COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Belgium Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Belgium
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: Belgium, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 201 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - Belgium Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Belgium {COM(2025) 201 final}  
 
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Moderate economic growth 

Economic growth in Belgium slowed down 
in  2024  and  is  expected  to  decelerate 
also  in  2025 (1).  In  2024,  economic  activity 
grew  by  1%,  fuelled  mainly  by  robust  private 
consumption.  In  2025,  private  consumption 
and  investment  are  expected  to  slow  down. 
Following  a  significant  decline  over  the  last 
two years, exports and imports are expected to 
continue  their  decrease  in  2025,  impacted  in 
particular  by  external  shocks,  including  the 
introduction of US tariffs. Overall, GDP growth 
is projected at 0.8% in 2025. 

Headline  inflation  is  expected  to  remain 
high.  The  gradual  phasing  out  of  energy 
measures  led  to  increased  energy  prices. 
Combined  with  high  food  prices,  headline 
inflation  in  2024  resulted  in  the  highest 
annual 
(4.3%). 
Inflationary  pressures  are  set  to  ease,  as 
industrial  goods  and  energy  prices  are 
projected  to  slow  down  significantly,  bringing 
inflation down to 2.8% in 2025, still above the 
EU average of 2.3%.  

the  euro  area 

rate 

in 

and 

Although 

rates 
disparities. 

The  labour  market  is  hindered  by  low 
significant 
participation 
regional 
the 
employment  rate  reached  a  historic  high  in 
2024,  it  remains  below  the  EU  average.  In 
addition,  low  activity  rates  (77.2%  against 
83.3%  in  the  EU),  especially  for  low-skilled, 
people  with  a  migrant  background  and  older 
workers  persist.  Unemployment  reached  5.7% 
in 2024 but varies substantially across regions 
(see  Annexes  10  and  17).  Labour  shortages 
and  skills  mismatches  persist,  with  Belgium 

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

country reports was 30 April 2025. 

registering one of the highest vacancy rates in 
2024 (see Section 4). 

Rising pressure on public finances 

Public  finances  are  deteriorating.  The 
headline  deficit  increased  to  4.5%  of  GDP  in 
2024  and  is  forecast  to  increase  to  5.4%  of 
GDP  in  2025  due  to  expenditure  growth,  as 
revenue  remains  stable  at  around  50%  of 
GDP.  Without  policy  action,  public  debt  would 
continue  to  increase  from  104.7%  of  GDP  in 
2024 to 126.4% in 2035. 

In 

be 

2024, 

allowed. 

Net expenditure growth in 2025 is above 
the maximum in the medium-term fiscal-
structural plan but applying the flexibility 
under  the  national  escape  clause  this 
would 
net 
expenditure (2)  in  Belgium  grew  by  4.2%  (see 
Annex  1).  This  increase  is  mainly  driven  by 
ageing-related  costs  and  gross  fixed  capital 
formation. In 2025, net expenditure is forecast 
by the Commission to grow by 5.0%, which is 
above  the  maximum  growth  rate  included  in 
the medium-term fiscal-structural plan (3). The 
net  expenditure  growth  is  mainly  driven  by 
ageing-related 
costs  and  defence.  The 
projected deviation from the maximum growth 

expenditure, 

(2)  Net expenditure is defined in Article 2(2) of Regulation 
(EU)  2024/1263  as  government  expenditure  net  of  (i) 
interest 
revenue 
(ii) 
measures, (iii) expenditure on programmes of the Union 
fully  matched  by  revenue  from  Union  funds,  (iv) 
national  expenditure  on  co-financing  of  programmes 
funded  by 
(v)  cyclical  elements  of 
unemployment  benefit  expenditure,  and  (vi)  one-off 
and other temporary measures. 

discretionary 

the  Union, 

(3)  The medium-term plan of Belgium has been positively 

assessed by the Commission (Commission 
recommendation for a Council recommendation 
endorsing the national medium-term fiscal-structural 
plan of Belgium, COM/2025/263 final). 

2 

 
 
 
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

Belgium  performs  well  and  is  improving  on  all  SDGs  on  productivity  (SDGs  4,  8,  9),  while  it  is 
moving  away  from  achieving  SDG  16  on  peace,  justice  and  strong  institutions  and  SDG  17 
(Partnerships for the goals). 

Belgium performs well or is improving on all SDGs related to fairness (SDGs 1, 3, 4, 5, 7, 8, 10) 
and to environmental sustainability. However, it is losing ground on SDG 14 (Life below water) 
and needs to catch up with the EU average on SDG 7 (Affordable and clean energy), 15 (Life on 
land), 13 (Climate action) and SDG 11 (Sustainable cities and communities). 

for  defence 
the 
of 

rate  is  allowed  under  the  conditions  of  the 
national  escape  clause  based  on  current 
The 
projections 
implementation 
and 
investments  underpinning  an  extension  of  the 
fiscal adjustment to 7 years (4) in the medium-
term fiscal-structural plan is due after 30 April 
2025. 

spending. 
reforms 

Rising spending will limit fiscal space at a 
time  of  high  public  investment  needs.  All 
levels  of  government  are  anchoring  spending 
reviews to their budgetary process to improve 
the  composition  and  efficiency  of  their  public 
spending.  Public  investment  remains  lower 
than  in  other  EU  countries  and  increasing 
public investment will be crucial to finance the 
twin transition and achieve the UN Sustainable 
Development  Goals  (see  Box  1).  Return  on 
investment  can,  however,  significantly  be 
public 
in 
hampered 
investment management (see Box 2). 

inefficiencies 

by 

Rising ageing costs put public 
finances under pressure 

Ageing-related  spending  is  projected  to 
increase  substantially  by  2070.  The  2024 
Ageing 
ageing-related 
spending to increase by 5.1 percentage points 

projects 

Report 

(4)  According 

to 

the 

the  Regulation, 

required  fiscal 
adjustment (in particular, to put or keep the government 
debt ratio on a plausible downward path by the end of 
the adjustment period or keep it at prudent levels below 
60% of GDP and to bring or maintain the deficit below 
3% of GDP over the medium term) should be completed 
in four years but may be extended over a period to up 
seven years if the Member State commits to a relevant 
set of reforms and investments. 

the 

(pps)  between  2022  and  2070,  substantially 
higher than the EU average of 1.4 pps (5). The 
bulk  of 
in  ageing-related 
expenditure relates to pensions and long-term 
care.  Rising  ageing-related  spending  poses  a 
challenge  to  consolidate  government  finances 
and bring down the high level of public debt. 

increase 

the 

The  increase  in  age-related  spending  is 
mostly due to rising pension expenditure. 
The  2024  Ageing  Report projects  spending  on 
pensions to increase by 3.5% of GDP between 
2022  and  2070  (EU  average  0.4%),  which  is 
about 1.2 pps of GDP higher than in the 2021 
Ageing  Report.  Of  this  revision,  0.6  pps  is 
explained  by  measures  adopted  in  December 
2020,  which  include  increasing  the  minimum 
pension  and  abolishing 
correction 
coefficients used to calculate the new pension 
in  the  self-employed  scheme.  The 
latter 
increases  the  pension  rights  of  self-employed 
without  increasing  their  social  contributions, 
further  eroding  the  financing  of  pension 
expenditure (6).  The  federal  government  plans 
to reform the pension system by introducing a 
bonus-malus  system  (to  replace  the  bonus 
system  introduced  in  2024),  increasing  the 
relevance  of  the  period  effectively  worked 
compared  to  periods  of  assimilated  work, 
further harmonising the civil servants’ pension 
system with the general system, and gradually 
phasing-out  the  favourable  conditions  under 
some  special  pension  regimes  in  the  public 
sector. 

(5)  European Commission and Economic Policy Committee, 

2024 Ageing Report - country fiche Belgium. 

(6)  The 2024 Ageing Report does not include the measures 
legislated in April 2024, which are estimated to reduce 
spending  on  pensions  by  0.2  pps  of  GDP  by  2070, 
thereby only partially offsetting the increase due to the 
2020 measures. 

3 

 
 
 
 
to 

According 

Ageing  is  also  projected  to  lead  to  a 
substantial  increase  in  long-term  care 
spending. 
demographic 
projections,  the  total  population  aged  75  or 
more is expected to rise by 74.5% over 2022-
2050  and  by  97.3%  over  2022-2070 (7).  This 
demographic  trend  will  translate  into  growing 
numbers of older people in need of long-term 
care and ultimately into higher long-term care 
spending.  According  to  the  2024  Ageing 
Report, spending on long-term care in Belgium 
is projected to increase by a further 1.7 pps of 
GDP by 2070 (EU average 0.8 pps) (8). 

Graph 1.1: Percentage of people independent 
or mildly dependent on care in residential 
care facilities (O/A Katz score) 

Source: https://www.healthybelgium.be/en/health-
system-performance-assessment/specific-domains/care-
for-the-elderly 

Evidence  suggests  a  possible  overuse  of 
residential  care  and  unnecessary  or 
institutionalisation.  Belgium 
premature 
ranks  high  for  long-term  care  in  residential 
institutions  and  rather  low  for  long-term  care 
at  home  compared 
to  other  European 
countries (9). Available data suggest that there 
is  a  high  level  of  unnecessary  or  premature 
institutionalisation 
care), 
(in 
although  it  has  been  decreasing  in  recent 
(see  Graph  1.1).  The  overuse  of 
years 

residential 

(7)  Federal Planning Bureau, Population perspectives 

2024-2070, February 2025. 

(8)  In 2022, government spending on long-term care 

amounted to 2.3% of GDP (EU average 1.7%), which 
made Belgium one of the countries with the highest 
long-term care spending in the EU. 

by 

including 

residential care compared with other countries 
suggests  that  there  may  be  room  to  improve 
the  cost-efficient  use  of  different  care 
settings, 
strengthening 
community-based  services.  In  particular,  the 
share  of  individuals  overly  dependent  on 
residential  care  facilities  was  high  in  the 
Brussels Region and in Wallonia. Greater focus 
on preventive care, where Belgium spends less 
than  many  other  Member  States,  could  also 
help  reduce  long-term  care  expenditure  (see 
Annex 14). 

is 

and 

adequate 

Ensuring 
financially 
sustainable  long-term  care  remains  a 
challenge.  All  the  federated  entities  have 
taken  measures  to  strengthen  the  supply  and 
coordination  of  home  care  services,  whether 
through  regional  health  organisations,  local 
service  centres,  home  care  services  or  day-
introducing  a 
care  centres.  Flanders 
healthcare prognosis model to determine care 
needs and the necessary funding. The Brussels 
Region  is  revising  the  accreditation  standards 
for  care  services  to  enable  older  people  to 
remain  at  home (10).  Wallonia  focusses  on 
increasing 
the  efficiency  of  care  paths, 
preserving  autonomy  and  reducing  the  need 
for  institutionalisation  and  long-term  care. 
Effective monitoring of the system for elderly 
care  is  paramount  to  improve  the  use  of  the 
different  care  settings  and  of  elderly  care-
related  expenditure,  to  continue  to  guarantee 
affordable care and services and to maintain a 
decent standard of living for beneficiaries (11). 

Improving the fiscal framework 

There  is  room  to  strengthen  Belgium’s 
medium-term 
framework. 
budgetary 
Belgium  is  the  only  country  without  a  fully 
developed  multiannual  fiscal  planning  at 

(10)  BDO, 2022, Révision des normes de financement des 
maisons de repos et des maisons de repos et de soins 
de la région bruxelloise. 

(9)  KCE, Performance of the Belgian health system – report 

(11)  Council Recommendation on access to affordable high-

2024, KCE report 376. 

quality long-term care – Belgian report 2024. 

4 

1015202530354045502008201020122014201620182020BEBRUFLAWAL 
  
 
 
Box 2: 

Barriers to private and public investment 

Private investment in Belgium is held back by: 

• 

• 

• 

labour  shortages,  particularly  in  technical  professions,  against  the  background  of  a  low 
employment rate and high disincentives to work, which hamper competitiveness; 

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 
firms, which are also potential drags on productivity. 

Public investment management in Belgium currently suffers from: 

•  A lack of coordination across government levels: in most areas, public investment is almost 
entirely  delegated  to  regions  and  communities.  Multi-year  investment  plans  are  missing  at 
federal and at federated entity level, although Flanders and Wallonia started taking action. 

•  A need to strengthen public investment project preparation: there are no standard procedures 
for the appraisal or selection of public investment projects at federal level, and the same is 
true  in  Wallonia,  Flanders  and  the  Brussels  Region.  Flanders  has  established  a  process  to 
expedite the delivery of complex projects, but it is not mandatory. 

•  Ex post reviews are often carried out only when needed and asset registers are not there yet. 
The  implementation  of  Belgium’s  recovery  and  resilience  plan  is  delayed  with  46.5  %  of  the 
funds disbursed. Belgium has fulfilled 28.3 % of the milestones and targets in its recovery and 
resilience  plan.  Enhancing  administrative  capacity  and  improving  the  timely  detection  and 
resolution of potential delays would support the effective execution of the plan. 

It remains important to accelerate the implementation of cohesion policy programmes. The mid-
term review offers opportunities to speed up progress and better address EU strategic priorities 
related to competitiveness, defence, housing, water resilience and the energy transition. 

