility, 
the  circular  economy  and  in  the  hydrogen 
value chain; 

•  Investing 

the  public 
in  digitalising 
administration  and  education  and  in  a 
reform to improve digital connectivity; 

•  Improving  the  sustainability  of  the 

pension system; 

•  Improving the efficiency and quality of 
public  spending  by  conducting  spending 
reviews; 

The  implementation  of  Belgium’s  RRP  is 
facing  significant  delays  which  require 
decisive  actions  to  ensure  completion  of  all 
the  measures  of  Belgium’s  RRP  by  August 
2026. 

Beyond  the  reforms  and  investments  in 
the  RRP  and  the  cohesion  programmes, 
Belgium would benefit from:  

•  Reforming the tax and benefits system 
to  strengthen  incentives  to  work  by 
shifting  the  tax  burden  away  from  labour 
and  by  reviewing  the  design  of  social 
benefits; 

15 

•  Reviewing  tax  expenditure  to  reduce 

economic and social distortions; 

•  Taking  steps  to  phase  out  fossil  fuel 
subsidies,  including  by  shifting  charges 
from electricity to fossil fuels; 

•  Tackling the projected increase in age-
related  costs,  including  by  improving  the 
effectiveness  and  efficiency  of  its  long-
term care systems, which will help improve 
the country’s fiscal sustainability; 

•  Increasing  the  effectiveness  of  the 
national  fiscal  framework  by  ensuring 
the  effective  coordination  of  fiscal  policies 
at  all  government  levels  and  by  increasing 
the  autonomy  and  staff  capacity  of  the 
secretariat of the High Council of Finance; 

•  Tackling  labour  shortages  and  skills 
the  green 
mismatches, 
transition, 
activation 
policies  to  further  integrate  disadvantaged 
groups into the labour market; 

including  for 
strengthen 

and 

•  Improving  basic  skills  by  enhancing  the 
performance  and  equity  of  the  education 
and training systems and pursuing reforms 
to boost the teaching profession; 

•  Improving  the  business  environment 
and  business  dynamics  by  reducing  the 
regulatory  burden  and  complexity,  and  by 
easing the restrictions in the service sector; 

•  Tackling  road  congestion  by  reforming 
the  tax  system,  including  through  smart 
road  pricing,  and  by  developing  active 
mobility and public transport solutions; 

•  Improving  climate  resilience  by  making 
in 
and 

ecosystems  more 
sustainable  water  management 
reducing nitrogen emissions. 

investing 

robust, 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Belgian RRP 

19 

21 

21 

23 

27 

29 

32 

34 

34 

38 

44 

46 

46 

48 

51 

53 

58 

60 

60 

62 

64 

66 

69 

69 

72 

74 

75 

24 
27 

 
 
 
Support from EU instruments in Belgium 
Resilience indices across dimensions for Belgium and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key energy indicators 
Key indicators for a fair transition in Belgium 
Circularity indicators 

A3.2.  Measures in Belgium's RRP 
28 
A4.1. 
31 
A5.1. 
32 
A6.1. 
37 
A7.1. 
43 
A8.1. 
44 
A9.1. 
46 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 
49 
A11.1.  Key innovation indicators 
52 
A12.1. 
57 
Industry and the Single Market 
A13.1.  Public administration indicators 
59 
A14.1.  Social Scoreboard for Belgium 
60 
A14.2.  Situation of Belgium on 2030 employment, skills and poverty reduction targets 
61 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
62 
A16.1.  Key health indicators 
65 
A17.1.  Selected indicators at regional level in Belgium 
67 
A18.1.  Financial soundness indicators 
70 
A19.1.  Taxation indicators 
73 
A20.1.  Key economic and financial indicators 
74 
A21.1.    Debt sustainability analysis - Belgium                                                                                                                                         77 
A21.2.    Heat map of fiscal sustainability risks - Belgium                                                                                                                         77 

LIST OF GRAPHS 

Progress towards the SDGs in Belgium 
Belgium's progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Total loans disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Belgium 
Distribution of RRF funding by pillar in Belgium 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
Belgium's energy retail prices for households and industry 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Belgium’s installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in Belgium 
Job vacancy rate in mining and quarrying, and transformation sectors 
ETS emissions by sector since 2013 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A3.2. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A12.1.  GDP per hour worked in PPS as percentage of the EU in 2023 vs growth rate 2000-2023 
A12.2.  Structural change (sector size and average productivity growth by sector) 
A12.3.  Total factor productivity index 2010=100 
A13.1.  a) Share of women and men in management positions; b) open government data maturity indicator: 2023 scores (in % of 

the total maximum score); country ranking, overall score (right side) 

A15.1.  Top performance rates in mathematics by community, PISA 2012, 2018 and 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  GDP per capita (2011) and annual GDP per capita growth (2013-2022) 
A17.2.  Employment and unemployment rates by region and by education level, 2022 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023 
A19.2.  Fossil fuel subsidies due to excise duty exemptions and reduced rates, 2021, millions of EUR 

21 
23 
28 
28 
29 
29 
34 
36 
36 
38 
39 
40 
44 
45 
46 
47 
53 
53 
54 

59 
62 
64 
64 
66 
67 
72 
72 

20 

 
 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Belgium’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

While  Belgium performs  well or is  improving 
on  most  of  the  SDG  indicators  related  to 
environmental  sustainability, 
it  needs  to 
catch  up  with  the  EU  average,  in  particular 
on  SDG 7  (Affordable  and  clean  energy),  15 
(Life on land), 13 (Climate action) and SDG 6 

Graph A1.1: Progress towards the SDGs in Belgium 

(Clean  water  and  sanitation).  Belgium  has 
made  some  progress  on  energy  consumption 
indicators, including the share of renewable energy 
in  gross  final  energy  consumption  (SDG 7),  which 
increased  from  9.1%  in  2017  to  13.8%  in  2022. 
Nevertheless,  Belgium’s  performance 
remains 
below  the  EU  average  (23%  in  2022).  The  final 
in  household  per  capita 
energy  consumption 
(SDG 7)  decreased  from  3.2  to  2.9  tonnes  of  oil 
equivalent but is still above the EU average of 2.1 
in  2022.  Belgium’s  recovery  and  resilience  plan 
(RRP) includes measures to support the shift from 
fossil fuels, in particular for the energy renovation 
of  buildings,  decarbonisation  of 
industrial 
production,  and  sustainable  transport.  Emissions 
from agriculture (ammonia, nitrates) are above the 
EU  average  (SDGs 2  and  6);  this  is  also  the  case 
for  the  indicator  phosphate  in  rivers  (SDG 15).  On 
SDG 12,  the  circular  material  use  rate  improved 
from 19.1% in 2017 to 22.2% in 2022 and is well 
above the EU average (11.5%).  

Belgium  performs  well  or  is  improving  on 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but signals that it 
is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

21 

 
 
 
 
 
 
to 

linked 

connection  in  2022  (78.3%)  is  now  above  the  EU 
average  (73.4%).  Belgium  is  performing  well  on 
education  indicators  overall,  although  there  are 
still  concerns over high inequalities in educational 
outcomes 
socio-economic 
background  of  pupils.  The  share  of  adults  with  at 
least basic digital skills was above the EU average 
in  2023  at  59.4%  (EU  55.6%).  Nevertheless,  the 
country  still  faces  a  significant  challenge  to 
improve  digital  skills.  The  RRP  includes  large 
investments  to  improve  digital  infrastructure  and 
equipment in schools. 

the 

Belgium  is  improving  on  SDG  indicators 
related  to  macroeconomic  stability  (SDGs 8, 
16,  17).  It  performs  well  on  the  quality  of  its 
institutions  (SDG 16),  in  particular  on  access  to 
justice  and  personal  security.  The  perceived 
independence  of  the 
justice  system  by  the 
population increased from 64% in 2018 to 66% in 
2023 and was substantially above the EU average 
of 53% in 2023. Belgium performs better than the 
EU average on indicators related to SDG 8 (Decent 
work and economic growth). 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes.  

most  SDG  indicators  related  to  fairness 
(SDGs 1, 3, 4, 5, 7, 8, 10). The country performs 
well on poverty and inclusive growth (SDGs 1 and 
8),  reflecting  the  high  redistributive  impact  of the 
tax  and  benefits  system.  The  share  of  people  at 
risk  of  poverty  or  social  exclusion  fell  in  2022  to 
18.7%,  below  the  EU  average  of  21.6%.  Belgium 
has  made  progress  on  various  employment 
indicators.  These  include  indicators  like  the  long-
term  unemployment  rate  (2.6%  in  2018  against 
2.2%  in  2023)  and  the  number  of  young  people 
not in employment, education or training (11.4% in 
2018, 9.6% in 2023). Several measures in the RRP 
aim  to  further  tackle  unemployment,  in  particular 
by 
learning. 
However, despite these measures the employment 
rate remains well below the 2030 national target, 
held  back  by  a  low  activity  rate  (see  Annex  14). 
Labour  market  participation 
in 
particular  for  vulnerable  groups,  such  as  adults 
with  a  lower  level  of  education,  people  with  a 
migrant  background  and  people  with  disabilities. 
Although  Belgium  needs  to  catch  up  with  the  EU 
average  on  affordable  and  clean  energy  (SDG 7), 
the  proportion  of  the  population  unable  to  keep 
their home adequately warm is lower than the EU 
average (5.1% in 2022; EU average: 9.3%). 

improving  training  and 

life-long 

remains 

low 

Belgium performs well and is making further 
progress on all SDGs on productivity (SDGs 4, 
8,  9).  It  performs  strongly  in  particular  on 
innovation,  with  R&D  intensity  of  3.4%  of  GDP  in 
2022 well above the EU average (2.2%). The share 
internet 
of  households  with  a  high-speed 

22 

 
 
 
 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Belgium's progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (32) 
addressed  to  Belgium  as  part  of  the  European 
Semester. These recommendations concern a wide 
range of policy areas that are related to 14 of the 
17  Sustainable  Development  Goals  (SDGs)  (see 
Annexes  1  and  3).  The  assessment  considers  the 
policy action taken by Belgium to date (33) and the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (34).  At  this  stage  of  RRP  implementation, 
52%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2023  have  recorded  at  least  ‘some 
progress’,  while  24%  recorded  ‘limited  progress’ 
(see  Graph  A2.1).  As  the  RRP  is  implemented 
further,  considerable  progress 
in  addressing 
structural CSRs is expected in the coming years. 

(32)  2023 CSRs: EUR-Lex - 32023H0901(01) - EN - EUR-Lex 

(europa.eu) 

2022 CSRs: EUR-Lex - 32022H0901(01) - EN - EUR-Lex 
(europa.eu) 
2021 CSRs: EUR-Lex - 32021H0729(01) - EN - EUR-Lex 
(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(01) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(01) - EN - EUR-Lex 
(europa.eu) 

(33)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (published twice a year reporting on progress in 
implementing milestones and targets on the basis of the 
payment requests assessment). 

(34)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. The CSR 
assessment presented here considers the degree of 
implementation of the measures included in the RRP and of 
those carried out outside of the RRP at the time of 
assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which have not yet been adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

23 

No progress8%Limited progress24%Some progress52%Substantial progress10%Full implementation6% 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
  
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

24 

BelgiumAssessment in May 2024*RRP coverage of CSRs until 2026Relevant SDGs2019 CSR 1Limited progressEnsure that the nominal growth rate of net primary government expenditure does not exceed 1,6 % in 2020, corresponding to an annual structural adjustment of 0,6 % of GDP. Not relevant anymoreNot applicableSDG 8, 16Usewindfallgainstoacceleratethereductionofthegeneralgovernment debt ratio. Not relevant anymoreNot applicableSDG 8, 16Continue reforms to ensure the fiscal sustainability of the long-term care  Limited ProgressSDG 3andpensionsystems,includingbylimitingearlyexitpossibilitiesfrom the labour market. Limited ProgressRelevant RRP measures planned as of 2021SDG 8Improvethecompositionandefficiencyofpublicspending,inparticular through spending reviews, Some ProgressSDG 8, 16andthecoordinationoffiscalpoliciesbyalllevelsofgovernmenttocreate room for public investment.Limited ProgressSDG 8, 162019 CSR 2Some progressRemove disincentives to work and strengthen the effectiveness of active labour market policies, in particular for the low-skilled, older workers and people with a migrant background. Limited ProgressRelevant RRP measures planned as of 2021, 2023, 2024.SDG 8, 10Improve the performance and inclusiveness of the education and training systems Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, 2026SDG 4, 8, 10and address skills mismatches.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, 2026SDG 42019 CSR 3Some progressFocus investment-related economic policy on sustainable transport, including upgrading rail infrastructure, Some ProgressRelevant RRP measures planned as of 2022, 2023, 2024SDG 10, 11the low carbon and energy transition Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2026SDG 7, 9, 10, 11, 13and research and innovation, in particular in digitalisation, taking into account regional disparities. Substantial ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025,SDG 9, 10, 11Tackle the growing mobility challenges, by reinforcing incentives and removing barriers to increase the supply and demand of collective and low emission transport.Some ProgressRelevant RRP measures planned as of 2021,2022, 2023, 2024, 2025, 2026SDG 112019 CSR 4Some progressReduce the regulatory and administrative burden to incentivise entrepreneurship Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024SDG 8, 9andremovebarrierstocompetitioninservices,particularlytelecommunication, retail and professional services.Some ProgressSDG 92020 CSR 1Substantial progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableSDG 8, 16Reinforcetheoverallresilienceofthehealthsystemandensurethesupply of critical medical products.Substantial ProgressRelevant RRP measures planned as of 2022, 2023SDG 32020 CSR 2Some progressMitigate the employment and social impact of the COVID-19 crisis, notably by promoting effective active labour market measures Substantial ProgressRelevant RRP measures planned as of 2023, 2024SDG 1, 2, 8, 10and fostering skills development.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025SDG 42020 CSR 3Some progressEnsure effective implementation of the measures to provide liquidity to assist SMEs and the self-employed Full ImplementationSDG 8, 9and improve the business environment.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024 SDG 8, 9 Front-load mature public investment projects Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, 2026SDG 8, 16and promote private investment to foster the economic recovery. Some ProgressRelevant RRP measures planned as of 2022SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoninfrastructure for sustainable transport, Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, 2026SDG 11clean and efficient production and use of energy, Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024SDG 7, 9, 13the circular economy, Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024SDG 6, 12, 15digital infrastructure, such as 5G and Gigabit Networks, Some ProgressRelevant RRP measures planned as of 2021, 2022, 2025, 2026SDG 9and research and innovation.Substantial ProgressRelevant RRP measures planned as of 2022, 2023SDG 9 
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

25 

2021 CSR 1Not relevant anymoreIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudent fiscal policy. Preserve nationally financed investment. Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not relevant anymoreNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition. Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Limited progressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Stand ready to adjust current spending to the evolving situation.No ProgressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Full ImplementationNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthemediumtermthroughgradualconsolidation,investmentandreforms.No ProgressNot applicableSDG 8, 16Prioritisereformstoimprovethefiscalsustainabilityoflong-termcare,includingbypromotingacostefficientuseofthedifferentcaresettings.Limited ProgressSDG 3Reformthetaxationandbenefitsystemstoreducedisincentivestoworkbyshiftingthetaxburdenawayfromlabourandbysimplifyingthetaxandbenefitsystem.Reducetaxexpendituresandmakethetax system more investment-neutral.Limited ProgressSDG 8, 10, 122022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 13 July 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiationswiththeCommissionandsubsequently starting their implementation.2022 CSR 3Some progressAddresslabourshortagesandskillsmismatches,notablybyimprovingtheperformanceandinclusivenessoftheeducationandtrainingsystem,enhancingthequalityandlabourmarketrelevanceofthevocationaleducationandtraininganddevelopingmoreflexibleand attractive career paths and training for teachers.Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2024, 2025, 2026SDG 42022 CSR 4Some progressReduce overall reliance on fossil fuelsLimited ProgressRelevant RRP measures planned as of 2022, 2023SDG 7, 9, 13bysteppingupenergyefficiencyimprovementsandthereductionoffossil fuel use in buildings,Some ProgressRelevant RRP measures planned as of 2022, 2023, 2024SDG 7promotingtheuseandsupplyofpublictransportaswellassoftmobilitySome ProgressRelevant RRP measures planned as of 2021,2022, 2023, 2024, 2025, 2026SDG 11andacceleratingthedeploymentofrenewableenergiesandrelatedgridinfrastructurebyfurtherstreamliningthepermittingproceduresincludingbyreducingthelengthofappealproceduresandadoptingframeworkconditionstoboostinvestmentsinsolarenergyinstallationsSome ProgressRelevant RRP measures planned as of 2022, 2023SDG 7, 8, 9, 13RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
  
 
Table (continued) 

Note: * See footnote (34).  
**   RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP may be necessary to fully implement CSRs and address their underlying challenges. Measures indicated as ‘being 
implemented’ are only those included in the RRF payment requests submitted and positively assessed by the European 
Commission. 
Source: European Commission 

26 

2023 CSR 1Limited progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable, and preserve incentives for energy savings.Substantial ProgressNot applicableSDG 8, 17Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimaryexpenditurein2024tonot more than 2%.No ProgressNot applicableSDG 8, 17PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticularto foster the green and digital transitions.Full implementationNot applicableSDG 8, 17Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.No ProgressNot applicableSDG 8, 17Strengthen efforts to improve the efficiency of long-term care.Limited progressSDG 3Pursuethereformofthetaxationandbenefitssystemtoreducedisincentivestoworkbyshiftingthetaxburdenawayfromlabourand by simplifying the tax and benefits system.Limited progressSDG 8, 10, 12Reviewtaxexpenditurestoreducetheireconomic,socialandenvironmental harmful impact.Limited progressSDG 8, 10, 122023 CSR 2Ensureaneffectivegovernancetoallowforaswiftandsteadyimplementationofitsrecoveryandresilienceplan.SwiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywith the recovery and resilience plan.2023 CSR 3Limited progressAddresslabourshortagesandskillsmismatches,inparticularbystrengtheningactivationpolicies(includingguidance)tointegratedisadvantaged groups into the labour market.Some ProgressRelevantRRPmeasuresbeingplannedasof 2021, 2022, 2023, 2024, 2025, 2026SDG 8, 10Improvetheperformanceandequityoftheeducationandtrainingsystems and continue reforms to strengthen the teaching profession.Limited progressRelevantRRPmeasuresbeingplannedasof 2021, 2022, 2023, 2024, 2025, 2026SDG 42023 CSR 4Some ProgressReduce overall reliance on fossil fuelsLimited progressRelevantRRPmeasuresbeingplannedasof 2021, 2022, 2023, 2024, 2025, 2026SDG 7, 9, 13bysteppingupenergyefficiencyimprovementsandthereductionoffossil fuel use in buildings,Some ProgressRelevantRRPmeasuresbeingplannedasof 2022, 2023, 2024, 2025, 2026SDG 7 by further stimulating the decarbonisation of industry andSome ProgressRelevantRRPmeasuresbeingplannedasof 2022, 2023, 2024SDG 7 bypromotingtheuseandsupplyofpublictransportaswellassoftmobility.Some ProgressRelevantRRPmeasuresbeingplannedasof 2021, 2022,  2023, 2024, 2025, 2026SDG 11Acceleratethedeploymentofrenewableenergiesandrelatedgridinfrastructurebyfurtherstreamliningthepermittingprocedures,includingbyreducingthelengthofappealprocedures,andbyadoptinglegalframeworkstofurtherboostinvestmentsinrenewableenergy installations and facilitate energy sharing.Some ProgressRelevantRRPmeasuresbeingplannedasof 2022, 2023, 2024, 2025, 2026SDG 7, 8, 9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsand competences needed for the green transition.Some ProgressRelevantRRPmeasuresbeingplannedasof 2024SDG 4RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

Table A3.1:  Key facts of the Belgian RRP 

Source: RRF Scoreboard 

Belgium’s RRP includes a REPowerEU chapter 
to phase out its dependency on Russian fossil 
fuels,  diversify 
its  energy  supplies,  and 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 
implementation,  EUR  145.1  million  was  disbursed 
as pre-financing on 25 January 2024. This helped 
launch  relevant  reforms  like  the  reform  of  the 
appeal  procedures  of  the  Council  of  State,  which 
aims at accelerating the deployment of renewable 
energy  in  Belgium  by  removing  administrative 
bottlenecks  linked  to  investments  in  renewable 
energy. 

The  plan  has  a  strong  focus  on  the  green 
transition,  devoting  51%  of  the  available 
funds  to  measures  that  support  climate 
objectives and 27% of its total allocation to 
support  the  digital  transition.  It  also  retains  a 
strong  social  dimension  with  social  protection 
measures,  especially  related  to  reskilling  and 
upskilling measures. 

This Annex provides a snapshot of Belgium’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).    

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR  5  034  million  in  grants  and  EUR  264 
million in loans under the RRF over the 2021-
2026 period, representing 0.9% of Belgium’s 
GDP (35).  As  of  mid-May  2024,  EUR  915.2  million 
has  been  disbursed  to  Belgium  under  the  RRF, 
comprising  EUR  872.2  million  in  grants  and  EUR 
43 million in loans.  

Belgium  still  has  EUR  4 382.8  million 
available  in  grants  and  loans  from  the  RRF. 
This will be disbursed after the assessment of the 
future fulfilment of the remaining 230 milestones 
the  Council 
included 
and 
Implementing  Decision (37)  (CID),  ahead  of  the 
2026 deadline established for the RRF.  

targets (36) 

in 

Belgium’s  progress  in  implementing  its  plan 
is  recorded  in  the  Recovery  and  Resilience 
Scoreboard (38). The scoreboard gives an overview 
of the progress made in implementing the RRF as 
a  whole.  Graphs  A3.1  and  A3.2  show  the  current 
state of play as reflected in the scoreboard.  

(35)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en 

(36)  A milestone or target is satisfactorily fulfilled once a Member 
State has provided evidence to the Commission that it has 
reached the milestone or target and the Commission has 
assessed it positively in an implementing decision. 

(37)  https://data.consilium.europa.eu/doc/document/ST-15570-

2023-ADD-1/en/pdf  

(38)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

27 

Initial plan CID adoption date13 July 2021Scope Revised plan with REPowerEU chapterLast major revision08 December 2023Total allocation EUR 5,034 million in grants and EUR 264 million in loans (0.9% of 2023 GDP)Investments and reforms 119 investments and 40 reforms Total number of milestones and targets230Fulfilled milestones and targets0 (0% of total) 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
Graph A3.1: Total grants disbursed under the RRF 

Graph A3.2: Total loans disbursed under the RRF 

Source: RRF Scoreboard 

Note: This graph displays the amount of grants, including pre-
financing, disbursed so far under the RRF. Grants are non-
repayable financial contributions. The total amount of grants 
given to each Member State is determined by an allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

With  a  significantly  delayed  implementation 
of  its  RRP,  Belgium  is still  working  on  the 
completion of its first payment request. As of 
15  May  2024,  the  Commission  is  working  in 
collaboration  with  Belgium  to  assess  its  first 
payment  request.  Table  A3.2  highlights  some 
implemented 
relevant  measures  that  will  be 
before  2026  to  keep  making  Belgium’s  economy 
greener, more digital, inclusive, and resilient.  

