Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Belgium
Date: 2025-05-21
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Belgium, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Brussels, 21.5.2025  COM(2025) 263 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Belgium  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of Belgium 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

1 

2 

3 

4 

A reformed EU economic governance framework entered into force on 30 April 2024. 
Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance,1  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure,2  and  the  amended  Council 
Directive  2011/85/EU  on  the  budgetary  frameworks  of  Member  States3  are  the  core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans,  that  Member  States  submit  to  the 
Council  and  to  the  Commission,  are  at  the  centre  of  the  new  economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the  adjustment  period,  general  government  debt  is  on  a  plausibly  downward 
trajectory,  or  stays  at  prudent  levels,  and  that  the  government  deficit  is  brought  and 
maintained  below  the  reference  value  of  3%  of  GDP  over  the  medium  term,  and  ii) 
ensuring the delivery of  reforms  and investments responding to  the main  challenges 
identified  in  the  context  of  the  European  Semester  and  addressing  the  common 
priorities of the EU. To that end, each plan is to present a medium-term commitment 
to a net expenditure4 path, which effectively establishes a budgetary constraint for the 

(OJ 

1466/97 

Regulation 

(EC)  No 

Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  of  29  April  2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing 
Council 
ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj). 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
for  budgetary 
(OJ  L,  2024/1265,  30.4.2024,  ELI: 
http://data.europa.eu/eli/dir/2024/1265/oj). 
Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii)  expenditure  on  Union 

the  Member  States 

frameworks  of 

2024/1263, 

30.4.2024, 

L, 

EN 

1 

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duration  of  the  plan,  covering  four  or  five  years  (depending  on  the  regular  term  of 
legislature  in  a  Member  State).  In  addition,  the  plan  is  to  explain  how  the  Member 
State  will  ensure  the  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester,  in  particular  in  the 
the 
country-specific  recommendations  (CSRs)  (including 
macroeconomic  imbalances  procedure  (MIP),  if  applicable),  and  how  the  Member 
State  will  address  the  common  priorities  of  the  Union.  The  period  for  fiscal 
adjustment  is  of  four  years,  which  may  be  extended  by  up  to  three  years  if  the 
Member  State  commits  to  delivering  a  set  of  relevant  reforms  and  investments  that 
satisfies the criteria set out in Regulation (EU) 2024/1263.  

those  pertaining 

to 

(3) 

(4) 

Following  the  submission  of  the  plan,  the  Commission  is  to  assess  whether  it 
complies with the requirements of Regulation (EU) 2024/1263.  

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net expenditure path of the Member State concerned and, 
investment  commitments 
the  set  of  reform  and 
where  applicable,  endorse 
underpinning an extension of the fiscal adjustment period. 

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF BELGIUM 

(5) 

On 18 March 2025, Belgium submitted its national medium-term fiscal-structural plan 
to  the  Council  and  to  the  Commission.  The  submission  took  place  following  an 
extension  of  the  deadline  as  set  out  in  Article  36  of  Regulation  (EU)  2024/1263,  as 
agreed with  the Commission  to  give Belgium the possibility  to present  a plan based 
on a solid political commitment of the newly appointed federal government. 

Process prior to the submission of the plan  

(6) 

On 5 February 2025 the Commission sent, according to Article 9 of Regulation (EU) 
2024/1263,  the  reference  trajectory5  to  Belgium.  The  Commission  published  the 
reference  trajectory  on  19  March  20256.  The  reference  trajectory  is  risk-based  and 
ensures that, by the end of the fiscal adjustment period and in the absence of further 
budgetary  measures  beyond  the  adjustment  period,  general  government  debt  is  on  a 
plausibly downward trajectory or stays at  prudent  levels  over the medium  term,  and 
the  general  government  deficit  is  brought  below  3%  of  GDP  over  the  adjustment 

5 

6 

programmes fully matched by revenue from Union funds, (iv) national expenditure on co-financing of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures.  
The prior guidance transmitted by the Commission to the Member States and Economic and Financial 
Committee includes trajectories without, and with, an extension of the adjustment period (covering 4 
and 7 years, respectively). It also includes the main initial conditions and underlying assumptions used 
in  the  European  Commission’s  medium-term  government  debt  projection  framework.  The  reference 
trajectory  was  calculated  on  the  basis  of  the  methodology  described  in  the  European  Commission’s 
Debt 
(https://economy-finance.ec.europa.eu/publications/debt-
sustainability-monitor-2023_en). It is based on the European Commission 2024  Autumn Forecast and 
its medium-term extension up to 2034, and long-term GDP growth and ageing costs are in line with the 
(https://economy-
joint 
finance.ec.europa.eu/publications/2024-ageing-report-economic-and-budgetary-projections-eu-
member-states-2022-2070_en). 
Belgium:  prior  guidance  tables  (https://economy-finance.ec.europa.eu/document/download/a785a06d-
962e-4366-9024-e80643258ac5_en?filename=Commission_prior_guidance-
belgium_en.pdf&prefLang=sl) 

Sustainability  Monitor 

Commission-Council 

European 

Ageing 

Report 

2023 

2024 

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period and maintained below that reference value over the medium term. The medium 
term  is  defined  as  the  ten-year  period  after  the  end  of  the  adjustment  period.  In 
accordance  with  Articles  6,  point  (d),  7  and  8  of  Regulation  (EU)  2024/1263,  the 
reference  trajectory  is  also  consistent  with  the  deficit  benchmark,  the  debt 
sustainability safeguard and the deficit resilience safeguard.  

The  reference  trajectory  of  Belgium  sets  out  that,  based  on  the  Commission’s 
assumptions  and  assuming  a  7-year  adjustment  period,  net  expenditure  should  not 
grow by more than the  values provided in  Table 1. This  corresponds  to  average net 
expenditure  growth  of  2.5%  over  both  the  adjustment  period  (2025-2031)  and  the 
period covered by the plan (2025-2029). 

Table 1: Reference trajectory provided by the Commission to Belgium on 5 February 
2025 

2025  2026  2027  2028  2029  2030  2031 

Average 
2025-2029 

Average 
2025-2031 

3.0 

2.6 

2.6 

2.2 

2.2 

2.4 

2.4 

2.5 

2.5 

Maximum net 
expenditure growth 

(annual, %) 

Source: Commission’s calculations. 

(7) 

In line with Article 12 of Regulation (EU) 2024/1263, Belgium and the Commission 
engaged  in  a  technical  dialogue  between  December  2024  and  March  2025.  The 
dialogue centred on the net expenditure path envisaged by Belgium and its underlying 
assumptions  (in  particular  the  envisaged  annual  fiscal  effort  and  the  GDP  deflator 
figure for 2025), the envisaged set of reform and investment commitments to underpin 
an  extension  of  the  adjustment  period  including  pension,  tax  and  labour  market 
reforms, as well as the envisaged delivery of reforms and investments responding to 
the  main  challenges  identified  in  the  context  of  the  European  Semester  and  the 
common  priorities  of  the  Union  in  a  fair  green  and  digital  transition,  social  and 
economic resilience, energy security and the build-up of defence capabilities. 