While  Belgium  has  signalled  interest  in  leveraging  the  Strategic  Technologies  for  Europe 
Platform under cohesion policy, Belgium can further support the development or manufacturing 
of  critical  technologies  in  the  areas  of  digital  and  deep  tech,  clean  and  resource  efficient 
technologies, and biotechnologies. 

of 

its 

fiscal 

national level (12), which risks undermining the 
credibility 
commitments. 
Introducing such a tool would  better align the 
the 
national 
requirements of the new economic governance 
framework, which focus on the medium term. 

framework  with 

fiscal 

The  cooperation  agreement  between  the 
federal  and  the  federated  entities  to 
ensure  effective  budgetary  coordination 
has  not  been  fully  implemented.  The  lack 
of agreement on multiannual targets proposed 
at  each  level  of  government  by  the  High 
Council 
effective 
monitoring  of  compliance  and  increases  the 

prevents 

Finance 

of 

(12)  National  Bank  of  Belgium,  2020,  ‘Belgium’s  fiscal 
framework:  what  is  good  and  what  could  be  better?’, 
Economic  Review.  Some  multiannual  fiscal  planning 
exists at local authority level and to a certain extent for 
some regions and communities (e.g. Flanders). 

5 

risk of deviating from the medium-term fiscal 
trajectory.  While  ensuring  effective  budgetary 
coordination,  the  cooperation  agreement  of 
2013 would need to be adjusted to align with 
the new economic governance framework. 

the  autonomy  and 

Boosting 
staff 
capacity  of  the  secretariat  of  the  High 
Council of Finance’s Borrowing Section  is 
crucial.  The  lack  of  human  and  financial 
resources  has  prevented  the  High  Council  of 
Finance  from  officially  performing  its  main 
task of monitoring compliance with fiscal rules 
and  performing  the  role  assigned  to  it  in  the 
correction  mechanism.  It  also  partly  explains 
it  has  not  performed  any  ex  post 
why 
assessments  of  forecasts  and  why  it  has 
relatively  poor  visibility  in  the  media.  The 
government  also  plays  a 
in 
nominating  members  of  the  High  Council  of 
Finance and secretariat staff. 

large 

role 

 
 
 
contribution  and  increase  the  employment 
bonus for low wages. 

leading 

The high tax burden on labour is offset by 
to 
subsidies, 
many  wage 
distortions.  Special  tax  schemes  such  as 
meal vouchers, commuter  subsidies, flexi-jobs 
or  withholding  tax  exemption  for  night/shift 
work  tend  to  create  economic  inefficiencies 
and  environmental  distortions  (see  Section  3). 
Wage subsidies and other tax expenditure also 
make  the  tax  system  complex,  which  weighs 
on  the  business  environment.  While  wage 
subsidies  are  costly  for  the  budget  and 
generally  not  well-targeted,  there  are  only 
limited  plans  to  reduce  their  use  at  federal 
level. Moreover, the  federal  government plans 
to  increase  wage  subsidies  to  address  labour 
shortages (flexi-jobs for students and retirees) 
or  to  reduce  cross-border  purchases  (meal 
vouchers).  As  regards  tax  expenditure,  the 
federal  government  plans  to  extend  reduced 
VAT rates to some goods and services, further 
increasing  the  VAT  gap,  which  is  well  above 
the EU average (see Annex 2). 

Capital  taxation  is  complex  and  distorts 
investment  behaviour.  Most  capital  income 
is  subject  to  a  final  withholding  tax  and 
excluded  from  the  personal  income  tax  base. 
However,  specific  tax  rules  apply  to  several 
types  of  investment  such  as  certain  pension 
schemes  and  interest  income  from  savings 
accounts. This distorts resource allocation and 
may  create  tax-induced  overinvestment  in 
certain  types  of  assets (15)  (see  Annex  5). 
Immovable property investments, for instance, 
are  favoured  due  to  the  underestimation  of 
cadastral  income  (used  to  calculate  property 
income 
tax)  and  the  absence  of  rental 
taxation.  While  the  federal  government  plans 
to  remove  the  interest  deduction  for  second 
homes  for  individuals  (not  corporations),  the 
favourable  tax  treatment  of  interest  income 
from  saving  accounts  or  of  certain  pension 
schemes  remains  untouched.  The  coalition 
agreement  includes  the  taxation  of  realised 
capital  gains  on  financial  assets  to  partially 
finance the labour tax reduction. 

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

Policy Studies, 25. 

Reforming the tax and benefits 
system to increase work incentives 

for 

the 

benefits 

relatively 

unemployment 

The  design  of  social  benefits  creates 
disincentives  to  work.  Unlike  all  other  EU 
countries, 
are 
currently unlimited in time and are not means-
tested 
long-term  unemployed. 
Requirements  to  get  people  into  work  or 
lenient (13). 
training  are  also 
Moreover, several non-cash benefits are linked 
to  the  unemployment  status  of  beneficiaries, 
which  adds 
inactivity  and 
to  existing 
unemployment and lowers the transparency of 
the  system  in  terms  of  work  incentives.  The 
federal 
limit 
unemployment  benefits  to  maximum  two 
years  for  those  under  55  and  to  link  social 
benefits  to  income.  Estimates  suggest  that 
limiting unemployment benefits in time would 
affect  low-income  households  more,  but  that 
the overall impact on poverty would be rather 
small (14).  Moreover,  in  view  of  a  general 
benefit  ceiling,  the  federal  government  plans 
to set up a central  register for social  benefits 
to improve transparency of the benefit system. 

government 

plans 

to 

income 

High  personal 
taxes  deter 
disadvantaged  groups  from  taking  up 
work  or  from  working  more  hours. 
Taxation  on  labour  (social  contributions  and 
income  taxes)  is  one  of the  highest  in  the  EU 
at  all  income  levels.  The  sizeable  low-wage 
low-wage  earners  from 
trap  discourages 
working  more  or  striving  for  higher  positions. 
For second earners, most of which are women, 
labour taxes and specific tax features such as 
the  marital  quotient  induce  low  levels  of 
working or unemployment. To incentivise work, 
the  federal  government  aims  to  make  gross 
salary  equal  to  net  salary  for  minimum  wage 
earners.  To  this  end,  it  plans  to  abolish  the 
marital  quotient,  increase  the  basic  tax-free 
allowance,  reduce  the  special  social  security 

(13)  OECD, 2018, How Demanding Are Activation 

Requirements for Jobseekers? 

(14)  Estimations performed by the European Commission’s 
Joint Research Centre, with the EUROMOD tax-benefit 
microsimulation model, forthcoming. 

6 

 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

Preserving  competitiveness  is  a  major 
challenge  for  the  Belgian  economy. 
Belgium  is  a  small  export-oriented  economy, 
with  one  of  the  most  open  economies  in  the 
EU (openness index of 84.4 in 2023). In recent 
years,  its  export  performance  dropped  by  6% 
on  a  three-year  average  basis,  potentially 
signalling  a  deterioration  in  competitiveness 
(see  Graph  2.1).  Supporting  competitiveness 
will  therefore  be  key,  e.g.  via  the  incentives 
provided  by  the  Strategic  Technologies  for 
Europe  Platform  to  invest  in  the  development 
or manufacturing of critical technologies. 

Graph 2.1: Export market share against 
advanced economies, goods and services 

Moreover,  high  inflation  increased  Belgium’s 
real  effective  exchange  rate  in  2024  relative 
to  its  main  competitors.  This  indicates  that 
Belgium’s  exports  are  becoming  more 
imports  cheaper.  This 
expensive  and 
reduces  Belgium’s  trade  competitiveness  and 
increases 
sustained 
risks 
competitiveness losses. 

the 

its 

of 

framework. 

The risk of lasting competitiveness losses 
is  mitigated  by  strict  implementation  of 
the  wage-setting 
The 
enforcement  of  the  wage  norm  (which  limits 
real  negotiated  wage  increases  to  avoid  cost 
differentials  with  key  export  competitors)  is 
expected to gradually offset the swift reaction 
consumer  price 
of  nominal  wages 
changes (16).  Nevertheless,  the  current  wage-
setting mechanism does not allow to take into 
levels 
account  differences 
across industries and firms, likely contributing 
to  overpay  in  low  productivity  sectors  and 
underpay  in  high  productivity  sectors.  The 
federal government plans various measures to 
reduce taxes on labour, but does not intend to 
adjust 
the  system  of  automatic  wage 
indexation. 

in  productivity 

to 

Source: European Commission 

Reducing investment barriers 

Monitoring labour costs is key 

High  labour  taxes  and  automatic  wage 
indexation  weigh  on  the  competitiveness 
of businesses. The high tax burden on labour 
(see Section 1) and automatic wage indexation 
in  Belgium  result  in  high  labour  costs  for 
employers.  Recent  episodes  of  high  inflation 
have  translated  into  nominal  hourly  wage 
in 
increases 
Belgium  that  are  significantly  above  the 
average  of  the  three  neighbouring  countries. 

(not  adjusted  for 

inflation) 

High energy costs are the major obstacle 
to  investment.  Belgium  depends  heavily  on 
it 
imported 
particularly  vulnerable  to  energy  price  hikes 
and this dents its competitiveness. Remedying 

fuels,  which  makes 

fossil 

(16)  According to the Central Economic Council, the gap in 

hourly nominal wage costs with respect to key 
neighbours decreased from 2.7% in 2023 to 1.0% in 
2024. This implies that 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. 

7 

75808590951001051100709111315171921232007=100BEEA20DEFRNL 
 
  
 
this  situation  means  accelerating  the  pace  of 
action  on  the  energy  transition  and  bringing 
energy  costs 
its 
neighbours (see Section 3). 

line  with  those  of 

in 

The  availability  of  skilled  staff  hinders 
business  and  investment  activity.  While 
the  job  vacancy  rate  has  fallen  recently,  it 
remains among the highest in the EU. This can 
be  explained  by  skills  mismatches, 
low 
incentives  to  work,  perceived  unattractive 
working  conditions  in  certain  sectors  and  low 
wage differentiation. Most job vacancies are in 
technical occupations, including healthcare and 
STEM-related jobs (see Section 4). 

start-up 

the  2024  EIB 

innovative 
to 

Difficulties  to  access  financing  may 
hamper 
firms. 
According 
Investment 
Survey (17),  65%  of  corporate  investment  in 
Belgium  is  financed  internally  and  88%  of 
Belgian  firms  are  satisfied  with  their  overall 
investment  level  over  the  past  three  years. 
This  suggests  that  Belgian  firms  do  not  face 
an  investment  gap.  However,  this  probably 
does  not  hold  for  firms  with  no  or  limited 
capacity  for 
internal  financing,  such  as 
innovative  start-up  firms,  in  particular  as  the 
domestic  markets  for  venture  and  growth 
capital  are  only  moderately  developed  (see 
Annex 5). 

Productivity is trending down 

Labour  productivity  growth  has  been 
weak  over  the  past  decade  compared  to 
the  EU.  At  more  than  130%  of  the  EU 
aggregate,  labour  productivity  (GDP  per  hour 
worked)  is  comparatively high in  Belgium, but 
growth  has  been  below  average  since  the 
2000s. In particular, labour productivity growth 
in  the  manufacturing  sector  turned  negative 
on  average  over  2019-2023 (18),  whereas  it 
accelerated  in  the  Netherlands  and  Germany. 
Similarly,  total  factor  productivity (19)  growth 

(17)  EIB Investment Survey 2024: Belgium overview. 

(18)  National Productivity Board, 2024 Annual Report. 

(19)  Productivity improvements due to technological 
progress and the skill of workers/managers. 

the  EU.  The  slowdown 

the  past  decade 
has  been  weak  over 
compared  to 
in 
productivity  growth  is  mainly  due  to  weaker 
productivity gains at sector level, rather than a 
change  in  the  structure  of  activities.  While 
manufacturing  experienced  relatively  strong 
labour  productivity  growth  but  made  up  a 
smaller  share  in  the  Belgian  economy,  the 
opposite  happened  in  other  sectors,  e.g.  in 
professional  and  scientific  services.  Several 
factors  explain  weak  productivity  growth, 
including low business dynamism and barriers 
to entry and conduct in retail and services. 

Belgium  has  one  of  the  lowest  levels  of 
business  dynamism  in  the  EU.  The  death 
rate  of  Belgian  firms  (when  they  cease 
trading) has been particularly low (3.8 in 2023 
compared to 8.0 in the EU) (20), which points to 
structurally  unviable  companies  remaining 
active. The general lack of business dynamism 
in  Belgium  is  a  potential  drag  on  productivity 
as  productive  resources  (labour  and  capital) 
are trapped in ‘zombie firms’, which limits the 
expansion  possibilities  of  healthy  and 
productive  incumbent  companies.  Moreover, 
young  and  innovative  firms  face  increased 
barriers to entry (21). In this respect, the share 
of high-growth firms in Belgium is significantly 
below the EU average. 

High  trade  restrictions  in  the  service 
sector  may  play  a  role  in  weakening 
business dynamism. Belgium has one of the 
highest  services  trade  restrictiveness  indices 
logistics 
for  architecture,  courier  services, 
(customs  brokerage  and  freight  forwarding) 
and  air  transport (22).  It  also  ranks  high  on 
service 
construction, 
commercial  banking,  accounting  services  and 
to  a  lesser  extent  on  engineering  services. 
Belgium  remains  quite  restrictive  for  some 
regulated professions.  According to the 2023-
2024  Product  Market  Regulation,  Belgium 

restrictions 

on 

(20)  National Bank of Belgium, Competitiveness scoreboard 

indicators. 2024 report. 

(21)  OECD WP (2017). The Walking Dead? Zombie Firms and 

Productivity Performance in OECD Countries. 

(22)  Intra-European Economic Area Services Trade 

Restrictiveness Index (Intra-EEA STRI). 

8 

 
 
 
remains  more  restrictive  for  most  of  the 
professions analysed (see Annex 4). 