Table A3.2:  Measures in Belgium's RRP 

Source: FENIX 

28 

EUR 872.2million (17.3%)Total allocation: EUR 5034millionUpcoming reforms and investments• Training and employment of vulnerable groups• Global cybersecurity governance framework• Renovation of social housingEUR 43million (16.3%)Total allocation: EUR 264million 
     
 
     
 
 
 
 
 
 
     
 
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member States. In addition to the EUR 5.3 billion 
of  Recovery  and  Resilience  Facility  (RRF)  funding 
described in Annex 3, EU cohesion policy funds (39) 
provide  EUR 2.5 billion  to  Belgium  for  the  2021-
2027  period (40).  Support 
two 
instruments combined represents around 1.33% of 
the  country’s  2023  GDP,  compared  to  the  EU 
average  of  5.38%  of  GDP (41).  Cohesion  policy 
supports  regional  development,  economic,  social 
and  territorial  convergence  and  competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

these 

from 

During  the  2014-2020  programming  period, 
cohesion  policy  funds  boosted  Belgium’s 
competitiveness, with  tangible achievements 
notably  in  business  development,  energy 
efficiency,  access  to  the  labour  market, 
lifelong  learning  and  social  inclusion.  By  the 
end  of  the  eligibility  period  in  December  2023, 
2014-2020  cohesion  policy  funds (42)  had  made 
EUR 2.3 billion  available  to  Belgium (43),  of  which 
EUR 1.2 billion  has  been  disbursed  since  March 
2020,  when  the  COVID-19  pandemic  began (44). 
The  achievements  of  cohesion  policy  funds  over 
the  programming  period  included  support  to  over 
13 900 start-ups, a decrease of 2 688 488 kWh in 
the  annual  primary  energy  consumption  of  public 
buildings, and 26 006 m2 of public or commercial 
buildings built or renovated in urban areas. During 
the same period, over 1.6 million people benefited 
from projects funded by the European Social Fund 
(ESF)  in  Belgium  focusing  on  vulnerable  groups, 

(39)  In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. 

(40)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to 
EUR 5.7 billion. 

(41)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(42)  In 2014-2020, cohesion policy funds included the European 
Regional Development Fund, the European Social Fund and 
the Youth Employment Initiative. REACT-EU allocations are 
included but ETC programmes are excluded. 

(43)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 4.4 billion. 

(44)  Cut-off date: 14 May 2024. 

particularly  young  people  (41%)  and  low-skilled 
people (34%). 

Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Belgium 

Source: European Commission 

Graph A4.2: Distribution of RRF funding by pillar in 
Belgium 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Belgium. 
Source: European Commission 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  Belgium’s  competitiveness,  to  the 
green  transition  and  to  social  cohesion, 
improving  the  living  and  working  conditions 
of  the  people.  In  2021-2027,  the  European 
Regional  Development  Fund 
(ERDF)  will  help 
improve  the  energy  performance  of  more  than 
233 400 m2  of  public  buildings,  help  make  an 
additional  6 868  tonnes/year  of  waste  ready  for 
reuse,  and  help  an  additional  3 761 businesses 
cooperate  with  research  organisations.  The  Just 
Transition  Fund  (JTF)  will  create  more  than  960 
jobs  in  recipient  businesses.  The  European  Social 
Fund  Plus  (ESF+)  will  contribute  EUR 1.3 billion  to 
a  mixture  of  mainstream  and  innovative  projects 

29 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable and inclusivegrowthSocial & territorial cohesionHealth & resilienceNext generation 
 
 
      
 
   
 
 
in  Belgium  to  give  social  and 
job  market 
assistance  to  vulnerable  groups.  For  instance,  in 
Wallonia,  17  local  initiatives  will  test  innovative 
approaches  to  tackle  long-term  unemployment. 
With  this  work,  cohesion  policy  substantially 
contributes  to  achieving  the  UN  Sustainable 
Development Goals (SDGs) in Belgium, in particular 
SDG 9 (Industry, innovation, infrastructure), SDG 8 
(Decent  work  and  economic  growth)  and  SDG  1 
(No poverty). 

and  boost  the  tax  compliance  capacity  of  public 
revenue authorities. The TSI also helps Belgium to 
increase its overall capacity to implement specific 
reforms and investments included in its RRP, such 
as 
reviews  and 
integrating them into budget processes. 

institutionalising 

spending 

Belgium  also  receives  funding  from  several  other 
EU 
in 
including 
Table A4.1. 

instruments, 

those 

listed 

The 

ERDF 

instance 

transport. 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Belgium.  For 
instance,  the  ERDF  co-finances  the  renovation  of 
public  buildings  in  the  Brussels  Capital  Region  to 
make  them  more  energy  efficient,  and  the  RRP 
includes  a  reform  of  the  Brussels  code  on  air, 
climate  and  energy  (COBRACE)  to  introduce  new 
obligations  on  the  energy  efficiency  of  buildings. 
Flanders also benefits from the joint impact of RRF 
in 
and  cohesion  policy  funds,  for 
sustainable 
tackles 
bottlenecks to cycling by funding bicycle lanes and 
bridges connecting sections of the bicycle highway 
network,  while  the  RRP  reform  of  the  federal 
‘mobility budget’ makes it easier for employees to 
get  an  allowance  for  sustainable  transport  to  the 
workplace in exchange for giving up their right to a 
company  car.  Together,  cohesion  policy  and  the 
RRP  work  to  improve  access  to  professional 
training in Wallonia. The RRP reform of the federal 
‘learning account’ will give all workers the right to 
training  and  make 
it  easier  for  temporarily 
unemployed workers to access training. In turn, the 
ERDF and the JTF boost the supply and quality of 
professional  training  by  supporting  cutting-edge 
equipment  and  infrastructure,  while  the  ESF+, 
funds  training  provision.  The  contribution  of 
cohesion  policy  and  RRP  funding  by  policy 
objective is illustrated by Graphs A4.1 and A4.2. 

The Technical Support Instrument (TSI) helps 
the federal and regional authorities invest in 
their  public  administration  and  create  a 
better  enabling  environment  for  EU  and 
national 
investment.  The  TSI  has  funded 
projects  in  Belgium  to  design  and  implement 
growth-enhancing 
reforms  since  2018.  The 
support  provided  in  2023  included  action  to 
integrate the ‘do no significant harm’ principle into 
public  funding  programmes; 
improve  market 
relevance  and  the  use  of  vocational  training 
profiles; review economic migration frameworks to 
attract  qualified  workers  to  shortage  occupations; 

30 

 
Table A4.1:  Support from EU instruments in Belgium 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023).   
(10) SURE - European instrument for temporary support to mitigate unemployment risks in an emergency. 
Source: European Commission 

31 

Amount 2021-2027 (EUR million)Cohesion policy2 503.1RRF grants (1)5 033.9Public sector loan facility (grant component) (2)13.9Common agricultural policy (3)3 249.0EMFF/EMFAF (4)40.3Connecting Europe Facility (5) 631.2Horizon 2020 / Horizon Europe (6)2 191.9LIFE programme (7) 146.0Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)1 655.7InvestEU 2021-2027 (9) 225.7PeriodTotal amount available (EUR million)Disbursed amount (EUR million)SURE (10)2020-20228 197.58 197.5RRF 2021-202626443EU grantsAmount 2014-2020 (EUR million)2 339.0--5 800.0 602.5 104.3EU loans41.7 784.23 395.3 130.8EU guaranteesEU Guarantee (EUR million) 
 
 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Belgium and the EU-27 

(1)  The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

resilience 

This  Annex  uses  the  Commission’s  resilience 
dashboards  (RDB) (45)  to  show  Belgium’s 
relative 
and 
vulnerabilities (46)  that  may  be  of  relevance 
for  societal,  economic,  digital,  and  green 
transformations, and for dealing with future 
shocks and geopolitical challenges (47). 

capacities 

According  to  the  RDB’s  set  of  resilience 
indicators,  Belgium  has  medium  overall 
vulnerabilities  (in  line  with  the  EU  average) 
and  high  overall  capacities  (above  the  EU 
average).  The  capacities  have  improved  with 
respect to last year, while the vulnerabilities have 
remained  stable.  This  is  also  reflected  in  the 
distribution  of 
indicators  among  different 
resilience  categories:  under  40%  of  vulnerability 
low 
indicators  fall 

into  the  medium-low  or 

(45)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(46)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(47)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

32 

category, while on the capacity side, above 60% of 
in  the  medium-high,  or  high, 
indicators  are 
capacity range. 

With  respect  to  the  2023  RDB,  Belgium  has 
maintained  its  medium  vulnerabilities  and 
high  capacities  in  the  social  and  economic 
dimension.  Belgium’s  self-reported  unmet  need 
for medical care has improved and the country has 
reduced  its  government  debt.  On  the  contrary, 
some vulnerabilities have worsened, with a higher 
percentage  of  people  employed  in  manufacturing 
with  a 
increased 
risk  of  automation  and 
antimicrobial  resistance.  On  the  capacity  side, 
Belgium’s  household  saving  rate  and  its  average 
PISA  score  have  decreased  but  its  active  labour 
market  policies  per  person  wanting  to  work  have 
increased. 

in 

stable. 

increase 

level,  whilst 

In  the  green  dimension,  Belgium’s  overall 
vulnerabilities  have  increased  to  a  medium-
its  capacities  have 
high 
remained 
its 
The 
vulnerabilities is mainly due to higher raw material 
consumption  per  capita  and  to  higher  CO2 
emissions  in  road  transport.  The  country  still  has 
many  high  and  medium-high  vulnerabilities 
relating,  for  instance,  to  the  high  percentage  of 
sealed  soil  surfaces  or  to  fossil  fuel  subsidies. 
Belgium is currently lagging behind the EU average 
for  specific  capacity 
indicators,  such  as  the 
proportion  of  renewable  energy  in  final  energy 
consumption or energy productivity. 

the 

In 
Belgium’s 
vulnerabilities and capacities are stable with 

dimension, 

digital 

BEBEEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowCapacitiesGeopoliticalVulnerabilities0,460,410,41Capacities0,780,870,65DigitalVulnerabilities0,560,580,52Capacities0,760,800,65GreenVulnerabilities0,420,350,44Capacities0,630,670,70Social and economicVulnerabilities0,600,580,47Capacities0,830,810,67DimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0,500,500,50Capacities0,770,800,67Vulnerabilities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(64 indicators) 
 
 
 
   
 
 
(ICT) 

technology 

respect  to  last  year’s  dashboard.  The  country 
continues  to  have  low  vulnerabilities  in  terms  of 
the  proportion  of  businesses  without  information 
and  communication 
training 
programmes  or  the  share  of  employees  not  able 
it  has  high 
to  use 
vulnerabilities 
in 
incidents 
businesses.  It  also  still  has  low  capacities  in  the 
advanced  digital  competences  of  young  people 
and in the number of ICT Master’s graduates, but 
maintains  high  capacities  in  different  indicators, 
such  as  the  investment  per  employee  in  high-
technology sectors.  

teleworking.  However, 
ICT  security 

for 

Finally,  Belgium’s  geopolitical  vulnerabilities 
have  remained  stable  and  are  on a  par  with 
the  EU  average  whilst  its  capacities  have 
increased and are now above the EU average. 
The  country  has,  for  instance,  improved  its  extra-
EU  trade  openness  (a  capacity  indicator  of  the 
degree  of  global  integration).  On  the  contrary,  it 
has  seen  an  increase  in its  vulnerabilities  relating 
to the net lending/borrowing ratio (an indicator of 
vulnerability  to  external  shocks  from  trade  and 
financial markets). 

33 

 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

its 

Belgium  has  made  progress  in  the  green 
transition,  with  more  action  needed 
to 
increase 
renewable  energy  and  energy 
to  protect 
efficiency  ambition 
biodiversity  and  ecosystems  and  in  other  areas. 
This Annex provides a snapshot of climate, energy, 
and  environmental  aspects  of  the  transition  in 
Belgium (48). 

for  2030, 

investment 

Belgium’s draft updated national energy and 
climate plan (NECP) does not yet map all its 
investment  needs  and  funding  sources  to 
achieve its 2030 climate and energy targets. 
Belgium’s  draft  plan  includes  information  on  the 
strategic 
expected 
investments  up  to  2030,  based  on  a  report  by 
independent  experts  covering  six  sectors.  But  the 
information  dates  to  September  2018  and  does 
not  directly  link  to  specific  policies  and  measures 
in  the  plan.  Belgium’s  plan  also  lacks  an  updated 
overview  of  national,  regional,  and  EU-level 
funding sources, which means it is not possible to 
identify potential funding gaps (49). 

needs 

for 

Even including the planned additional policies 
and  measures,  Belgium  still  has  a  gap  to 
its  2030  effort  sharing 
close  to  reach 
target (50).  Belgium’s  2022  greenhouse  gas 
emissions  from  its  effort  sharing  sectors  are 
expected to come in at 18.2% below 2005 levels. 
Current  policies  are  projected to  reduce  Belgium’s 
effort  sharing  emissions  by  21.6%  from  2005 
levels by 2030. The additional  policies included in 
Belgium’s  draft  updated  NECP  are  projected  to 
reduce  these  emissions  by  42.6%  from  2005 
levels. This leaves a gap of 4.4 percentage points 

(48)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(49)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of Belgium. 

(50)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned with the objective to reach the EU-level economy-
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

34 

below Belgium’s effort sharing target to achieve a 
47% reduction (51). 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

Belgium  has  renewable  energy  and  energy 
efficiency  targets  in  its  draft  updated  NECP 
that  are  significantly  below  the  shares 
resulting  from  the  national  contribution 
expected  under  EU  legislation (52).  Belgium’s 
renewable  energy  contribution  set  in  its  draft 
updated  NECP,  21.7%  by  2030,  is  significantly 
below the expected contribution of 33%. Its energy 
efficiency  contribution  of  36.5  Mtoe  in  primary 
energy consumption and 29.9 Mtoe in final energy 
consumption  for  2030  set  in  the  draft  updated 
NECP are also less ambitious than the contribution 
expected by the Energy Efficiency Directive. 

Continued momentum is crucial to accelerate 
the  take-up  of  zero-emission  transport  in 

(51)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. 
Projections on the impact of current policies (‘with existing 
measures’, WEM) and additional policies (‘with additional 
measures’, WAM) as per Belgium’s draft updated NECP. 

(52)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Belgium at 33.8 Mtoe for primary energy consumption. The 
Commission communicated a corrected national contribution 
of 29.04 Mtoe in final energy consumption for 2030 in 
accordance with Article 4(5) of the Energy Efficiency 
Directive to increase the contribution towards the Union’s 
binding energy efficiency target. 

010203040506070809020052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
     
 
 
 
is 

average (54). 

Belgium (53).  Passenger  transport  in  Belgium  is 
split by means of transport broadly in line with the 
EU 
predominantly 
Freight 
transported  by  road.  At  12%,  inland  waterways 
transport  more  than  twice  the  share  of  freight 
than  the  EU  average  (5.4%).  Belgium  has  the 
second highest share of electrified railway lines in 
the  EU,  at  87%.  Road  traffic  congestion  is  above 
the EU average (55). At 2.6% in 2023, the share of 
battery  electric  vehicles  in  Belgium’s  passenger 
cars  fleet  has  grown  dynamically,  as  has  the 
number  of  publicly  accessible  charging  points, 
reaching 35 000 in 2023, or one charging point for 
every  eight  e-vehicles  (above  the  EU  average  of 
1:10). 

increase 

carbon 
to 
Belgium’s  actions 
removals  through  land  use,  land-use  change 
and  forestry  (LULUCF)  are  becoming  more 
ambitious. Belgium achieves net carbon removals 
through  its  forests.  To  reach  the  2030  LULUCF 
target, 
of 
320 kt CO2eq are needed (56). Belgium is currently 
on track to meet this target (57). 

additional 

removals 

carbon 

On  climate  change,  there  is  scope  for  more 
increase  adaptive  capacity (58). 
action  to 
Belgium  is  updating  its  comprehensive  national 
climate and vulnerability assessment, due in 2024. 
Water management is increasingly identified  as a 
key affected sector, and for all sectors the water-
related  hazards,  fluvial  and  pluvial  floods  and 
droughts,  are  signalled.  The  climate  protection 
gap (59) 
indicating  decent 
insurance coverage for all risk categories, including 
floods (the highest risk). 

in  Belgium 

low, 

is 

(53)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

(54)  Passenger cars: 85% of passenger-kilometres; railways: 6%; 

buses and coaches: 8%, tram and metro: 1 %. 

(55)  In 2020, road vehicle drivers experienced peak-hour delays 
of 41 hours on average in Belgium (EU average: 29 hours). 

(56)  National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839. 

(57)  Projections submitted in Belgium’s draft updated national 

energy and climate plan, 2023. 

Sustainable  water  management,  pollution 
reduction  and  climate  adaptation  are  major 
environmental  issues  in  Belgium.  Transport, 
energy,  buildings,  agriculture,  and  tourism  are  all 
susceptible to increased risks of water scarcity and 
flooding.  The  water  exploitation  index  plus  (WEI+) 
measured  5.8  in  2019,  with  the  worst  seasonal 
water scarcity conditions recorded at 13.2 in Q3 of 
2019. To tackle water scarcity, Flanders started a 
pilot project for desalinating water from the North 
Sea, but the resulting energy consumption is high. 
On average, 4.6% of land in Belgium was affected 
by droughts over the period 2000-2020. This rose 
dramatically  to  affect  53%  of  land  in  2022,  with 
croplands the most damaged ecosystem. In terms 
of water productivity, in 2019, Belgium generated 
EUR 106  per  cubic  metre  of  water  abstracted, 
above  the  EU  average.  Only  27%  of  surface 
freshwater  bodies  reached  good  ecological  status 
and 2.3% good chemical status due to ubiquitous 
substances being persistent, bio-accumulative and 
in  a  good 
toxic.  Marine  waters  are  not 
environmental 
the 
descriptors used in the Marine Strategy Framework 
Directive. 

tracked  by 

status,  as 

Despite  making  significant  progress  on 
nature  protection,  Belgium’s  ecosystems  are 
still  subject  to  major  degradation.  Belgium 
protects 14.6% of its land and 38% of its marine 
areas.  However,  only  4%  of  habitats  and  25%  of 
species  were  reported  to  be  in  a  favourable 
conservation  status.  Nature  restoration  would 
bring  significant economic  benefits,  as  every  euro 
invested  in  nature  is  estimated  to  generate  at 
least EUR 8 in benefits (60). 

Intensive  agriculture  has  a  major  impact  on 
ecosystems,  biodiversity  and  air  quality.  The 
annual output of Belgium’s agricultural sector was 
EUR 9.1  billion (61)  in  2023.  Belgium  has  a  lower 
share  of  organic  farming  than  the  EU  average, 
with  major  differences  between  Wallonia  and 
Flanders. The share of organic agricultural area in 
Wallonia  is  rather  high,  11%  of  the  utilised 
agricultural area, but very low in Flanders, at 1.3%. 
In 2019, over 90% of land under organic farming 
in  Belgium  was  in  Wallonia.  Further  action  would 

(58)  See the Commission’s 2023 assessment and 

(60)  European Commission (2022), impact assessment 

recommendation on Belgium’s progress on climate 
adaptation. 

(59)  On the climate protection gap, see the annotations to Table 

accompanying the proposal for a Regulation of the European 
Parliament and the Council on nature restoration, SWD(2022) 
167 final. 

A6.1. 

(61)  Production value at basic price (2015=100). 

35 

 
 
 
contribute to the goal of at least 25% of the EU’s 
agricultural  land  under  organic  farming  by  2030. 
Belgium’s  livestock  farming  is  among  the  most 
intensive  in  the  EU.  The  livestock  density  index 
stood at 2.68 in 2020 (EU average: 0.75). Intensive 
poultry and pig farming is among the sectors with 
the  highest  environmental  burden  of  ammonia 
emissions 
into  the  air.  Agriculture  generated 
91.3% of all ammonia emissions, against the EU-
27 average of 90.7%. 

Graph A6.2: Changes in livestock density and 
organic farming 

excess  nutrients.  46%  of  cropland  and  grassland 
areas  are  also  unhealthy  due  to  a  loss  of  soil 
organic carbon.  

The uptake of organic products is increasing, 
but  food  waste  remains  a  major  issue.  Total 
spending on organic products in Belgium increased 
by  13%  between  the  second  half  of  2022  and 
2023.  Belgium  generates  the  second  highest 
volume  of  food  waste in  the  EU,  with  262  kg  per 
person  wasted  a  year,  considerably  above  the  EU 
average of 131 kg per person in 2021. Most waste 
was generated during manufacturing. 

Graph A6.3: Environmental investment gap, annual 
average 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

and 

pesticide 

Intensive agriculture also increases the risks 
pollution, 
nitrate 
of 
particularly 
in  Flanders.  Belgium’s  gross 
nitrogen balance on agricultural land is one of the 
worst  in  the  EU.  The  content  of  nitrates  in 
groundwater  exceeds  the  EU  average  at  28.6 
(against  the  average  of  20.5  mg  nitrates/l)  and 
16%  of  groundwater  monitoring  stations  have 
levels  above  the maximum  50  mg  nitrates/l.  Very 
high  livestock  density,  which  affects  not  only 
surface  water  quality  but  also  quantity, 
is 
instrumental  in  causing  this  pollution.  Pesticide 
pollution  in  surface  water  bodies  is  a  major 
concern.  In  2021,  in  74.1%  of  all  surface  water 
monitoring  sites  pesticides  exceedances  were 
detected making Belgium one of the most polluted 
EU countries. Based on the impact assessment for 
the Soil Monitoring Law, 56% of Belgian soil could 
be considered as unhealthy (62), (63), mainly due to 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

Belgium  would  benefit  from  investing  more 
in  sustainable  water  management  and 
pollution  prevention.  Over  2014  to  2020,  the 
environmental  investment  gap  was  estimated  at 
EUR 2.1  billion  per  year,  equivalent  to  0.5%  of 
average GDP, below the EU average of 0.8%. The 
gap is estimated to be increasing over 2021-2027 
at  close  to  EUR  3  billion  per  year.  There  remains 
an opportunity to increase funding, in particular for 
pollution  prevention  and  control  (EUR  1.5  billion 
per  year),  circular  economy  and  waste  (EUR  886 
sustainable  water 
million  per 
management  (EUR  579  million  per  year),  as  the 
investment gap has widened there. 

year)  and 

(62)  SWD 417 final of 5.7.2023 - impact assessment for the 

(63)  However, not all soil degradation processes could be 

Directive of the European Parliament and of the Council on 
Soil Monitoring and Resilience (Soil Monitoring Law). 

quantified for all land uses. This number simply indicates an 
order of magnitude. 

36 

01234024681020162020% LSU per hectare% of total utilised agricultural areaLivestock density index Belgium (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Belgium (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area)9662565681441.512579886002004006008001.0001.2001.4001.6001.8002.0002.200Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
       
 
          
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions  for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

37 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp81.605,6-10%-19%-14,8%-18,2%-47%-25-4Net greenhouse gas removals from LULUCF (2)Kt CO2eq-1 765-400,000-374,000-270,000-408,000-1.352n/an/aShare of energy from renewable sources (1) (3)%2%10%13%13%14%33%--Energy efficiency: primary energy consumption (3)Mtoe51,648,443,948,745,233,8Energy efficiency: final energy consumption (3)Mtoe36,835,833,235,933,429,02Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---23,824,6769,0786,616,4Share of zero-emission vehicles in new registrations (4)% 0,71,63,55,810,39,012,1n/aNumber of publicly accessible AC/DC charging points --80951252423508299178446956n/aShare of electrified railways%85,8%85,8%85,7%86,6%-56,1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---25,121,9537,0486,716,3Final energy consumption in buildings2015=10099,0%97,0%95,5%102,2%87,8%104,0%97,2% Climate adaptation         Climate protection gap (5)score 1-4--1,71,21,31,51,5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater3,95,8---3,6--Circular economy | Material footprint (7)tonnes per person14,912,813,013,016,414,214,814,9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants552424315409-545584-Biodiversity | Habitats in good conservation status (9)%4,314,7                       Common farmland bird index (10)2000=100615957--78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area6,566,857,257,48-9,1--Nitrates in groundwatermg NO3/litre-----20,42--Food waste per capitaKg per capita250262-130131-Share of soil in poor health (11)%5641Soil organic matter in agricultural land (12)Mt per ha61----7.904--DistanceEU-27 
 
     
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

This  Annex (64)  sets  out  Belgium’s  progress 
and  challenges  in  accelerating  the  net-zero 
its 
energy 
competitiveness 
energy 
sector (65). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECP) for 2030 (66). 

transition,  while  supporting 
the 

clean 

in 

increased 

Belgium  displays  positive  developments  in 
terms  of 
renewable  energy 
capacity  installed,  development  of  energy 
infrastructure, including for hydrogen, energy 
efficiency  measures.  However,  further  efforts 
are  needed  to  accelerate  the  clean  energy 
transition.  Belgium  is  highly  dependent  on  fossil 
fuels  and  remains  dependent  on  imports  from 
clean  energy 
non-EU 
technologies. 

for  most 

countries 

Belgium  has  an  electricity  interconnection 
level  of  just  above  the  advised  15%.  In  the 
first  Project  of  Common  Interest (PCI) /  Project  of 
Mutual interest (PMI) list it has one interconnection 
project  with  France,  the  line  between  Lonny  and 
Gramme.  It  will  also  increase  internal  capacity 
between  Zandvliet  and  Liefkenshoek.  It  develops 
an interconnector with the UK, the Cronos project. 
Regarding offshore electricity, Belgium develops a 
hybrid interconnector with Denmark, the Triton link 
and with the UK the Nautilus link. 

requires 

in  Belgium 

The  further  development  of  the  electricity 
grids 
significant 
investment.  As  an  example,  between  2024  and 
2027  Elia  will  invest  EUR  6.5  billion  in  the  high 
voltage  grid,  which  is  more  than  four  times  the 
amounts  it  has  invested  during  the  past  three 
years. Significant amounts will be needed also for 
the distribution network. 