(8) 

The plan does not report on a consultation process with relevant national stakeholders, 
including social partners, prior to submission. 

Other related processes 

(9) 

On  26  July  2024,  the  Council  established  the  existence  of  an  excessive  deficit  in 
Belgium due to non-compliance with the deficit criterion.7  

(10)  On  21  January  2025,  the  Council  adopted  a  Recommendation  under  Article  126(7) 
TFEU  with  a  view  to  bringing  an  end  to  the  situation  of  an  excessive  deficit  in 
Belgium.8 In the absence of a national medium-term fiscal-structural plan endorsed by 
the  Council,  the  recommended  corrective  net  expenditure  path  reflected  the 
methodology used for the reference trajectory, with a fiscal adjustment of four years 
and  based  on  available  data.  In  addition,  the  Council  established  the  deadline  of  30 
April  2025  for  Belgium  to  take  effective  action  and  present  the  necessary  measures 

7 
8 

OJ L, 1.8.2024, ELI: Decision - EU - 2024/2125 - EN - EUR-Lex 
Council Recommendation 5032/25 EDP Belgium 

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together with its 2025 annual progress report, to be submitted to the Commission in 
accordance  with  Article  21  of  Regulation  (EU)  2024/1263.  In  the  Recommendation 
under Article 126(7) of 21 January 2025 the Council indicated (recital 16) that upon 
submission  of  the  national  medium-term  fiscal-structural  plan  by  Belgium,  its 
assessment by the Commission and endorsement by the Council, a new corrective net 
expenditure path could be recommended by the Council. 

On [8 July 2025], together with the present Recommendation endorsing the national 
medium-term  fiscal-structural  plan,  the  Council  [adopted],  upon  a  Commission 
recommendation,  a  revised  Council  Recommendation  under  Article  126(7)  TFEU 
with a view to bringing an end to the situation of an excessive government deficit into 
Belgium.  The  adoption  of  these  two  recommendations,  which  is  tailored  to,  and 
justified  by,  the  transition  to  the  new  economic  governance  framework,  ensures 
consistency between the recommended adjustment paths. 

(11)  On 30 April 2025, Belgium submitted its Draft Budgetary Plan for the year 2025. The 

Commission [adopted] an Opinion on this Draft Budgetary Plan on [4 June 2025].9 

(12)  On 30 April 2025, Belgium  requested the activation of the national escape clause to 
accommodate  higher  defence  spending,  in  accordance  with  Article  26  (1)  of 
Regulation (EU) 2024/1263. 

(13)  On  21  October  2024,  the  Council  addressed  to  Belgium  a  series  of  country-specific 

recommendations (CSRs) in the context of the European Semester.10 

SUMMARY  OF  THE  PLAN  AND  THE  COMMISSION’S  ASSESSMENT  OF 
THEREOF 

(14) 

In line with  Article 16 of Regulation (EU) 2024/1263, the  Commission assessed the 
plan as follows: 

Macroeconomic and fiscal situation and outlook  

(15)  Economic activity in Belgium grew by 1.0% in 2024, driven mainly by robust private 
consumption. According to the European Commission Spring 2025 Forecast, growth 
in economic activity is expected to slow down to 0.8% in 2025, driven by moderate 
domestic  demand  and  decreasing  exports.  In  2026,  real  GDP  is  set  to  increase  by 
0.9%,  as  investment  is  projected  to  accelerate,  and  exports  to  increase  supported  by 
the  expected  improvement  of  the  external  environment. Over  the  forecast  horizon 
(i.e.,  2025-2026),  potential  GDP  in  Belgium  is  expected  to  decelerate,  from  1.7% 
growth  rate  in  2024  to  1.3%  in  2026,  driven  by  the  softening  of  the  labour 
contribution to potential growth. The unemployment rate stood at 5.7% in 2024, and 
is  projected  by  the  Commission  to  amount  to  6.1%  in  2025  and  5.8%  in  2026. 
Inflation (GDP deflator) is projected to increase from 1.9% in 2024 to 2.8% in 2025 
and to reach 2.1% in 2026.  

(16)  Regarding  fiscal  developments,  in  2024  Belgium’s  general  government  deficit 
increased  to  4.5%  of  GDP.  According  to  the  European  Commission  Spring  2025 
Forecast, it is set to reach 5.4% of GDP in 2025 and, on a no-policy change basis, to 

9 
10 

European Commission Opinion of [4 June 2025] on the 2025 Draft Budgetary Plan of Belgium. 
Council Recommendation on the economic, budgetary, employment and structural policies of Belgium, 
C/2024/6808, OJ C, 29.11.2024, p.8. 

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increase to  5.5% of GDP in  2026. The European Commission  Spring  2025 Forecast 
includes Belgium’s (draft) budgets for 2025 that the federal and the federated entities 
proposed  to  the  respective  parliaments  in  2024  and  2025.  General  government  debt 
was  104.7%  of  GDP  at  end-2024.  According  to  the  European  Commission  Spring 
2025 Forecast, the debt ratio is expected to increase to 107.1% of GDP at end-2025. It 
is  projected  to  increase  further  to  109.8%  of  GDP  at  the  end  of  2026.  The  fiscal 
forecast  by  the  Commission  does  not  consider  the  policy  commitments  in  the 
medium-term  plan  as  such  until  they  are  underpinned  by  credibly  announced  and 
sufficiently specified concrete policy measures. 

Net expenditure path and main macroeconomic assumptions in the plan 

(17)  Belgium’s  national  medium-term  fiscal-structural  plan  covers  the  period  2025-2029 

and presents a fiscal adjustment over seven years.  

(18)  The  plan  contains  the  information  required  by  Article  13  of  Regulation  (EU) 
2024/1263, with the exception of information on consultations of national parliaments 
and the consultation required by Article 13(g)(vi) of Regulation (EU) 2024/1263. 

(19)  The plan commits to the net expenditure path indicated in Table 2, corresponding to 
average  net  expenditure  growth  of  2.6%  over  the  years  2025-2029.  In  addition, 
Belgium  commits  to  a  set  of  reforms  and  investments  with  a  view  to  extending  the 
adjustment  period  to  7  years  (2025-2031),  over  which  the  average  net  expenditure 
growth is planned to be 2.5%.  

The average net  expenditure growth  reported in  the plan over the  adjustment period 
(2025-2031) is equal to the average net expenditure growth in the reference trajectory 
transmitted by the Commission on 5 February 2025.  