Innovation diffusion is low 

to 

the  European 

is  concentrated 

Low  innovation  diffusion  may  contribute 
to  a  slowdown  in  productivity.  Belgium 
ranks  as  one  of  the  EU’s  innovation  leaders 
according 
Innovation 
Scoreboard (23). With 3.3% expenditure on R&D 
as  a  share  of  GDP  in  2023,  Belgian  R&D 
intensity is  among  the  highest in  the  EU,  well 
above  the  EU  aggregate  of  2.25%.  This  is 
driven  by  robust  R&D  policies,  world-class 
research  institutions  and  the  presence  of 
multinational  companies.  However,  Belgian 
R&D  activity 
in  a  few 
industries  and  companies,  which  may  partly 
explain  why 
into 
it  has  not 
sustained productivity growth (24). A few R&D-
intensive 
industries  –  the  pharmaceutical 
industry, computer, electronics and IT services 
–  account  for  the  lion’s  share  of  total  R&D 
spending.  The  strong  tax 
incentives  that 
support  R&D  might  therefore  benefit  just  a 
few  large  players.  OECD  estimates (25)  show 
that  small  and  medium-sized  enterprises 
(SMEs) received only 8% of the total amounts 
allocated in 2023, while accounting for almost 
the  number  of  beneficiaries. 
half  of 
Furthermore, 
in 
low 
Belgium (26),  which  may  be  due  among  other 
things  to  high  seniority  pay  and  low  pay 
transparency (27),  also  limits  the  spread  of 
innovation to the rest of the economy.  

job  mobility 

translated 

the 

High  levels  of  tax  relief  fail  to  reach 
companies  with  the  highest  growth 
potential.  Studies (28)  show  that  corporate 
incentives  for  R&D  are  not 
income  tax 

(23)  See the European Innovation Scoreboard for Belgium. 

(24)  See National Productivity Board, 2024 Annual Report. 

(25)  OECD (2021a) R&D Tax Incentives: Belgium, 2020. 

(26)  FPS Economy European Innovation Scoreboard: NL-FR. 

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

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

they effective? NBB Economic Review. 

in  stimulating  additional  R&D 
effective 
activities  and  that  direct  subsidies  and  labour 
tax  incentives  –  rather  than  corporate  income 
tax incentives – would boost R&D spending in 
small  start-ups  (see  Annex  3).  Reforming 
support  for  R&D  could  improve  the  efficiency 
of public support and better allocate resources 
to  high-growth  businesses.  In  addition  to 
moving from tax relief to direct subsidies, the 
OECD  suggested  capping  the  amount  eligible 
for corporate tax support to avoid the bulk of 
R&D  support  being  allocated  to  a  small 
number of large companies (29). 

Simplify the business environment 

in 

2022, 

regulatory 

A  high  regulatory  burden  and  complexity 
impairs  Belgium’s  business  environment. 
The  fragmentation  of  policy  action  across 
levels  of  government  and  the  absence  of 
effective  coordination  makes  the  business 
environment  complex.  81%  of  Belgian  firms 
experience  challenges 
in  complying  with 
regulatory  requirements,  well  above  the  EU 
average  (60%).  While  administrative  costs 
have  declined  from  3.5%  of  GDP  in  2000  to 
1.1% 
burden 
disproportionally weighs on SMEs (30). Belgium 
also  ranked  among  the  poorest  performers  in 
the  2022  Tax  Framework  Complexity  Index 
and  has  the  second  highest  share  of  firms 
devoting more than 10% of staff to regulatory 
requirements. The federal government plans to 
reduce  firms’  administrative  burden,  including 
simplifying the tax system and removing some 
VAT  formalities  (see  Annex  4).  To  avoid  the 
introduction  of  new  regulatory  requirements, 
mechanisms 
tape  and 
simplifying  regulation  could  be  strengthened 
at  all  levels  of  government  (see  Annex  6). 
implementing  possible 
Seeking  out  and 
economies  of  scale  could  be  eased  by 
streamlining government structures. 

for  cutting 

red 

(29)  OECD (2019) In-depth productivity review of Belgium. 

(30)  Compliance costs per employee in SMEs is estimated to 
be eight times higher than in larger firms and estimated 
compliance costs for SMEs are among the highest in the 
EU. 

9 

 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

existing 

solutions.  Moreover, 
scale  up 
promoting  circular  economy  practices  and 
sustainable  supply  chains  could  help  reduce 
industrial energy demand and the dependency 
on imports of critical raw materials (75.6% of 
material inputs in Belgium vs. 22% in the EU). 
So  far,  emission  reductions  in  manufacturing 
are mainly due to energy efficiency or product 
improvements rather than a shift to renewable 
energy  sources.  Further  spurring  renewables 
would help decarbonise industry. 

Electricity  for  industries  is  priced  much 
higher than gas. Taxes and levies in Belgium 
make  up  28%  of  electricity  costs,  but  only 
18%  of  gas  costs.  Taxes  and  levies  raise  the 
industries 
electricity-to-gas  price  ratio  for 
from  3.35  to  4,  which  is  one  of  the  highest 
ratios  in the  EU  and  undermines  incentives to 
switch  from  fossil  fuels  to  electricity.  The 
federal  government  plans  to  increase  the 
share  of  nuclear  energy  in  the  energy  mix  to 
reduce electricity costs. 

including 

The  transport  sector  still  accounts  for  a 
large  share  of  greenhouse  gas  emissions 
and  generates  road  congestion  costs. 
Greenhouse  gas  emissions  from  the  aviation 
and  maritime 
fuel 
sectors, 
consumption related to international transport 
activities  (56.1%  of  the  share  of  greenhouse 
gas  emissions  of  the  entire  transport  sector 
against  the  EU  average  of  26%  in  2022),  are 
particularly large compared with EU peers (32). 
Investments in sustainable fuel production and 
distribution  infrastructure  for  maritime  and 
aviation  transport  are  still  lacking.  Moreover, 
rail  transport  remains  insufficiently  attractive 
for  both  passenger  and  freight  transport.  The 
electrification  of  road  transport  is  steadily 
advancing,  as  evidenced  by  the  marked 
increase  in  the  number  of  electric  cars  and 

(32)  EU transport in figures: Statistical pocketbook 2024 

sharing 

More  action  is  needed  to  put  Belgium  on 
the path to its 2030 climate target. In its 
draft  updated  national  climate  and  energy 
plan,  Belgium  has  announced  measures  to 
address  climate  change.  Even  with  those 
additional measures, Belgium will fall short of 
meeting  its  new  2030  climate  target  for  the 
sectors (31),  achieving  a 
effort 
reduction of 42.6% instead of 47% compared 
to 2005 (Annex 7). Swift and steady adoption 
of  the  full  set  of  additional  measures  will  be 
critical,  while  further  policies  are  needed  to 
reduce  Belgium’s  high  dependency  on  fossil 
fuel  imports.  Tackling  these  challenges  would 
help 
long-term 
competitiveness  and  help  achieve  the  UN 
Sustainable Development Goals (Annex 15). 

Belgium’s 

boost 

Decarbonising industry 

The manufacturing sector makes up 30% 
of  Belgium’s  greenhouse  gas  emissions, 
among  the highest  share in the EU.  While the 
emissions 
intensity  of  manufacturing  has 
declined since 2017 in line with the overall EU 
trend,  it  remains  70%  above  the  EU  average. 
industries  have  a  strong 
Energy-intensive 
In  2023,  57%  of 
presence 
emitted  by  Belgian 
greenhouse  gases 
manufacturing came from industrial processes 
rather than from energy use. 

in  Belgium. 

Decarbonising  industrial  processes  and 
shifting  to  cleaner  energy  needs  to  be 
further 
Energy-intensive 
sectors  (e.g.  chemicals,  steel,  fertilisers  and 
cement) in particular need to be encouraged to 
develop  new  low-carbon  technologies  or  to 

incentivised. 

(31)  Sectors  outside  the  current  EU  emissions  trading 
system,  in  particular  buildings  (heating  and  cooling), 
road transport, agriculture, waste, and small industry. 

10 

 
 
 
 
public  charge  points.  However,  the  number  of 
passenger cars has steadily increased over the 
last  decade,  contributing  to  congestion  costs 
estimated at EUR 5.3 billion in 2024 (33). Policy 
options to reduce road congestion and further 
incentivise 
include 
additional  road  charging  differentiation  (by 
time,  CO2  performance  of  the  vehicle  and 
distance)  for  all  types  of  vehicles.  Promoting 
and  investing  further  in  public  transport  and 
car sharing as well as in active mobility would 
also make transport more sustainable. 

electrification 

fleet 

Enable renewables and boost 
energy efficiency 

in 

renewable  energy 

The  roll-out  of  renewables  in  Belgium  is 
low  and  needs to  accelerate.  With  a  share 
of 
final  energy 
consumption  of  only  14.7%  in  2023,  the  roll-
out of renewables is  among  the lowest in the 
EU.  In  its  updated  draft  national  climate  and 
energy  plan,  Belgium  has raised its target  for 
the share of renewables in 2030 from 17.5% 
to  21.7%.  However,  this  remains  below  its 
expected national contribution to the EU 2030 
target (33%). 

The  roll-out  of  renewable  electricity  is 
held back by constraints in the electricity 
network. Although curtailment of solar power 
due to grid congestion became a serious issue, 
investments  were 
no  new  onshore  grid 
announced.  In  addition,  Belgium’s  regulatory 
framework  still  hampers  the  development  of 
flexible  resources.  The  country  has  made 
commitments  to  promote  the  installation  of 
response 
electricity  storage  and  demand 
including 
regulatory 
frameworks  for  energy  storage  and  flexibility 
in  the  distribution  system.  However,  further 
investment  in  the  capacity  of  the  onshore 
distribution grid is needed. 

establishing 

by 

in  grid 

infrastructure  and 
Investing 
speeding  up  permit-granting  procedures 
of 
would 

promote 

roll-out 

the 

renewables.  Belgium  plans  to  deploy  an 
offshore  energy  island,  i.e.  a  first-of-its-kind 
artificial  energy  island  that  will  integrate 
additional  offshore  wind  farms  of  up  to  3.5 
GW.  However,  its  implementation  scope  is 
uncertain  as  the  model  for  the  project  is 
currently  being  reviewed  due  to  significant 
expected extra costs. The length of the permit-
level  for 
granting  procedure  at  regional 
transmission  lines  is  a  serious  obstacle  that 
undermines  timely  network  reinforcement  to 
ensure  the  inland  distribution  of  additional 
offshore  wind  power.  Moreover,  public 
acceptance of renewables remains a challenge 
for  permit-granting  and  for 
the  further 
expansion  of  onshore  utility-scale  projects. 
While  Belgium  has  legalised  plug-in  solar 
systems as of 2025, further steps are needed. 

Map 3.1:  Electricity-gas price ratio for 
households, 2024 

Source: Eurostat 

Comparatively  high  electricity  prices  for 
households  hinder  the  transition  to 
electricity.  Household  retail  electricity  prices 
in  Belgium  are  among  the  highest  in  the  EU, 
with the greatest electricity-to-gas price ratio. 
After taxes and levies, electricity costs  almost 
four  times  more  per  unit  than  gas,  hindering 
the  switch  to  greener  heating  systems.  A 
recent study (34) 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 
these 
thresholds  in  France and the Netherlands, but 
well  above  them  in  Belgium  (see  Map  3.1), 

ratios  are  below 

(33)  FEB and Febiac, Belgian Mobility Dashboard. 

(34)  FPS  Health  and  Finance  (2023),  The  landscape  of 
carbon and energy pricing and taxation in Belgium. 

11 

 
 
 
 
 
 
to 

taken  by 

the  Belgian 
despite  measures 
authorities 
the  electricity  bill. 
Shifting  excise  duties  from  electricity  to 
heating  oil  and  gas  would  make  electricity 
more affordable than fossil fuels. 

reduce 

Belgium  records  sizeable  fossil  fuel 
subsidies  with  no  planned  phase-out 
before 2030 (Annex 8). Using a larger scope, 
a  recent  report  by  the  Belgian  authorities 
estimates 
that  federal  direct  fossil  fuel 
subsidies  in  Belgium  amounted  to  EUR 12 
billion (2.4% of GDP) (35) in 2021. Phasing out 
these  subsidies  would  contribute  to  Belgium’s 
climate  commitments  and  could  generate  tax 
revenues.  Fossil  fuel  subsidies  that  neither 
tackle  energy  poverty  in  a  targeted  way  nor 
genuine  energy  security  concerns,  hinder 
electrification  and  are  not  crucial  to  industrial 
competitiveness could be considered  a phase-
out  priority  (e.g.  reduced  excise  duties  on 
professional  diesel  and  on  fuel  oil,  company 
fuel  cards,  reduced  VAT  on  gas  (Annex  2  and 
8).  The  federal  government  plans  to  increase 
excise  duties  on  professional  diesel  while 
maintaining  Belgium’s  competitive  advantage 
compared to neighbouring countries. 

Fossil fuel subsidies hold back the energy 
renovation of buildings. Heating and cooling 
account  for  86%  of  residential  final  energy 
consumption,  despite  the  existence  of  grant-
based  schemes  to  make  energy  renovation 
affordable.  Unless  it  steps  up  its  efforts, 
Belgium 
its  2030 
is  unlikely  to  achieve 
reduction  target  for  energy  consumption  by 
buildings. This calls for correcting incentives, in 
particular by  adjusting  the  tax  system.  Taxing 
heating  fuels  based  on  their  energy  content 
could  encourage  energy  sobriety  and  energy 
renovation.  Taxing  rental  income  and  making 
renovation  expenses  tax  deductible  could 
increase 
the  energy  efficiency  of  rental 
housing. 

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

subsidies. 