The  existing  natural  gas  infrastructure  is 
well  developed  to  ensure  security  of  gas 
supply.  The  development  of  natural  gas 

(64)  It is complemented by Annex 6 as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to protect the most vulnerable groups, 
complementing ongoing efforts under the European Green 
Deal, REPowerEU and the European Green Deal Industrial 
Plan. 

(65)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(66)  Belgium submitted its draft updated NECP in December 

2023. 

infrastructure is no longer an option under the new 
TEN-E Regulation. 

Belgium invests in hydrogen infrastructure (a 
backbone  pipeline,  a  pipeline  to  France  and 
receiving  terminals),  and  has  five  hydrogen 
candidate  projects  for  the  next  (PCI)/(PMI) 
list. It is also active in carbon capture and storage, 
with  projects  intending  to  capture  and  transport 
CO2 from the industrial areas around the ports of 
Antwerp-Bruges  and  Gent  to  storage  under  either 
the  Dutch  or  the  Norwegian  continental  shelf.  In 
2023  the  EU-first  CCS  transport  from  Antwerp  to 
Denmark  and  the  storage  under  the  sea  in 
Denmark was realised. 

Graph A7.1: Belgium's energy retail prices for 
households and industry 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

Energy  average  retail  prices  in  gas  and 
electricity  showed  a  noteworthy  decline  in 
2023  in  Belgium,  dipping  below  the  levels 
recorded  in  the  second  half  of  2022.  In  the 
second  semester  of  2023,  the  retail  gas  and 
electricity prices for households decreased both by 
13%.  However,  although  gas  prices  declined  by 
12%  compared  to  the  EU  average,  electricity 
prices  were  33%  higher.  For  the  industrial  and 
services sector, gas prices declined by 14% in the 
second  semester  of  2023  and  about  24%  below 
the EU average. Moreover, electricity prices at the 
end  of  2023  had  decreased  by  5%  since  the 

38 

0,000,050,100,150,200,250,300,350,400,450,50€/KWhGas (industry & service) - BEGas (industry & service) - EUGas (households) - BEGas (households) - EUElectricity (industry & service) - BEElectricity (industry & service) - EUElectricity (households) - BEElectricity (households) - EU 
 
 
   
 
beginning  of  the  year,  remaining  however  about 
8% higher than the EU average. In relative terms, 
electricity  prices  for  non-household  consumers 
have  increased  significantly  compared  to  the  US 
and 
the 
international  competitiveness  of  energy-intensive 
industries in Belgium. 

thus  potentially  affecting 

Japan, 

Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(1) For Eurostat data (EU and BE), the consumption band is ID, 
which refers to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and provides 
an insight into international competitiveness 
(2) JP = Japan 
Source: Eurostat, IEA 

Most  of  the  direct  energy  support  measures 
for  final  consumers  implemented  since  the 
outset of the energy crisis were not targeted 
at  the  most  vulnerable  households  or  firms. 
The  federal  government  provided  direct  energy 
support  measures  to  households    until  end  2023, 
using  a  variety  of  measures,  including:  (i)  two 
basic  packages  for  gas  (EUR  270  and  EUR  405) 
and  two  basic  electricity  packages  (EUR  122  and 
EUR 183), (ii) a one-off lump sum payment of EUR 
80 to help the most vulnerable households and (iii) 
a VAT reduction on solar photovoltaic panels, solar 
thermal panels, solar boilers and heat pumps. The 
regional 
additional 
measures,  e.g.  the  Flemish  government  adopted 
several  measures  to  protect  vulnerable  citizens 
with  low  incomes  and  to  support  a  structural 
reduction of energy consumption. 

governments 

adopted 

Belgium’s  energy  mix 
remains  highly 
dependent on fossil fuels. According to Eurostat 
data  for  2022,  less  than  one  third  of  its  energy 
came  from  renewable  energy  (11%)  and  nuclear 
energy (20%). 

Natural  gas  is  still  quite  important  in  the 
Belgian  energy  system.  In  2022  it  still 
accounted  for  24.6%  of  gross  available 
energy  in  the  country  and  for  23%  of  gross 
electricity production. While Belgium fully relies 
on  imports  of  natural  gas,  only  a  small  part  of 
imports  come  from  Russia.  Traditionally 
its 
dependence  on  imports  from  Russia  was  lower 
than the EU average, amounting to 12% in 2021. 
Belgium operates one underground storage facility 
with  a 
total  capacity  of  around  0.8  bcm, 
representing  only  5%  of  its  total  yearly  demand. 
Belgium  fulfilled  its  gas  storage  obligations  last 
winter, reaching 99.1% by 1 November 2023, and 
ended  the  winter  season  with  a  storage  filled  at 
54.35%  by  1  April  2024.  Belgium  also  has  one 
LNG  terminal  in  Zeebrugge.  The  latter  became 
crucial after the invasion of Ukraine by Russia, and 
should see its regasification capacity enhanced by 
an additional 10.5 GWh per hour by 2026. Belgium 
managed  to  reduce  its  gas  demand  between 
August  2022  and  December  2023  by  17%  in 
comparison  with  the  average  over  the  previous 
five  years.  However,  the  share  of  gas  in  gross 
energy  consumption  is  expected  to  increase  by 
2030  (according  to  the  most  recent  information 
provided  by  the  Belgian  authorities,  mainly  to 
replace  electricity  generation  of  4000  MW  of 
nuclear capacity that have already been closed in 
2023 of will close in 2025). 

Belgium  has  reconsidered  the  future  of  its 
nuclear  powerplants,  to  ensure  the  security 
of its electricity supply. In December 2023, the 
federal  government  and  ENGIE  signed  the  final 
agreement to extend the operation of the Tihange 
3  and  Doel  4  nuclear  power  plants  for  10  years 
until 2035, which will keep 2 GW of nuclear power 
in  the  energy  mix.  Belgium’s  draft  updated  NECP 
mentions that this decision took into consideration 
both  the  effects  on  security  of  supply  of  higher 
gas  prices  felt  after  Russia’s  invasion  of  Ukraine 
and the unavailability of part of the French nuclear 
power  generation  in  2022.  Other  measures  taken 
to ensure security of energy supply include the use 
of  the  Capacity  Remuneration  Mechanism  (CRM) 
and  the  accelerated  deployment  of  onshore  and 
the 
offshore 
development of 3.5 GW of offshore wind energy in 
the North Sea by 2030.  

renewable 

including 

energy, 

The 
installed  renewable  energy  capacity 
increased  by  15%  in  2023,  reaching  more 
than  15  GW  installed  capacity,  an  evolution 
driven  by  the  significant  increase  of  solar 

39 

050100150200250Index ( 2018 S2 = 100)JPUKUSBEEU 
  
is 

for 

regime 

favourable 

(more  than  25%).  The  total  installed  solar 
in  2023  was  8 549  MW (67).  The 
capacity 
permitting 
self-
consumers, as in most cases no planning permit is 
required for rooftop PV. The total wind capacity in 
Belgium for 2022 was 5 504 MW (an increase of 
4%), out of which 3 242 onshore wind and 2 262 
MW  offshore  wind (68).  Belgium  plans  to  develop 
an  additional  3.5  GW  of  offshore  wind  by 
2030 (69).  This  goal  aligns  with  Belgium’s  non-
binding  agreement,  set  out  in  the  non-binding 
goals of the EU Sea Basins agreements of January 
2023. 

Graph A7.3: Belgium’s installed renewable capacity 
(left) and electricity generation mix (right) 

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

In its updated draft NECP, Belgium submitted 
a proposed contribution to the EU renewable 
energy  target  of  21.7%,  which  is  significantly 
below  the  one  resulting  from  EU 
legislation 
(estimated  at  33%,  according  to  the  formula  set 
out  in  Annex  II  of the  Regulation (EU)  2018/1999 
on the Governance Regulation of the Energy Union 
and Climate Action). 

in 

steps 

Belgium  made 
the 
some 
implementation of reforms to accelerate the 
deployment  of  renewables.  Flanders  and 
Wallonia  have  adopted  strategies  to  accelerate 
permit-granting for wind energy. Belgium has also 
taken measures to make more space available for 
wind  energy  and  to  accelerate  appeal  procedures. 
Flanders has integrated several permits in a single 
unified  application  process.  In  its  REPowerEU 

(67)  IRENA report Renewable Energy Statistics 2024, the data 
might differ from the Eurostat data because a different 
methodology was used to calculate the capacity in AC and 
DC. 

(68)  International Renewable Energy Agency (IRENA) report 2024 

(69)  BE_SWD_2023_601_en.pdf (europa.eu) 

40 

chapter,  Belgium  proposed  some  additional 
reforms,  including  an  obligation  to  install  solar 
panels  on  certain  buildings,  and  a  reform  to 
accelerate the energy transition. 

Belgium’s relatively low share of renewables 
in  heating  and  cooling  (10.4%  in  2022)  is 
mainly based on biomass use, with heat pumps 
covering slightly more than 13% of this share. The 
targets  stated  in  the  draft  NECP  appear  rather 
unambitious,  despite  significant  growth  in  heat 
pumps. The draft updated NECP shows a continued 
reliance  on  biomass  as  the  first  contributor  to 
renewable heat. 

Belgium demonstrated significant progress in 
its  efforts  towards  reaching  the  2030  EU 
targets for energy efficiency. In 2022, Belgium 
had a primary energy consumption of 45.2 Mtoe, a 
7.2%  decrease  compared  to  2021  and  a  3.9% 
decrease compared to 2012. It had a final energy 
consumption  of  33.4  Mtoe,  a  6.8%  decrease 
compared to 2021 and a 5.9% decrease compared 
to  2012.  The  best  results  came  from  the 
residential sector, which decreased its final energy 
consumption  by  15%.  However, 
they  were 
triggered  largely  by  the  high  gas  and  electricity 
prices, as well as by the rather mild temperatures 
compared  to  the  previous  year.  The  worst  results 
came  from  the  transport  sector,  which  increased 
its final energy consumption by 3.7%. 

Belgium  has  implemented  a  wide  range  of 
energy  efficiency  measures  covering  the 
main  sectors,  with  support  from  several  EU 
funds.  However,  schemes  directly  supporting 
energy efficiency in SMEs are rather limited. 
Support  from  the  Recovery  and  Resilience  Facility 
has been scaled up under the REPowerEU chapter, 
notably  by  (i)  reinforcing  measures  on  energy 
efficiency  and  incentivizing  reductions  in  energy 
demand,  while  addressing 
energy  poverty 
(increased  pace  of  building  renovation)  and  (ii) 
the 
supporting  zero-emission 
infrastructure  for  this,  including  railways.  Under 
cohesion policy, almost 19% of the overall funding 
allocated  to  Belgium  covers  energy  efficiency 
investment. 

transport  and 

Most of the schemes on energy efficiency are 
still  grant-based  and  the  use  of  financial 
instruments  is  still  very  limited.  However, 
Belgian authorities are working on the deployment 
of 
energy 
renovation of public buildings and infrastructure. In 

instruments 

targeting 

financial 

 
 
 
addition,  Flanders  adopted  several  measures 
aimed  at  introducing  new  obligations  for  the 
building sector and industry. 

in 

for 

target 

reduction 

Regarding  buildings,  Belgium  needs  to  step 
up  its  efforts  in  the  residential  sector  to 
achieve  a  meaningful  contribution  to  its 
2030 
energy 
consumption  by  buildings.  While  there  was 
progress 
the  primary  energy 
consumption, in terms of final energy consumption 
there  was  no  visible  progress  in  the  residential 
sector  between  2021  and  2022,  when  using 
climate  corrected  data (70).  Heating  and  cooling 
represent  more  than  85%  of  the  country’s 
residential final energy consumption, of which only 
9% comes from renewables. 

terms  of 

year. 

support 

Financial 

Approximately 60 000 heat pumps were sold 
in  2022,  an  increase  of  118%  on  the 
for 
previous 
condensing  gas  boilers  in  buildings  ended  in 
2023.  There  are  several  measures  in  place  to 
support  increased  uptake  of  renewable  energy  in 
buildings,  for  instance  through  solar  installations 
(PV and solar thermal) and heat pumps. Electricity 
in Belgium is 3.80 times more expensive than gas, 
meaning that end users save energy but pay more 
if  they  choose  a  heat  pump  for  heating (71). 
Building  renovation  is  an  important  part  of  the 
Belgian  recovery  and  resilience  plan  (RRP),  with 
investment  of  over  EUR  1  billion  in  the  energy-
efficient  renovation  of  buildings,  including  social 
housing.  The  low  number  of  market  surveillance 
activities  on  products  covered  by  eco-design  and 
about 
creates 
labelling 
energy 
compliance levels. 

concerns 

Consumer  empowerment  in  the  electricity 
market is significant, with a growing number 
of  prosumers  and  energy  communities.  But 
the deployment of smart meters is lagging in 
Brussels  and  Wallonia.  Due  to  a  favorable 
regulatory  framework  and  high  and  volatile 
wholesale  energy  prices,  the  small-scale  installed 
solar  PV  capacity  increased  by  14%  in  2022, 

(70)  Final energy consumption in households from Eurostat (data-
tables of December 2023), climate-corrected by the Joint 
Research Centre with reference period 2005-2022. 

(71)  Therefore, Belgium would benefit from analysing how 
taxation and network charges and levies affect the 
economics of decarbonised heating, and addressing any 
imbalances. 

41 

reaching  approximately  7.5  GW  of  total  installed 
solar PV capacity, in particular due to an increase 
in  installed  capacity  in  the  residential  segment.  
Only  22.4%  of  household  consumers  had  smart 
meters  in  2022  (EU  average  80%).  The  Flanders 
region  alone  is  on  track  to  reach  80%  of  final 
customers  by  2024.  Belgium  has  transposed  the 
EU  rules  on  energy  communities  and  prosumers, 
based  on  a  number  of  enabling  conditions, 
including: 

•  eased  permitting  requirements  for  smaller-

scale solar PV; 

•  dedicated  supply 

licensing  regimes  and  a 

regulatory framework; 

• 

ICT  infrastructure  and  financial  incentives  (e.g. 
VAT  exemptions 
in  Flanders  and  reduced 
network  tariffs  in  Brussels)  for  energy  traded 
between  peers  and  shared  within  multi-
apartment buildings and energy communities.  

Wallonia  has  introduced  a  feed-in  tariff  for 
small-scale renewable energy installations in 
2024.  There  are  currently  more  than  a  dozen 
energy  communities  operational  in  Belgium.  An 
investment  support  programme 
for  energy 
communities exists in Wallonia under the regional 
recovery  and  resilience  plan.  Switching  rates  are 
among  the  highest  in  the  EU.  In  2022  almost 
100%  of  contracts  held  by  household  consumers 
in electricity were variable-price contracts.  

Belgium  remains  dependent on imports from 
non-EU  countries  for  most  clean  energy 
technologies.  However,  Belgium  shows  some 
positive  developments  in  the  battery  and 
electrolyser  supply  chain,  as  well  as  a 
considerable  foothold  in  the  wind  industry. 
Notably,  Belgium 
is  a  strategic  producer  of 
offshore  wind  foundations  and  substations,  with 
multiple  factories 
in  Flanders  contributing  to 
offshore projects all over Europe. Belgium has also 
been  historically  manufacturing  wind 
rotor 
gearboxes  in  Lommel.  Belgium  is  host  to  two 
electrolyser  manufacturing  plants,  both  supported 
by  the  Important  Project  of  Common  European 
Interest 
is 
operated  by  an  American  company  in  Oevel  with 
an estimated capacity of 500 MW, while the other, 
situated  in  Seraing,  is  the  stacking  unit  of  a  new 
transnational  operation  (with  a  second  factory  in 
France),  managed  by  a  Belgian  firm.  Both 
operators  have  announced  plans to  scale  up  their 

(IPCEI)  Hy2Tech  programme.  One 

 
 
capacity  to  1  GW  each  at  the  latest  by  2030. 
Belgium  has  substantial  potential  for  battery 
manufacturing,  with  one  manufacturing  plant 
located  in  Ninove,  with  the  capacity  to  produce 
10 000 units annually. It is operated by a Belgian 
company  that  aims  to  establish  Belgium's  first 
battery  pack  gigafactory  (3  GWh)  in  Seneffe-
Manage by mid-2025. Regarding solar PV, Belgium 
has been producing solar modules in Wallonia for 
an  extended  period,  boasting  a  capacity  of  about 
100  MW  as  of  2023.  The  landscape  comprises  a 
standard  module  producer  and 
firms 
specializing  in  building  integrated  photovoltaics 
(BIPV).  One  of  these  companies  serves  as  the 
manufacturer for a pioneering offshore PV project 
in the North Sea, known as SeaVolt. 

two 

technologies, 

Belgium  is  making  significant  efforts  in  R&I 
for Energy Union priorities. In its draft updated 
NECP  Belgium  reported  its  national  spending  on 
research  and  innovation  in  specific  climate  and 
energy 
representing  0.32%  of 
Belgium’s  GDP  in  2021  and  corresponding  to  a 
share  of  10%  in  overall  R&I  spending  (equal  to 
3.2%  of  GDP);  mainly  in  nuclear  safety,  followed 
by  smart  systems,  sustainable  transport  and 
efficient  systems.  The  report  details  the  split 
between  public  and  private  funds  (25%  from  the 
public sector). Venture capital investment has also 
shown  positive  trends  in  recent  years,  with  EUR 
32.2 million of investment in climate tech firms in 
2023. Belgium plans to build a new major nuclear 
(Multipurpose 
research 
Hybrid  Research  Reactor 
Tech 
Applications), with the ambition to remain a world-
class  R&D  and  innovation  player  in  numerous 
related fields. 

infrastructure,  MYRRHA 

for  High 

42 

 
Table A7.1:  Key energy indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 

Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

43 

20192020202120222019202020212022Import Dependency [%] 77.6%78.0%70.8%74.0%60.5%57.5%55.5%62.5%of Solid fossil fuels 101.8%102.1%92.6%99.5%43.3%35.8%37.3%45.8%of Oil and petroleum products 101.5%102.7%95.8%100.6%96.7%96.8%91.7%97.7%of Natural Gas 101.8%99.1%99.9%100.8%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 16.9%14.1%11.9%12.1%39.7%41.3%41.1%21.0%of Crude Oil32.0%28.5%26.7%20.5%28.8%26.7%26.4%19.5%of Hard Coal39.7%38.9%42.9%24.5%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)17.4               17.8                  18.4                  18.5               18.4               18.5               15.6               Gas Consumption year-on-year change [%]1.2%2.4%3.0%0.8%-0.6%0.4%-15.6%Gas Imports - by type (in bcm)18.2               17.9                  19.8                  23.2               21.7               21.3               24.2               Gas imports - pipeline17.2               16.7                  17.3                  16.5               17.0               17.1               12.9               Gas imports - LNG1.01.12.56.74.74.211.2               Gas Imports - by main source supplier (in bcm) (1)Norway5.7                 9.3                     10.4                  9.1                 11.1               11.4               5.1                 Qatar1.0                 1.1                     2.0                     4.5                 2.5                 2.6                 5.8                 Russia-                 1.6                     2.5                     3.9                 3.0                 2.5                 2.9                 United States-                 -                    -                    0.2                 0.6                 0.1                 1.9                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals1                    1                        1                        1                    1                    LNG Storage capacity (m3 LNG)566,000        566,000            566,000            566,000        566,000        Underground StorageNumber of storage facilities1                    1                        1                        1                    1                 Technical Capacity (bcm)0.8                 0.8                     0.8                     0.8                 0.8              20162017201820192020202120222023Gross Electricity Production (GWh) (2)85,610          86,619              75,040              93,646          89,455          100,465        95,944          -                 Combustible Fuels31,558       32,615           33,171           34,497       35,277       30,667       30,773       -              Nuclear43,523       42,227           28,597           43,524       34,435       50,326       43,879       -              Hydro1,489         1,397             1,308             1,181         1,315         1,350         1,646         -              Wind5,420         6,521             7,574             9,755         12,819       11,998       12,353       -              Solar3,095         3,308             3,903             4,253         5,112         5,618         6,876         -              Geothermal0000000-              Other Sources524             551                487                436             498             507             418             -              Gross Electricity Production [%]Combustible Fuels36.9%37.7%44.2%36.8%39.4%30.5%32.1%-                 Nuclear50.8%48.8%38.1%46.5%38.5%50.1%45.7%-                 Hydro1.7%1.6%1.7%1.3%1.5%1.3%1.7%-                 Wind6.3%7.5%10.1%10.4%14.3%11.9%12.9%-                 Solar3.6%3.8%5.2%4.5%5.7%5.6%7.2%-                 Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-                 Other Sources0.6%0.6%0.6%0.5%0.6%0.5%0.4%-                 Net Imports of Electricity (GWh)6,183             6,022                17,328              1,855-             333-                7,877-             7,528-             -                 As a % of electricity available for final consumption 7.4%7.2%20.6%-2.2%-0.4%-9.4%-9.5%-                 Electricity Interconnection [%]-              18.9%9.5%18.3%14.2%16.1%14.8%15.4%Share of renewable energy consumption - by sector [%]Electricity15.8%17.2%18.9%20.8%25.1%26.0%29.1%-                 Heating/cooling8.2%8.2%8.3%8.3%8.4%9.2%10.4%-                 Transport6.0%6.6%6.7%6.8%11.0%10.3%10.4%-                 Overall8.7%9.1%9.5%9.9%13.0%13.0%13.8%-                 2020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)35.76         20.85             237.14              32.18             as a % of total VC investment (3) in Belgium start-ups and scale-ups3.3%1.6%10.0%2.1%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)291.3         179.7             -                    -                 Public R&I (% GDP)0.06%0.04%-                    -                 Private R&I (EUR mln)226.7         -                    -                    -                 Private R&I (% GDP)0.05%-                    -                    -                 ELECTRICITY/ENERGYCLEAN ENERGYBelgiumEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
  
 
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Belgium’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
vulnerable situations. Belgium’s green economy 
is  expanding.  Between  2015  and  2021,  total  jobs 
in  the  environmental  goods  and  services  sector 
grew  by  20%  (to  around  78 000)  (EU:  18.2%), 
reaching  2.2%  of  total  employment  (EU:  2.7%). 
Also between 2015 and 2022, the greenhouse gas 
emission  intensity  of  Belgium’s  workforce  (see 
Graph A8.1 and Table A8.1) fell from 19.6 to 16.0 
tonnes  per  worker,  above  the  EU  average  (14.3 
tonnes  per  worker  in  2022) (72),  indicating  a 
positive trend in the green transition. At the same 
time,  job  creation  in  the  green  sector  could  be 
stronger  and  the  recent  rise  in  energy  poverty 
tackled,  in  order  to  contribute  to  a  fair  green 
transition in line with the Council Recommendation 
on  ensuring  a  fair  transition  towards  climate 
neutrality (73).  Further  supporting  the  uptake  of 
green skills remains key to a fair transition and the 
implementation of REPowerEU. Belgium’s recovery 
and resilience plan (RRP) includes several reforms 
and  investments  in  support  of  a  fair  green 
transition (74),  complementing  its  territorial  just 
transition  plans  and  actions  supported  by  the 
European Social Fund Plus (ESF+). 

transition 

in  Belgium’s  sectors  most 
Employment 
affected  by 
is 
the  green 
decreasing.  In  2023,  employment  in  energy-
intensive  industries (75)  comprised  3%  of  total 
employment  (3.5%  in  the  EU),  a  fall  from  2015 
(3.6%).  Employment  in  mining  and  quarrying  has 
reached  the  same  level  as  in  2015  (with  around 
3 700  workers  in  2023),  despite  experiencing 
some  changes  in  the  preceding  years.  The  job 
vacancy  rate  in  construction  (see  Graph  A8.2),  a 
key  sector  for  the  green  transition,  is  higher  than 

(72)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for Belgium, 
such indicators were calculated based on employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(73)  The Council Recommendation of 16 June 2022 on ensuring a 
fair transition towards climate neutrality (2022/C 243/04) 
covers employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(74)  See also the 2022 country report (Annex 6) and Annex 3 for 

an overview. 