The plan assumes potential GDP growth to decrease to 1.2% in 2029 (from 1.7% in 
2024). In addition, the plan expects the growth rate of the GDP deflator to decrease to 
2.1% in 2028 (from 2.7% in 2024), before increasing to 2.2% in 2029. 

Table 2: Net expenditure path and main assumptions in Belgium’s plan 

2025 

2026  2027  2028  2029  2030  2031 

Extension of the adjustment 
period 

Average 
over the 
period of 
validity of 
the plan 

2025-2029 

Average 
over the 
adjustment 
period 

2025 – 
2031 

3.6 

2.5 

2.5 

2.1 

2.1 

2.3 

2.4 

2.6 

2.5 

3.6. 

6.1 

8.8 

11.1 

13.4 

16.0 

18.8 

n.a. 

n.a. 

Net 
expenditure 
growth 
(annual, %) 

Net 
expenditure 
growth 

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5 

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(cumulative, 
from base 
year 202411, 
%) 

Potential GDP 
growth (%) 

Inflation 
(GDP deflator 
growth) (%) 

1.6 

1.4 

1.4 

1.2 

1.2 

1.1 

1.1 

1.4 

2.5 

2.1 

2.1 

2.1 

2.2 

2.2 

2.2 

2.3 

1.3 

2.3 

Source: Medium-term fiscal-structural plan of Belgium and Commission calculations 

Implications of the plan’s net expenditure commitments for general government debt  

(20) 

If the net expenditure path committed to in the plan and the underlying assumptions 
materialise, general government debt-to-GDP ratio would increase by 3.9 percentage 
points by 2027, starting from the level of 202412, according to the projected change in 
gross debt in the plan during this period, before declining by 3.0 percentage points by 
the end of the adjustment period (2031), as per the following table. The persistence of 
relatively high deficits in the first years of the adjustment period prevent the debt-to-
GDP  ratio  from  reducing  by  2031.  Nevertheless,  over  the  medium  term  (i.e.  until 
2041), the general government debt is expected to gradually decrease reaching 87.6% 
of GDP by 2041. 

Table 3: General government debt and balance developments in Belgium’s plan 

2024*  2025**  2026 

2027 

2028 

2029 

2030 

2031  2041 

Government debt 

103.4 

105.1 

107.0  107.3  107.3  106.7  105.6  104.0  87.6 

(% of GDP) 

Government balance 

-4.6 

-4.7 

-4.6 

-4.1 

-3.5 

-3.0 

-2.5 

-2.0 

-1.8 

(% of GDP) 

* Eurostat validated data for 2024: debt 104.7%, balance -4.5%. 
** Eurostat EDP notification: planned balance -5.2% in 2025. 
Source: Medium-term fiscal-structural plan of Belgium 

Thus,  according  to  the  plan,  the  general  government  debt  ratio  would  be  put  on  a 
downward  path  by  the  end  of  the  adjustment  period  (2031).  This  is  plausible  as, 
based  on  the  plan’s  assumptions,  debt  is  projected  to  decline  over  the  ten  years 
following  the  adjustment  period  under  all  deterministic  stress  tests  of  the 
Commission’s  Debt  Sustainability  Analysis,  and  the  stochastic  projections  indicate 
that debt would decline with a sufficiently high probability.  

The  higher  outturn  data  for  government  debt  in  2024  (104.7%  of  GDP)  raises  the 
debt level but is not expected to change the trajectory of the adjustment path for the 

11 

12 

The  cumulative  growth  rates  are  calculated  by  reference  to  the  base  year  2024,  because  the  2024 
outturn data was available during the assessment phase.  
2024  outturn  data  of  government  debt  is  104.7%  of  GDP  according  to  Eurostat  (gov_10q_ggdebt) 
which is higher than the figure in the plan (103.4%; see table 3). 

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government  debt.  The  deficit  at  4.5%  in  2024  turned  out  0.1%  lower  than  in  the 
plan. 

Therefore,  based  on 
the  plan’s  policy  commitments  and  macroeconomic 
assumptions, the net expenditure path put forward in the plan is consistent with the 
requirement for debt as set out in Articles 6, point (a), and 16(2) of Regulation (EU) 
2024/1263. 

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(21)  Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit  would  stand  at  4.6%  of  GDP  in  2024  and  progressively  decline  to  3.0%  in 
2029 and to 2.0% at the end of the adjustment period (2031). 

Thus, according to the plan, the general government balance would not exceed the 3% 
of GDP reference value at the end of the adjustment period (2031).  

In  addition,  in  the  ten  years  following  the  adjustment  period  (until  2041),  the 
government deficit would not exceed 3% of GDP. 

Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the net expenditure path put forward in the plan is consistent with the requirement for 
the deficit as set out in Articles 6, point (b), and 16(2) of Regulation (EU) 2024/1263. 

Time profile of the fiscal adjustment 

(22)  The  time  profile  of  the  fiscal  adjustment,  measured  as  the  annual  change  in  the 
structural primary balance, as described in the plan, is backloaded from 2025 to 2026-
2030  compared  to  the  linear  path  referred  to  as  a  rule  under  Article  6,  point  (c),  of 
Regulation (EU) 2024/1263. In the first year of the plan (2025), the improvement in 
the structural primary balance is half of the effort underlying the reference trajectory 
(0.25%  of  GDP  instead  of  0.5%).  This  is  explained  in  the  plan  by  the  federal 
government having taken office on 3 February 2025, delaying the implementation of 
fiscal  consolidation  measures,  which  therefore  affect  only  part  of  2025.  For  the 
following  years,  Belgium  commits  to  a  more  ambitious  primary  structural  balance 
adjustment compared to the reference trajectory to compensate for the lower effort in 
2025.  Correspondingly,  the  backloading  of  the  adjustment  explains  the  higher  net 
expenditure  growth  in  2025  in  the  plan  in  comparison  to  the  Commission’s  prior 
guidance (3.6% against 3.0%). At the same time, because of the stronger adjustment 
in the following years, the net expenditure growth is lower (by 0.1 percentage points) 
in  the  plan  over  the  period  2026-2030,  resulting  in  an  identical  average  net 
expenditure growth  over the adjustment period in the plan and  in  the Commission’s 
prior  guidance.  Overall,  the  fiscal  adjustment  over  the  first  five  years  of  the  plan 
total  effort  over  the  entire  adjustment  period. 
remains  proportional 

the 

to 

Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the net expenditure path put forward in the plan is consistent with the no-backloading 
safeguard clause set out in Article 6, point (c) of Regulation (EU) 2024/1263.  

Table 4: Structural primary balance developments in Belgium’s plan  

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

EN 

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-2.0 

-1.8 

-1.2 

-0.7 

0.0 

0.6 

1.1 

1.6 

n.a. 