12 

Improve water quality by moving 
to sustainable agriculture 

Water quality and nature degradation are 
major  causes  for  concern.  Most  water 
bodies  in  Belgium  are  affected  by  diffuse 
pollution  sources.  In  2021,  72.6%  of  surface 
water bodies failed to achieve good ecological 
status  and  100%  failed  to  achieve  good 
chemical status, while groundwater bodies are 
doing  better.  In  Flanders  in  particular,  water 
pollution  from  nitrates  is  very  serious  (Annex 
7). Moreover, biodiversity is declining and only 
4.3%  of  habitats  were  reported  as  having  a 
good  conservation  status,  among  the  lowest 
shares  in  the  EU.  This  creates  significant 
economic 
risks,  since  sectors  such  as 
agriculture, construction and water utilities are 
particularly  dependent  on  ecosystem  services. 
Nature-based  solutions  are  key  to  building 
climate 
the 
economy from extreme weather events. 

resilience  and 

to  shielding 

releases 

Intensive  agriculture 
large 
volumes  of  air  and  water  pollutants. 
Intensive  animal  farming  (including  poultry 
and  pigs), primarily  located  in  Flanders, is the 
main  contributor  to  air  and  water  emissions, 
followed  by  electricity  production,  the  metal 
sector  and  chemicals  production.  Pollution  is 
directly  caused  by  excess  levels  of  nitrogen 
deposits,  which  primarily  stem  from  mineral 
fertilisers  and  manure.  Belgium’s  livestock 
density  is  among  the  highest  in  the  EU  and 
pesticides  were  detected  in  49%  of  surface 
water  bodies  at 
the 
thresholds. 

levels  exceeding 

Action  is  needed  to  reduce  nutrients  and 
chemicals 
in  surface  waters  and  to 
further  strengthen  sustainable  farming. 
The  revised  7th  Nitrates  Action  Programme 
adopted by the Flemish government in 2024 is 
a step in the right direction but will not ensure 
compliance  with  the  EU  Nitrates  Directive. 
Making  better  use  of  the 
‘polluter  pays’ 
principle  and  more  periodically  reviewing 
permits  for  water  abstraction  and  discharges 
pollution. 
could 
Transitioning  to  more  sustainable  farming 
practices is vital. 

prevent  water 

help 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

incentives, 

experience  low  levels  of  employment,  driven 
by low albeit increasing activity levels. Despite 
targeted  activation  measures  and  some 
financial 
lower-educated  people 
born  outside  the  EU,  particularly  women,  and 
persons  with  disabilities  continue  to  face  low 
labour  market  participation.  Strengthening 
personalised  activation  measures,  coupled 
with  increased  cooperation  between  regional 
employment  services  and  social  enabling 
services (36)  remain  crucial  to  improve  labour 
market  outcomes.  This  would  also  facilitate 
interregional  labour  mobility.  Older  workers 
and  people  with  a  migrant  background  also 
face difficulties linked to discrimination, which 
is tackled with increased inspections and fines. 
High  disincentives  to  work  embedded  in  the 
tax  and  benefits  system  also  affect  labour 
market participation (see Section 1). 

in 

labour 

service, 

shortages  and 
for 
call 

skills 
High 
mismatches 
increased 
participation  of  adults  in  upskilling  and 
reskilling.  The  vacancy  rate  is  among  the 
highest in the EU (4.1% against 2.3% in the EU 
in  2024)  and  widespread  (see  Annex  10) 
scientific, 
particularly 
the 
healthcare,  construction,  energy  and 
ICT 
(information  and  communications  technology) 
reskilling 
sectors.  Accompanying  up-  and 
measures,  also  to  support  emerging 
job 
opportunities driven by the twin transition (37), 
would be needed for most people currently not 
in  employment.  Between  2016  and  2022, 
adult  participation  in  training  decreased  from 
45.2%  to  41.6%,  with  people  with  the  lowest 
levels  of  education  and  older  people 
particularly  lagging  behind  (see  Graph  4.2). 

(36)  Carpentier 

et 

al. 

2023, 

Interregionale 
tewerkstellingszones  op  basis  van  een  vraag-  en 
aanbodanalyse  points  to  language  learning,  mobility 
offers and early childhood care as perceived barriers to 
employment. 

(37)  High Council of Employment (2025). The transition to a 

greener labour market. 

High labour shortages coupled 
with low levels of employment 

Despite  reaching  a  record  high  level,  the 
employment  rate  is  constrained  by  low 
activity  rate.  The  employment  rate  (20-64 
years)  hit  a  record  high  72.3%  in  2024  but 
remained  below  the  EU  average  (75.8%)  and 
the  national  target  of  80%  by  2029.  This  is 
mainly  driven  by  a  low  activity  rate  (77.2% 
against 83.3% in the EU in 2024), particularly 
among  people  with  lower  education  levels, 
people  with  a  migrant  background  and  older 
workers.  There  are  also  significant  regional 
disparities  (see  Annexes  10  and  17),  offering 
scope  to  further  facilitate  interregional  labour 
mobility.  Although  Belgium  has  one  of  the 
highest vacancy rates in the EU, the transition 
rate  to  employment  lags  behind  the  EU 
average  (see  Graph  4.1),  questioning  the 
efficiency of activation measures. 

Graph 4.1: Job vacancy rate and transition 
from unemployment to employment, 2024 

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

is 
Strengthening  activation  policies 
levels  of 
essential  to  address 
employment.  Vulnerable  groups,  particularly 
in  Wallonia, 
in  the  Brussels  Region  and 

low 

13 

EUBEBGCZDEEEIEELESHRITCYLVLTHUMTNLATPLPTROSISKFISE01020304050607000.511.522.533.544.55Vacancy rateDKFRTransition rate (% of unemployment) 
 
  
 
individual 

initiatives  to  create 
The  different  public 
portable 
learning  rights  remain 
insufficient  in  terms  of  coverage  and  need  to 
be  strengthened,  made  more  efficient  and 
aligned with the evolving labour market needs. 

Graph 4.2: Adult participation in learning over 
the last 12 months 

Source: 2022 Adult Education Survey (excluding guided 
on-the-job training) 

Despite  significant  improvements,  there 
is  untapped  potential  for  older  people  to 
stay  longer  in  employment.  Employment 
rates  for  those  over  55  have  increased  over 
the  past  decade  but  remain  low  compared  to 
EU peers. The legal pension age, set to rise to 
67  from  2030,  could  further  boost  the 
employment  of  older  people.  While  a  federal 
action  plan  was  adopted  in  2023  to  improve 
their  working  conditions,  additional  qualitative 
and  financial  measures  could  help  extend 
careers.  The  federal  coalition  agreement 
includes  plans  to  introduce  a  bonus-malus 
system  in  order  to  provide  incentives  for 
working longer. Moreover, it includes measures 
which  aim  to  address  the  growing  number  of 
people on long-term sick leave. 

Belgium 

performs  well 

Differentiated  activation  policies  are 
needed  to  better  integrate  low-income 
earner  groups  into  the  labour  market. 
Although 
in 
implementing  the  European  Pillar  of  Social 
Rights, vulnerable groups face a higher risk of 
poverty  and  require  targeted,  tailor-made 
approaches focused on employment, the most 
sustainable way out of poverty (see Annex 11). 
Expanding  workforce 
and 
improving the inclusivity of the labour market 

participation 

are key to achieving the national  2030 target 
of 279 000 fewer people at risk of poverty or 
social  exclusion.  Despite  overall  effective 
social  benefits,  access  remains  more  limited 
(part-time  and 
for  non-standard  workers 
temporary 
their 
poverty risk. 

contractors), 

increasing 

Decline in students’ performance, 
educational inequalities, and low 
number of STEM graduates  

Educational 
inequalities  and  declining 
students’  performance  negatively  impact 
competitiveness.  Student  performance 
in 
basic  skills  has  been  on  a  long-term  decline, 
as  evidenced  by  international  assessments 
(PISA,  PIRLS,  TIMSS),  accompanied  by  a  sharp 
drop in the share of top performers (see Annex 
12). Socio-economic and migrant backgrounds 
important  predictors  of  student 
are  still 
performance.  Early  tracking  of  students (38) 
(Flemish  and  German-speaking  Communities) 
and  high  levels  of  students  repeating  a  year 
(French  Community)  have  amplifying  effects 
on  existing  socio-economic  inequalities  and 
affect  overall  performance.  In  response,  all 
Communities are pursuing reforms focusing on 
in 
basic  skills  and  quality  management 
schools (39).  However,  further  measures  may 
be  needed 
inequalities  and 
declining  performance,  like  further  revising 
grade  retention  policies,  giving  students  more 
flexibility  to  transfer  between  general  and 
vocational tracks, making vocational education 
and training (VET) more attractive, increase its 
market  relevance  (see  Annex  12),  and  further 

to  address 

(38)  Early  tracking  refers  to  the  selection  of  students  into 
different educational tracks by performance at an early 
age. 

recently 

teachers’  professional  capacity 

(39)  In  the  Flemish  Community,  strengthening  school-level 
to  actively 
and 
incorporate  the 
launched 
results  of  the 
standardised  testing  into  their  strategic  planning  and 
pedagogical practice could improve students’ results. In 
the  French  Community,  evaluating  the  measures 
implemented under the Pact for an Excellent Education 
is  key  to  determine  further  steps,  without  abandoning 
inclusive  and 
the  original  goals  of  high-quality, 
competence-based education. 

14 

0102030405060Total (25-64 years old)MenWomen55-64 years old25-34 years old35-44 years oldLow-educatedUnemployedInactiveBEEU27 
  
 
efforts,  little  progress  has  been  made  to 
increase  participation  in  STEM  subjects  in 
vocational  training  (see  Annex  12).  Further 
developing  graduate  tracking  mechanisms (42) 
could better support the monitoring of student 
pathways  and  incentives  to  address  labour 
market needs, including in STEM fields (43). 

Graph 4.3: Share of STEM graduates over total 
number of graduates, by sex, 2022 (%) 

Source: European Commission 

in 

Declining  levels  of  digital  skills  among 
young  people  weigh  on  competitiveness. 
While  overall  digital  proficiency 
the 
population  has  increased,  the  share  of  young 
people  (16-19-year-olds)  with  basic  digital 
skills, which is key for the digital transition and 
productivity,  decreased  by 9.2 pps from 2021 
to  2023  (see  Annex  12).  Flemish  eighth 
graders  are  among  the  top  performers  in  the 
EU  in  the  2023  International  Computer  and 
Information  Literacy  Study  (ICILS),  but  36% 
failed  to  reach  the  baseline  proficiency  level 
(EU:  43%).  While  Belgium  is  modernising  its 
digital 
infrastructure  for  schools,  further 
training  for  teachers  to  effectively  use  digital 
tools for learning could be strengthened. 

strengthening  personalised 
tutoring. 

learning  and 

Teacher  shortages  remain  critical  across 
the country, especially in languages, science, 
technology,  engineering  and  mathematics 
(STEM) and technical subjects. The shortage of 
qualified  and  experienced  teachers  could 
reinforce  trends  in  student  performance  and 
disproportionately  affect  schools  with  higher 
shares  of  disadvantaged  students  and  lower 
performance (40).  Recent  evaluations  highlight 
the  need  for  additional  teacher  training  in 
digital skills and  in the effective use of ICT in 
to 
education.  The  Communities  continue 
implement  measures 
teacher 
shortages  and  increase  the  attractiveness  of 
the  profession.  Long-term  measures  such  as 
the reforms of initial teacher education are in 
their 
of 
implementation.  Improving teacher well-being, 
ensuring  job  stability  for  novice  teachers  and 
providing  attractive  and  differentiated  career 
pathways  as  well  as  continuous  professional 
development requires further attention. 

to  address 

inception 

phases 

early 

or 

Belgium  lags  behind  in  supplying  ICT  and 
STEM  graduates  to  meet  labour  market 
demand.  While  Belgium  has  an  above-
average  tertiary  educational  attainment  rate, 
the  share  of  students  and  graduates  in  STEM 
fields  is  among  the  lowest  in  the  EU  (18.8% 
against  26.6%  in  the  EU  in  2022)  (see  Graph 
4.3),  and  it  has  not  improved  in  almost  a 
decade despite targeted actions. Similarly, the 
proportion  of  ICT  graduates  is  below  the  EU 
average (3% against 4.5% in the EU), and the 
share of women in ICT and STEM is among the 
lowest  in  the  EU  (see  Annex  12).  Designing 
outreach  programmes  for schools  and  scaling 
up existing initiatives (e.g. STEM Academies in 
Flanders (41)  and 
the  announced  regional 
strategy  for  STEM  education  in  the  French 
this 
Community) 
imbalance.  The  share  of  STEM  students 
enrolled  in  VET  is  below  the  EU  average 
(27.7% against 36.3% in 2023). Despite some 

address 

could 

help 

(40)  Gambi, L., & De Witte, K. (2023).  The uphill battle: The 
amplifying  effects  of  negative  trends  in  test  scores, 
COVID-19  school  closures  and  teacher  shortages. FEB 
Research Report Department of Economics. 

(42)  Collecting information about leavers of higher and 

vocational education and training to improve knowledge 
on how graduates progress in the labour market 

(43)  2017 Council Recommendation on tracking graduates 

(41)  https://www.dagvandewetenschap.be/stem-academies. 

EUR-Lex - 32017H1209(01) - EN - EUR-Lex. 