(75)  Mining and quarrying (NACE B), chemicals (C20), minerals 

(C23), metals (C24) and automotive (C29). 

in 

enterprises 

the EU average (5.4% vs 3.6% in the EU in 2023). 
This  is  also  reflected  in  the  Eurobarometer  on 
skills shortages, where 77% of small and medium-
sized 
the  Belgian 
(SMEs) 
construction  sector  agreed  that  skills  shortages 
in  general  business 
are  holding  them  back 
activities (76).  In  the  2021-2027  ESF+  budget  for 
Belgium,  15% 
support 
developing green skills, jobs and the economy and 
8%  (EUR  112  million)  to  developing  digital  skills 
and jobs. 

(EUR  205  million) 

Graph A8.1: Fair transition challenges in Belgium 

Source: Eurostat, EU Labour Force Survey, EMPL-JRC GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

the  EU  average, 

Upskilling  and  reskilling  in  energy-intensive 
industries  slightly  increased,  but  are  still 
below 
leaving  skills 
shortages  as  bottlenecks  in  achieving  a  fair 
transition. In energy-intensive industries, workers’ 
participation  in  education  and  training  increased 
from 6.1% in 2015 to 8.8% in 2022, although it is 
still  below  the  EU  average  (10.9%).  In  Belgium, 
40%  of  SMEs  think  that  the  skills  required  for 
greening  business  activities  are  becoming  even 
more important (EU:  42%) (76).  In line with the EU 
renewable  energy  target,  by  2030  about  4  199 
additional  skilled  workers  will  be  needed  for  the 
deployment  of  wind  and  solar  energy,  which  may 
require  an  investment  in  skills  of  EUR  47.9-59.9 
million (77).  To  address  this  challenge,  specific 
investments under the RRP and the Just Transition 
Mechanism  fund  training  to  reskill  workers  in 
regions  affected  by  the  transition,  together  with 
policy  measures  at  national  level  and  flexibility 
mechanisms to encourage in-company training. 

(76)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(77)  EMPL-JRC AMEDI project. 

44 

0.00.20.40.60.81.01.21.4Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndustriesEnergy povertyTransport poverty(proxy)Carbon inequalityBE Latest vs EU LatestEU LatestBE 2015 vs EU Latest 
 
 
   
 
 
 
Table A8.1:  Key indicators for a fair transition in Belgium 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

Graph A8.2: Job vacancy rate in mining and 
quarrying, and transformation sectors 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

Energy  poverty  indicators  had  decreased 
steadily  in  previous  years,  but  the  spike  in 
energy  prices  in  2022  almost  brought  the 
situation back to 2015 levels. The share of the 
population unable to keep their homes adequately 
warm  decreased  slightly  from  5.2%  in  2015  to 
5.1% 
in  2022,  well  below  the  EU  average 
(9.3%) (78).  The  indicator  increased  by  1.6  pps 
between  2021  and  2022  on  the  back  of  energy 
price  increases  due  to  supply  constraints  caused 
by  the  COVID-19  pandemic  and  Russia’s  war  of 
aggression against Ukraine, despite the emergency 
measures  implemented  in  Belgium.  In  particular, 
12.0% of the population at risk of poverty (AROP) 
(EU:  20.1%)  and  4.5%  of  lower  middle-income 
households  (in  deciles  4-5)  (EU:  11.6%)  were 
unable  to  keep  their  homes  adequately  warm  in 
2022.  Also,  in  January  2023,  37.1%  of  the 
population  at risk of poverty  spent a considerable 
share  of  their  budget  (more  than  6%)  on  private 

fuels 

(EU:  37.1%) (79).  Some  RRP 
transport 
measures  promote  the  renovation  of  all  housing 
types, supporting also low-income households (80). 

Despite being slightly below the EU average, 
environmental  inequalities  remain  an  issue. 
In 2021, the consumption footprint for 20% of the 
population with the highest income was 1.6 times 
higher  than  the  footprint  of  the  poorest  20% (81) 
(EU:  1.8).  The  average  levels  of  air  pollution  in 
2021  stood  below  the  EU  average  (10.7  vs  11.4 
µg/m3 PM2.5), but still with 77% of the population 
living  in  regions  exposed  to  critical  levels  of  air 
pollution (82),  leading  to  a  significant  impact  on 
health,  affecting  vulnerable  groups  in  particular, 
and around 5 100 premature deaths annually (83).  

Belgium  is  making  progress  in  the  fair 
transition towards climate neutrality. It set up 
comprehensive research on the implications of the 
climate 
transition,  a  dedicated  stakeholders’ 
forum,  and  financial  support  for  businesses 
contributing 
climate  and  environmental 
objectives,  particularly  through  the  creation  of 
quality jobs (84). 

to 

(79)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU.  

(80)  See the 2022 country report, Annexes 6 and 3. 

(81)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

(82)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

(83)  EEA- Air Quality Health Risk Assessment 

(78)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

(84)  Based on the monitoring review of the Council 

Recommendation on ensuring a fair transition towards 
climate neutrality, which took place in October 2023. 

45 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%BCDEFHEU 2023BE 2023BE 2015IndicatorDescriptionBE 2015BEEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes19.616.0 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)3.6%3.0% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries6.0%8.8% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm5.2%5.1% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport28.4%37.1% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.61.6 (2021)2.7 (2021) 
 
      
 
 
 
   
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
Belgium’s 
essential 
competitiveness (85). In this regard, priorities for 
Belgium  are  the  use  of  circular  materials  in 
industry, the built environment, and the uptake of 
circular business models. 

circularity, 

boost 

to 

Belgium’s  circular  economy  transition  is  on 
track  to  achieve  the  EU  Circular  Economy 
Action  Plan  goals, but more  measures would 
be beneficial to reduce waste and phase out 
unsustainable disposal practices. The material 
footprint  increased  significantly  in  2022,  reaching 
15.9  tonnes  per  capita,  above  the  EU  average. 
Total  waste  generation  is  highly  above  the  EU 
average.  Belgium’s  draft  updated  national  energy 
and climate plan includes very good references to 
circular  economy  in  the  national  objectives  and 
targets.  Further  improving  waste  treatment  and 
reducing dependence on incineration would help to 
reach  the  targets  for  2030  set  by  the  draft 
updated national energy and climate plan.  

Graph A9.1: ETS emissions by sector since 2013 

Source: European Commission 

(ETS) 

system 

trading 

In  2023,  the  sectors  covered  by  the  EU 
emissions 
in 
Belgium (86)  emitted  21%  less  greenhouse 
gases  than  in  2019.  In  2023,  only  23%  of 
greenhouse  gases  emitted  by  Belgium’s  ETS 
installations  came  from  power  generation,  much 
below  the  EU  average  of  57%.  The  chemical 
industry emitted more than a quarter (28%) of the 
total emissions from all industry sectors, refineries 

(85)  See also Annexes 6, 7 and 12. 

(86)  This analysis excludes air travel. For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

46 

one  fifth  (20%),  cement  and  lime  production  also 
nearly  one  fifth  (17%),  the  metals 
industry 
emitted  18%,  and  18%  of  the  emissions  came 
from  other  industries.  Between  2019  and  2023, 
the  power  sector  registered  a  significantly  higher 
emissions  reduction  (33%) (87)  than  the  industry 
sectors 
(16%).  Between  2013  and  2023, 
greenhouse  gas  emissions  declined  by  37%  in 
power  generation  and  by  15%  in  the  industry 
sectors,  with  larger  reductions  in  the  cement  and 
line  industry.  This  resulted  in  a  22%  reduction 
overall. 

Belgian  industry  is  progressing  in  making 
more efficient use of resources, even though 
it  remains  more  exposed  to  risk  of  supply 
chain  disruptions than other  Member  States. 
Belgium achieved the EU’s second-highest circular 
material  use  rate  in  2022  but  is  one  of  the 
countries  relying  the  most  on  imports.  Material 
import  dependence 
to  74.7%  of 
materials  used  in  2022  –  compared  with  an  EU 
resource 
average  of  22.4%.  By 
productivity  increased,  reaching  3.3  purchasing 
power  standards  per  kilogram  (PPS/kg)  in  2022, 
compared  with  2.6  PPS/kg  in  2017 (88),  placing 
Belgium  well  above  the  EU  average.  Water 
abstraction for manufacturing purposes decreased 
to  18%  of  total  water  abstracted  in  Belgium  in 
2019.  There  is  still  room  to  make  better  use  of 
circularity to drive the decarbonisation of industry. 

increased 

contrast, 

There  is  still  room  for  improving  Belgian 
and 
of 
uptake 
firms’ 
circularity 
environmentally 
sustainable  approaches. 
Belgium has not been able to recover its previous 
levels  of  performance  on  circular  material  use 
rate (89), and the 2022 Eco-Innovation Scoreboard 
placed the country in the ‘catching-up group’. As of 
2023,  Belgium  totalled  65  EU  Ecolabel  licences 
and 3 754 products with the EU Ecolabel, showing 
increase  compared  to  the  previous  year. 
an 
Support  is  available  at  federal  and  regional  level 
to develop circular business models (90). 

(87)  This includes a steep decrease of 15% year-on-year in 2020, 

and a gradual rebound in the next 2 years. 

(88)  Although the peak was in 2021 with 3.4 PPS/kg. 

(89)  Circular material use rate decreased to 22,2% in 2022 from 

23,7% in 2021. 

(90)  Eco-innovation country profile 2022 Belgium, Ecorys. 

00.20.40.60.8105101520253035404520132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherBelgium (both axes) 
 
 
  
 
 
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

Graph A9.2: Treatment of municipal waste 

2017 of 19, the number of patents on waste and 
recycling decreased to 6 in 2020. 

stable 

construction 

The  built  environment  system  continues  to 
exacerbate  the  depletion  of  resources, 
despite  recent  improvements.  During  the  first 
9 months  of  2023,  Belgium’s  building  permits 
index  stood  at  101.1  on  average,  showing 
activities 
approximately 
compared  to  2015 (92),  while  the  population  grew 
by 4.6%. Belgium’s residential and non-residential 
floor  areas  per  capita  are  larger  than  the  EU 
average.  In  2020,  they  measured  64.2 m2  per 
capita  (EU  average:  52.3 m2)  and  23.4 m2  per 
capita (EU average: 19.4 m2), respectively. In 2020, 
the  three  Belgian  regions  submitted  long-term 
renovation  strategies  aiming  to  decarbonise  the 
building  stock.  The  plan  for  the  Brussels  Region 
extensively includes circular economy practices. 

for 

targets 

Belgium  is  on  track  to  meet  the  Waste 
Framework  Directive’s 
the 
construction  sector.  Between  2010  and  2020, 
waste generated from construction and demolition 
activities steadily increased, reaching 20.78 million 
tonnes,  and  waste  generation  per  capita  is  the 
second highest in the EU. However, the proportion 
of  backfilling  was  well  above  the  EU  average  of 
9.89%  and  reached  45.0%  in  2020.  Belgium 
successfully 
construction  and 
demolition  waste  recovery  rate,  which  increased 
from 17% in 2010 to 99% in 2020. In 2021, 84% 
of  the  Belgian  population  was  connected  to  at 
least  secondary  wastewater  treatment,  above  the 
EU average of 81%. 

improved 

its 

(92)  2015=100. 

47 

Source: Eurostat 

While  being  among  the  best  performers  in 
the EU as regards waste recycling, Belgium is 
still  highly  reliant  on  incineration.  With  a 
municipal  waste  recycling rate  of  55.5%  in  2021, 
Belgium is on track to meet both the 2025 target 
for  recycling  and  the  2035  target  for  landfilling. 
Despite 
recycling, 
Belgium  ranked  second  in  the  EU  for  incineration 
per  capita  in  2021 (91)  and  second  for  waste 
generation  (755 kg  per  capita  in  2022,  compared 
with  an  EU  average  of  527 kg).  After  a  peak  in 

the  good  performance 

in 

(91)  Between 2019 and 2022, the use of this disposal method 
rose dramatically, from 178 to 332 kg of waste incinerated 
per capita (44% of total waste treated in 2021).  The sudden 
peak relates to changes in statistical methodology extending 
the scope of reporting. 

409416729755677010020030040050060070080020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)2,82,83,03,43,3-2,52022Circular material use rate (%)20,820,723,023,722,2-11,52022Eco-innovation index (2013=100)90,591,293,494,499,8-121,52022Recycling of plastic packaging (%)42,447,344,749,2--40,72021Cost of air emissions from industry (EUR bn)14,814,113,213,5--352,72021Built environmentRecovery rate from construction and demolition waste (%)97,0-99,095,8--89,02020Soil sealing index (base year = 2006)102,7-----103,42018Non-residential floor area (m2 per capita)23,123,323,4---18,02020Waste backfilled (%)--45,0-958,4-9,92020 
     
 
 
 
 
     
 
ANNEX 10: DIGITAL TRANSFORMATION 

for 

the 

targets 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with 
digital 
transformation  by  2030,  this  Annex  describes 
Belgium’s  performance  on  digital  skills,  digital 
infrastructure/connectivity and the digitalisation of 
businesses  and  public  services.  Where  relevant,  it 
makes reference to progress on implementing the 
Recovery  and  Resilience  Plan 
(RRP).  Belgium 
allocates 27% of its total RRP allocation to digital 
objectives  (EUR 1.25  billion) (93).  Under  Cohesion 
Policy,  an  additional  EUR  0.3  billion  (13%  of  the 
is 
country’s 
allocated 
digital 
transformation (94). 

total  Cohesion  Policy 
the 

country’s 

funding) 

to 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  Belgium's  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The 2023 report on the state of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (95).  Among  others,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (96). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependencies,  cybersecurity 
and climate change. 

increases 

Digital 

(93)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(94)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 Cohesion Policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(95)  European Commission (2023): Report on the State of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(96)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

some 

skills,  with 

Overall, Belgium has a mixed performance on 
significant 
digital 
challenges  remaining  but  some  progress  to 
note. Although the share of individuals employed 
as  ICT  specialists  is  above  the  EU  average, 
demand for ICT specialists remains high; the share 
of enterprises reporting difficulties in recruiting ICT 
specialists is above the EU average (69% vs 63%). 
increasing  the  share  of  women 
Furthermore, 
among  ICT  specialists  remains  a  challenge  for 
Belgium, although it is on par with the EU average 
(19.4%).  To  address  this  challenge,  Belgium  has 
set  up  an  inter-federal  strategy  on  women  in 
digital (97).  The  proportion  of  people  with  at  least 
basic digital  skills (59%)  is above the EU average 
(56%),  as  measured  by  DESI  in  2023,  with  an 
increase  of  5  percentage  points  between  2021 
and  2023.  In  Belgium’s  RRP,  digital  reskilling  and 
upskilling measures and a focus on digital skills in 
lifelong  learning  should  contribute  to  greater  job 
mobility  and  labour  market  integration,  and  help 
address the shortage in digitally skilled workforce. 

(VHCN)  coverage 

Belgium  presents  mixed  results  in  terms  of 
digital  infrastructure/connectivity,  but  has 
progressed  well  since  last  year.  It  scores 
higher than  the EU average in terms of very high 
(96%  of 
capacity  network 
households  were  covered  in  2023,  compared  to 
the  EU  average  of  79%),  thanks  to  its  extensive 
cable  network.  However,  it  still  lags  significantly 
behind  in  terms  of  fibre  deployment  (25%  of 
households  were  covered  with  fibre  to  the 
premises  (FTTP)  in  2023  compared  to  the  EU 
average  of  64%).  The  RRP  includes  measures  to 
fibre.  Belgium’s 
support 
performance  is  also  far  below  the  EU  average 
when  it  comes  to  overall  5G  deployment,  with  a 
40.4%  coverage  compared  to  the  EU  average  of 
89.3%.  5G  assigned  spectrum  rose  from  3%  to 
66% in 2023, nearing the EU average of 68%; this 
improvement  following  the 
was  a  projected 
allocation  of  5G  spectrum 
in  the  multiband 
spectrum auction. 

roll-out 

the 

of 

Belgium  performs  most  solidly  on  the 
digitalisation of businesses. It scores above the 
indicators  and  fares 
EU  average 
particularly  well  with  regard  to  the  share  of 
enterprises  using  big  data,  cloud  services,  and 

in  all  the 

(97)  ‘Women in Digital’ national and intersectoral strategy for 

2020-2025 https://news.belgium.be/fr/plan-interfederal-et-
intersectoriel-women-digital. 

48 

 
 
 
 
 
artificial intelligence (all above EU averages). 64% 
of Belgian enterprises have taken up at least  one 
of  these  three  technologies,  9  percentage  points 
above the EU average for 2023. Furthermore, the 
share of Belgium’s SMEs with at least a basic level 
of digital intensity is at 74.5%, well above the EU 
average  of  58%.  In  2022,  5.2%  of  enterprises  in 
Belgium  reported 
ICT  service  outage  due  to 
cyberattacks  (e.g.  ransomware  attacks,  denial  of 
service  attacks).  Over  the  same  year,  23.9%  of 
enterprises  developed  or  reviewed  their 
ICT 
security  policy  within  the  previous  12  months. 

Belgium’s RRP includes measures and action plans 
to strengthen the cyber resilience of businesses as 
well  as  society  at  large,  such  as  with  protections 
through 
to  alert 
organisations  when  systems  are  affected,  or 
awareness  raising  campaigns  and  personalised 
support to SMEs ('Cyber scan'). 

spear  warning 

systems 

Belgium  performs  above  EU  average 
in 
relation  to  digital  public  services,  both  in 
public  services  for  businesses  and  for 
citizens.  The  large  share  of  digital  investment 

Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The fibre to the premises coverage indicator is included separately as its evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

49 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills54%54%59%56%80%% individuals20212021202320232030ICT specialists (1)5.6%5.6%5.4%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage69%78%96%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)10%17%25%64%-% households2021202220232023Overall 5G coverage4%30%40%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity65%NA75%58%90%% SMEs2021202320232030Data analyticsNANA45%33%-% enterprises20232023Cloud47%47%48%39%-% enterprises2021202120232023Artificial intelligence10%10%14%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA64%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens72818279100Score (0 to 100)20212022202320232030Digital public services for businesses81889285100Score (0 to 100)20212022202320232030Access to e-health recordsNA8510079100Score (0 to 100)2022202320232030Belgium 
 
     
 
 
 
 
 
 
dedicated  to  this  dimension  in  the  Belgian  RRP 
provides  an  opportunity  to  continue  to  improve 
these  results.  For  electronic  identification  (eID), 
three schemes have been notified to the European 
Commission  under  the  eIDAS  Regulation.  One  of 
those widely used schemes (itsme) is provided by 
a  private  entity 
the 
government.  On  access 
to  electronic  health 
records,  Belgium  performs  very  well  with  a 
maximum  score  of  100  compared  to  an  EU 
average of 79. To improve access for citizens and 
businesses,  Belgium’s  RRP  includes  measures  for 
the digital transformation of public administration 
at  federal  and  regional  level,  and  the  justice  and 
healthcare systems. 

in  collaboration  with 

50 

 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance of Belgium’s research and innovation 
(R&I)  system,  which is  essential  for  delivering  the 
twin 
long-term 
transition 
competitiveness. 

ensuring 

and 

Belgium  is  a  ‘leader  innovator’  and  its 
performance  increased  relative  to  the  EU 
average.  According  to  the  2023  edition  of  the 
European Innovation Scoreboard (98), its innovation 
performance  increased  by  14.1  percentage  points 
since 2016, at a higher rate than the EU’s (8.5pp). 
Its overall performance remains far above the EU 
average 
(125.8%).  This  growth  was  mainly 
achieved  thanks  to  a  very  substantial  increase  in 
business  enterprise  expenditure  on  R&D  (BERD), 
now the highest in the EU (2.53% in 2022).  

The particularly good science base is a major 
asset,  with  world-class  universities  well-
connected  both  internationally  and  to  the 
business  sector.  The  share  of  the  country’s 
international co-publications in its total number of 
publications  has  gradually  increased,  from  55.8% 
in  2010  to  70.8%  in  2022,  well  above  the  EU 
average of 55.5%. The share of joint public-private 
publications  has  also  increased  over  the  last 
decade  (11.3%  in  2022  compared  to  9.7%  in 
2010)  and  Belgium  scores  second  in  the  EU  in 
terms  of  public  R&D  financed  by  businesses  as  a 
percentage of GDP. 

There  is  potential  for  strengthening  the 
contribution  of  the  Belgian  R&I  system  to 
environmental  sustainability,  notably  in  the 
energy  field.  While  the  Belgian  public  science 
base  has  a  good  position  in  energy  research  (as 
shown  by  the  share  of  most-cited  publications  in 
this  field),  the  share  of  energy-related  patents  in 
total  Belgian  patent  applications  decreased  by 
3.2%  annually  in  the  last decade  and is  now  less 
than  half  of  the  EU  average.  The  ongoing 
implementation  of  the  Belgian  recovery  and 
resilience plan (RRP)  and ERDF  programmes helps 
to  mobilise  R&I  for  the  green  transition.  Key 
measures  related  to  energy  are  implemented  by 
the  different  regions  under  Repower  EU,  such  as 

investments by the Flemish region in R&D relating 
to the production of innovative technologies in the 
field  of  solar  energy,  energy  storage  and 
incorporation into energy grids. 

(science, 

Shortages of skilled human resources hinder 
the  Belgian  economy’s  green  and  digital 
transitions.  In  2021,  the  share  of  graduates  in 
technology,  engineering  and 
STEM 
mathematics)  subjects  was  lower  than  the  EU 
average  of  13.2%  (EU-27:  16.9%).  The  share  of 
ICT graduates was 2.3%, one of the lowest in the 
EU (3.4%). Skills shortages, including in relation to 
the  green  and  digital  transitions,  is  a  significant 
challenge  for  Belgium’s  competitiveness  and 
position  as  innovation  leader.  The  Belgian  RRP 
contains  several  measures  aimed  at  developing 
STEM  green  skills,  such  as  investments  by  the 
French  Community  in  equipment  for  a  shared 
platform  used  by  universities  to  contribute  to  the 
development  of  green  skills  related  to  complex 
energy  systems.  The  recent  ‘green  skills  roadmap 
for  Flanders’ (99)  drawn  up  under  the  Commission 
Technical 
highlights 
opportunities  to  enhance  green  skills  with  a  view 
to  benefiting  further  from  the  green  transition  as 
an engine of growth. 

Instrument 

Support 

in 

the 

innovation 
Business  dynamism 
ecosystem  remains  low.  The  business  creation 
rate  is  still  among  the  lowest  in  the  EU  and  is 
accompanied  by  a  low  destruction  rate.  High-
growth  businesses  account  for  only  5.75%  of 
employment in Belgium, far below the EU average 
of 12.51%. This points to some weaknesses in the 
in  generating  new  growing 
Belgian  economy 
businesses that could accelerate the renewal of its 
economic  fabric  towards  new  growth  areas.  (See 
also  Annex  12)  While  all  three  regions  have  a 
to  support 
variety  of  measures 
entrepreneurship,  there  is  less  emphasis  in  their 
policies  on  scale-up  and  growth (100).  However,  in 
2023 Belgium was one of the five Member States 
which  invested  in  the  European  Tech  Champions 

in  place 

(98)  European Innovation Scoreboard (EIS), country profile: 

Belgium 2023. Web page: 
https://ec.europa.eu/assets/rtd/eis/2023/ec_rtd_eis-country-
profile-be.pdf The EIS provides a comparative analysis of 
innovation performance in EU countries, including the relative 
strengths and weaknesses of their national innovation 
systems (also compared to the EU average). 