0.2 

0.6 

0.6 

0.6 

0.6 

0.5 

0.5 

Structural 
primary 
balance 

(% of GDP) 

Change in 
structural 
primary 
balance 

(pps.) 

Source: Medium-term fiscal-structural plan of Belgium.  

Consistency of the plan with the excessive deficit procedure 

(23)  The net expenditure path set out in the plan is in line with the requirements under the 
excessive  deficit  procedure  (in  particular  with  the  minimum  annual  structural 
adjustment established as a benchmark in Article 3(4), third subparagraph of Council 
Regulation (EC) 1467/97), after considering that the lower adjustment in 2025 is fully 
compensated by a higher adjustment in subsequent years. 

Consistency of the plan with the deficit resilience safeguard 

(24)  The  requirement  of  the  preventive  arm  set  out  in  Article  8  of  Regulation  (EU) 
2024/1263  regarding  the  deficit  resilience  safeguard,  which  aims  to  provide  a 
common  margin  relative  to  the  deficit  reference  value  of  3%  of  GDP,  applies  to 
Belgium as of 2030, as the deficit is planned to be below 3% of GDP as of 2029. 

In  2030  and  2031,  in  accordance  with  Article  8  of  Regulation  (EU)  2024/1263,  the 
annual adjustment in the structural primary balance should therefore not be less than 
0.25% of GDP if the structural deficit remained above 1.5% of GDP in the preceding 
year, to achieve a common resilience margin in structural terms of 1.5% of GDP. The 
fiscal adjustment that results from the plan’s policy commitments and macroeconomic 
assumptions exceeds 0.25% of GDP in 2030 and 2031. Therefore, based on the plan’s 
policy  commitments  and  macroeconomic  assumptions,  the  net  expenditure  path  put 
forward in the plan is consistent with the deficit resilience safeguard.  

Consistency of the plan with the debt sustainability safeguard 

(25) 

In  accordance  with  Article  7  of  Regulation  (EU)  2024/1263,  as  general  government 
debt will be above 90% of GDP over the adjustment period according to the plan, the 
debt ratio is required to  decline by at least  1.0 percentage point on average per year 
until it falls below 90%, after which it should decline by at least 0.5 percentage points 
on average. The average decline is calculated over the period 2030-2031, i.e. starting 
in the year in which the excessive deficit procedure would be abrogated according to 
the plan, and amounts to 1.6 percentage points. Therefore, based on the plan’s policy 
commitments and macroeconomic assumptions, the net expenditure path put forward 
in the plan is consistent with the debt sustainability safeguard. 

Macroeconomic assumptions of the plan 

(26)  The  plan  is  based  on  a  set  of  assumptions  that  is  in  line  with  the  Commission’s 
assumptions  transmitted  to  Belgium  on  5  February  2025.  It  takes  into  account 
additional  available  information  compared  to  the  reference  trajectory  and  includes 

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accordingly an updated assumption for the GDP deflator of 2025. The assessment also 
takes into account the release of outturn data for 2024 after the submission of the plan, 
which shifts the base year of the  recommendation to  2024. The updated  assumption 
and  the  shift  do  not  affect  the  average  annual  net  expenditure  growth  over  the 
adjustment period. 

Fiscal strategy of the plan 

(27)  According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure  will  be  mainly  delivered  through  expenditure  restraint  but  also 
discretionary  revenue  increases.  The  plan  states  that  2/3  of  the  fiscal  consolidation 
effort  over  the  plan  period  is  coming  from  structural  reforms  in  the  labour  market 
(limitation  of  unemployment  benefits)  and  pension  reform  (introduction  of  a 
bonus/malus  system,  harmonisation  of  different  pension  regimes  to  strengthen  years 
worked and pension received, change indexations). In addition, 1/3 of the fiscal effort 
is  assumed  to  come  from  other  discretionary  fiscal  measures  of  which  2/3  on  the 
expenditure  side  and  1/3  from  taxation  of  the  highest  income  households  and  other 
revenue measures.  

(28)  The specification of the policy measures is to be confirmed or adjusted and quantified 
in the annual budgets. At the same time, there are risks to the implementation of the 
indicative fiscal strategy in the plan, which stem from the fact that several structural 
measures  announced by  the government  have not been fully specified yet. Also,  the 
plan  assumes  significant  positive  second-round  effects,  however  not  specified  in 
detail,  from  a  labour  market  participation  rate  to  reach  80%  by  2029,  which  would 
require  a  strong  increase  from  current  levels.  In  addition,  the  implementation  of  the 
fiscal  consolidation  will  require  a  closer  and  more  effective  budgetary  coordination 
between the federal and the federated entities than in recent years. This latter risk is 
expected to be mitigated by the measure on budgetary coordination, which is part of 
the set of reform and investment commitments underpinning the extension (Annex II).  

Set of reform and investment commitments in the plan to underpin an extension of the 
fiscal adjustment period  

In  the  plan,  Belgium  commits  to  25  reforms  and  investments,  aiming  to  improve 
potential  growth  and  fiscal  sustainability,  to  underpin  an  extension  of  the  fiscal 
adjustment  period  from  4  to  7  years.  The  set  of  reforms  and  investments 
underpinning  an  extension  of  the  adjustment  period  is  composed  of  three 
commitments  from  the  RRP  with  additional  specifications;  as  well  as  four  new 
reforms and investments. This includes the following measures (see also Annex II). 

Reform in the area of pensions, aims at improving the financial sustainability of the 
pension system. This commitment adds to an existing measure in the RRP (notably 
under  Component  4.4,  ‘End  of  career  and  pensions’).  Measures  in  the  plan  will 
strengthen the relationship between work and the acquisition of pension rights, and 
harmonize pension regimes for employees, civil servants and the self-employed. The 
government also includes transitional measures for people close to retirement to ease 
the social impact of the reform. Most of the measures are expected to be adopted by 
Q4 2025 and implemented in either 2026 or 2027 onwards. 

Reform  in  the  area  of  public  expenditure  aims  to  complete  spending  reviews  to 
improve the efficiency and quality of public spending. This commitment also adds to 
an existing measure in the RRP (notably under Component 6.1, ‘Spending reviews’). 

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One important  objective  of the reform  is  to  provide  a plan for the gradual  phasing 
out of subsidies. The expected adoption of this plan is by Q4 2025. 