15 

0%10%20%30%40%CYMTBEBGPLLVNLESSKLUITLTHUDKCZIEELEUEEPTROHRSEFISIFRATDEFemaleMale 
 
  
 
KEY FINDINGS 

Belgium’s  medium-term  fiscal  structural  plan 
includes  measures  to  address  a  series  of 
structural challenges through: 

• 

• 

• 

• 

improving  the fiscal  sustainability 
of the pension system; 

improving 
quality of public spending; 

the  efficiency  and 

increasing  the  effectiveness  of 
the  national  fiscal  framework  by 
ensuring  the  effective  coordination  of 
fiscal policies at all government levels; 

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

•  simplifying 

the 
and 

business 
environment 
improving 
business  dynamics  by  reducing  the 
regulatory 
easing 
restrictions in the service sector; 

burden 

and 

To  boost  competitiveness,  sustainability  and 
social fairness, Belgium would benefit from: 

• 

chapter; 

cohesion 

implementing the RRP, including the 
swiftly 
REPowerEU 
implementing 
policy, 
taking  advantage  of  the  opportunities 
under 
review  and 
making  optimal  use  of  EU 
InvestEU 
instruments, 
and 
improve 
STEP, 
competitiveness; 

the  mid-term 

including 

to 

•  making the long-term care system 

more cost-effective; 

•  making  the  tax  system  more 
less  distortive  by 

neutral  and 

16 

tax 

reviewing 
and 
harmonising  the  taxation  of  different 
kinds of assets; 

expenditure 

• 

increasing  innovation  diffusion  by 
reforming  R&D  public  support  and 
improving the job mobility of workers; 

•  decarbonising industrial  processes 
by  encouraging  the  development  of 
low-carbon  technologies  and  scaling 
up  existing  solutions,  including  re-use 
and recycling of critical raw materials. 

tackling 

•  decarbonising the transport sector 
road  congestion, 
and 
charging 
including 
differentiation, 
supporting 
sustainable  fuels  for  aviation  and 
maritime  sectors  and  by  developing 
active mobility and public transport; 

through 

road 

by 

•  accelerating 

the 
renewable  energy 
reinforcing the grid; 

roll-out 
of 
including  by 

• 

• 

• 

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

losses  and 
reducing  nutrient 
improving  water  quality  by  further 
supporting  sustainable  agriculture,  by 
making  ecosystems  more  robust  and 
by improving climate resilience; 

tackling 
labour  shortages  and 
skills  mismatches,  including  for  the 
transition,  by 
green  and  digital 
strengthening (inter)regional activation 
policies,  also 
integrate 
disadvantaged  groups  into  the  labour 
market  and  by  addressing  regional 
disparities; 

to  further 

 
 
• 

improving  the  performance  and 
equity  of 
the  education  and 
training  systems  by  improving  their 
labour  market  relevance,  in  particular 
in  ICT  and  STEM  fields,  and  pursuing 
reforms 
teaching 
profession. 

to  boost 

the 

17 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure (outturn and forecasts), annual and cumulated deviations vis-à-vis the medium-term plan 
Defence expenditure and the national escape clause 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF – Grants 
RRF - Loans 

21 

24 

24 

34 

37 

37 

42 

48 

56 

61 

61 

68 

74 

80 

80 

85 

89 

94 

95 

98 

98 

100 

107 

25 
26 
26 
27 
27 
28 
28 
29 
29 

 
 
 
Implementation of Reforms and Investments underpinning an extension 

A1.10. 
A1.11.  Projected change in age-related expenditure in 2024-2040 and 2024-2070 
A1.12.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making business easier: indicators 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A8.1. 
A9.1. 
A13.1.  Social Scoreboard for Belgium 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in Belgium 

Financial indicators 
Selected indicators on administrative burden reduction and simplification 
Key Digital Decade targets monitored through the Digital Economy and Society Index 
Key clean industry and climate mitigation indicators: Belgium 
Key Energy Indicators 
Key indicators tracking progress on climate adaptation, resilience and environment 

LIST OF GRAPHS 

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 
Retail energy price components for household and non-household consumers, 2024 

Tax revenue shares in 2023 
Tax wedge for single and second earners, % of total labour costs, 2024 
Environmental and property taxation as % of total tax revenue, Belgium and the EU, 2023 

A2.1. 
A2.2. 
A2.3. 
A4.1.  Making Business Easier: selected indicators. 
A5.1. 
Net savings-investment balance in Belgium 
A5.2. 
International investment position of Belgium 
A5.3. 
Capital markets and financial intermediaries in Belgium 
A5.4. 
Composition of NFC funding as a % of GDP 
A5.5. 
Composition of household financial assets per capita and as a % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A6.3. 
Participation rate of 25-64 year olds in adult learning (%) by occupation 
A7.1. 
GHG emission intensity of manu-facturing and energy-intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A7.3. 
A8.1. 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A10.1.  Key labour market indicators 
A10.2.  Labour shortages and job vacancy rate 
A10.3.  Employment rate of specific groups 
A11.1.  Populations at risk of poverty or social exclusion 
A11.2. 
A11.3. 
A12.1.  Share of students enrolled in STEM programmes as a share of total tertiary students (ISCED 5-8), by sex, 2022 (%) 
A12.2.  Adult participation in learning over the last 12 months 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in Belgium 
A16.1.  Distribution of RRF funding in Belgium by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in Belgium 
A17.1.  Average annual real GDP per head growth vs GDP per head in 2013 

Belgium’s installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 

In-work poverty in Belgium according to socio-economic characteristics 
Impact of population ageing on long-term care (LTC) 

22 

31 
32 
33 
36 
41 
47 
55 
57 
57 
67 
73 
79 
94 
96 
102 
104 
107 

34 
34 
35 
43 
48 
48 
49 
51 
52 
56 
57 
59 
63 
63 
64 
68 
69 
70 
77 
80 
81 
82 
85 
86 
87 
91 
92 
95 
95 
98 
101 
101 
107 

 
 
 
 
A17.2.  Labour productivity per hour 
A17.3.  Share of internet users interacting with public authorities: percentage of individuals who used the internet within the last 

year (%) 

A17.4.  Access to services in rural areas in 2021 

107 

109 
110 

23 

 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  Belgium, 
including  how  Belgium  is  responding  to  Council  recommendations  issued  under  the  reformed  Economic 
Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024(44),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

Belgium  submitted  its  plan  on  18  March  2025.  The  plan  covers  the  period  until  2029  and  presents  an 
extended fiscal adjustment over seven years, which is underpinned by a set of reforms and investments 
to  which  Belgium  committed  with  the  aim  of  improving  potential  growth  and  fiscal  sustainability.  The 
Commission has assessed the MTP of Belgium and on 21 May 2025 recommended to the Council to adopt 
a recommendation endorsing the plan(45). Following its positive assessment of the medium-term plan, on 
21 May 2025 the Commission adopted a revised Recommendation for a Council Recommendation under 
Article  126(7)  TFEU(46)  to  correct  the  excessive  deficit  in  Belgium.  The  maximum  growth  rates  for  net 
expenditure established by this revised Recommendation adopted by the Commission and recommended 
to be endorsed by the Council under the excessive deficit procedure are consistent with the path set out in 
the plan. 

The assessment of the fiscal situation of Belgium considers the Commission Recommendation for Council 
Recommendation  to  correct  the  excessive  deficit  and  the  Commission  Recommendation  for  a  Council 
Recommendation endorsing Belgium’s plan and it is carried out on the basis of outturn data from Eurostat 
and the Commission Spring 2025 Forecast and taking into account the Annual Progress Report (APR), that 
Belgium  submitted  on  30  April  2025.  Furthermore,  given  Belgium’s  request  to  activate  the  National 
Escape  Clause(47) following the Commission Communication of 19 March 2025(48), the assessment also 
considers, as appropriate, the projected increase in defence expenditure based on the Commission Spring 
2025 Forecast. 

The Annex is organised as follows. First, developments in government deficit and debt are presented 
based  on  the  figures  reported  in  table  A1.1.  Then,  the  assessment  of  the  fiscal  situation  of  Belgium 
follows,  considering  the  relevant  Recommendation  to  correct  the  excessive  deficit  and  the  Commission 
Recommendation  for  a  Council  Recommendation  endorsing  the  plan,  based  on  the  relevant  figures 
presented in Tables A1.2 to A1.9, including data on defence expenditure. Further on, the progress made in 
the implementation of the set of reforms and investments underpinning the extension of the fiscal 
adjustment period(49) is assessed, taking into account the information presented in Table A1.10. 

(44)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(45)  COM(2025) 263 of 21.05.2025 final. 

(46)  COM(2025) 264 of 21.05.2025 final. 

(47)  On 30 April 2025, Belgium requested to the Commission and to the Council the activation of the National Escape Clause. On this 
basis, the Commission adopted a Recommendation for a Council Recommendation allowing Belgium to deviate from, and exceed, 
the net expenditure path set by the Council, COM(2025)600. 

(48)  Communication from the Commission accommodating increased defence expenditure within the Stability and Growth Pact of 19 

March 2025, C(2025) 2000 final. 

(49)  According to the Regulation, the required fiscal adjustment (in particular to put or keep the government debt ratio on a plausible 
downward path by the end of the adjustment period or keep it at prudent levels below 60% of GDP; and to bring or maintain the 

24 

 
 
 
 
 
 
The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024(50). 

Developments in government deficit and debt  

Belgium’s government deficit amounted to 4.5% of GDP in 2024. Based on the Commission’s Spring 2025 
Forecast, it is projected to increase to 5.4% of GDP in 2025. The government debt-to-GDP ratio amounted 
to  104.7% at the end of 2024 and,  according to the Commission, it is projected to increase to  107.1% 
end-2025.  The  increase  of  the  deficit  in  2025  mainly  reflects  higher  ageing-related  costs,  defence 
expenditure and interest payments. 

Table A1.1:  General government balance and debt 

Source : Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

Developments in net expenditure  

The  net  expenditure(51)  growth  of  Belgium  in  2025  is  projected  by  the  Commission(52)  to  be  above  the 
maximum growth rate contained in the plan. The difference between the Commission's calculations of the 
net expenditure growth of 5.0% and Belgium’s projection of 6.0% is due to lower projected growth rates 
in  gross  fixed  capital  formation  and  intermediate  consumption  (mostly  related  to  defence  expenditure) 
and a smaller impact of revenue-reducing discretionary revenue measures in the Commission’s forecast.  

deficit below 3% of GDP over the medium term) should be completed in four years but may be extended over a period to up seven 
years if the Member State commits to a relevant set of reforms and investments. 

(50)  European Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

(51)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union 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-off and other temporary measures.  

(52)  European Commission Spring 2025 Forecast, European Economy-Institutional paper 318, May 2025. 

25 

2024OutturnAPRCOMAPRCOM1General government balance% GDP-4.5-5.5-5.4n.a.-5.52General government gross debt% GDP104.7107.2107.1n.a.109.8Variables20252026 
 
             
 
 
 
 
Table A1.2:  Net expenditure growth 

* The cumulative growth rate in the APR is calculated by reference to the base year of 2023. The COM figures are calculated by 
reference to 2024. 
Source : Medium-term fiscal structural plan of Belgium (MTP), Annual Progress Report (APR) and Commission's calculation based 
on Commission Spring 2025 Forecast (COM). 

The assessment of the net expenditure growth and in particular the comparison with the recommended 
net expenditure path considers that Belgium has requested the activation of the national escape clause to 
facilitate transitioning to a higher level of defence expenditure. General government defence expenditure 
in Belgium amounted to 0.9% of GDP in 2021, 1.0% of GDP in 2022 and 0.9% of GDP in 2023. According 
to the Commission 2025 Spring Forecast, expenditure on defence is projected at 1.3% of GDP in 2024 and 
1.7% of GDP in 2025. Based on current projections for defence spending, the deviation that is projected 
for Belgium is within the flexibility provided by the national escape clause. 

Table A1.3:  Net expenditure (outturn and forecasts), annual and cumulated deviations vis-à-vis the 
medium-term plan 

* The medium-term plan was positively assessed by the Commission and is now pending the endorsement by the Council. 
Source: Commission Spring 2025 Forecast and Commission's calculation.  

26 

MTPAPRCOMMTPAPRCOM2024n.a.3.9%4.2%n.a.n.a.n.a.20253.6%6.0%5.0%3.6%10.1%5.0%20262.5%n.a.3.0%6.1%n.a.8.2%AnnualCumulative*Growth rates2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC317.8334.5352.8364.02Interest expenditurebn NAC12.013.915.216.63Cyclical unemployment expenditurebn NAC-0.20.20.70.44Expenditure funded by transfers from the EUbn NAC1.51.61.81.85National co-financing of EU programmesbn NAC0.50.60.70.76One-off expenditure (levels, excl. EU funded)bn NAC0.50.00.10.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC303.5318.3334.3344.48Change in net nationally financed primary expenditure (before DRM)bn NAC14.816.010.19DRM (excl. one-off revenue, incremental impact)bn NAC1.9-0.10.110=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC12.916.010.011Outturn / forecast net expenditure growth% change4.24%5.0%3.0%12Net expenditure growth as reported in the medium-term plan*% changen.a.3.6%2.5%13=(11-12) x 7Annual deviationbn NACn.a.4.61.714 (cumulated from 13)Cumulated deviationbn NACn.a.4.66.215=13/17Annual balance% GDPn.a.0.70.316=14/17Cumulated balance% GDPn.a.0.71.017p.m. Nominal GDP  bn NAC596.2614.0636.1655.2Variables 
 
               
 
 
 
 
               
 
 
 
Table A1.4:  Defence expenditure and the national escape clause 

Source: Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation. 

Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

27 

2021202220232024202520261Total defence expenditure% GDP0.91.00.91.31.71.72of which: gross fixed capital formation% GDP0.20.10.10.30.50.53Flexibility from increases in defence expenditure% GDP0.80.84Cumulated balance after flexibility% GDP-0.10.22024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change1.01.20.8n.a.0.92Private consumption% change2.01.81.5n.a.1.13Government consumption expenditure% change2.61.32.2n.a.0.64Gross fixed capital formation% change1.41.70.5n.a.1.25Exports of goods and services% change-3.4-0.7-1.8n.a.1.96Imports of goods and services% change-3.5-0.2-1.0n.a.2.1Contributions to real GDP growth 7- Final domestic demandpps2.01.61.4n.a.1.08- Change in inventoriespps-1.10.00.0n.a.0.09- Net exportspps0.1-0.4-0.6n.a.-0.210Output gap% pot GDP-0.2-0.5-0.9n.a.-1.311Employment % change0.30.50.3n.a.0.512Unemployment rate%5.76.16.1n.a.5.813Labour productivity% change0.70.70.4n.a.0.314HICP % change4.32.82.8n.a.1.815GDP deflator% change1.92.52.8n.a.2.116Compensation of employees per head% change2.93.43.6n.a.2.217Net lending/borrowing vis-à-vis the rest of the world% GDP-0.1n.a.-0.5n.a.-0.920252026Variables 
 
        
 
 
 
 
               
 
 
 
Table A1.6:  General government budgetary position 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR). 

Table A1.7:  Debt developments 

* End of period. 
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

28 

2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue50.050.150.1n.a.50.0of which:2- Taxes on production and imports12.011.811.9n.a.11.93- Current taxes on income, wealth, etc.17.017.217.2n.a.17.24- Social contributions15.415.315.4n.a.15.45- Other (residual)5.65.85.6n.a.5.58=9+16Expenditure 54.555.655.5n.a.55.6of which:9- Primary expenditure52.253.353.1n.a.53.0of which:10- Compensation of employees 12.612.612.6n.a.12.611- Intermediate consumption4.34.74.5n.a.4.512- Social payments25.826.026.3n.a.26.313- Subsidies3.63.63.6n.a.3.614- Gross fixed capital formation3.03.53.3n.a.3.215- Other2.92.92.8n.a.2.916- Interest expenditure2.32.32.4n.a.2.518=1-8General government balance-4.5-5.5-5.4n.a.-5.519=1-9Primary balance-2.3-3.2-3.0n.a.-3.020Cyclically adjusted balance-4.4n.a.-4.9n.a.-4.721One-offs-0.10.00.0n.a.0.022=20-21Structural balance-4.2-5.2-4.8n.a.-4.723=22+16Structural primary balance-2.0-2.9-2.4n.a.-2.2Variables (% GDP)202520262024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)104.7107.2107.1n.a.109.82=3+4+8Change in the ratio (pps. of GDP)1.52.52.4n.a.2.7Contributions**3Primary balance2.33.23.0n.a.3.04≈5+6+7'Snow-ball' effect-0.7-1.5-1.2n.a.-0.6of which:5- Interest expenditure2.32.32.4n.a.2.56- Real growth effect-1.0-1.2-0.8n.a.-0.97- Inflation effect-2.0-2.6-2.9n.a.-2.28'Stock-flow' adjustment-0.10.80.6n.a.0.320252026Variables 
 
               
 
 
 
 
 
               
 
 
 
Table A1.8:  RRF – Grants 

Source: Annual Progress Report 

Table A1.9:  RRF - Loans 

Source: Annual Progress Report 

Implementation of the set of reforms and investments underpinning the 
extension of the adjustment period  

Table  A1.10  includes  information  on  progress  towards  implementation  of  the  set  of  reforms  and 
investments underpinning the extension of the adjustment period that Belgium committed to deliver in its 
medium-term  fiscal-structural  plan  as  adopted  by  the  Commission  and  pending  endorsement  by  the 
Council. 

The reforms and investments underpinning an extension are all due after 30 April (for details, see Table 
A1.10).  

The R&I underpinning an extension of the adjustment period include 6 measures (i) a pension reform that 
improves  the  financial  sustainability  of the  system, (ii)  a  labour market  reform  aiming  at  strengthening 

29 

Revenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.10.10.10.10.20.22Cash disbursements of RRF grants from EUn.a.0.20.00.00.10.20.320202021202220232024202520263Total current expenditure0.00.00.00.00.10.10.14Gross fixed capital formation0.00.00.00.00.00.10.05Capital transfers0.00.00.10.00.00.00.06=4+5Total capital expenditure0.00.00.10.10.00.10.120202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.0n.a.8Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.0n.a.Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP)Cash flow from RRF loans projected in the Plan (% of GDP)20202021202220232024202520261Disbursements of RRF loans from EUn.a.0.00.00.00.00.00.02Repayments of RRF loans to EUn.a.0.00.00.00.00.00.020202021202220232024202520263Total current expenditure0.00.00.00.00.00.00.04Gross fixed capital formation0.00.00.00.00.00.00.05Capital transfers0.00.00.00.00.00.00.06=4+5Total capital expenditure0.00.00.00.00.00.00.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.0n.a.8Other costs with impact on revenue0.00.00.00.00.00.0n.a.9Financial transactions0.00.00.00.00.00.0n.a.Expenditure financed by RRF loans (% of GDP)Other costs financed by RRF loans (% of GDP) 
 
               
 
 
 
 
               
 
 
incentives to work and reduce long-term sickness, (iii) a tax reform to increase labour market participation 
by  reducing  the  tax  burden  on  labour  and  removing  tax  expenditure  (iv)  a  reform  in  the  area  of  public 
expenditure aiming at completing spending reviews, (v) a more effective budgetary coordination between 
the federal and federated entities and (iv) an improvement of the business environment and regulation. 

The  implementation  of  these  measures  has  key  steps  starting  in  Q4  2025.  Therefore,  no  measure 
underpinning the extension has been assessed as completed yet.  

30 

 
Table A1.10:Implementation of Reforms and Investments underpinning an extension 

The progress of each backward-looking key step (i.e., those scheduled for completion by 30 April 2025) is classified as either 
‘completed’ or ‘not completed’. The status of forward-looking key steps not yet completed remains blank, as these will be 
assessed by the Commission in future APRs. 

31 

Delivery of milestones C44-R-407-M157 and C44-R-407-M158 of Belgium’s RRP*Q4 2025Entry into force of legislation including on the following measures(i)(cid:9)Actuarial neutrality (abolishing current bonus and introducing bonus/malus system)(ii)(cid:9)Reduction of assimilated periods in pension calculation(iii)(cid:9)Phasing out of preferential schemes for civil servants(iv)(cid:9)Extinction of sickness pension(v)	Limited indexation of civil servants’ high pensions(vi)(cid:9)Harmonization of career requirements for early retirementQ1 2027Delivery of an impact assessment of the pension reformQ4 2029Complete spending reviews in the areas of a) fossil fuel subsidies and of b) the withholding tax exemption for R&D work, overtime and night/shift work. Q4 2026Delivery of an annual impact assessment report explaining 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 2029, compared with the expenditure projections at unchanged policies. Q4 2026Entry 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)(cid:9)limiting unemployment benefits to maximum two years(ii)(cid:9)reducing long-term sickness by requiring employers to contribute to the payment of incapacity benefits and by increasing accountability for employees and doctors.Q4 2025Delivery of an impact assessment justifying the permanent reduction of 0.3% of GDP in expenditure on unemployment benefits and long-term sickness leave, compared to the expenditure projections at Q2 2027Entry 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)(cid:9)increasing the personal tax-free allowance for earned income(ii)(cid:9)reforming the special social security contributionQ1 2026Entry into force of legislation which finances the labour tax reduction of 0.5% of GDP in 2029 by:(i)(cid:9)removing tax expenditure, including:- abolishing the tax reduction for unemployment benefits- limiting the ‘marital quotient’(ii)(cid:9)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)(cid:9)limiting the welfare envelopeQ1 2026Delivery of an impact assessment justifying the 0.5% of GDP budgetary impact of the combined measures of the tax reform, compared to unchanged policies.Q2 2029Entry into force of legislation to ensure:(i)(cid:9)effective budgetary coordination between the federal and federated entities.(ii)(cid:9)Redefining the tasks and enhancing the financial and staff capacity of the High Council of Finance.Q4 2025Entry into force of legislation to ensure effective budgetary coordination between the federal and federated entities by setting multiannual budgetary targets for all entities.Q4 2026Business environment and regulationEntry into force of legislation and adoption of measures to improve the business environment by:(i)(cid:9)reducing the administrative burden for companies.(ii)	simplify procedures to improve access by SME’s to public procurement.(iii)(cid:9)an SME plan with a specific focus on start-ups to reduce cost of doing businessQ4 2025Recommended implementation dateStatus(COM's assessment)Pension reform (Adding to RRP measure R-4.07)Budgetary coordinationSpending reviews (Adding to RRP measure R-6)Labour market reformTax reformMeasureKey steps 
 
     
 
 
Cost of ageing  

Total age-related spending in Belgium is projected to rise from about 27% of GDP in 2024 to 
about 28% in 2040 and 32% in 2070 (see Table A1.11). The projections imply Belgium would have 
the highest age-related public expenditure by 2070 of all Member States. The overall increase is driven by 
the  projected  rise  in  pension  spending  and,  to  a  lesser  extent,  long-term  care  and  healthcare,  while 
expenditure on education is expected to fall.   

Public  pension  spending  is  projected  to  increase  continuously  over  the  next  decades.  The 
pension expenditure-to-GDP ratio would rise from about 13% of GDP in 2024 to about 16% by 2070, the 
third  highest  projected  level  among  EU  Member  States. The  pension  reform  measures  included  in  the 
federal coalition agreement are not reflected in these projections.  

Public healthcare expenditure is projected at 6.2% of GDP in 2024 (below the EU average of 
6.6%) and is expected to increase by 0.3 pps by 2040 and by a further 0.3 pps by 2070 (2).  

Public  expenditure  on  long-term  care  is  projected  at  2.3%  of  GDP  in  2024  (above  the  EU 
average of 1.7%) and is expected to increase by 0.7 pps of GDP by 2040 and by a further 1 pp 
of  GDP by  2070 (3).  This  increase in  long-term  care  expenditure  contributes significantly to  fiscal  risk. 
The ‘Economic developments and key economic challenges’ chapter describes the scope for improving cost 
effectiveness.  

Table A1.11:Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source : 2024 Ageing Report (EC/EPC). 

National fiscal framework 

Belgium  has  chosen  to split  the  Independent  Fiscal  Institution  (IFI)  tasks on  two  institutions, 
leveraging  established  institutions  and  practices.  The  Federal  Planning  Bureau  (FPB),  which  is  a 
long-standing  institution  with  a  solid  reputation  for  technical  expertise,  produces  the  macroeconomic 
forecast  underlying  the  government's  budgetary  plans  and  performs  election  platform  costing,  and  the 
High Council of Finance – Public sector borrowing requirements (HCF-PSBR) monitors the compliance with 
fiscal  rules.  The  HCF-PSBR  is  severely  hampered  in  its  activities  by  the  lack  of  a  financing  agreement 
among the various layers of government, which has led to a lack of financial and human resources. The 
FPB is frequently assigned additional  tasks without the matching additional  resources, which affects its 
ability  to  autonomously  determine  its  work  programme.  Moreover,  the  procedure  for  recruitment  of  the 
Head of IFI (the Commissioner) is not grounded in law and ministers exert a heavy influence. 

32 

BE27.21.20.30.7-0.61.628.7BEEU24.30.50.30.4-0.30.925.2EUBE27.23.10.61.7-0.74.731.9BEEU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
 
 
  
 
 
There are areas of improvement across the full public investment cycle and at different levels 
of  government  (53).  In  Belgium,  public  investment  is  delegated  to  regions  and  communities  except  in 
energy,  public  buildings,  rail,  and  prisons  which  fall  under  the  federal  remit  (54).  There  is  no  integrated 
investment  plan  at the  federal  level  or  at  the  level of  the  federated  entities which  can  define  strategic 
objectives  that  are  shared  between  sectors  and  are  fiscally  realistic.  In  the  regions  of  Flanders  and 
Bruxelles-Capitale,  investment  planning  takes  place  mostly  at  the  sectoral  level  with  some  coordination 
across sectors, although Flanders is in the process of developing an integrated multi-annual investment 
plan (55). Ex-post reviews are carried out on an ad hoc basis, while asset registers are not yet in place. 

Table A1.12:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source : Fiscal Governance Database 

(53)  Assessment is based on data for the federal level, Bruxelles-Capitale and Flanders Region. Belu Manescu, C. (2022), “New evidence 

on the quality of public investment management in the EU”, ECFIN DIscussion Paper no 177. 

(54)  Herne, E., 2025, “Improving the efficiency of public investment in infrastructure Belgium”, IMF Selected Issues Papers SIP 2025/020. 

(55)  Herne, E., 2025, “Improving the efficiency of public investment in infrastructure Belgium”, IMF Selected Issues Papers SIP 2025/020; 
Belu Manescu, C. (2022), “New evidence on the quality of public investment management in the EU”, ECFIN Discussion Paper no 
177. 

33 

2023BelgiumEU AverageCountry Fiscal Rule Strength Index (C-FRSI)13.0114.52Medium-Term Budgetary Framework Index (MTBFI)0.680.73 
 
 
     
 
 
 
 
 
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Belgium’s  tax  system.  It  includes 
information on: (i) the tax mix; (ii) competitiveness 
and  fairness  aspects  of  the  tax  system;  and  (iii) 
tax collection and compliance.  The recent coalition 
agreement of the new federal government, drawn 
up  in  January  2025,  includes  many  measures 
related to  the topics  in this  fiche.  These  have  not 
yet  been  taken  into  account  since  they  have  not 
yet been legislated. 