(99)  https://reform-support.ec.europa.eu/what-we-do/labour-
market-social-protection-and-migration/green-skills-
roadmap-flanders_en. 

(100) Report on Science Technology and Innovation (BRISTI) 2021, 

page 192. Web page: FWB_rapport_2021_en.pdf 
(belspo.be). 

51 

 
 
 
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical Database), Invest EU 

Initiative 
companies in their late-stage growth phase (101). 

(ETCI)  which  will  back  high-tech 

the  innovation  base,  with  more  innovative  small 
and medium-sized enterprises (SMEs). 

Differences  persist  across  regions  in  terms 
of innovation performance. While Brussels and 
Flanders  are  among  ‘innovation  leader’  regions 
according  to  the  Regional  Innovation  Scoreboard 
2023, Wallonia is classified as a ‘strong innovator’. 
A major difference in the innovation ecosystem of 
the three regions is public research intensity, which 
is  much  weaker  in  Wallonia  (0.52%)  than  in  the 
other  two  regions  (Brussels:  0.76%,  Flanders: 
0.94%) (102).  However,  Wallonia’s  performance  is 
clearly  improving;  the  Regional  Innovation  Index 
shows a strong increase between 2014 and 2023, 
in  line  with  the  other  regions.  A  driver  of  this 
increasing  performance  has  been  a  widening  of 

(101) https://www.eib.org/en/events/european-tech-champions-

initiative. 

(102) Regional Innovation Scoreboard, country profile: Belgium 

2023. Web page: 
https://ec.europa.eu/assets/rtd/ris/2023/ec_rtd_ris-regional-
profiles-belgium.pdf. 

52 

R&D intensity (GERD as % of GDP)2.062.433.433.433.432.24Public expenditure on R&D as % of GDP0.660.720.870.850.90.73Business enterprise expenditure on R&D (BERD) as % of GDP1.381.72.512.562.531.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 13.113.711.67::9.6PCT patent applications per billion GDP (in PPS)3.83.33.38::3.4Public-private scientific co-publications as % of total publications9.310.410.711.311.37.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0610.0770.0830.077:0.054New graduates in science & engineering per thousand pop. aged 25-3411.912.113.113.2:16.9Total public sector support for BERD as % of GDP0.2270.263:0.355:0.204Business enterprise expenditure on R&D (BERD) financed by the public sector (national and abroad) as % of GDP0.1180.12:0.1244:0.1Green innovation Share of environment-related patents in total patent applications filed under the Patent Cooperation Treaty (%)13.912:::14.7Venture capital (market statistics) as % of GDP0.0350.0280.0730.080.080.085Employment share of high-growth enterprises measurd in employment (in %):10.45.75::12.512022EU average (1)Finance for innovation and economic renewal2021Belgium 201020152020Key indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD) 
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

Belgium’s  labour  productivity  level  is  high 
compared  to  the  EU,  although  growth  has 
been  weaker  compared  to  the  EU  average 
since the  2000s.  As  a  result, hourly productivity 
in  purchasing  power  standards  (PPS)  in  Belgium 
declined  from  147.6%  of  the  EU  aggregate  in 
2000 to 135.9% in 2023 (GDP per hour worked, in 
PPS).  It  remains  higher  than  in  neighbouring 
countries, where it was 121% in Germany, 116.8% 
in France and 122.8% in the Netherlands in 2023 
(Graph  A12.1).  These  developments  have  taken 
place amid muted total factor productivity growth 
on average. 

Graph A12.1: GDP per hour worked in PPS as 
percentage of the EU in 2023 vs growth rate 
2000-2023 

professional  and  scientific  services  (M)  sectors 
grew  in  size.  The  relative  size  in  the  economy  of 
the manufacturing sector (C), where productivity is 
high,  shrunk  like  other  service  sectors  (wholesale 
and  retail  (G),  finance  and  insurance  (K)  and 
transport  (H)).  As  a  result,  the  change  in  the 
sectoral  breakdown  of  the  economy  has  led  to 
rather  neutral  labour  productivity  growth  since 
2000. 

Graph A12.2: Structural change (sector size and 
average productivity growth by sector) 

Source: Eurostat 

of 

that 

hours 

worked 
in 

Productivity  dynamics  in  Belgium  have  been 
characterised  by  marked  volatility  in  the 
aftermath  of 
the  COVID-19  pandemic. 
Productivity  per  hour  worked  has  experienced 
significant  fluctuations  due  to  a  reduction  in  the 
number 
was 
disproportionally  concentrated 
lower  added 
value  (contact  intensive)  jobs.  This  composition 
effect resulted in a notable temporary increase in 
aggregate  productivity  during  the  peak  of  the 
pandemic 
followed  by  a 
in  2020), 
subsequent decline as economic activity resumed, 
with  decreases  of  0.9%  in  2021  and  1.3%  in 
2022.  In  contrast,  labour  productivity  per  person 
closely  mirrored  the  fluctuations 
in  GDP  as 
temporary job retention schemes proved effective 
in  maintaining  employment 
the 
pandemic,  declining 
(-5.3%)  and 
recovering in subsequent years (4.8% in 2021 and 
0.9% in 2022). 

throughout 

in  2020 

(3.3% 

Structural  change  across  sectors  has  not 
supported Belgian labour productivity growth 
over  the  past  two  decades  (see  Graph  A12.2). 
Over  2002-2021,  across  the  sectors  with  high 
labour  productivity,  only  the  information  and 
and 
communication 

construction 

(F), 

(J), 

Source: Eurostat (nama_10_a64, nama_10_a64_e, 
nama_10_lp_a21) 

Differences  in  labour  productivity  across 
sectors  are  largely  explained  by  differences 
in total factor productivity. Following the same 
trend,  growth  in  total  factor  productivity  has 
stagnated  since  2015  (see  Graph  A12.3),  despite 
comparatively  strong 
innovation  performance, 
bringing  productivity  levels  below  the  EU  average 
and lower than most neighbouring economies. For 
labour 
what  concerns  the 
productivity  per  person  in  the  sector  declined  in 
the last five years while the EU average showed a 
slight  increase.  It  was  below  EU  average  in  2023 
(see table A12.1). 

industry,  the  real 

increased 

investment 

Business 
in  2023, 
despite  high  interest  rates.  It  reached  15.65% 
of  GDP  in  2022,  above  the  EU  average  (13.56%) 
and some of its peer countries (Germany 12.45%) 
the 
France 
(14.78%) (103).  According  to  the  EIB  Investment 

Netherlands 

(10.78%) 

and 

(103) Eurostat: Investment share of GDP by institutional sectors 

[sdg_08_11] 

53 

0,01,02,03,04,05,06,004080120160200240LUBENLUSFRDEDKSEUKITFIATEA19IEESEU27CYELSIMTPTCZSKHRHUPLEELTBGLVROAnnual average % changePPS per hour, % EUIncome in 2000Income in 2023Growth 2000-2023(rhs)ABCDEFGHIJKMN-2-101234-10-50510Annualised labour productivity growth (%) over 2002-2022Change (pp) in the share of the sector in total economy gross value added between 2002 and 2022 
 
       
      
 
 
 
Survey  2023 (104),  in  the  face  of  decelerating 
economic  growth  and  monetary  policy  tightening, 
firms in Belgium remained relatively positive about 
their investment intentions in 2023. A larger share 
of  firms  expects  to increase  rather  than decrease 
investment. Optimism was down slightly in certain 
sectors at the beginning of 2024 (105), but 94% of 
Belgian  firms  indicated  that  they  had  invested  in 
the  previous  year,  which  was  above  the  EU 
average  of  85% (106).  Tax  incentives  in  the  R&D 
sector  favour  investment  in  this  domain  (see 
Annex  11).  Firms  are  already  heavily  investing  in 
digitalisation and automation in response to higher 
wage  costs  and  labour  shortages.  Belgium  is 
among the 17 Member States that became part of 
the unitary patent system launched in June 2023. 
It enables simple patent protection in Europe, with 
a  single  procedure  for  the  registration  of  patents 
and centralised litigation.  

Graph A12.3: Total factor productivity index 
2010=100 

Source: Ameco 

By  comparison,  public  investment  remains 
comparatively  low.  At  2.73%  of  GDP  in  2022, 
public  investment  in  Belgium  lies  below  the  EU 
average  of  3.26% (107).  The  National  Council  for 
Productivity  predicts 
in 
productivity 
It  advocates 
in  the  short  term. 
sufficient  public  investment,  boosting  innovation 
and  ensuring  that  a  more  skilled  workforce  is 

improvement 

little 

available to reverse the situation (108). The federal 
government  set  up  a  study  committee  on  public 
investment  in  September  2023.  It  will  centralise 
and  develop  expertise  in  public  investment  at 
federal  level  and  advise  the  government  on 
developing its investment policy. 

to 

long-term  barriers 

Main 
investment 
remain  energy  costs,  the  availability  of 
skilled staff and business regulations. The EIB 
Investment  Survey  2023  reports  that  the  most 
frequently  mentioned  long-term  impediments  to 
Belgian firms’ investment are energy costs (82%), 
uncertainty about the future (69%), the availability 
of  skilled  staff  (68%)  and  business  regulations 
(54%).  These  are  also  the  main barriers  for  firms 
across the EU. 

in 

IT,  engineering, 

Belgium  benefits  from  a  highly  skilled 
workforce,  but  the  share  of  STEM  graduates 
is  low.  The  number  of  20-  to  29-year-olds  with 
higher  education  qualifications 
science, 
mathematics, 
the  processing 
industry,  and  production  per  1 000  inhabitants 
increased  from  14.0  in  2018  to  16.4  in  2021. 
However,  Belgium  remains  well  below  the  EU-27 
average (19.7 in 2018 to 21.9 in 2021) (see Annex 
14). 
for 
International  Student  Assessment  (PISA)  results 
show a decline in the number of overachievers and 
an  increase  in  underachievers  overall,  but  the 
numbers  are  better  than  the  EU  average  (See 
Annex 15). 

recent  Programme 

The  OECD’s 

Disincentives  to  work  remain  high.  Belgium 
had  the  highest  job  vacancy  rate  in  the  EU  in 
2023, at 5.55% against an EU average of 2.54%. 
These  vacancy  rates  mainly  affect  part-time  and 
low-skilled  jobs.  According  to  the  National  Bank 
projections,  growth  will  be  increasingly  held  back 
in  the  short  term (109). 
by 
Furthermore,  Belgium  has  the  second  highest  low 
wage  unemployment  trap  in  the  EU (110)  which 
discourages  low  qualified  workers  from  working. 
Belgium  has  one  of  the lowest  employment  rates 

labour  shortages 

(104) EIB Investment Survey 2023 – Belgium overview, EIBIS, 

January 2024 

(105) Opinion surveys | nbb.be 

(108) National Productivity Board – Annual report 2023. 

(106) EIB Investment Survey 2023 – Belgium overview, EIBIS, 

(109) Economic projections for Belgium – Autumn 2023, National 

January 2024 

Bank of Belgium, December 2023. 

(107) Eurostat: Investment share of GDP by institutional sectors 

(110) Tax rate on low wage earners – Unemployment trap 

[sdg_08_11] 

[earn_nt_unemtrp] 

54 

98100102104106108110112101112131415161718192021222324*25*BEDEFRNLEA20 
  
 
 
of  the  EU (111)  (see  also  Annex  14,  Employment, 
skills, and social policy challenges). 

rate 

in  Belgium 

low  death  rate 

Belgium’s  business  environment  rebounded 
after  the  pandemic,  but  its  dynamism  is 
lower than most EU countries on average. The 
enterprise  birth 
increased 
markedly in the last 2 years, up 4.1% in 2021 and 
4.5% in 2022, much higher than the 3.2% average 
increase over the last 10 years (112). However, the 
enterprise birth rate among active enterprises was 
one  of  the  lowest  in  the  EU  in  2021,  and  so  was 
the percentage of enterprise deaths among active 
enterprises (113).  The 
in  pre-
pandemic  years  points  to  the  insufficient  closure 
of  structurally  unviable  companies.  The COVID-19 
emergency  support  measures  and  the  suspension 
of  bankruptcy  filings  led  to  a  pause  in  business 
bankruptcies  in  2020-21 (114), (115).  The  share  of 
high-growth enterprises (average annual growth of 
10% or more over the last 3 years) is also lower in 
Belgium 
(5.66% 
compared  to  9.18%  in  2021 (116)).  Belgian  public 
administration  scores  above  the  EU  average  on 
overall  perceived  government  effectiveness,  but 
coordination  between 
levels  of 
government continues to be a significant challenge 
(See Annex 13). 

the  EU-27  average 

the  various 

than 

in  the 

Belgium’s  high  services  trade  restrictions 
may  play  a  role 
low  business 
dynamism. The country shows one of the highest 
services  trade  restrictiveness  indices  (STRI)  within 
the European Economic Area (EEA). Belgium ranks 
worst  in  the intra  EEA  STRI  index  for  architecture, 
and second worst for courier services. It is also in 
the  top  three  most  restrictive  countries  for 

(111) Employment and activity by sex and age – annual data 

[LFSI_EMP_A] 

(112) https://statbel.fgov.be/en/news/almost-127000-enterprises-

created-2022 

(113) Visualisations – Eurostat (europa.eu) 

(114) A study for Flanders found strong aggregate productivity 

growth in 2020 due to COVID-19, mostly driven by surviving 
firms (and to a lesser extent by a positive net entry effect), 
despite reduced creative destruction compared to normal 
times. See Konings J., Magerman G., and Van Esbroeck D., 
(2022), ‘The Impact of Covid Rescue Policies on Productivity 
Growth and Reallocation’, mimeo. 

(115) OECD working paper (2017). McGowan, Andrews and Millot. 

The Walking Dead? Zombie Firms and Productivity 
Performance in OECD Countries. 

(116) High-growth enterprises and related employment by NACE 

Rev. 2 activity [bd_hg__custom_10014612]. 

telecoms, logistics (customs brokerage and freight 
forwarding),  air  transport.  It  also  ranks  high  on 
service  restrictions  for  construction,  commercial 
banking, accounting services and to a lesser extent 
engineering services. The arrival of a fourth player 
in  the  telecoms  market  in  summer  2024  may 
improve  competition  in  this  sector.  According  to 
business 
the 
environment 
factor 
productivity by about 3.5% (117). 

in  Belgium’s 
increase 

reforms 
could 

total 

IMF, 

remain. 

regulated 

Regulated  professions  remain  one  of  the 
problematic  areas  of  the  single  market  for 
Belgium.  On 
professions,  most 
regulatory  burdens  pointed  out  in  the  2021 
Communication (118) 
Architects, 
accountants,  lawyers,  estate  agents  and  tourist 
guides  (in  Wallonia)  are  more  regulated  than  the 
EU 
the 
proportionality of shareholding or voting rights for 
estate  agents  and  architects  remain.  Lawyers  in 
Belgium  are  subject  to  incompatibility  rules  and 
multidisciplinary  restrictions  that  could  affect  the 
potential  of  this  sector  to  innovate  and  roll  out 
digital solutions and new business models. 

Restrictions 

average. 

such 

as 

Belgium  is  a  net  importer  of  energy  sources 
and  raw  materials,  and  energy  intensive 
industries  are  particularly  affected.  Belgium 
is  still  very  dependent  on  fossil  fuels,  which 
accounted  for  68.1%  of 
its  primary  energy 
consumption  and  made  up  74%  of  its  gross 
available  energy  in  2022  compared  to  70.9%  in 
the EU (Eurostat). Belgium is a net importer of all 
critical raw materials and ranks among the lowest 
in  the  mining  contribution  index (119).  It  is  a  main 
provider  of  arsenic  albeit  in  the  processing  stage 
(67% of EU supplies) (120). 

Belgium  developed  a  national  security 
strategy  for  the  first  time  at  the  beginning 
of  2022.  Achieving  economic  open  strategic 
autonomy 
government 
objectives (121).  By identifying strategic sectors for 

one 

the 

of 

is 

(117) IMF Article IV Consultation, December 2023. 

(118) Communication on updating the reform recommendations 
for regulation in professional services, COM(2021)385. 

(119) ICMM – Role of Mining in National Economies: Mining 

Contribution Index (6th edition). 

(120) Microsoft Word -SCRREEN2_factsheets_ARSENIC.docx 

(121) A strategy to make Belgium more resilient | FPS Foreign 
Affairs – Foreign Trade and Development Cooperation 
4/02/2022. 

55 

 
 
 
Belgium  is  well  integrated  into  the  single 
market  but  could  perform  better  on 
implementation  of  single  market  regulation. 
In  2022,  intra-EU  imports  and  intra-EU  exports 
made  up  61.3%  of  Belgium’s  GDP,  one  of  the 
highest shares in the EU compared to the 2022 EU 
average  of  46%.  But  Belgium  performs  poorly 
when it comes to transposing EU directives, having 
a  deficit  of  1.6%  and  ranking  25th  out  of  27 
Member  States  (EU  average  0.7%).  It  ranks  14th 
on  conformity,  with  1.2%  of  directives  being 
wrongly  transposed  (EU  average  1.1%).  Overall, 
the  country  is  an  average  performer  on  public 
procurement, with 26% of contracts awarded after 
receiving  only  single  bids 
in  2023,  which 
constitutes  a  slight  improvement  compared  with 
2022 (24%). Belgium solved 80.6% of the SOLVIT 
cases (62) it handled as lead centre, below the EU 
average of 88.3% (124). 

the 

Belgium is in the stage of technical readiness 
for 
single  market/cross-border 
automated  exchange  of  evidence,  the  ‘once-
only’  technical  system  (OOTS) (125).  As  part  of 
the  Single  Digital  Gateway  Regulation (126),  the 
system  will  enable  the  automated  exchange  of 
evidence  between  Member  States’ 
relevant 
authorities, improving online access to information, 
administrative  procedures,  and  assistance  within 
the  EU.  The  onboarding  of  the  Belgian  competent 
authorities  is  crucial  for  the  system  to  function 
smoothly and to reduce administrative burden. 

for 

creation  of  an 

its  own  economy,  analysing  their  vulnerabilities, 
and  designating  those  responsible  for  stockpiling 
in  strategic  sectors,  companies  can  improve  their 
own  resilience.  Belgian  authorities  also  agreed  on 
the 
Interfederal  Screening 
Committee  in  2022,  aimed  at  establishing  a 
mechanism 
direct 
screening 
investments.  It  brings  together  all  the  federated 
entities  of  the  country  alongside  the  federal 
government.  The  Belgian  sovereign  fund,  the 
Federal  Participation  and  Investment  Company 
(SFPIM) has drawn up a list of Belgian companies, 
or  companies  active  in  Belgium,  of  strategic 
interest for the country's economy. SFPIM is trying 
to take stakes in some of them to anchor them in 
the country. 

foreign 

their  strategy  to  factor 

Belgian  firms  have  proven  resilient  to  the 
energy  crisis  and  climate  change.  State  aid 
during  the  2022  energy  crisis  was  low  compared 
with  neighbouring  countries,  and  Belgian  firms 
quickly  adapted 
in 
skyrocketing  energy  prices.  Belgium  has  the 
highest  share  of  firms  that  have  taken  measures 
to reduce their greenhouse gas emissions. Despite 
this,  according  to  the  2023  EIB  Business  Survey, 
only  20%  of  firms  believe  climate  change  will 
have a major impact on their functioning while the 
majority believes it will only have a minor impact 
or  no  impact  at  all (122).  Around  20%  see  climate 
change as an opportunity. 

Access  to  finance  has  deteriorated  slightly 
for Belgian businesses. While access to finance 
remains  easier  in  Belgium  than  the  EU  average, 
in 
the  number  of 
2023 (123).  This  increase  is  linked  to  the  rise  in 
interest rates. Belgium scored better than most of 
the other EU Member States in the EIF SME Access 
to Finance Index in 2023 (See Table A12.1). 

loans  rejected 

increased 

On 
late  payments,  the  payment  delays 
between businesses are on a par with the EU 
average.  Only  45%  of  Belgian  businesses  are 
concerned about customers’ ability to pay on time, 
14 points lower than the EU average of 59%. The 
share  of  small  and  medium-sized  enterprises 
(SMEs)  experiencing  late  payments  in  the  past  6 
months  was  49.81%,  slightly  worse  than  the  EU 
average (48.68%). 

(124) Country data: Belgium | Single Market Scoreboard 

(europa.eu) 

(122) EIB Investment Survey: European Union overview 

(125) Implementing Regulation (EU) 2022/1463. 

(123) SAFE survey. 

(126) Regulation (EU) 2018/1724. 

56 

 
 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (4) OECD, (5) ECFIN BCS, (6) COMEXT and Commission 
calculations, (7) EIB Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index 
* Own Commission calculations for the EU27 average  

57 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP15,23,64,23,94,33,8Net Public investment, level of public capital stock, net of depreciation, % GDP10,40,50,50,40,51,2Real labour productivity per person in industry (% yoy)23,7-2,72,1-0,6-3,9-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)2-1,5-0,64,36,9-9,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP253,451,056,961,357,442,9Transposition deficit, % of all directives not transposed30,81,52,82,31,60,7Conformity deficit, % of all directives transposed incorrectly30,91,11,21,11,21,1SOLVIT, % resolution rate per country381,989,891,288,281,088,3Number of pending infringement proceedings3312838323125,9RestrictionsEEA Services Trade Restrictiveness Index40,060,060,060,060,060,05Single bids, % of total contractors3212122242628,6Direct Awards, %3122228,1Material Shortage (industry), firms facing constraints, %56,88,619,433,620,817,2Labour Shortage using survey data (industry), firms facing constraints, %511,412,216,224,315,723,3Vacancy rate (business economy), % of vacant posts to all available ones (vacant + occupied)24,23,75,35,95,52,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,180,170,170,190,210,22Installed renewables electricity capacity, % of total electricity produced241,445,447,250,7-53Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle725,525,719,421,07,022,2Bankruptcies, Index (2015=100)2108,573,866,794,5104,8105,6Business registrations, Index (2015=100)2126,2123,3138,5123,7116,2120,2Payment gap - corporates B2B, difference in days between offered and actual payment8-212121515Payment gap - public sector, difference in days between offered and actual payment8-612161816Share of SMEs experiencing late payments in past 6 months, %943,842,042,450,049,848,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,730,600,670,59-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0,140,290,270,13-0,17Access to financeECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsPublic procurement BelgiumHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliance 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

Belgium’s  public  administration  is  essential 
for  the  economy’s  competitiveness  by,  in 
particular,  shaping  the  conditions  for  the 
twin  transition  and  creating  a  favourable 
business environment. The country scores above 
the  EU  average  on  overall  perceived  government 
effectiveness  although  there  has  been  a  slight 
recent  years (127).  Coordination 
decrease 
in 
levels  of  government 
between  the  different 
continues to be a significant challenge (see Annex 
12),  leading  to,  for  example,  slow  progress  with 
the sustainable development goals. In line with the 
recovery  and  resilience  plan’s  (RRP)  priority  to 
strengthen  cybersecurity  and  the  provision  of 
digital  public  services,  Belgium  launched  a  range 
of  digital  services  related  to,  for  example,  civil 
status  registers (128),  criminal  proceedings (129), 
setting up a company or a non-profit organisation, 
and collective debt settlement. 