Reforms  in  the area  of  the  labour market. The plan commits to  incentivising work 
including  by  limiting  unemployment  benefits  over  time,  improving  work-life 
balance and flexibility, and reducing long-term sickness, administrative burden and 
SME’s  compliance  costs.  The  unemployment  benefit  reform  and  the  global 
prevention and reintegration plan for the long-term sick workers are expected to be 
adopted by Parliament by Q3 2025.  

implemented  by  Q1  2026.  Two  measures 

Reforms  in  the  area  of  taxation  aim  to  lower  the  tax  burden  on  labour,  improve 
competitiveness  and  strengthen  investments.  To  make  work  rewarding,  the  plan 
includes  an income  tax  cut  for those working, expected to  be adopted by Q4 2025 
the  plan  will  support 
and 
competitiveness  by 
the  electricity 
transmission tariffs of energy-intensive industries. The financing of this tax reform 
will stem partly from the broadening of the tax base, including the introduction of a 
capital  gains  tax,  and  is  complemented  by  a  reduction  in  the  expenditure  on  the 
welfare adjustments of social benefits. 

the  wage  cost  and  reducing 

tempering 

in 

Reforms in the area of competitiveness and business environment. The plan commits 
to  implementing  the  digitalisation  of  government  services,  which  is  a  measure 
included  in  the  RRP  (Component  2.2,  ‘Public  administration’).  The  reforms  also 
include  a  plan  to  increase  SMEs’  competitiveness  and  another  to  reduce 
administrative burden on firms. These two measures, which are new compared to the 
RRP, are expected to be adopted by Q4 2025 and implemented by Q1 2026. 

Reforms in the area of budgetary coordination. This measure, also new compared to 
the  RRP,  aims  to  improve  budget  coordination  between  the  different  levels  of 
government.  The  first  step  is  the  adaptation  of  the  2013  cooperation  agreement, 
which is expected to be agreed upon by Q4 2025. The adoption and implementation 
of the revised cooperation agreement with regions (retroactively) is expected by Q4 
2026.  The  second  step  is  redefining  the  tasks  of  the  High  Council  of  Finance 
(independent fiscal institution). 

(29) 

In line with Article 14 (3) of Regulation (EU) 2024/1263, each reform and investment 
underpinning  an  extension  of  the  adjustment  period  is  sufficiently  detailed,  front-
loaded, time-bound and verifiable. 

(30)  The  RRP  commitments  underpinning  the  extension  contain  significant  reforms  and 
investments  aimed  at  improving  fiscal  sustainability  and  enhancing  the  growth 
potential  of  the  economy.  In  addition,  Belgium  commits  to  continuing  the  reform 
effort  over  the  period  covered  by  the  medium-term  fiscal-structural  plan  and 
maintaining the nationally financed investment levels realised over the period covered 
by the RRP (see below, Table 5). The commitments will be monitored throughout the 
implementation of the plan. Accordingly, commitments under the  RRP can be taken 
into  account  for  the  extension  of  the  adjustment  period  as  provided  by  Article  36, 
point (d), of Regulation (EU) 2024/1263. 

(31)  The set of reforms and investments underpinning the extension is expected to improve 
the growth and resilience potential of Belgium’s economy in a sustainable manner as 
required  by  Article  14(2),  point  (a)  of  Regulation  (EU)  2024/1263.  Belgium’s  plan 
does  not  provide  an  estimation  of  the  overall  expected  (potential)  growth  impact  of 

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the  set  of  reforms  and  investments  underpinning  the  extension.  Such  impact  is 
however  reported  in  the  plan  for  some  of  the  reforms,  based  on  analyses  by  the 
Federal  Planning  Bureau  (FPB)  (an  independent  fiscal  institution)  and  the  Federal 
Pension Service (FPS). An additional assessment was made by the Federal Planning 
Bureau using the Commission’s QUEST model which estimates a 1.85% higher GDP 
level by 2040 mainly coming from improved competitiveness and higher employment 
rate stimulating private consumption. Overall, based on the information provided, the 
economic  strategy  behind  the  set  of  reforms  and  investments,  including  RRP 
commitments,  appears  to  address  previously  identified  weaknesses  in  Belgium’s 
growth and resilience potential (e.g. in the European Semester Country Reports). The 
key areas of intervention concern the pension, labour market, tax and competitiveness 
reforms,  leading  towards  a  higher  employment  participation  rate  and  investments 
accompanied by enhanced budgetary coordination and improved efficiency of public 
spending. 

(32)  The set of reforms and investments underpinning the extension is expected to support 
fiscal  sustainability  as  required  by  Article  14(2),  point  (b)  of  Regulation  (EU) 
2024/1263.  The  plan  does  not  provide  an  estimation  of  the  overall  expected  fiscal 
impact  of  the  set  of  reforms  and  investments  underpinning  the  extension.  An 
additional assessment of the impact was made by the Federal Planning Bureau using 
the  QUEST  model  which  estimates  an  improvement  in  the  structural  government 
balance  of  0.9%  of  GDP  by  2040.  The  plan  however  does  include  a  fiscal  impact 
assessment  of  all  planned  federal  measures  for  the  plan  period.  According  to  the 
projections  provided  in  the  plan,  the  Commission  estimates  that  set  of  reforms  and 
investments  underpinning  the  extension  have  an  average  annual  direct  deficit-
reducing  impact  of  around  0.7%  of  GDP  over  the  plan  period,  mainly  due  to  the 
budgetary impact of the structural reforms of the labour market and pensions (0.4% of 
GDP),  new  revenue  measures  (“broadest  shoulders”,  0.2%  of  GDP)  and  reduced 
expenditure on social benefits (welfare envelope, 0.2% of GDP), while the labour tax 
cut  has  an average  budgetary cost  (0.2% of GDP). The budgetary cost  of the labour 
tax  cut  is  concentrated  in  the  last  year  of  the  plan  (0.5%  of  GDP  in  2029),  still 
resulting  in  a  combined  budgetary  improvement  in  2029  of  0.9%  of  GDP  coming 
from the labour market  and pension reforms (0.7% of GDP), new revenue  measures 
(0.3% of GDP) and reduced expenditure on social benefits (0.4% of GDP).  

(33)  The  plan  states  that  the  total  pension  reform  of  the  new  government  is  expected  to 
reduce pension expenditure by EUR 2.4 bn in 2029. For the labour market reform, the 
limitation  of  unemployment  benefits,  the  stimulation  of  longer  work  and  the 
prevention  and  the  reintegration  of  long-term  sick  workers  are  expected  to  reduce 
expenditure (EUR 2.7 bn by 2029).13 For the tax reform no fiscal impact is mentioned 
in the text but it can be derived from Table 7.1 on federal measures that the labour tax 
cut  reduces  revenue  by  EUR  3.7  bn,  which  is  compensated  partly  by  the  ‘broadest 
shoulders’ tax increases (EUR 2.3bn) and also by the reduction in expenditure on the 
welfare envelope (EUR 2.8bn), as explained in the measure description that the costs 
of the labour tax cuts are more than compensated by the  new revenue measures  and 
the reduced welfare envelope.  

13 

Table 7.1 states pension and labour market reform sums up to EUR 5.08bn by 2029 minus EUR 2.4bn 
pension reform equals EUR 2.7bn for the labour market reforms. 