The overall tax burden in Belgium is high and 
the  tax  structure  relies  heavily  on  labour 
taxes.  Belgium’s  tax  revenue  as  a  percentage  of 
GDP was above the EU average in 2023 (42.5% vs 
39%).  Revenue  from  labour  taxes  is  also  high  in 
Belgium  when  expressed  as  a  percentage  of  GDP 
(22.0%  in  2023  vs  20.0%  EU  average).  The  high 
tax burden on labour risks reducing labour-market 
participation,  which  runs  counter  to  the  Belgian 
the 
government’s 
employment  rate  to  80%  (in  2023:  72.1%).  In 
taxes, 
contrast, 
recurrent 
and 
environmental  taxes,  which  are  among  the  taxes 
least  detrimental  to  growth,  are  close  to  the  EU 
average (expressed as a percentage of GDP). Given 
Belgium’s high public deficit and large public debt-
to-GDP  ratio,  it  will  be  difficult  to  reduce  tax 
revenue in the short- to medium term. 

from  consumption 
taxes 

immovable 

increasing 

revenues 

objective 

property 

of 

previous  reforms,  the 
labour  tax  wedge  for 
Belgium in 2024 was close to the EU average for 
single  people  earning  50%  of  the  average  wage 
(33.1%  vs  an  EU  average  of  31.8%)  but  much 
higher  than  the  EU  average  at  higher  levels  of 
income  (52.6%  vs  an  EU  average  of  40.3%  for 
single people earning 100% of the average wage). 
Personal income tax in Belgium is progressive, but 
the  tax  brackets  are  narrow  and  even  average 
income  earners  are  therefore  subject  to  the 
highest  income  tax  rates  (45%  and  50%).  As  a 
result, there are high marginal tax rates for lower-
middle-wage earners, and this leads to significant 
low-wage  traps.  On  the  more  positive  side,  the 
progressivity  of  the  tax  system  results  in  a  tax-
and-benefit system that performs better than the 
EU  average  in  reducing  income  inequality,  as 
measured by the Gini coefficient. In Belgium, taxes 
and  benefits  reduced  the  Gini  coefficient  by  12.6 
points,  while  the  reduction  was  on  average  7.7 
points in the EU in 2023.  

Graph A2.2: Tax wedge for single and second 
earners, % of total labour costs, 2024 

Graph A2.1: Tax revenue shares in 2023 

Source: Taxation Trends Data, DG TAXUD 

The tax wedge on labour is well above the EU 
average  at  almost  all  income  levels,  except 
for very-low-income earners.(56) As a result of 

(56)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
social-security 
taxes  and  employee  and  employer 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

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

There  is  scope  for  Belgium  to  shift  the  tax 
burden away from labour to other tax bases, 
for  example  by  cutting  back  on  the  use  of 
reduced VAT rates. Revenues from consumption 
taxes  slightly  decreased  in  2022  and  2023, 
remaining  slightly  below  the  EU  average (9.7%  in 
2023 vs 10.5% on average in the EU) due to more 
extensive use of reduced VAT rates. The estimated 
VAT  compliance  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  and  2023.  Cutting  back  on  the 
use of reduced VAT rates could have a significant 
fiscal  impact.  A  recent  study  that  compared  the 
actual  VAT  tax  structure  in  Belgium  in  2019  to  a 

34 

51,226,921,951,822,825,0Tax revenue shares in 2023, Belgium (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital33,145,852,658,756,52025303540455055606550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - BESingle earner - EU averageSecond earner -  BESecond earner -  EU average 
 
       
 
      
 
counterfactual  hypothetical  scenario  where  all 
commodities  and  services  are  subject  to  the 
standard  VAT  rate  estimated  that  these  reduced 
rates  reduce  VAT  revenues  from  the  household 
sector by 20%, which is equivalent to 1.2% of GDP 
(57).  

step  in  greening  the  scheme,  only  zero-emission 
vehicles  will  be  able  to  benefit  from  the  system 
from  2026.  The  legislation  for  these  reforms  to 
the 
took  effect  on 
system 
1 January 2023  and  is  progressively  making  the 
fiscal treatment of company cars greener.  

company-car 

Tax  rates  on  property  transactions  have 
recently  been  reduced  in  two  of  the  three 
Belgian regions. Property transaction taxes have 
historically  been  high  in  Belgium.  However,  in 
Flanders,  the  property-transaction  tax  rate  for 
main  dwellings  started  decreasing  in  2016  and 
has  been  further  reduced  to  2%  in  2025.  In 
Wallonia, this tax was reduced from 12.5% to 3% 
on 1 January 2025. At the same time, transaction 
taxes remain high in Brussels for all types of real 
estate 
reduced  under  certain 
conditions (58))  and  in  Flanders  and  Wallonia  for 
real  estate  that  is  not  a  person’s  main  dwelling. 
High transaction-tax rates have a negative impact 
on  the  functioning  of  the  real-estate  market.  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. 

(12.5%  albeit 

transaction 

lower 

scope 

remains 

in  Belgium 

to 
There 
consistently  apply  environmental 
taxes. 
Excise  duties  in  Belgium  on  energy  products  used 
for  heating  are  still  low  for  fossil  fuels.  The  level 
of excise duties on gas and electricity is linked to 
market-price  levels  (the  ‘cliquet  system’),  but 
excise  duties  on  heating  oil  are  kept  at  the  EU 
minimum level. Excise duties on transport fuel are 
relatively  high  for  diesel  and  are  average  for 
petrol,  but  professional  transporters  and  the 
agricultural  sector  benefit  from  a  reduced  excise 
rate  on  diesel.  As  part  of  its  recovery  and 
resilience plan, Belgium has greened its company-
car  scheme  (a  scheme that  allowed  employers  to 
give cars to employees at a more tax-advantaged 
rate  than  would  be  the  case  if  they  simply 
increased  the  employee’s  salary)  in  recent  years 
by allowing only hybrid cars to qualify. As a second 

Graph A2.3: Environmental and property taxation 
as % of total tax revenue, Belgium and the EU, 
2023 

Source: Taxation Trends Data, DG TAXUD 

Revenues  from  corporate  income  taxes  in 
Belgium  were  equivalent  to  3.9%  of  GDP  in 
2023,  above  the  EU  average  of  3.2%.  Since 
1 January 2020,  the  standard  rate  of  corporate 
income  tax  is  25% (59).  This  rate  applies  to  both 
Belgian  companies  (subject  to  Belgian  corporate 
income 
Permanent 
Establishments  of  foreign  companies  of  foreign 
companies 
to  Belgian  non-resident 
corporate  income  tax).  The  effective  average 
corporate income-tax rate was 23.8 % in 2023. 

(subject 

Belgian 

tax) 

and 

The  complexity  of  the  Belgian  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  in  Belgium.  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. It is estimated that tax 
expenditures  in  personal  income  taxation  are 

(57)  Turrini,  A.,  Guigue,  J.,  Kiss,  A.,  Leodolter,  A.,  Van  Herck,  K., 
Neher,  F.,  Leventi,  C.,  Papini,  A.,  Picos,  F.,  Ricci,  M.  and  F. 
Lanterna  (2024).  Tax  Expenditures  in  the  EU:  Recent  Trends 
&  New  Policy  Challenges.  Discussion  Paper  212,  European 
Commission.  

(58)  For main dwellings priced below EUR 600 000, a tax 

reduction applies on the first EUR 200 000. 

(59)  A specific corporate income tax rate of 20% is applicable to 
SMEs on the first bracket of EUR 100 000 of profit if certain 
conditions are met. A surcharge is due on the final corporate 
income tax amount upon assessment if sufficient advance 
tax payments have not been made for the tax year. For tax 
years 2024 and 2025, the surcharge is 6.75%. 

35 

3.94.01.30.90.20.23.02.44.52.3012345678Belgium -environmentaltaxationEU -environmentaltaxationBelgium - propertytaxationEU - propertytaxationEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
  
 
Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).       
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2023. For more details on the VAT gap, see European Commission, Directorate-General for Taxation and 
Customs Union, VAT gap in the EU - 2024 report, https://data.europa.eu/doi/10.2778/2476549 
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, OECD 

remained comparatively low at 85.7% and 82.6% 
respectively. 

risk 

leading 

costly  and 

equivalent to more than 2.5% of GDP, one of the 
highest shares in the EU (60). These tax-exemption 
schemes  are 
to 
inefficiencies.  Belgium  ranks  25th  out  of  the  27 
Member  States  in  the  Tax  Complexity  Index (61), 
indicating that it has one of the most complex tax 
systems  in  the  EU.  For  SMEs,  Belgium  has  high 
estimated  tax-compliance  costs  compared  with 
the EU average (Belgium has the third highest tax-
compliance  costs  in  the  EU (62).  The  cost-of-
collection  ratio  for  Belgium  remains  close  to  the 
EU average (0.8 for Belgium vs an EU average of 
0.9 in 2021). In addition, concerns remain over the 
country’s 
tax  administration  system.  Despite 
recent  efforts  to  increase the  digitalisation  of the 
tax administration system, the on-time filing rates 
for  personal  and  corporate  income  taxes  in  2022 

(60)  Turrini,  A.,  Guigue,  J.,  Kiss,  A.,  Leodolter,  A.,  Van  Herck,  K., 
Neher,  F.,  Leventi,  C.,  Papini,  A.,  Picos,  F.,  Ricci,  M.  and  F. 
Lanterna  (2024).  Tax  Expenditures  in  the  EU:  Recent  Trends 
&  New  Policy  Challenges.  Discussion  Paper  212,  European 
Commission.  

(61)  The index ranges from zero (not complex) to one (extremely 

complex). 

(62)  See European Commission (2022), Tax Compliance costs for 
SMEs: An update and a complement. Final Report. DG GROW. 

36 

BEMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)43,643,242,442,537,840,239,739,0Taxes on labour (% of GDP)23,721,822,022,019,820,520,120,0of which, social security contributions (SSC, % of GDP)14,013,012,813,012,913,012,712,7Taxes on consumption (% of GDP)10,810,69,89,710,911,210,910,5of which, value added taxes (VAT, % of GDP)7,06,86,46,36,87,37,47,1Taxes on capital (% of GDP)8,810,610,410,67,18,58,78,5Personal income taxes (PIT, % of GDP)12,111,311,811,78,69,69,49,3Corporate income taxes (CIT, % of GDP)2,53,83,83,92,22,93,23,2Total property taxes (% of GDP)3,13,73,33,21,92,22,11,9Recurrent taxes on immovable property (% of GDP)1,31,21,21,31,11,11,00,9Environmental taxes (% of GDP)2,42,52,22,32,52,42,12,0Effective carbon rate in EUR per tonne of CO2 equivalentsNA71,0NA74,0NA86,0NA84,8Tax wedge at 50% of average wage (single person) (*)41,833,433,933,533,133,931,831,531,531,8Tax wedge at 100% of average wage (single person) (*)55,952,453,052,752,640,939,939,940,240,3Corporate income tax - effective average tax rates (1) (*)26,823,823,823,821,319,319,118,9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)11,013,512,612,68,68,27,97,7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)15,512,635,532,6VAT gap (% of VAT total tax liability, VTTL) (**)7,011,011,76,67,0Progressivity & fairnessTax administration & complianceBy tax baseSome tax typesBelgiumEU-27 
 
 
 
   
 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

Belgium  remains  a  strong  performer 
in 
research  and  innovation  (R&I),  although  this 
does  not  fully  translate 
into  business 
Innovation 
dynamism.  The  2024  European 
Scoreboard  ranks  Belgium  as  a  ‘strong innovator’, 
with  performance  well  above  the  EU  average (63) 
and  nearly  on  a  par  with  the  ‘innovation  leader’ 
countries.  Belgium’s 
innovation  performance 
relative  to  the  EU  average  has  steadily  increased 
over  the  last  decade  alongside  its  overall  R&D 
intensity (64), which reached 3.32% of GDP in 2023 
(compared  to  2.06%  in  2010).  This  growth  has 
been  achieved  thanks  to  a  very  substantial 
increase  in  business  R&D  intensity  (2.46%  in 
2023), now the second highest in the EU. Thanks, 
in  particular  to  the  quality  of  its  public  science 
intersectoral  and 
base  and 
international 
R&D 
its 
performers,  Belgium  has  a  well-functioning  R&I 
system.  However,  business  dynamism 
in  the 
innovation  ecosystem  remains  moderate,  and 
shortages  of  skilled  human  resources  hinder  the 
Belgian economy’s green and digital transitions. 

interconnections 

the  excellent 

of 

Science and innovative ecosystems 

Belgium’s  strong  science  base  is  a  major 
asset, but its excellence is gradually eroding. 
The  quality  of  research  outputs,  as  measured  by 
the  share  of  scientific  publications  within  the  top 
10%  most  cited  publications  worldwide,  is  well 
above  the  EU  average (65)(11.5%  vs  9.6%  in 
2021).  However, 
it  has  followed  a  slightly 
downward  trend  in  the  last  decade  (13.7%  in 
2013). Public R&D expenditure as a percentage of 
GDP, the sixth highest in the EU (0.85% versus EU 
average  of  0.72%  in  2023),  has  stagnated  over 
the  last  three  years.  A  continuation  of  this 
stagnation  might  prevent  Belgium  from  reversing 
its scientific performance’s erosion and remaining 
a  R&D  powerhouse.  In  addition,  several  factors 
such as the increasing pace of developments in AI 
tools  require  substantial  public  R&D  investment, 

(63)  European Commission, 2024, European Innovation 

Scoreboard (EIS), country profile: Belgium, ec.europa.eu. 

(64)  Defined as gross domestic expenditure on R&D as a 

percentage of GDP. 