The  Belgian  federal  government  has  good 
evaluation capacity in several line ministries 
and  well-respected  suppliers  of  evaluations. 
The  federal  government’s  efforts  to  strengthen 
policy evaluation still need to tackle weaknesses in 
planning  and 
improve 
coordination between the regional government and 
municipalities,  the  Flemish  region  published  a 
study  on  how  to  strengthen  local  governance  to 
regroup 
and 
coordination (131). 

coordination (130).  To 

administrative 

design 

A set of new measures aim to ease access to 
the  Belgian  federal  public  administration. 
These include a new competence model and more 
flexibility  on  educational  qualifications,  allowing 
final-year  students  to  apply.  The  recruitment 
process has been also adapted, aiming to facilitate 
access  to  the  civil  service  by  applicants  with 
disabilities (132).  To  improve  crisis  management,  a 
‘crisis  pool’  of  civil  servants  from  all  grades  has 

(127) Worldwide governance indicators, 2022 data. 

(128) Civil status registers | Belgium.be  

(129) Via the Just-on-web portal. 

(130) OECD (2022) Improving decision making through policy 

evaluation in Belgium. Paris: OECD. 

(131) Steunpunt Bestuurlijke Vernieuwing (2023) Toekomstvisie op 

het lokaal en binnenlands bestuur in Vlaanderen. 
https://www.steunpuntbestuurlijkevernieuwing.be/toekomstvi
sie-vlaanderen/kopie-van-toekomstvisie-vlaanderen.  

(132) Ministerraad: aanwerving van personen met een handicap | 

BOSA (belgium.be). 

58 

been  set  up.  The  staff  in this pool  will be  able  to 
volunteer  for  up  to  4  weeks  a  year  in  crisis 
response  roles.  However,  the  participation  of  civil 
servants  in  adult  learning  is  lower  than  the  EU 
average (Table A13.1). Gender parity in senior civil 
been 
service  management 
improving.  There  was  a  sharp  increase  in  the 
number  of  women  in  such  positions  in  2023 
although  it  remains  below  the  EU  average  for  all 
levels of administrators (Graph A13.1). 

positions 

has 

A 

range 

Belgium  performs  above  the  EU  average  on 
of  measures 
e-government. 
(JustConsult, JustAct,  JustRestart)  are expected to 
further boost the overall maturity of digital public 
administration services at federal level. These will 
be  complemented  by  the  Flemish  digital  strategy 
and  the  digital  Wallonia  strategy.  Moreover, 
Belgium  scores  above  the  EU  average  for  e-
government  users.  The  Smart  Nation  initiative 
launched  in  2023  aims  to  further  improve  the 
public’s  digital  skills  and  those  of  civil  servants. 
However, despite recent improvements, Belgium is 
less  advanced  than  most  other  Member  States  in 
providing open government data (Graph A13.1).  

To  help  address  fiscal  challenges,  the 
independent  fiscal 
institution  could  be 
strengthened.    A  lack  of  financial  and  human 
resources has prevented Belgium’s High Council of 
Finance  (HCF)  from  fully  monitoring  compliance 
with  fiscal  rules.  The  government  also  plays  a 
large role in nominating the members of HCF and 
staffing  of  its  secretariat.  Belgium  is  also  less 
advanced on fiscal structural indicators measuring 
its  national  medium-term  budgetary  framework 
and the strength of its fiscal rules (Table A13.1).  

There 
is  still  no  full  overview  of  the 
efficiency  of  the  justice  system  due  to  the 
continued  lack  of  data  on  court  proceedings (133). 
However,  there  are  ongoing  efforts  to  identify 
judicial  backlogs.  The  limited  data  available  show 
that  the  estimated  time  to  resolve  administrative 
cases  at  first  instance  has  increased  (from  235 
days  in  2021  to  288  days  in  2022).  Despite 
significant  investments  and  initiatives,  there  are 
still  structural  human  and  financial  resource 
deficiencies.  Several  steps  have  been  taken  to 
significantly  increase  the  level  of  digitalisation  of 
the  justice  system  by  2026,  in  particular  by 

(133) For more details, see the 2024 EU Justice Scoreboard and 
the Commission’s 2024 Rule of Law Report (forthcoming). 

 
 
 
 
 
allowing 
the  electronic  submission  of 
documents. On judicial independence, no systemic 

for 

deficiencies have been reported. 

Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available is 
shown. (3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as 
the existence of key enablers for the provision of those services. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: E-government activities of individuals via websites, Eurostat (# 1); E-government benchmark report (# 2); Open data 
maturity report (# 3); Labour Force Survey, Eurostat (# 4, 5, 7); European Institute for Gender Equality (# 6); Fiscal Governance 
Database (# 8, 9); OECD Indicators of Regulatory Policy and Governance (# 10). 

Graph A13.1: a) Share of women and men in management positions; b) open government data maturity 
indicator: 2023 scores (in % of the total maximum score); country ranking, overall score (right side) 

(1) 2023 data; (2) Open government data: on the right, low values denote good performance. 
Source: European Institute for Gender Equality (chart a) and Open Data Maturity | data.europa.eu (chart b). 

59 

BE20192020202120222023EU-27(2)1n/an/an/a88.185.975.02n/a71.774.177.577.975.830.60.60.60.70.70.8446.648.053.0 (b)55.552.852.958.57.811.4 (b)11.412.917.9657.255.249.448.634.49.271.61.71.7 (b)1.71.71.580.70.70.70.7n/a0.791.21.21.21.2n/a1.410n/an/a1.82n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance0102030405060708090100BEEU27BEEU27BEEU27Level 1administratorsLevel 2administratorsSenioradministratorsa) Gender parityMenWomen-327121722270%10%20%30%40%50%60%70%80%90%100%PolicyQualityPortalImpactTotal201820192020202120222023Open data 2023Open data rankingb) Open government data BE2023EU27BE 
 
 
      
 
   
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS 

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU. This Annex provides an overview of Belgium’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills and poverty reduction. 

Table A14.1:Social Scoreboard for Belgium 

Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat. 

After  a  strong  post-pandemic  recovery,  the 
Belgian  labour  market  stabilised  in  2023  in 
line  with  economic  activity.  With  real  GDP 
growth  slowing  down  to  1.4%  in  2023,  the 
employment  rate  (20-64  age  group)  reached 
72.1% in 2023, still below the EU average (75.4%) 
and  the  2030  national  target  of  80%.  Despite  a 
high  vacancy 
low 
unemployment rate, employment growth continues 
to  be  held  back by  an  overall  low  and  stagnating 
activity  rate  among  20-64  year-olds  (76.1%  vs 
80%  in  the  EU  in  2023),  as  there  are  still 
significant  gaps 
in  activity  and  employment 
between  regions  and  for  women  and  certain 
disadvantaged  groups.  The  employment 
rate 
among 20–64-year-olds in 2023 was 66.5% in the 
Brussels  Capital  Region,  65.5%  in  Wallonia  and 

rate  and  a  historically 

60 

76.8%  in  Flanders,  whereas  the  activity  rate  (20-
64-years-old) was respectively 74.3%, 71.1% and 
79.2%. In 2023, Belgium started implementing the 
‘Jobs  Deal’  from  2022  with  measures  to  boost 
employment.  These  include  measures  to  help 
dismissed  employees  to  find  work  or training  and 
greater flexibility on night work in e-commerce, as 
well  as  measures  to  improve  work-life  balance, 
such as the possibility to request a 4-day working 
week,  an  alternating  work  schedule,  and  the  right 
to  disconnect.  However,  with  some  of  the  highest 
unemployment and low-wage employment traps in 
the  EU,  and  despite  existing  regional  initiatives, 
still  more  and  better  targeted  policy  action  is 
warranted,  in  particular  to  tackle  the  tax  and 
benefits disincentives to work. Although the 2022 
tax  reform  that  would  increase  financial  work 
incentives in the tax system failed to be adopted, 
its  blueprint  can  be  used  as  a  basis  for  further 
discussions in the future. 

low 

Further  activating  underrepresented  groups 
is  needed  for  Belgium  to  reach  the  2030 
national employment target of 80%. In 2023, 
the employment rates of older workers (55-64 age 
level  of 
group:  57.8%),  people  with  a 
education  (46.8%),  people  born  outside  the  EU 
(59.0%,  up  6.7  pps  since  2020),  and  in  particular 
women  born  outside  the  EU  (48.9%,  also  up  6.7 
pps since 2020), were still significantly lower than 
the overall employment rate of 72.1%. For people 
born in Belgium with parents born outside the EU, 
the employment rate is lower than for those with 
Belgian-born  parents  (FOD  WASO  &  Unia,  2022). 
Under  the  Belgian  RRP,  the  Flemish  Community 
enhanced the inclusiveness of its labour market by 
end 2023 whereas a federal  reform is planned in 
2024 to tackle discrimination in the labour market 
through  well-monitored 
testing.  Despite  a 
decrease  (33.6  pps  in  2023  vs  38  pps  in  2021), 
the  employment  gap  between  persons  with  and 
without  disabilities  remains  one  of  the  highest  in 
the  EU  (21.4  pps  in  2022).  Several  federal  and 
regional measures have been taken since 2022 to 
improve the reintegration of workers on long-term 
sick leave, the number of whom rose significantly 
between  2013  and  2021  (from  4.5%  of  the 
working-age  population  to  6.7%,  according  to 
national statistics). 

The Belgian labour market is confronted with 
labour  shortages  and  skills 
significant 

34.96.259.49.67.63.672.15.52.2102.918.719.648.8435.37.752.71Policy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022)Dynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022) 
 
 
 
   
 
 
mismatches,  which  are  both  among  the 
highest  in  the  EU.  In  2023,  the  vacancy  rate 
remained  high  at  4.6%.  There  are  significant 
shortages  in  both  low-skilled  and  high-skilled 
occupations in all regions, much of which is linked 
to  the  low  number  of  graduates  in  science, 
technology,  engineering  and  mathematics  (see 
Annex  15).  Reforms  are  currently  ongoing  to 
address  concerns  about  the  attractiveness  and 
labour  market  relevance  of  vocational  education 
and  training.  The  federal  bodies  have  introduced 
financial  incentives  to  encourage  people  to  take 
jobs  in  sectors  with  shortages.  Also,  a  recently 
implemented measure under the RRP allows long-
term  unemployed  people  to  receive  a  partial 
unemployment  benefit  during  the  first  3  months 
of work in a profession with shortages. 

the 

Low  skill  levels  are  a  major  impediment  to 
getting more people into work and to greater 
limited 
while 
competitiveness, 
participation  in  adult  education  of  people 
with a low level of education poses a serious 
issue  in  the  context  of  the  twin  transitions. 
The  share  of  adults  (aged  25-64)  participating  in 
learning  activities  in  the  previous  12  months  was 
34.9%  in  2022,  below  the  EU  average  of  39.5% 
and  4.5  pps  less  compared  to  2016.  It  is  still  far 
from  Belgium’s  national  target  of  at  least  60.9% 
by 2030. The rate is particularly low among people 
with a low level of qualifications (12.5% vs 18.4% 
in  the  EU).  Together  with  labour  shortages  and 
other  challenges, 
this  undermines  Belgium’s 
potential to increase its economic competitiveness 
(see  Annex  20).  The  RRP 
reforms 
introducing an individual right of 5 days of training 
per  year  for  employees  and  setting  up  individual 
learning accounts, while the European Social Fund 
Plus  (ESF+)  strongly  supports  training  activities 
targeted at disadvantaged groups in every region. 

includes 

Social  transfers  are  highly  effective 
in 
reducing  poverty,  and  income  inequality  is 
low.  During  the  energy  crisis,  the  automatic 
indexation  of  wages  and  benefits  protected 
households’  purchasing  power 
relatively  well 
(Capeau  et  al.,  2022).  The  share  of  people  at  risk 
of  poverty  or  social  exclusion  (AROPE)  fell  to 
18.8% in 2021 and remained around that level in 
2022  and  2023  (EU:  21.6%  in  2022),  although 
there are significant regional disparities (Flanders: 
12.2%,  Wallonia:  24%,  Brussels  Capital  Region: 
37.6%).  At  the  same  time,  the  share  of  people 
living  in  quasi-jobless  households  is  among  the 
highest in the EU, at 10.5% in 2023, here also with 

61 

important  regional  disparities.  The  depth  of 
the  EU  average, 
poverty,  while  still  below 
increased  by  3  pps 
is 
nevertheless one of the highest performers for the 
impact of its social transfers in reducing poverty. 

in  2022.  Belgium 

in 

Inequalities 

Belgium (134). 

The  overall  good  social  outcomes  hide 
uneven  opportunities  between  groups  based 
on  socio-economic,  migrant  and  parental 
backgrounds.  People  with  a  vulnerable  socio-
demographic profile have persistently low incomes 
and  a  difficult  upward  economic  and  social 
of 
mobility 
opportunities for young people are reflected in the 
large  and 
increasing  difference  between  the 
AROPE  rates  of  children  under  6  years  of  age  of 
highly  educated  parents  (7.2%)  and  those  of 
parents with a low level of education. (84.4%). This 
gap increased from 67.7 pps in 2021 to 77.2 pps 
in  2022  (EU:  55.5  pps  in  2022).  There  are  also 
significant  inequalities  in  educational  outcomes 
linked  to  socio-economic and  migrant  background 
(see the OECD PISA data in Annex 15). In addition, 
the AROPE gap between persons with and without 
disabilities  increased  and  was  one  of  the  biggest 
in the EU in 2022 (at 20.3 pps vs the EU average 
of  10.5  pps).  While  the  implementation  of  the 
European Child Guarantee is ongoing, as described 
in  the  Belgian  progress  report,  the  RRP  and  the 
ESF+  finance  better  support  for  active  inclusion 
and 
inclusive  education.  They  will  also  help 
Belgium  reach  its  national  target  of  279 000 
fewer people at risk of poverty or social exclusion 
by  2030  (from  2019),  of  which  93 000  children, 
which is showing good progress. 

Table A14.2:Situation of Belgium on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months, special extraction excluding guided on-the-job 
training. 
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

(134) OECD, Economic Surveys : Belgium 2022. 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 72.18078(2023)34.960.960(2022)-116-279-15 000(2023)Poverty reduction2 (thousands)Employment (%)Adult learning1 (%) 
 
  
 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Belgium’s education and training system based on 
the  2023  Education  and  Training  Monitor  and the 
2022  OECD  Programme  for  International  Student 
Assessment (PISA) results. 

basic 

Underachievement 
skills  as 
in 
measured  in  the  PISA  study  has  increased, 
especially  among  disadvantaged  pupils.  The 
results (135)  show  a 
long-term 
latest  PISA 
performance 
deterioration 
reading, 
in 
in 
mathematics  and 
science  among  15-year-
olds. (136)  The  underachievement  rate  of  students 
from  the  bottom  quarter  of  the  socio-economic 
distribution  increased  by  9.2 pps  since  2018, 
reaching  45.8%  in  mathematics  (EU:  48%,  BEfl: 
41.4%,  BEfr:  51.1%,  BEde:  35.6%),  while  the  rate 
for  advantaged  pupils  remains  the  lowest  in  the 
EU  (EU:  10.9%,  BE:  6.2%,  BEfl:  6.1%,  BEfr:  6.2%, 
BEde:  8.5%).  Migrant  background  is  also  a  key 
determinant  of  performance.  Almost  half  of  all 
foreign-born  students  (45.1%)  underachieve  in 
mathematics,  in  contrast  to  one  in  five  students 
(19.4%)  without 
background, 
representing  a  gap  of  25.7 pps.  While  Belgium 
ranked first in the EU in terms of the proportion of 
top  performers  in  mathematics  in  2012  (BE: 
19.5%), 
it  experienced  a  sharp  decline  over 
10 years  (11.5%  in  2022,  BEfl:  15%,  BEfr:  6.9%, 
BEde:  6.4%).  Increasing  underachievement  and 
declining top performance negatively influence the 
skill set of the future workforce. 

a  migrant 

in 

the  2022  PISA  study, 

Teacher  shortages  are  becoming  acute 
across  the  communities.  Among  the  schools 
the 
participating 
percentage of students in schools whose principal 
reported  that  the  school’s  capacity  to  provide 
instruction  is  hindered  by a  lack  of  teaching  staff 
to  some  extent  or  a  lot  was  80.1%  (vs  33.9%  in 
2012)  –  the  highest  in  the  EU.  Many  teachers 
leave 
the 
the  profession  prematurely,  and 
situation 
rates  of 
is  aggravated  by  high 
absenteeism.  Novice  teachers  face  difficulties  in 
securing  long-term  contracts,  and  schools  often 
struggle to find replacements for absent teachers 

language 

instruction 

during  the  school  year.  Demographic  growth  and 
education  policies  introducing  additional  language 
requirements  (Language  Action  Plan  in  BEfl  and 
earlier  second 
in  BEfr) 
generate  a  higher  need  for  specific  teacher 
profiles. However, the number of new graduates of 
teacher  training  programmes  does  not  match  the 
demand (137).  Immediate  teacher  shortages  are 
addressed  via  replacement  pools  and  platforms. 
The  communities  are  also  developing  long-term 
flexible  and 
solutions,  such  as 
alternative  career  pathways, 
job 
security,  strengthening  the  mentoring  of  novice 
teachers,  and  reforming  initial  teacher  education 
and training to improve retention. 

introducing 

increasing 

Graph A15.1: Top performance rates in 
mathematics by community, PISA 2012, 2018 and 
2022 

Source: OECD (2023). 

While  participation 
in  early  childhood 
education  and  care  is  high,  challenges  of 
equal  access  persist.  Participation 
in  early 
childhood education and care among children aged 
between 3 and the start of compulsory school age 
is  one  of  the  highest  in  the  EU  (97.6%  in  2021), 
similarly for the participation of children under 3 in 
formal  childcare  (52.7%).  However,  Flanders  and 
the  Brussels-Capital  Region  experience  significant 
shortages  of  childcare  places  and  a  lack  of 
qualified staff.  

Pupils’  background  and 
characteristics 
continue  to  influence  school  success.  Pupils 
who  are  older  than  their  peers  due  to  grade 
repetition  or  delayed  entry  into  education  fare 

(135) OECD (2023), PISA 2022 Results (Volume I): The State of 
Learning and Equity in Education, PISA, OECD Publishing, 
Paris. 

(136) The average performance in BEfl declined sharply in all three 
domains, while in BEfr the drop is more moderate in reading 
and in science compared with 2018. BEde declined in 
mathematics and reading and maintained its performance in 
science. 

(137) In BEfr, the number of students entering initial teacher 

education dropped by 10% between 2019-2020 and 2020-
2021, while in BEfl, annual enrolments for primary and early 
childhood education programmes decreased by 31.4% and 
24.2% between 2014-2015 and 2021-2022. 

62 

051015202530BEBeflBefrBedeEU%202220182012 
 
 
   
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

reading (138)  and 

significantly  worse 
in 
in 
mathematics (139) compared with those who are on 
track  with  their  schooling.  The  French  Community 
government has committed to limit the occurrence 
of  repetition  and  delay,  and,  with  support  of  the 
Recovery  and  Resilience  Facility,  it  is  preparing  a 
strategy to combat early school  leaving. However, 
only  60.67%  of  students  in  secondary  education 
were 
in  2020-
2021 (140).  Across  Belgium,  the  percentage  of 
students  who  self-reported  repeating  a  year  at 
least once in primary or secondary  education was 
26.5% in the PISA study, the highest in the EU; the 

‘on  time’  with  their  studies 

(138) Schillings, Patricia; André, Marine and Dupont, Virginie (2023), 
PIRLS 2021: Synthesis note, Fédération Wallonie-Bruxelles 
and Université de Liège. 

(139) OECD (2023), PISA 2022 Results (Volume II): Learning During 

– and From – Disruption, PISA, OECD Publishing, Paris. 

(140) Les chiffres clés dans la Fédération Wallonie-Bruxelles, 

https://statistiques.cfwb.be/. 

63 

proportion among disadvantaged students reached 
46.7% (141). 

Participation  in  tertiary  education  is  among 
the  highest  in  the  EU,  but  qualifications  in 
labour  market 
certain  fields  with  high 
relevance  are  lacking.  The  share  of  young 
people aged between 25 and 34 holding a tertiary 
education  degree  was  50%  in  2023,  well  above 
the EU-level target of 45%. At the same time, the 
share  of  new  students  enrolling 
in  science, 
technology, 
and  mathematics 
programmes was only 20.7% in 2021, one of the 
lowest  in  the  EU  (28.1%).  The  share  of  ICT 
graduates  (2.8%  vs  EU  4.2%)  and  the  share  of 
women  among  total  ICT  entrants  (10.5%  vs  EU 
20%)  is one of the lowest in the EU, despite high 
demand for ICT professionals (see Annex 10). 

engineering 

(141) OECD (2023), PISA 2022 Results (Volume I): The State of 
Learning and Equity in Education, PISA, OECD Publishing, 
Paris. 

96%98.3%201391.8%201398.4%d92.2%97.6%202192.5%2021,dReading< 15%16.1% 18.0%21.3% 22.5%25.3%202226.2%2022Mathematics< 15%19.0% 22.1%19.7%22.9%25.0%202229.5%2022Science< 15%17.7% 16.8%20.0%22.3%22.4%202224.2%2022< 9 %12.0%12.6%8.6%10.5%6.2%9.5%Men14.4%14.5%10.6%12.1%7.9%11.3%Women9.5%10.6%6.5%8.7%4.4%7.7%Cities16.2%b11.2%11.8%9.4%7.2%8.6%Rural areas9.9%b14.0%6.5%11.0%6.1%9.9%5By country of birthNative10.6%11.3%7.2%9.2%5.8%8.2%EU-born17.9%26.2%18.4%22.4%7.0%u21.0%Non EU-born25.6%30.1%18.9%23.0%10.5%21.6%6Socio-economic gap (percentage points)::31.929.539.6202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :44.8% 64.5%45%43.0%34.1%47.4%38.7%50.0%43.1%Men35.9%29.1%40.6%33.3%42.6%37.6%Women50.1%39.2%54.2%44.2%57.3%48.8%Cities44.3%b43.5%51.2%49.0%52.2%53.3%Rural areas42.6%b24.8%46.6%27.7%47.1%31.7%Native45.7%35.4%49.1%39.7%52.3%44.2%EU-born45.4%29.3%52.5%36.7%48.7%40.2%Non EU-born25.2%24.2%34.0%31.0%38.3%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::39.4%201637.4%201634.9%202239.5%202213.0%201322.7%201316.1%23.8%17.2%202124.5%2021201220182023IndicatorTargetBelgiumEU-27BelgiumEU-27BelgiumEU-271Participation in early childhood education (age 3+)2Low-achieving 15-year-olds in:Early leavers from education and training(age 18-24)3Total3By gender4By degree of urbanisationTertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over 
 
 
 
  
 
(77.6%  in  2021)  is  slightly  below  the  EU  average 
and the proportion of out-of-pocket payments for 
healthcare  in  Belgium  (17.9%)  is  higher  than  the 
average level across the EU (14.5%). Based on the 
age  profile  of  the  Belgian  population,  public 
expenditure  on  health  is  projected  to  increase  by 
0.6 percentage points (pps) of GDP by 2070, in line 
with  the  increase  for  the  EU  overall  (see  Graph 
A16.2 and Annex 21). 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
in 
population  health  and  the  health  system 
Belgium. 