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In addition, the extension is underpinned by two reforms that are expected to reduce 
the  implementation  risk  of  fiscal  consolidation.  One  reform  relates  to  spending 
reviews  with  the  objective  to  improve  efficiency  and  quality  of  public  spending.  A 
second  reform  aims  to  improve  the  budgetary  coordination  between  the  federal  and 
federated  entities  and  to  redefine  the  tasks  of  the  High  Council  of  Finance.  The 
redefinition of tasks of the High Council of Finance should go hand in hand with the 
strengthening of their financial and staff capacity. 

These reforms and investments are also included in Annex II. 

The table with the federal discretionary measures also includes an estimate for second 
round effects of EUR 7.9 bn by the end of the plan period. This estimate is based on 
an increase of the employment participation rate from 72.3% in 2024 to 80%, which is 
assessed as optimistic and unlikely to be reached by 2029. 

(34)  The set of reforms and investments underpinning the extension addresses the common 
priorities  of  the  EU  as  required  by  Article  14(2),  point  (c)  of  Regulation  (EU) 
2024/1263.  In  particular,  social  and  economic  resilience,  including  the  European 
Pillar of Social Rights, would be addressed by the reform of the pension system, the 
labour  tax  reduction,  the  labour  market  reform  including  the  reintegration  of  long-
term  sick  workers,  the  improved  efficiency  and  quality  of  public  spending,  the 
improvement  of  the  budgetary  coordination  between  different  levels  of  government 
and  the  simplification  of  the  business  environment.  The  priorities  linked  to  a  fair 
green  and  digital  transition  and  to  energy  security  would  be  addressed  by  the 
reduction of electricity transmission tariffs for energy-intensive industries and by the 
digitalisation of government services. 

(35)  The set of reforms and investments underpinning the extension intends to address the 
relevant14  CSRs  issued  as  part  of  European  Semester  as  required  by  Article  14(2), 
point  (d)  of  Regulation  (EU)  2024/1263.  In  particular,  the  reform  of  the  pension 
system, the improved efficiency and quality of public spending and the improvement 
of  the  budgetary  coordination  between  different  levels  of  government  relate  to  the 
fiscal structural CSRs in 2024 and 2019. These CSRs requested Belgium to ensure the 
fiscal sustainability of the pension system, improve the composition and efficiency of 
public  spending  and  the  coordination  of  fiscal  policies  by  all  levels  of  government. 
The labour tax reform, the labour market reform including the reintegration of long-
term  sick  and  limiting  unemployment  benefits  in  time  relate  to  the  CSRs  in  2019, 
2021,  2022,  2023  and  2024,  requesting  to  reform  the  tax  and  benefits  system  to 
remove disincentives to work. The measure improving the business environment and 
reducing administrative burden relate to the CSRs in 2019, 2020 and 2024, requesting 
to  improve  the  business  environment  and  to  reduce  the  regulatory  burden  and 
complexity. 

14 

CSRs considered ‘relevant’ are recommendations: i) adopted by the Council from 2019 onwards, ii) for 
which the Member State has not yet made ‘full’ or ‘substantial’ progress in addressing them and are not 
outdated (assessed as ‘Not Assessed / No Input to Add ’), as assessed in the latest European Semester 
surveillance exercise (available in CeSaR (europa.eu)), iii) not linked to purely fiscal SGP-related and 
iv) not covering the same challenge but in a rephrased manner. 

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(36)  The  plan  ensures  that  the  planned  overall  level  of  nationally  financed  public 
investment realised on average over the period covered by the RRP is maintained, as 
required by Article 14(4) of Regulation (EU) 2024/1263. 

Table 5: Nationally financed public investment in the plan (% of GDP) 

Average level over 
the period covered by 
the RRP (2021 to 
2026) (15) 

2.9 

2025 

2026 

2027 

2028 

2029 

Average over the 
duration of the plan 

3.2 

3.2 

3.1 

3.0 

3.0 

3.1 

Source: Medium-term fiscal-structural plan of Belgium 

(37)  Finally, the set of reform and investment commitments underpinning an extension can 
be  regarded  as  consistent  with  the  commitments  in  the  RRP  and  the  Partnership 
Agreement agreed under the Multiannual Financial Framework as required by Article 
14 of Regulation (EU) 2024/1263. The additional specifications to the pension reform 
and the spending reviews are consistent with the commitments taken under the RRP. 

(38) 

In  conclusion,  the  set  of  reforms  and  investments  underpinning  the  extension  of  the 
adjustment period is assessed as fulfilling, taken altogether, the criteria in Article 14 
of  Regulation  (EU)  2024/1263.  As  a  result,  the  adjustment  period  can  be  extended 
from 4 to 7 years, as put forward in the plan. 

Other reform and investment intentions in the plan responding to the main challenges 
identified  in  the  context  of  the  European  Semester  and  addressing  the  common 
priorities of the Union 

(39)  Besides  the  set  of  reforms  and  investments  underpinning  an  extension  of  the 
adjustment  period,  the  plan  describes  policy  commitments  concerning  other  reforms 
and  investments  to  respond  to  the  main  challenges  identified  in  the  context  of  the 
European Semester, especially the CSRs, and to address the common priorities of the 
EU.  The  plan  includes  44  reforms  and  investments,  of  which  12  are  financially 
supported  by  the  Recovery  and  Resilience  Facility  and  1  by  the  European  Regional 
Development Fund. 

(40)  Concerning  the  common  priority  of  a  fair  green  and  digital  transition,  including  the 
climate objectives set out in Regulation (EU) 2021/1119, the plan includes 20 reforms 
and  investments.  Related  to  2022  and  2023  CSRs  to  reduce  the  overall  reliance  on 
fossil fuels,  step up energy efficiency improvements  and the reduction of fossil fuel 
use  in  buildings,  and  further  stimulate  the  decarbonisation  of  industry,  the  plan 
includes  measures  such  as  increasing  the  VAT  rate  on  certain  fossil  fuels  (federal 
level),  further  grants  and  loans  for  energy-efficient  housing  renovation  (included  in 
the Recovery and Resilience Facility), shifting charges from electricity to fossil fuels, 
developing  an  industrial  climate  transition  plan  (Flanders),  investing  in  the  energy-
efficient  renovation  of  public  buildings  and  in  a  research  platform  on  the  green 
transition  (included  in  the  Recovery  and  Resilience  Facility)  (French  Community). 
Related to 2019, 2022, 2023 and 2024 CSRs on soft mobility and to increase the use 

15 

It is assumed and accepted that the two periods will overlap. The requirement to maintain the level of 
investment is intended to apply to the years after the end of the lifetime of the Recovery and Resilience 
Facility. 