Life  expectancy  at  birth  in  Belgium  was 
slightly  higher  than  the  EU  average  both 
before  and  during  the  COVID-19  pandemic 
(see Graph A16.1). There was a significant decline 
in life expectancy in Belgium with the onset of the 
COVID-19  pandemic  in  2020.  Life  expectancy 
rebounded  strongly  in  2021,  almost  to  the  pre-
pandemic level, but it fell slightly, by 0.1 years, in 
2022  despite  a  decline 
in  mortality  from 
to  2021 (142). 
COVID-19 
Belgium  has  fared  comparatively  well  in  avoiding 
deaths from treatable causes (see Table A16.1). In 
2021,  the  leading  causes  of  death  were  cancer 
system 
the 
and 
(‘cardiovascular diseases’), followed by COVID-19. 

in  2022  compared 

circulatory 

diseases 

of 

Graph A16.1: Life expectancy at birth, years 

Baseline scenario 
Source: European Commission / EPC (2024) 

Source: Eurostat 

Health  spending  relative  to  GDP  in  Belgium 
was  in  line  with  the  EU  average  in  2021. 
Spending per capita on inpatient care is above the 
EU average, whereas spending on outpatient care, 
on disease prevention and on pharmaceuticals and 
medical devices is below. In 2021, total healthcare 
spending  was  10.9%  of  GDP.  This  was  slightly 
down from 11.2% in 2020, as the rebound in GDP 
outpaced 
spending. 
Provisional  data  from  the  OECD  suggest  that  in 
2022  total  healthcare  spending  remained  at 
10.9% of GDP. Publicly funded health expenditure 
as a proportion of total health spending in Belgium 

the  growth 

in  health 

(142) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

Spending on prevention in Belgium amounted 
to  3.1%  of  total  healthcare  spending  in 
2021,  compared  to  6.0%  for  the  EU  overall. 
Between  2019  and  2021,  spending  on  prevention 
in  Belgium  almost  doubled,  closely  following  the 
trend  across  the  EU.  The  increase  in  spending  on 
preventive  care  in  2021  in  Belgium  was  mainly 
due  to  an  elevenfold  increase  in  spending  in 
immunisation programmes, and a 67% increase in 
spending 
and 
in 
counselling programmes. 

information, 

education, 

Belgium  faces  challenges  with  shortages  of 
health professionals and disparities in access 
to  health  services.  While  the  proportion  of 
Belgian population that  reported  unmet  needs  for 
medical  care  in  2022  was  below  the  EU  average, 
those  unmet  needs  were  disproportionately 
concentrated  among  individuals  in  the  lowest 
income  quintile.  As  a  result,  Belgium  had  one  of 
the  widest  income-related  gaps  in  unmet  needs 
for medical care among western EU countries. The 
government has taken some measures to alleviate 
financial  barriers  to  healthcare  access  for  the 
most  economically  disadvantaged  sections  of  the 
population. For example, since 2022 patients have 
been able to pay only the ‘out-of-pocket payment’ 
rather  than  paying  for  the  entire  cost  of  the 
service  and  then  having  to  seek  retrospective 
reimbursement.  There  are  shortages  of  health 

64 

81,681,782,180,881,981,880,981,081,380,480,180,6201720182019202020212022BelgiumEU6,66,20,60,602468EUBelgium% of GDP20242070increase 
 
   
 
   
 
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

professionals, which undermine the accessibility of 
healthcare  services.  For  example,  a 
lack  of 
adequate  resources  is  leading  to  long  waiting 
times for mental health services, which is reported 
as  the  most  frequent  barrier  in  this  regard (143). 
Stressful  working  conditions  and  limited  career 
prospects are among the main factors that reduce 
the  attractiveness  of  health  professions  and 
contribute  to  shortages.  The  number  of  practising 
doctors  (3.2)  per  1 000  populations  in  Belgium  in 
2021  was  below  the  EU  average  (4.1).  This,  and 
the  high  proportion  of  active  doctors  aged  55  or 
above (42.6%), raise concerns about the long-term 
accessibility of health services.  

increase  the  supply  of  doctors,  the 
To 
number  of  students  admitted  to  medical 
schools  has  been  increased  in  recent  years. 
The number of nurses has also increased over the 
past years and reached 11.1 per 1 000 population 
in 2021, well above the EU average (7.9 in 2021). 
Despite  this,  there  are  shortages  of  nurses,  with 
the deficit estimated at over 20 000 (144). In 2022, 
more  than  80%  of  hospitals  reported  having  to 
close  beds  due  to  staff  shortages,  including  of 
nurses.  The  government  has  taken  measures  to 
the  nursing 
increase 
profession  and  improve  the  working  conditions  of 
nurses,  to  boost  the  number  of  practising  nurses 
over time. Since 2020, public investment has been 
directed towards increasing nurses’ pay (especially 

the  attractiveness  of 

(143) https://europa.eu/eurobarometer/surveys/detail/3032 

(144) OECD/European Observatory on Health Systems and Policies 
(2023), Belgium: Country Health Profile 2023, State of 
Health in the EU, OECD Publishing, Paris/European 
Observatory on Health Systems and Policies, Brussels. 

in  hospitals)  and 
recruiting  additional  staff. 
Salaries for new entrants to the healthcare sector 
have  been  increased  and  the  salary  grid  system 
for  nurses  has  been  revised  to  ensure  that  pay 
reflects  actual  responsibilities  rather  than  solely 
qualifications. 

for 

In  its  recovery  and  resilience  plan,  Belgium 
plans  to  invest  EUR 93.6  million  (1.77%  of 
the  plan’s  total  value)  in  healthcare.  The 
investments  are  in  digital  health  services  and 
cancer 
health  data,  nuclear  medicine 
treatment,  and  health  research  and  innovation. 
More  specifically, investment  in digital  health  and 
health data is targeted at developing standardised 
care  sets  for  patient  data  collection  and  storage, 
extending  the  e-prescription  system,  creating  an 
for  medicine 
integrated 
system 
teleconsultations, 
consumption,  operationalising 
and  providing  digital  tools  for  integrated  care 
teams  among  other  things.  Belgium  has  adopted 
legislation to set up a Health Data Authority, in line 
with  the  European  Commission’s  proposal  for  a 
European  Health  Data  Space.  Complementary 
investments are planned under the cohesion policy 
funds  for  2021-2027.  Belgium  plans  to  invest 
around  EUR 31 million  from  the  European  Social 
Fund  Plus  towards  improving  the  accessibility, 
quality and resilience of the health system (145). 

tracking 

(145) The EU cohesion policy data reflect the status as of 13 May 

2024. 

65 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)69,965,262,761,6NA93.3 (2021)Cancer mortality per 100 000 population231,0229,3223,2220,1NA235.4 (2021)Current expenditure on health, % GDP 10,910,811,210,9NA10.9 (2021)Public share of health expenditure, % of current health expenditure76,675,377,977,6NA81.1 (2021)Spending on prevention, % of current health expenditure 1,51,62,13,1NA6.0 (2021)Available hospital beds per 100 000 population562557553549547525 (2021)Doctors per 1 000 population3,13,23,23,2NA4.1 (2021)*Nurses per 1 000 population11.1**11.1**11.1**11.1**NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***22,321,416,717,420,419.4 (2022) 
 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  Belgium.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion  in  the  Belgian  regions  and  assesses 
investment  and  subnational  reform 
emerging 
social 
to  boost  economic  growth, 
needs 
development and competitiveness in the country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

Regional  and  intra-regional  disparities  in 
terms  of  economic  and  social  development 
remain high. In 2022, the GDP per capita of the 
Brussels-Capital  Region  was  196%  of  the  EU 
average  (100%)  while  several  other  provinces, 
such  as  Hainaut  (74%)  Luxembourg  (72%),  Liège 
(85%),  Namur  (79%)  and  Limburg  (97%)  lag 
behind. 
(142%)  and 
Brabant-Wallon  (152%)  continued  their  strong 
economic performance.  

In  contrast,  Antwerpen 

Graph A17.1: GDP per capita (2011) and annual 
GDP per capita growth (2013-2022) 

Source: DG REGIO calculations based on JRC (ARDECO) and 
Eurostat data 

Belgium  continues  to  show  major  disparities 
in terms of GDP growth per capita within the 
country.  Average  annual  real  GDP  growth  per 
capita  in  Belgium  was  1  %  between  2013  and 
2022,  standing  below  the  EU  average  (1.44%).  In 
the Flemish provinces, real GDP growth per capita 
varied between 0.98% and 1.69%. Four provinces 
in  Wallonia  (Hainaut,  Liège,  Luxembourg,  Namur) 
recorded  slower  per  capita  growth  of  between 
0.39%  and  0.64%.  In  contrast,  Brabant-Wallon  is 
the  fastest  growing  province  in  Belgium,  with 
average GDP per capita growth of 2.85%, standing 
well  above  the  EU  average.  The  Brussels-Capital 
Region recorded negative GDP per capita growth (-
0.15%),  partly  due  to  the  rising  population. 
Brussels  and  its  commuting  zone,  Liège  and 

66 

Luxembourg  are  in  a  development  trap,  as  these 
long  period 
experienced  a 
regions  have 
(>16 years)  of  below-average  growth  in  GDP, 
productivity and employment. 

Belgium’s  overall  productivity  growth  has 
recovered but remains below the EU average. 
Belgium’s  labour  productivity  in  2022  increased 
by 4%, reaching 130% of the EU average, with the 
highest  labour  productivity  values  observed  in 
Brussels-Capital,  Brabant-Wallon  and  Vlaams-
Brabant. 

Labour  market  performance 
is  generally 
better  in  Flanders.  High  discrepancies  between 
both  employment  and  unemployment  rates  of 
high, medium and low-skilled workers remain. The 
Belgian  unemployment  rate  was  5.5%  in  2023. 
Unemployment  in  the  Flemish provinces  (3.3%)  is 
systematically  lower  whereas  in  the  Walloon 
provinces it is higher (8.2%). Unemployment in the 
Brussels-Capital Region is the highest, at 10.3% of 
the  active  population.  There  is  scope  to  further 
supporting  voluntary 
labour  mobility  across 
sectors  and  regions  to  alleviate  labour  shortages. 
A study, requested by the Government of Flanders, 
has  outlined  the  opportunities  and  barriers  for 
interregional  mobility  based  on  specific  zones  in 
Wallonia and Flanders. 

The  level  of educational  attainment is  lower 
in  the  Walloon  provinces  (in  the  Hainaut  in 
particular)  and  the  Brussels-Capital  Region. 
In  the  Walloon  provinces,  the  proportion  of  the 
population with a high level  of education is lower 
and life expectancy is also lower than the Belgian 
average.  In  the  Brussels-Capital  Region,  a  higher 
proportion  of  the  population  (38.8%)  is  either  at-
risk-of-poverty  or  severely  materially  and  socially 
deprived.  These  figures  are  lower  in  Wallonia 
(25.8%) and much lower in Flanders (11.2 %). 

While  the  regional  competitiveness  index 
(RCI) in all Belgian provinces is above the EU 
average,  the  environment  for  firms  and 
residents  is  less  attractive  in  some  Walloon 
provinces.  The  challenge  of  skills  mismatches 
and  skills  shortages  prevails  in  certain  sectors. 
Belgian enterprises are expected to face a growing 
number  of  hard-to-fill  vacancies  due  to  adverse 
demographic  trends  and  the  industrial  and  green 
transition.  In  2022,  Belgian  companies  had  205 
000 job vacancies, corresponding to a job vacancy 
rate  of  4.8%.  The  regional  breakdown  of  the 

-0,500,511,522,533,56080100120140160180200220240Annual GDP per head growth 2013/22GDP (pps) per head in 2011 (EU=100)Capital regionOther NUTS2 regionsLinear (National average)Linear (EU27_2020) 
 
     
 
 
Table A17.1:Selected indicators at regional level in Belgium 

Source: Eurostat, EDGAR database 

vacancies is 67% in Flanders, 20% in Wallonia and 
13% in Brussels.  

Graph A17.2: Employment and unemployment rates 
by region and by education level, 2022 

in 

regions 

the  EU-27  with 

Brabant  excel  in  knowledge-intensive  and  high-
tech  sectors  and  boast  high  employment  rates  in 
these  sectors.  Brabant-Wallon  ranks  top  of  all 
NUTS2 
leading 
knowledge-intensive  and  high-tech  sectors.  The 
number of patent applications is high, particularly 
in  biotechnology  and  ICT:  Brabant-Wallon  (85 
biotechnology  patent  applications  per  million 
inhabitants)  and  Vlaams-Brabant  (122  ICT  patent 
applications per million inhabitants) are among the 
top  regions  in  the  EU.  However,  the  provinces  of 
Limburg,  West-Vlaanderen,  Hainaut,  Luxembourg 
and  Namur  invest  less  than  2%  of  their  GDP  in 
R&D. 

Note: Bubble size corresponds to the size of the working age 
population with a given level of educational attainment 
relative to the total working age population in the region. 
Source: European Commission 

While  Belgium outperformed the  EU  average 
for  innovation,  regional  disparities  remain. 
Belgium invested 3.42% of its GDP in R&D in 2021 
(1.1%  more  than  the  EU  average)  and  some 
provinces,  such  as  Brabant-Wallon  and  Vlaams-

The performance of rail passenger transport 
(share of population in a 120-km radius that 
can be reached within 1h30) is below the EU 
average  (15.7%)  in  most  provinces  and  the 
infrastructure  for  clean  mobility  (electric 
charging  points)  differs  across  provinces. 
Particularly in Limburg (3.8%) and the province of 
Luxembourg 
(4.1%),  the  performance  of  rail 
passenger  transport  is  rather  low.  Moreover,  the 
average  of  82.5  charging  points  for  electric 
vehicles  per  million  inhabitants  is  well  below  the 
EU average of 120. Wallonia performs poorly with 
only  48  charging  points  per  million  inhabitants. 

67 

BXL -LowBXL -MediumBXL -HighFL -LowFL -MediumFL -HighWAL -LowWAL -MediumWAL -High0510152025303530507090Unemployment rate (%)Employment rate (%)BXL: BrusselsFL: FlandersWAL: WalloniaRegionGDP per head(PPS)Productivity (GVA (PPS) per person employed)GDP per head growthUnemployment rateEmployment in knowledge-intensive servicesEmployment in high-technology sectorsRegional competitiveness index (RCI)EU-27 = 100,2022EU-27 = 100, 2022Average % change on the preceding year, 2013-2022% of active population, 2023% of total employment, 2022% of total employment, 2022EU-27 = 100, 2022European Union1001001.446.140.84.9100.0Belgique/België1201301.015.550.35.8125.7Région de Bruxelles-Capitale/Brussels Hoofdstedelijk Gewest196.0157.7-0.1510.647.86.9136.3Vlaams Gewest124.0131.71.33.349.05.4131.1Région wallonne87.0112.31.08.254.06.1112.4Prov. Antwerpen142.0144.61.33.648.55.8133.9Prov. Limburg (BE)97.0109.91.03.246.84.4125.8Prov. Oost-Vlaanderen112.0123.31.32.951.15.7134.6Prov. Vlaams-Brabant136.0151.31.74.256.17.9136.3Prov. West-Vlaanderen116.0118.11.12.842.02.9121.2Prov. Brabant Wallon152.0168.72.95.761.511.1136.3Prov. Hainaut74.0102.00.69.350.85.1107.6Prov. Liège85.0108.10.69.153.45.3111.7Prov. Luxembourg (BE)72.097.40.46.552.44.5104.9Prov. Namur79.0102.30.66.657.07.0111.4 
   
 
  
 
the 

ratio 

Also  cycling  infrastructure  is  less  developed  in 
cycling 
Wallonia: 
infrastructure  to  main  roads  is  the  highest  in  the 
province of Antwerpen (93.8) and the lowest in the 
province of Luxembourg (7.3). The Brussels-Capital 
Region scores average with a ratio of 40.3. 

separate 

of 

All  Belgian  provinces  have  reduced  the 
emissions  of  greenhouse  gas  between  1990 
and  2022  but  climate  transition  affects 
Belgian  provinces  differently. 
In  Hainaut, 
emissions per capita remain high, five times higher 
than in the Brussels-Capital Region, due to its high 
industrial emission intensity.  

Investment and subnational needs ahead 

investment  strategy  agreed 

The 
in  the 
cohesion policy programmes adopted in 2022 
and  2023  remains  valid  for  the  current 
economic  and  social  situation.  Nevertheless, 
Belgium  is  invited  to  reflect  on  the  following 
issues. 

A 

to 

actions 

between 

supporting 

labour  mobility 

a 
Effective 
comprehensive  regional  skills  strategy  and 
voluntary 
reduce 
disparities  in  the  labour  market  remains 
necessary. 
skill 
relationship 
mismatches  and  unemployment  levels  across  the 
EU  has  been  proven.  Evidence  show  that  skill 
mismatches  may  lead  to  lower  innovation  and 
competitiveness.  Several  occupations  have  been 
identified  as  mismatch  priority  occupations  for 
Belgium, they are either in shortage or surplus. An 
assessment  of  skills mismatch  trends  is  essential 
especially  in  the  light  of  the  industrial  and  green 
transition.  

Innovation,  R&D  and  the  green  transition 
merit  specific  attention.  Alleviating 
the 
differences  in  terms  of  innovation,  notably  R&D 
intensity, that persist between provinces could help 
address  the  difference  in  competitiveness  across 
provinces. Continuing investments in the uptake of 
renewables  energies  and  smart  energy  systems, 
energy  efficiency  in  all  sectors  as  well  as  in 
climate  change  adaptation,  net-zero  technologies 
and  sustainable  mobility  would  help  regions  to 
green  their  economy.  Belgium  could  also  benefit 
the  Strategic 
from 
Technologies  for  Europe  Platform  (STEP)  to  boost 
investments  in  critical  technologies  to  support 
industry transformation. 

opportunities 

the 

of 

68 

 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

solvency 

losses  are  partly  due 

The financial sector appears relatively sound 
and  quite  profitable.  Bank 
is 
satisfactory,  with  a  relatively  stable  average 
capital-adequacy  ratio  of  19.8%  in  Q3-2023  (vs 
19.6%  in  the  EU).  Credit  quality  is  strong,  even 
though  the  non-performing-loan  ratio  slightly 
increased  from  a  record  low  of  1.4%  in  Q2-2022 
to  1.5%  in  Q3-2023  (vs  1.8%  in  Q3-2023  in  the 
EU).  Low  credit 
to 
government  measures  and, 
for  households, 
automatic wage indexation, against a backdrop of 
strong labour market performance. However, some 
credit losses could materialise in the future in the 
current context of higher interest rates. With return 
on equity of 11.9% in the first 9 months of 2023, 
Belgian  banks  are  profitable,  and  perform  better, 
on average, than their EU peers (which had return 
on  equity  of  9.9%  in  the  same  period),  thanks  to 
an  increase  in  interest  income  and  continuously 
low  credit-loss  provisions.  Funding  from  the  ECB 
dropped  from  a  peak  of  8.8%  in  April  2021  to 
0.8% in December 2023, a trend which is common 
to  many  euro  area  Member  States.  Funding  from 
depositors  remains  comfortable,  with  a  loan-to-
deposit  ratio  of  85.4%  in  September  2023  (vs 
93.3% in the EU). 

Belgium’s financial system has withstood the 
rise  in  risk-free  interest  rates  and  the 
turmoil  in  financial  markets  of  March  2023, 
but  continues  to  face  significant  challenges. 
Sound  management  of 
interest-rate  risk  has 
allowed Belgian banks to benefit from the general 
rise in interest rates after a long period of low – or 
even  negative  –  interest  rates.  The  earlier  period 
of low rates was indeed a major challenge for the 
profitability of traditional banking and life insurers 
offering  contracts  with  a  guaranteed  return. 
However,  banks’  interest  income  and  general 
performance  in  the  future  will  depend  on  several 
factors.  More  volatile  depositor  behaviour  or  a 
further  increase  in  political  pressure  on  banks  to 
raise  interest  rates  on  deposits  could  have  a 
significant  impact  on  banks’  funding  costs  and 
profitability. Likewise, sudden exogeneous events – 
like the failure of Credit Suisse – can quickly drive 
up  the  cost  of  market  funding  as  these  events 
prompt investors to demand a higher risk premium 
on  top  of  the  risk-free  interest  rate.  In  addition, 
maintaining the current strong financial position of 
Belgian  financial  institutions  will  also  require 
banks  to  continue  to  deal  in  an  appropriate  way 
with  the  structural  challenges  and  opportunities 

stemming  from  digitalisation  and  the  drive  for 
cost  effectiveness.  These  challenges  could  put 
renewed pressure on the profitability and business 
models  of  Belgian  banks  in  the  future.  Finally,  it 
remains  a  weakness  that  contributions  to  the 
Belgian  Deposit  Guarantee  Scheme  are  not 
invested  in  a  segregated  and  diversified  portfolio 
of low-risk assets. 

Credit  growth  has  slowed  down  due  to  less 
attractive  lending  conditions,  but  remains 
stronger  than  in  the  rest  of  the  euro  area. 
Due  to  the  rise  in  interest  rates,  year-on-year 
credit  growth  in  Belgium  has  significantly  slowed 
down  since  September  2022  to  reach  3.9%  in 
December  2023  (vs  0.4%  in  the  euro  area)  for 
lending to non-financial corporations and 2.4% (vs 
0.3%  in  the euro  area)  for  lending to  households. 
Interest  rates  on  new  loans  to  households  and 
SMEs have soared by about 3.5 percentage points 
to levels unseen since the global financial crisis. In 
October  2023,  interest  rates  on  new  loans  to 
Belgian  households  for  house  purchases  at 
floating  rates  reached  5.4%  (vs  4.8%  in  the  euro 
area),  while  interest  rates  on  new  loans  to  SMEs 
reached  5.5%,  in  line  with  the  5.6%  observed  on 
average in the euro area. 

The  vulnerabilities  of  the  residential  real-
estate market have somewhat decreased. The 
risks  in  the  residential  real-estate  market  remain 
significant  but  have  somewhat  abated  since 
interest  rates  have  begun  to  rise.  Housing  loans 
represent a substantial share of total bank assets 
and have continued growing. They are secured by 
relatively low capital buffers due to relatively low 
microprudential  risk  weights  applied  by  banks 
applying  the  internal  ratings-based  approach  to 
these 
have 
significantly  fallen  in  real  terms  since  Q2-2022, 
which  reduces  the  risk  of  further  significant 
corrections  in  the  future.  Household  indebtedness 
remains high, but the credit quality of the portfolio 
of  mortgages  held  by  banks  has  significantly 
improved  thanks  to  borrower-based  measures  in 
In  view  of  the 
force  since  January  2020. 
decreasing  but  persisting  risks,  the  National  Bank 
of  Belgium  has  decided  to  reduce  its  sectoral 
Systemic  Risk  Buffer  from  9%  to  6%  and  to 

exposures (146).  House 

prices 

(146) Notification by the National Bank of Belgium on Systemic 

Risk Buffer (SyRB), 11/01/2022, ESRB notification. 

69 

 
 
 
 
 
Table A18.1:Financial soundness indicators 

(1) Last data: Q3-2023. 
(2) Data are annualised. 
(3) Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

increase  the  countercyclical  capital  buffer  in  two 
stages  from  0%  to  1%  as  of  1 October 2024. 
While  smaller  in  magnitude,  banks’  commercial 
real-estate exposures are also significant. They are 
especially  sizeable  for 
they 
represent  nearly  10%  of  their  total  assets.  The 
commercial  property  market  continues  to  be 
characterised  by  strong  polarisation  between 
prime  and  non-prime  segments.  Against  a 
backdrop  of  weak  economic  growth,  these  non-
prime exposures could lead to an increase in credit 
losses in the future. 

insurers,  where 

Belgium’s tax  system is  not  neutral  towards 
investment  choices.  Some  features  of  the  tax 
system  distort  investment  choices  and  lead  to 
in  certain  assets.  Favourable 
overinvestment 
taxation of immovable property is a case in point, 
since:  (i)  the  ‘notional’  cadastral  value  applied 
often  underestimates  the  actual  rental  income 
that such a property could achieve; and (ii) interest 
on 
loans  for  secondary  residences  are  tax 
deductible.  In  Wallonia,  homeowners  continue  to 
benefit  from  favourable  tax  treatment  for  their 
mortgage payments (‘chèque habitat’). In the area 
of  pensions,  some  tax  incentives  favour  specific 
schemes,  creating  obstacles 
the  better 
allocation of capital. The tax on securities accounts 
introduces a bias against investment in securities. 
It is worth noting that one of the rare features that 
aimed at making the tax system more neutral was 
abrogated  in  December  2022.  Up  until  that  date, 
Belgium was one of the few Member States (along 
with  Cyprus,  Malta,  Italy,  Poland,  and  Portugal) 
with  a  notional  interest-deduction  scheme  aimed 
at  reducing  the  debt-equity  bias,  although  the 

to 

magnitude of the notional interest rate was so low 
that the scheme was largely ineffective. Further to 
a  decision  from  December  2022,  this  interest-
deduction  scheme  will  now  disappear  entirely  as 
of 2024. 

though 

the  absolute  amounts 

Sustainable  finance  is  beginning  to  grow. 
Even 
remain 
modest, EUR 4.5 billion in public green bonds were 
issued in 2022 after 3 years without any issuance. 
The issuance of private green bonds, however, has 
shrunk,  almost  halving  from  EUR 3.0 billion  in 
2021  to  EUR 1.7 billion  in  2022.  During  the  first 
quarter  of  2023,  environmental,  social  and 
governance  (ESG)  funds  benefited  from  positive 
net inflows amounting to EUR 4 billion, while non-
ESG  funds  witnessed  net  outflows  amounting  to 
EUR 1.4 billion, which seems to indicate increasing 
investor interest and participation in ESG funds. 