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and  supply  of  low  emission  transport,  relevant  measures  concern  the  investment  in 
cycling infrastructure and public transport in Flanders (included in the RRF), as well 
as reforming vehicle taxation and investing in the Trans-European Transport Network 
(TEN-T) and the renovation of bridges in Wallonia. The measures in the plan related 
to the priority of digital transition include a digital strategy for higher education and 
the digitalisation of childcare management in the French Community (included in the 
RRF)  and  investments  in  the  digitalisation  and  cybersecurity  of  SMEs  in  Flanders. 
The plan does not include other reforms and investments aimed to address the 2019, 
2020,  2022,  2023  and  2024  CSRs  at  other  government  levels  and  on  upgrading  rail 
infrastructure, investing in the circular economy and facilitating energy sharing.  

(41)  Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European Pillar of Social Rights, the plan includes 16 reforms and investments related 
to the 2019 CSR on the fiscal sustainability of public finances, such as the review of 
revenues and expenses and improving long-term care in Flanders, as well as investing 
in  health prevention in Wallonia. Related to  CSRs in 2019, 2022, 2023 and 2024  to 
address labour shortages and skills mismatches, the plan includes measures to reform 
the social benefit system (federal level), to strengthen the activation of job seekers and 
to  better  align  job  seekers  competences  to  labour  market  needs  (supported  by  the 
European  Regional  Development  Fund)  (Flanders),  to  reform  employment  policy 
(Wallonia), to invest in early childcare in Flanders and Wallonia. Related to CSRs in 
2019, 2022, 2023 and 2024 to  improve the  education and training systems, the plan 
includes measures to reform the basic curriculum and strengthen language knowledge 
in  the  Flemish  education  system  and  to  fight  against  school  drop  out  in  the  French 
Community (included in the RRF). Related to CSRs in 2019 and 2024 to reduce the 
regulatory  and  administrative  burden  for  companies,  the  plan  includes  measures  to 
simplify  the  business  environment  in  Flanders.  The  plan  does  not  include  other 
reforms  and  investments  aimed  to  address  the  2019,  2022,  2023  and  2024  CSRs  at 
other government  levels  as well as  on  making the long-term  care system  more cost-
effective and strengthening the teacher profession. 

(42)  Concerning the common priority of energy security, the plan includes three measures, 
such  as  the  study  and  development  of  small  nuclear  reactors  (SMRs)  and  further 
research  on  nuclear  capacity.  Related  to  2022  and  2023  CSR  to  accelerate  the 
deployment  of  renewable  energies  and  related  grid  infrastructure,  the  plan  includes 
measures  such  as  further  streamlining  permitting  procedures  in  Flanders.  The  plan 
does not include other reforms and investments aimed to address the 2022 and 2023 
CSRs at other government levels. 

(43)  Concerning  the  common  priority  of  defence  capabilities,  the  plan  includes  three 
measures to reach the objectives of its strategic defence plan STAR (Security/Service, 
Technology,  Ambition,  Resilience)  in  view  of  enhancing  defence  policy  and 
strengthening its defence capabilities beyond the NATO norm. The plan also includes 
innovation support targeted to defence industry in Flanders. 

(44)  The  plan  provides 

information  on 

the  consistency  and,  where  appropriate, 
complementarity,  with  the  cohesion  policy  funds  and  Belgium’s  RRP.  The  plan 
underlines  that  all  the  government  entities  commit  to  implementing  the  RRP  in  line 
with the country specific recommendations.  In addition, the Flemish region states its 
commitment to implement the projects of the cohesion policy for 2021-2027. 

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(45)  The plan provides an overview of the public investment needs of Belgium related to 

the common priorities of the EU. 

In relation to the fair green and digital transition, the plan highlights the need to invest 
in renewable energy, the rail network and cybersecurity. 

In  relation  to  social  and  economic  resilience,  the  plan  refers  to  investment  needs  to 
reform  the  pension  system  and  to  encourage  Belgians  to  engage  in  entrepreneurial 
activities by providing an attractive environment with as few barriers as possible.   

In relation to energy security, the plan highlights the need for Belgium to strengthen 
the security of its energy equipment, by investing in research and in its electrical grid 
to make it more robust. 

In relation to building up defence capabilities, the plan highlights Belgium’s ambition 
to comply with the NATO commitments.  

Conclusion of the Commission’s assessment 

(46)  Overall, the Commission is of the view that Belgium’s plan fulfils the requirements of 

Regulation (EU) 2024/1263. 

OVERALL CONCLUSION  

(47) 

In accordance with Article 17 of Regulation (EU) 2024/1263, the net expenditure path 
as set in the plan should be recommended by the Council to Belgium, and the set of 
reforms  and  investments  underpinning  the  extension  of  the  adjustment  period  to  7 
years should be endorsed. 

HEREBY RECOMMENDS that BELGIUM: 

(1)  Ensure that net expenditure growth does not exceed the maxima established in 

Annex I to this Recommendation. 

(2) 

Implement the set of reforms and investments that underpins the extension of 
the  fiscal  adjustment  period  to  7  years,  as  established  in  Annex  II  to  this 
Recommendation, by the indicated deadlines. 

In  addition,  the  Council  invites  Belgium  to  ensure  the  delivery  of  other  reforms  and 
investments  responding  to  the  main  challenges  identified  in  the  context  of  the  European 
Semester, in particular in the country-specific recommendations, and addressing the common 
priorities of the Union. 

ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Belgium 

Years 

2025 

2026 

2027 

2028 

2029 

Growth rates 

Annual 

(%) 

Cumulative (*) 

3.6 

3.6 

2.5 

6.1 

2.5 

8.8 

2.1 

2.1 

11.1 

13.4 

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(*) The  cumulative growth rates are  calculated by  reference to the base year of 2024. The cumulative growth 
rates are used in the annual monitoring of ex-post compliance in the control account. 

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Set of reforms and investments that underpins an extension of the adjustment period to 7 years 

ANNEX II 

Main objective 

Description and timing of key 
steps 

Monitoring 
indicator(s) 

Pension 
reform 

(Adding 
to 
RRP  measure 
R-4.07) 

the 

Improve 
financial 
sustainability 
of 
the pension system 

Satisfactory 
of 
fulfilment 
milestones  C44-R-
407-M157  and  C44-
of 
R-407-M158 
Belgium’s RRP. 

the 

Delivery 
impact 
of 
reform 
Federal 
Bureau. 

of 

the 
assessment 
pension 
by 
the 
Planning 

reducing 

By  Q4  2025,  delivery  of 
milestones  C44-R-407-M157 
and 
of 
C44-R-407-M158 
Belgium’s  RRP,  notably  by 
the 
permanently 
projected 
in  public 
increase 
pension  spending  by  at  least 
0.3%  of  GDP  by  2029  and  by 
at least 1.0% of GDP by 2040, 
compared  to  the  2024  Ageing 
Report 
projections,  while 
ensuring that the overall impact 
of  the  pension  reform  between 
2029  and  2070  will  not  result 
in debt cumulation. 

By Q1 2027, entry into force of 
legislation 
the 
following measures 

including  on 

(i)  Actuarial neutrality 

(abolishing current bonus 
and introducing 
bonus/malus system) 
(ii)  Reduction of assimilated 
periods in pension 
calculation 
(iii) Phasing out of 

preferential schemes for 
civil servants 

(iv) Extinction of sickness 

pension 

(v)  Limited indexation of 
civil servants’ high 
pensions 

(vi) Harmonization of career 
requirements for early 
retirement 

By  Q4  2029,  delivery  of  an 
impact 
the 
pension reform. 

assessment  of 

Spending 
reviews 

Adopt  compulsory 
saving  targets  for 

complete 
2026, 
By  Q4 
spending  reviews  in  the  areas 

Satisfactory 
fulfilment 

of 

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to 
(Adding 
RRP  measure 
R-6) 

the  years  2026-
2029 

of  a)  fossil  fuel  subsidies  and 
of  b) 
tax 
exemption 
for  R&D  work, 
overtime and night/shift work. 

the  withholding 

impact 

explaining 

As  of  Q4  2026,  delivery  of  an 
assessment 
annual 
report 
the 
permanent  overall  reduction  of 
annual  expenditure  of  at  least 
0.1%  of  GDP  in  2026,  and  as 
of Q4 2029 of at least 0.3%  in 
the 
2029, 
expenditure 
at 
unchanged policies.  

compared  with 
projections 

milestones C61-R-6-
M207  of  Belgium’s 
RRP. 

of 
Completion 
spending  reviews  by 
Federal 
the 
authorities 
the 
in 
areas of a) fossil fuel 
subsidies  and  of  b) 
the  withholding  tax 
exemption  for  R&D 
work,  overtime  and 
night/shift work. 

of 

an 
impact 

Delivery 
annual 
assessment 
explaining 
the 
achievement  of  a 
permanent  reduction 
annual 
of 
to 
expenditure  up 
2029  compared  with 
expenditure 
the 
projections 
at 
unchanged policies. 

Labour 
market 
reform 

(new measure) 

Strengthen 
incentives  to  work 
and  reduce  long-
term sickness 

Entry  into  force  of 
legislation  to  reduce 
unemployment 
benefits  and 
term sickness. 

long-

of 

Delivery 
an 
impact 
assessment 
the 
showing 
permanent  reduction 
of  expenditure  on 
unemployment 
benefits  and 
long-
term sickness leave.  

By Q4 2025, entry into force of 
legislation  which  permanently 
decreases  general  government 
expenditure  on  unemployment 
benefits and long-term sickness 
leave by  at  least  0.3% of GDP 
per year from 2027 by: 

(i)  limiting unemployment 

benefits to maximum two 
years 

(ii)  reducing long-term sickness 
by requiring employers to 
contribute to the payment of 
incapacity benefits and by 
increasing accountability for 
employees and doctors. 

By  Q2  2027,  delivery  of  an 
impact  assessment 
justifying 
the  permanent  reduction  of 
0.3% of GDP in expenditure on 
unemployment  benefits  and 

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Tax reform 

(new measure) 

labour 

Increase 
market 
by 
participation 
reducing 
tax 
burden  on  labour 
and  removing  tax 
expenditure 

the 

Entry into force of a 
law to reform labour 
taxation.  

Entry into force of a 
law 
introducing 
capital gains tax. 

of 

Adoption 
a 
decision  limiting  the 
welfare envelope. 

Delivery 
by  Q2 
2029  of  an  impact 
assessment 
justifying 
the 
budgetary  impact  of 
the 
combined 
measures  of  the  tax 
reform. 

sickness 

leave, 
long-term 
compared  to  the  expenditure 
projections 
unchanged 
at 
policies. 

By Q1 2026, entry into force of 
legislation  which  reduces  the 
tax  burden  for  those  active  on 
the  labour  market,  totalling  a 
cumulative  0.5%  of  GDP  in 
2029 including by: 

(i)  increasing the personal tax-

free allowance for earned 
income 

(ii)  reforming the special social 

security contribution 

By Q1 2026, entry into force of 
legislation  which  finances  the 
labour tax reduction of 0.5% of 
GDP in 2029 by: 

(i)  removing tax expenditure, 

including: 
▪ abolishing the tax reduction 
for unemployment benefits 

▪ limiting the ‘marital 

quotient’ 

(ii)  increasing capital related 

taxes, including: 
▪ introducing of a 10% capital 
gains tax on realized capital 
gains. 

▪ abolishing the tax 

deductibility of mortgage 
interest for secondary 
residences. 

(iii) limiting the welfare envelope. 

Delivery  by  Q2  2029  of  an 
impact  assessment 
justifying 
the  0.5%  of  GDP  budgetary 
impact 
combined 
the 
measures  of  the  tax  reform, 
unchanged 
to 
compared 
policies. 

of 

Budgetary 
coordination 

Implement 
effective 

By Q4 2025, entry into force of 
legislation to ensure: 

Entry  into  force  and 
effective 

EN 

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of 
2013 

implementation 
adapted 
cooperation 
agreement  to  ensure 
effective  budgetary 
coordination 
between  the  federal 
federated 
and 
entities.  

tasks  of 

Adoption of a Royal 
redefining 
Decree 
the 
the 
Public 
Section 
Sector  Borrowing 
Requirement  of  the 
High  Council  of 
Finance.  

Entry  into  force  of 
and 
legislation 
adoption 
of 
measures to improve 
the 
business 
environment.  

Delivery of the SME 
plan. 

(new measure)  budgetary 

(i)  effective budgetary 

coordination 
between 
federal 
federated entities 

the 
and 

coordination between the 
federal and federated entities. 

(ii) Redefining the tasks and 

enhancing the financial and 
staff capacity of the High 
Council of Finance. 

By Q4 2026, entry into force of 
legislation  to  ensure  effective 
coordination 
budgetary 
and 
federal 
between 
federated  entities  by  setting 
multiannual  budgetary  targets 
for all entities. 

the 

Business 
environment 
and 
regulation 

(new measure) 

the 

by 

and 

Improve 
business 
environment 
simplifying 
regulation 
reducing 
administrative 
burden 

By Q4 2025, entry into force of 
legislation  and  adoption  of 
measures 
the 
improve 
to 
business environment by: 

(i)  reducing the administrative 
burden for companies. 
(ii)  simplify procedures to 

improve access by SME’s to 
public procurement. 

(iii) an SME plan with a specific 
focus on start-ups to reduce 
cost of doing business 

Done at Brussels, 

For the Council 
The President 

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