The insurance sector currently appears sound 
as  a  whole,  but  vulnerabilities  exist.  After  an 
increase from 207% in Q4-2021 to 227% in Q2-
2022, insurers’ solvency ratio fell back to 211% in 
Q2-2023.  This  ratio  remains  more  than  twice  the 
regulatory requirement, but below the EEA average 
(261%). In 2022, Belgian insurers performed well, 
with net profit of EUR 3.7 billion, corresponding to 
a return on equity of 16%. Insurers (and especially 
life insurers)  have benefited  from the rise in risk-
free  rates  which  drove  down  the  value  of  their 
liabilities. However,  they  have  suffered (especially 
non-life  insurers)  from  the  rise  in  inflation.  Like 
elsewhere,  unexpectedly  high  inflation  in  Belgium 
may  reduce  profitability  for  the  non-life  business 
long-tail 
insurers,  especially 
of  Belgian 

for 

70 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)229.2217.8215.1241.8228.6230.3223.6257.0184.6Share (total assets) of the five largest banks (%)68.873.474.075.375.771.5--69.6Share (total assets) of domestic credit institutions (%)150.950.349.650.652.252.952.3-62.9NFC credit growth (year-on-year % change)6.49.57.52.02.86.63.9-2.4HH credit growth (year-on-year % change)5.25.77.04.76.66.32.4-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)2.72.32.12.11.61.51.51.81.8- capital adequacy ratio (%)19.018.818.720.320.420.119.819.620.1- return on equity (%)28.88.28.65.99.99.911.99.913.2Cost-to-income ratio (%)158.261.259.556.756.356.454.752.844.9Loan-to-deposit ratio (%)190.293.293.479.079.383.585.493.380.2Central bank liquidity as % of liabilities2.92.72.28.48.64.50.8-0.7Private sector debt (% of GDP)185.5180.3178.5182.8172.4161.4-133.0118.4Long-term interest rate spread versus Bund (basis points)40.539.844.636.235.959.165.5107.7104.2Market funding ratio (%)65.063.762.662.361.058.9-50.839.8Green bonds outstanding to all bonds (%)3---1.52.12.93.34.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
  
 
business.  The  fact  that  wages  are  automatically 
indexed in Belgium is an aggravating factor, since 
it  leads  to  a  rapid  increase  in  the  cost  of  claims. 
Insurers have put measures in place to absorb this 
kind of shock as much as possible, such as: (i) the 
(to  compensate  for 
indexation  of  premiums 
inflation  in  claims);  (ii)  targeted  inflation  hedges 
inflation-linked  bonds  and/or 
(investment 
in 
inflation  derivatives);  and/or 
reinsurance 
(iii) 
treaties to cede the inflation risk to third parties. 

71 

 
ANNEX 19: TAXATION 

This  Annex  provides  an 
indicator-based 
overview  of  Belgium’s  tax  system.  It  includes 
information on the tax structure (the types of tax 
that  Belgium  derives  most  of  its  revenue  from), 
the  tax  burden  on  workers,  and  the  progressivity 
and redistributive effects of the tax system. It also 
provides 
tax  collection  and 
compliance. 

information  on 

The overall tax burden in Belgium is high and 
the  tax  structure  relies  to  a large  extent on 
labour  taxes.  Belgium’s  tax  revenue  as  a 
percentage of GDP was above the EU aggregate in 
2022  (see  Table  A.19.1).  Revenue  from  labour 
taxes  is  high  in  Belgium  when  expressed  as  a 
percentage  of  GDP.  This  risks  running  counter  to 
the  objective  of  increasing  employment.  On  the 
other  hand,  revenues  from  consumption  taxes, 
recurrent 
and 
environmental  taxes,  which  are  among  the  taxes 
least  detrimental  to  growth,  were  close  to  the  EU 
aggregate  (expressed  as  a  percentage  of  GDP). 
This  suggests  that  there  is  scope  to  shift  the  tax 
burden  away  from  labour  to  other  tax  bases 
because there may be limited scope to reduce tax 
revenue  in  the  short  run  given  the  high  public 
deficit and large public debt-to-GDP ratio. 

immovable 

property 

taxes 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

The second earner tax wedge assumes a first earner at 100% 
of the average wage and no children. For the methodology of 
the tax wedge for second earners, see OECD, 2016, Taxing 
Wages 2014-2015. 
Source: European Commission 

labour 

tax  burden 

Belgium’s 
is  more 
progressive than the EU average, but the tax 
brackets  are  narrow.  Graph  A19.1  shows  that, 
as  a  result  of  previous  reforms,  the  labour  tax 
wedge  for  Belgium  in  2023  was  close  to  the  EU 
average  for  single  people  earning  50%  of  the 
average  wage  but  much  higher  than  the  EU 

lower-middle  wage  earners, 

average  at  higher  levels  of  income.  For  a  single 
worker earning the average wage, the tax wedge is 
the  highest  in  the  EU.  The  personal  income  tax 
system  offers  several  tax  brackets,  but  these  are 
rather  narrow.  Even  average  income  earners  are 
therefore  subject  to  the  highest  income  tax  rates 
(45% and 50%). There are high marginal tax rates 
for 
to 
significant low-wage traps. Moreover, the high tax 
wedge  for  second  earners  and  specific  tax 
features like the ‘marital quotient’ may discourage 
second  earners  from  working  (147).  In  2022,  the 
tax-and benefit system performed better than the 
EU  average  in  reducing  income  inequality,  as 
measured by the Gini coefficient (Table A19.1). In 
Belgium,  taxes  and  benefits  reduced  the  Gini 
coefficient by 12.6 pps, while the reduction was on 
average 7.9 pps in the EU in 2022. 

leading 

Graph A19.2: Fossil fuel subsidies due to excise 
duty exemptions and reduced rates, 2021, 
millions of EUR 

Source: FPS, 2024 Inventory of federal fossil fuel subsidies 

Excise  duties  on  energy  products  used  for 
heating are still low for fossil fuels. The level 
of  excise  duties  on  gas  and  electricity  was  linked 
to  market  price  levels  (the  ‘cliquet  system’),  but 
excise  duties  on  heating  oil  were  kept  at  the  EU 
minimum level. Excise duties on transport fuel are 
rather  high  for  diesel  and  are  average  for  petrol, 
but  professional  transporters  and  agriculture 
benefit  from  a  reduced  excise  rate  on  diesel  (see 
Graph  A19.2).  Transport  taxes  and  pollution  taxes 
seem  to  be  underused,  contributing  to  increasing 
traffic  congestion  and  pollution  issues.  There 

(147) The ‘marital quotient’ allows the allocation of part of the 

taxable income of the spouse with the highest income to the 
other spouse, where it will benefit from the tax-free 
allowance and be taxed at a lower marginal rate. 

72 

33.946.152.758.956.72025303540455055606550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - BESingle earner - EU averageSecond earner -  BESecond earner -  EU average05001.0001.5002.0002.500Gasoil - heatingNatural gas -reduced rateDiesel -professionaltransportGasoil - industrialand commercialuseLPG - combustion 
 
     
  
 
 
remains scope to consistently apply environmental 
taxes throughout Belgium. 

Property  transfer  taxes  are  high,  while 
recurrent  taxes  on 
immovable  property 
immovable 
remain  underused.  Taxation  of 
property  is  characterised  by  high  transaction  tax 
rates in Brussels and Wallonia, which may hamper 
the  functioning  of  the  real  estate  market  and 
restrict 
labour  mobility.  Moreover,  a  system 
strongly  reliant  on  transaction  taxes  as  the  main 
source  of  property  taxation  generates  a  more 
volatile  revenue  stream  than  a  property  tax 
system  where 
taxes  are 
combined with higher recurrent property taxes. 

transaction 

lower 

No major tax reform could be agreed upon, In 
July  2023,  the  Belgian  prime  minister  announced 
that negotiations on the first stage of a broad tax 
reform,  proposed  by  the  minister  of  finance,  had 
failed  as  no  political  consensus  could  be  reached. 
However, some smaller tax measures were agreed 
in  December  2023  as  part  of  the  budget 
agreement.  This 
for  example,  an 
includes, 
extension  of  the  scope  of  the  sectors  and 
limitation  in  the  tax  exemption  for  the  flexi-
scheme. Furthermore, it includes an increase in the 
fiscal  work  bonus.  Finally,  shortcomings  were 
addressed  in  the  so-called  ‘Cayman  tax’,  which 
aims  to  prevent  Belgian  tax  residents  from 
avoiding  taxation  by  holding  assets  through 
foreign low-taxed legal entities and trusts. 

Table A19.1:Taxation indicators 

The  complexity  of  the  tax  system  weighs  on 
the  business  environment  and  hinders  the 
efficiency of tax collection. To offset the heavy 
tax  burden  on  labour,  wage  subsidies  and  other 
tax  expenditures  have  been  widely  used.  Special 
schemes  (e.g.,  the  company  car  scheme  and  the 
withholding tax exemption for overtime, R&D work 
and  night/shift  work)  have  been  introduced  to 
compensate  for  the  high  tax  burden  on  labour. 
These  schemes  are  costly  and  risk  leading  to 
inefficiencies, but their use has been increasing. In 
addition, 
tax 
administration. Despite the efforts to increase the 
digitalisation  of  the  tax  administration,  the  on-
time filing rates for personal and corporate income 
taxes  in  2021  remained  comparatively  low  at 
87.6% and 82.5% respectively. 

remain  as 

concerns 

regards 

Revenues from consumption taxes decreased 
further due to more extensive use of reduced 
VAT  rates.  The  estimated  VAT  gap   (the  gap 
between  revenues  actually  collected  and  the 
theoretical  tax  liability)  shrank  to  6.9%  in  2021, 
but  increased  to  stabilise  at  11.6%  in  2022.  The 
VAT  rate  gap  increased  following  the  introduction 
of  a  reduced  VAT  rate  for  electricity  and  gas  in 
2022.  The  policy  gap  decreased  slightly  from 
53.4% in 2020 to 53.0% in 2021. 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage: 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

73 

BE2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)43.643.443.243.337.940.040.440.2Labour taxes (as % of GDP)23.722.921.722.320.021.320.720.3Consumption taxes (as % of GDP)10.910.410.710.310.810.711.211.0Capital taxes (as % of GDP)8.89.910.510.67.18.08.68.9Of which, on income of corporations (as % of GDP)2.53.33.84.02.42.53.03.4Total property taxes (as % of GDP)3.13.53.63.41.92.32.22.1Recurrent taxes on immovable property (as % of GDP)1.31.31.21.21.11.21.11.0Environmental taxes as % of GDP2.42.52.52.22.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)41.832.833.433.933.933.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)55.952.252.453.052.741.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)23.323.423.419.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)11.012.413.512.68.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)16.615.540.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)11.713.66.911.69.75.4BelgiumEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
  
 
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1:Key economic and financial indicators 

(1) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

74 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)3.00.70.76.93.01.41.31.4Potential growth (y-o-y).1.41.41.61.81.91.61.5Private consumption (y-o-y)1.61.50.16.33.21.41.71.5Public consumption (y-o-y)1.41.30.85.24.51.60.81.1Gross fixed capital formation (y-o-y)6.00.22.54.9-0.23.61.51.5Exports of goods and services (y-o-y)5.70.82.513.94.9-3.3-0.73.0Imports of goods and services (y-o-y) 5.91.32.613.04.9-2.6-0.53.0Contribution to GDP growth:Domestic demand (y-o-y)2.41.10.85.62.62.01.41.4Inventories (y-o-y)0.50.00.00.50.30.00.00.0Net exports (y-o-y)0.2-0.3-0.10.90.1-0.6-0.20.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.60.50.71.01.00.70.6Capital accumulation (y-o-y).0.50.60.60.60.60.60.6Total factor productivity (y-o-y).0.40.30.30.30.30.30.3Output gap1.2-0.4-0.6-0.70.50.0-0.4-0.5Unemployment rate8.37.77.16.35.65.55.65.4GDP deflator (y-o-y)2.01.61.63.25.94.12.52.1Harmonised index of consumer prices (HICP, y-o-y)2.12.51.33.210.32.34.02.3HICP excluding energy and unprocessed food (y-o-y)1.61.91.61.44.97.43.32.1Nominal compensation per employee (y-o-y)2.72.50.84.47.37.73.52.6Labour productivity (real, hours worked, y-o-y)1.80.01.0-0.9-1.30.40.60.5Unit labour costs (ULC, whole economy, y-o-y)0.92.61.2-0.56.37.12.61.8Real unit labour costs (y-o-y)-1.10.9-0.4-3.60.42.90.1-0.3Real effective exchange rate (ULC, y-o-y)-0.20.4-0.4-0.72.60.3-1.9-0.5Real effective exchange rate (HICP, y-o-y)0.60.10.50.70.6-2.0..Net savings rate of households (net saving as percentage of net disposable income)10.79.96.710.55.8...Private credit flow, consolidated (% of GDP)9.311.34.86.15.82.2..Private sector debt, consolidated (% of GDP)125.2174.9179.3172.3161.4156.5..of which household debt, consolidated (% of GDP)44.153.059.762.159.958.1..of which non-financial corporate debt, consolidated (% of GDP)81.1121.9119.6110.2101.498.4..Gross non-performing debt (% of total debt instruments and total loans and advances) (1)2.64.22.41.41.3...Corporations, net lending (+) or net borrowing (-) (% of GDP)1.31.51.72.51.21.41.21.7Corporations, gross operating surplus (% of GDP)24.223.625.527.927.926.326.126.2Households, net lending (+) or net borrowing (-) (% of GDP)3.63.81.94.31.53.23.02.7Deflated house price index (y-o-y)7.00.61.34.1-3.9-2.8..Residential investment (% of GDP)5.96.15.96.26.05.8..Current account balance (% of GDP), balance of payments2.30.10.61.3-1.0-1.0-0.4-0.5Trade balance (% of GDP), balance of payments2.5-0.20.91.8-1.6-1.6..Terms of trade of goods and services (y-o-y)-0.5-0.60.3-1.3-3.71.30.20.1Capital account balance (% of GDP)-0.20.00.00.20.20.3..Net international investment position (% of GDP)35.649.946.267.757.765.2..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2).58.443.936.028.731.4..IIP liabilities excluding non-defaultable instruments (% of GDP) (2).241.1196.9200.6183.2188.9..Export performance vs. advanced countries (% change over 5 years)..-3.78.11.4-2.8..Export market share, goods and services (y-o-y)-2.5-3.30.32.0-5.3-4.3-4.1-0.6Net FDI flows (% of GDP)-2.0-3.01.54.32.3-1.5..General government balance (% of GDP)-0.7-3.9-2.9-5.4-3.6-4.4-4.4-4.7Structural budget balance (% of GDP)..-2.8-4.8-3.9-4.2-4.0-4.3General government gross debt (% of GDP)92.8100.4104.1107.9104.3105.2105.0106.6forecast 
 
 
 
  
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks for Belgium over the short, medium and 
long  term. 
It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

1  –  Short-term  risks  to  fiscal  sustainability 
low.  The  Commission’s  early-detection 
are 
indicator  (S0)  does  not  point  to  any  major  short-
term  fiscal  risks  (Table  A21.2) (148).  Government 
gross financing needs are expected to remain high, 
in  2024-2025 
at  around  17.5%  of  GDP 
(Table A21.1, Table 1).  Financial  markets’  percep-
tions  of  sovereign  risk  are  positive,  as  confirmed 
by the ratings of the main agencies.  

2  –  Medium-term  fiscal  sustainability  risks 
appear high.   

The baseline DSA shows that the government 
debt  ratio  is  projected  to  remain  at  a  high 
level  over  the  medium  term,  with  a 
continuous increase to 119% of GDP in 2034 
(Graph 1,  Table  1) (149).  The  assumed  structural 
primary  deficit  of  1.9%  of  GDP  as  of  2025  (prior 
to  changes  in  ageing  costs)  contributes  to  these 
developments.  Compared  to  historical  data,  the 
deficit  appears  plausible, 
indicating  that  the 
country  has  considerable  room  for  corrective 
action.  Indeed,  most  of  past  fiscal  positions  were 
more  stringent  than  the  one  assumed  in  the 
baseline  (Table  A21.2) (150).  The  debt  dynamics 

(148) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(149) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary surplus, before changes in ageing costs, of 1.9% of 
GDP from 2025 onwards; (ii) inflation converging linearly 
towards the 10-year forward inflation-linked swap rate 10 
years ahead (which refers to the 10-year inflation 
expectations 10 years ahead); (iii) the nominal short- and 
long-term interest rates on new and rolled over debt 
converging linearly from current values to market-based 
forward nominal rates by T+10; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 1.2%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

(150) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 

continue  to  benefit  from  a  favourable  but 
declining snowball effect of 1 pp. of GDP annually 
on average in 2025-2034. 

four 

The  baseline  projections  are  stress-tested 
deterministic 
alternative 
against 
scenarios to assess the impact of changes in 
key  assumptions  relative  to  the  baseline 
(Graph 1).  Under  the  historical  structural  primary 
balance  (SPB)  scenario  (i.e.  the  SPB  returns  to  its 
historical  15-year  average  of  -0.4%  of  GDP)  the 
debt ratio would be lower than under the baseline 
by  about  11 pps.  in  2034.  However,  under  the 
adverse  interest-growth  rate  differential  scenario 
(i.e. 
differential 
deteriorates by 1 pp. compared with the baseline), 
the debt ratio would be about 9 pps. of GDP higher 
in  2034  than  under  the  baseline.  Under  the 
financial  stress  scenario 
rates 
temporarily  increase  by  1.9 pps.  compared  with 
the baseline) the government debt ratio would be 
about  2 pps.  higher  in  2034.  The  lower  structural 
primary  balance  scenario 
the  projected 
improvement in the SPB in 2024 is halved)  has a 
similar impact. 

interest-growth 

interest 

rate 

(i.e. 

(i.e. 

the 

These 

stochastic 

The  stochastic  projections  indicate  high  risk, 
pointing  to  the  considerable  sensitivity  of 
these  projections  to  plausible  unforeseen 
events  (151). 
simulations 
indicate a 64% probability that the debt ratio will 
be  higher  in  2028  than  in  2023,  implying  high 
risks  given  the  high  debt  level.  In  addition,  the 
uncertainty 
the  baseline  debt 
projections is high, with a difference of 29 pps. of 
GDP  between  the  10th  and  90th  debt  distribution 
percentiles in five years’ time (Graph 2).  

surrounding 

3  –  Long-term  fiscal  sustainability  risks 
appear  overall  high.  This  assessment  is  based 
on  the  combination  of  two  fiscal  gap  indicators, 
capturing  the  required  fiscal  effort  to  stabilise 
debt  (S2  indicator)  and  to  bring  debt  to  60%  of 

observed in the past. Technically, this consists in looking at 
the percentile rank of the projected SPB within the 
distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2023. 

(151) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

75 

 
 
 
 
 
 
 
residents  and  the  lack  of  fiscal  coordination 
among  the  different  government  levels,  with 
several of the federated entities displaying specific 
vulnerabilities.  On  the  other  hand,  risk-mitigating 
factors include the lengthening of debt maturity in 
recent  years,  which  allows  for  a  more  gradual 
transmission  of  rising  interest  rates  to  the  debt 
burden,  relatively  stable  financing  sources,  with  a 
diversified  and 
investor  base,  and 
government debt being fully denominated in euro.  

large 

GDP  (S1  indicator)  in  the  long  term (152).  This 
assessment  is  driven  by  the  unfavourable  initial 
budgetary  position  and  projected 
in 
ageing costs.  

increase 

indicator  points  to  high  fiscal 
The  S2 
sustainability  risks.  The  indicator  shows  that, 
relative  to  the  baseline,  the  SPB  would  need  to 
improve by 6.2 pps. of GDP in 2025 to ensure debt 
stabilisation  over  the  long  term.  This  result  is 
driven by the projected increase in ageing-related 
spending 
(contribution  of  3.6 pps.)  and  an 
unfavourable  initial  budgetary  position  (2.5 pps.). 
Rising  ageing  costs  are  primarily  due  to  a 
projected  increase  in  public  pension  expenditure 
(2.2 pps.)  and  long-term  care  spending  (1.5  pps.) 
(Table A21.1, Table 2). Hence, additional measures 
may be required to further improve the efficiency 
and  fiscal  sustainability  of  the  Belgian  long-term 
care system. 

The  S1  indicator  points  to  medium  fiscal 
sustainability  risks.  The  indicator  shows  that 
reducing government debt to 60% of GDP by 2070 
would  require  an  improvement  of  the  fiscal 
position by 4.8 pps. of GDP in 2025. Similar to the 
S2  indicator,  this  result  is  driven  by  the  current 
unfavourable  budgetary  position  (contribution  of 
1.7 pps.)  and  the  projected  rise  in  age-related 
public  spending  (2.1  pps.).  The  gap  between  the 
current  government  debt  ratio  and  the  60% 
reference value adds to the required effort 0.9 pp.) 
(Table A21.1, Table 2).  

4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment.  On 
the one hand, risk-increasing factors relate to the 
recent  increase  in  interest  rates,  the  share  of 
short-term  debt,  high  gross  financing  needs,  the 
large  share  of  government  debt  held  by  non-

(152)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt over an infinite horizon. It is 
complemented by the S1 indicator, which measures the 
permanent SPB adjustment in 2025 to bring the debt ratio to 
60% by 2070. The impact of the drivers of S1 and S2 may 
differ due to the infinite horizon component considered in the 
S2 indicator. For both the S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6% of GDP, 
‘medium risk’ if it is between 2% and 6% of GDP, and ‘low 
risk’ if the effort is negative or below 2% of GDP. The overall 
long-term risk classification combines the risk categories 
derived from S1 and S2. S1 may notch up the risk category 
derived from S2 if it signals a higher risk than S2. See the 
2023 Debt Sustainability Monitor for further details. 

76 

 
 
Table A21.1: Debt sustainability analysis - Belgium 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - Belgium 

Source: Commission services. 

77 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)107.9104.3105.2105.0106.6107.2107.9109.0110.5111.9113.5115.3117.1119.1Changes in the ratio-3.9-3.70.9-0.11.50.60.81.11.51.41.61.71.92.0of whichPrimary deficit3.72.02.42.32.32.22.22.22.42.32.52.52.62.7Snowball effect-8.8-7.4-3.4-1.7-1.2-1.6-1.5-1.2-0.9-0.9-0.8-0.8-0.8-0.8Stock-flow adjustments1.11.81.9-0.70.40.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)18.518.918.317.018.217.918.118.418.819.119.519.920.320.8S1S2Overall index  (pps. of GDP)4.86.2of which Initial budgetary position1.72.5Debt requirement0.9Ageing costs2.13.6of which    Pensions1.32.2     Health care0.40.5     Long-term care1.01.5Education-0.6-0.7Table 2. Breakdown of the S1 and S2 sustainability gap indicators6070809010011012013014020212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9045556575859510511512513520212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHHIGHHIGHHIGHHIGHHIGHDebt level (2034), % GDP119.1108.3120.7128.0120.6Debt peak year20342034203420342034Fiscal consolidation space95%86%95%95%95%Probability of debt ratio exceeding in 2028 its 2023 level64%Difference between 90th and 10th percentiles (pps. GDP)28.6Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)(1)Debtlevelin2034.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty. (For further details on the Commission's multidimensional approach, see the 2023 Debt Sustainability Monitor)LOWHIGHHIGHMEDIUMHIGH