(65)  Key innovation indicators table. 

although  regional  public  investment  in  digital  and 
numerical  infrastructures  are  highly  supported  so 
far. 

Belgian  R&I  performers  are  well  connected 
globally.  The  share  of the  country’s  international 
co-publications  in its  total  number  of  publications 
has  gradually  increased,  from  55.8%  in  2010  to 
70.4%  in  2023,  well  above  the  EU  average  of 
55.9%.  Belgium’s  R&I  community  participates 
actively  in  collaborative  R&I  projects  funded  by 
Horizon  Europe,  the  EU’s  framework  programme 
for  R&I.  Belgian  research  performers  have  so  far 
obtained  5.5%  of  Horizon  Europe  funds (66),  with 
Belgium  ranked  sixth  among  Member  States.  The 
Brussels  and  Flanders  regions  together  attracted 
around  90%  of  the  budget  gained  by  Belgian 
research  performers  from  Horizon  Europe.  The 
country is participating in six Important Projects of 
Common  European  Interest.  These  large-scale 
cross-border  projects  with  a  high 
level  of 
technological risk are key to boosting R&I for small 
and medium-sized enterprises (SMEs).   

to 

collaboration 

is  room  to  better  use  scientific 
There 
evidence 
support  policymaking.  As 
underlined  in  the  OECD  evaluation  of  Belgium’s 
COVID-19  responses  (OECD,  2023) (67),  increasing 
the use of data and evidence for political decision-
making  would  help  increase  the  effectiveness  of 
policy  actions.  In  this  context,  building  better 
connections, 
coordination 
between  policymakers  and  scientists  is  of  utmost 
importance.  An  example  of  good  practice  is  the 
‘Flash’  scheme.  This  is  open  to  the  entire  Belgian 
scientific  community  and  aims  to  provide  a  rapid 
response to pressing needs for scientific evidence 
to  support  decision-making  processes  at  federal 
level (68).  To  further  develop  data  collection, 
analysis  and  sharing  is  particularly  important  in 
order  to  better  design,  target  and  evaluate 
economic measures.  

and 

(66)  Horizon Europe dashboard. 

(67)  OECD (2023), Evaluation of Belgium’s COVID-19 Responses: 
Fostering Trust for a More Resilient Society, OECD Publishing, 
Paris.  

(68)  Science advice to policymakers: Roles, enabling conditions 
and incentives, Horizon Policy Support Facility Mutual 
Learning Exercise on bridging the gap between science and 
policy, Second thematic report, 2024. 

37 

 
 
 
 
 
 
Differences  persist  across  regions  in  terms 
of  innovation  performance.  According  to  the 
2023  Regional 
Innovation  Scoreboard,  while 
Brussels  and  Flanders  are  among  ‘innovation 
leader’  regions ‘(69),  Wallonia  is  deemed  a  ‘strong 
innovator’.  A  major  difference  in  the  innovation 
ecosystem  of  the  three  regions  is  public  R&D 
intensity,  which  is  much  weaker  in  Wallonia 
(0.52%)  than  in  the  two  other  regions  (Brussels 
0.76%,  Flanders  0.94%).  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.  

Business innovation 

its 

but 

performance 

The  Belgian  innovation  ecosystem  benefits 
level  of  business  R&D 
from  a  high 
investment  and  very  good  science-business 
linkages, 
in 
technological  developments  is  on  a  slightly 
downward  trend.  Business  R&D  intensity,  at 
2.46%,  which  is  well  above  the  EU  average  of 
1.49%,  is  one  of  the  highest  in the  EU.  Indicators 
on science-business linkages have been improving 
in  the  last  decade.  Public-private  scientific  co-
publications in  2023  as  a  percentage  of  the  total 
number of publications reached 11.5% (well above 
the  EU  average  of  7.7%),  and  public  expenditure 
on R&D financed by the business enterprise sector 
as  a  percentage  of  GDP  is  one  of  the  highest  in 
the  EU  (0.077%  vs  EU  average  of  0.05%).  On 
technology  development  as  captured  by  patent 
data, the number of patent applications filed under 
the  Patent  Cooperation  Treaty  per  billion  of  GDP 
(in  (in  PPS€)  has  been  on  a  slightly  downward 
trend  in  the  last  decade,  in  line  with  the  trend  at 
EU  level.  In  2020,  Belgium  had  the  highest  share 
of  its  patent  applications  in  the  agri-food,  health 
and electronics industrial ecosystems.  

in 

the 

Business  dynamism 
innovation 
ecosystem  remains  moderate,  despite  public 
support that targets start-ups and scale-ups. 
Indicators  suggest  that,  despite  relatively  good 
performance compared with other Member States, 
Belgium’s  SME  sector  could  be  more  heavily 

(69)  2023 Regional Innovation Scoreboard. Regional profiles of 
Belgium as part of the European Innovation Scoreboard in 
terms of regional R&I performance. 

38 

engaged in innovation (70). In addition, Belgium has 
a  wide  range  of  SME  support  programmes,  with 
little  evidence  of  their  positive  effects.  Belgian 
SMEs  appear  to  face  difficulties  growing  in  size 
(high-growth  businesses  account  for  only  5.75% 
of  employment  vs  an  EU  average  of  12.51%), 
despite  the  fact  that  Belgium  offers  substantial 
and numerous tax incentives and exemptions that 
target  start-ups  and  scale-ups.  These  include  the 
investors (71)  and 
tax 
exemptions  for  the  taxation  of  capital  gains 
realised  from  the  sale  of  qualifying  start-up 
shares (72). The impact of the strengthening of the 
‘Tax  Shelter for Start-ups and Scale-ups’ in 2021, 
a  support  measure  where  individuals  investing  in 
start-ups or scale-ups benefit from a tax reduction 
ranging from 25% to 45% of the amount invested, 
is yet to be seen.  

scheme 

shelter 

for 

There  is  room  to increase  the  efficiency and 
additionality  of  public  support  to  high-
growth  R&D  businesses.  Belgium’s  public 
support  to  business  R&D  is  substantial,  with  R&D 
tax  incentives  taking  the  largest  share.  Some 
research (73)  suggests  that  while  direct  support  – 
mostly  subsidies  provided  by  regions  –  and  the 
partial 
the 
withholding  tax  on  the  wages  of  R&D  personnel 
have  encouraged  additional  investment  in  R&D, 
tax  credits  may  not  significantly  boost  R&D 
investment in Belgium.  

from  payment  of 

exemption 

Moreover,  evidence  shows  that  large  firms 
tend  to  be  the  main  recipients  of  public 
support  and  disproportionally  benefit  from 
R&D tax support (74). Indicators suggest that the 

(70)  OECD(2024). Economic Surveys BELGIUM. 

(71)  The tax shelter scheme gives taxpayers a tax reduction of 
30% of the amount invested in start-ups (companies with 
less than 50 employees and < 4 years old), 45% for 
investments in micro-enterprises (less than 10 employees 
and < 4 years old) and 25% for scale-ups (less than 10 
employees, 5-10 years old and more than 10% annual 
growth). 

(72)  Start-ups (firms created less than 48 months ago) are 

partially exempted from the withholding tax – an advance on 
professional income tax firms should collect and return to 
the state (10% for small firms and 20% for micro-
enterprises). The amount invested that qualifies for the 
reduction is limited to EUR 100 000 per taxpayer per year. 

(73)  Dumont, M. (2019), ‘Tax incentives for business R&D in 

Belgium: Third evaluation’, Federal Planning Bureau Working 
Papers, No. 4-19. 

(74)  Dumont, M. (2022): Public support to business research and 

development in Belgium: fourth evaluation.  

 
 
 
share  of  R&D  tax  support  among  small  firms  is 
low  by  OECD  standards  and  well  below  their 
contribution  to  business  R&D  spending,  which  is 
around 20% of the total. Evidence shows that the 
efficiency  and  impact  of  tax  incentives  for  R&D 
activities  could  be  increased  by  targeting  small 
firms  that  are  financially  constrained (75).  The 
OECD  has  recommended  reforming  the  system 
and suggests capping R&D corporate tax relief for 
each  company  to  ensure  that  small  and  young 
firms  receive  a  larger  part  of  public  R&D  support 
or  shifting  public  R&D  support  from  indirect  tax 
relief to direct government funding. 

Despite substantial progress over the last 20 
years,  Belgium  still  struggles  to  foster 
cultivate a regulatory environment that fully 
enables  innovation  and  business  dynamism. 
Regulatory  burden  can  duly  weigh  on  smaller 
firms.  According 
to  OECD  Product  Market 
Regulation  indicators,  Belgium  performs  worse 
than  the  OECD  average  and  top  performing 
countries  in  four  key  areas  for  SMEs:  simplifying 
administrative  and  regulatory  burden (see  Annex 
4),  easing  requirements  for  new  businesses, 
barriers  to  entry  in  service  sectors  and  improving 
lobbying 
(see  Annex  4).  Further 
reforms  are  needed  to  create  a  regulatory 
environment  that  truly  nurtures  innovation  and 
business dynamism (76). 

regulations 

In 2023 and 2024, Belgium made notable and 
consistent progress in terms of the uptake of 
digital  technologies  by  business  enterprises. 
83.7% of Belgian SMEs had at least a basic level 
of digital intensity in 2023, above the EU average 
of 72.9%. 24.7% of Belgian SMEs had adopted AI 
in 2023, well above the EU average of 13.5% and 
up  from  13.8%  in  2023.  The  take-up  of  cloud 
solutions by Belgian enterprises (47.7% in 2024) is 
above  the  EU  average  (38.9%),  similar  to  their 
adoption  of  data  analytics  (44.5% in  2023, vs  an 
EU average of 33.1%). 

(75) 
OECD Publishing, Paris. 

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

OECD(2024). Economic Surveys BELGIUM. The 

(76) 
OECD study provides policy recommendations to improve SME 
growth, productivity and innovation.  

39 

Financing innovation 

has 

capital 
in 

intensity 
recent  years, 

Venture 
been 
reflecting 
decreasing 
Belgium’s  difficulty  in  fully  benefiting  from 
the  strengths  of  its  R&I  system.  Venture 
capital volume decreased from 0.084% in 2020 to 
0.063% of GDP in 2023 and is now below the EU 
average  of  0.078%.  In  2015-2023,  most  private 
equity  and  venture  capital  investment  went  into 
innovative tech companies operating in the field of 
health  and  medical  technology.  This  shows  the 
importance of start-up and scale-up activity in this 
sector  in  Belgium.  Health  was  followed  by  agri-
food, aerospace and defence (77).  

Innovative talent 

Shortages  of  skilled  workers  hinder  the 
Belgian  economy’s  twin  transitions  and 
business dynamism. In 2022, the number of new 
graduates per thousand population aged 25-34, in 
STEM  subjects  (science,  technology,  engineering 
and  maths),  at  12.9,  was  lower  than  the  EU 
average  (17.6).  The  number  of  new  graduates  in 
ICT  per  thousand  of  the  population  aged  25-34 
was 2.4, one of the lowest in the EU (EU average 
through 
3.6). 
consultancy services and flexible training modules 
could  help  address  skills  shortages  that  hamper 
firms’ capacity to scale up.  

Improving  access 

training 

to 

Support  for  entrepreneurial  education 
is 
present  in  Belgium,  however  implementation 
challenges  persist.  In  the  French  Community, 
entrepreneurship  education  is  integrated  into  the 
curricula  and  educational  policies  and  initiatives 
supporting entrepreneurship for young people and 
lack  of 
teachers  exist.  However,  there 
evaluation  and  coordination  of  existing  initiatives. 
In  Flanders,  entrepreneurship  education  has  been 
present  in  government  policies  since  2011.  To 
further  increase  entrepreneurial  competences  the 
government 
implemented  an  action  plan  on 
entrepreneurial education (2015-2019). This led to 
the  development  of  successful  initiatives  and 

is  a 

(77)  Monitoring industrial ecosystems (2024). Fact sheets: 

Belgium. 

 
 
 
education  tools  at  all  levels  that  are  still  used 
today. However, evidence is limited  on the impact 
of these initiatives on students’ attitudes.    

40 

 
 
 
 
 
 
 
 
 
 
 
 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the highest number of country data. 
Source: Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

41 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.272.683.373.413.293.32:2.243.45Public expenditure on R&D as % of GDP0.670.780.860.840.850.85:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 13.812.811.711.5:::9.612.3Researchers (FTE) employed by public sector (Gov+HEI) per thousand active population4.54.95.45.65.85.8:4.2:International co-publications as % of total number of publications5865.969.769.970.670.4:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP1.591.882.492.542.422.46:1.492.70Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.560.72:0.95:::0.400.30Researchers employed by business per thousand active population4.65.96.99.29.59.9:5.7:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)3.53.23.432.7::2.8:Employment share of high-growth enterprises measured in employment (%)9.51:5.76::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::77.23:83.772.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::44.47:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::46.87:47.69:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::10.32:13.8124.7113.48:Public-private scientific co-publications as % of total number of publications9.910.81111.311.411.5:7.78.9Public expenditure on R&D financed by business enterprises (national) as % of GDP0.0640.0760.0830.077:::0.050.02Total public sector support for BERD as % of GDP0.2280.264:0.356:::0.2040.251R&D tax incentives: foregone revenues as % of GDP0.1240.1770.2260.20.2::0.10.1Business entreprise expenditure on R&D (BERD) financed by the public sector (national and abroad) as % of GDP 0.1040.086:0.124:::0.10.11Venture capital (market statistics) as % of GDP, total (calculated as a 3-year moving average)0.00290.0370.0840.0870.0790.063:0.078:Seed funding (market statistics) as % of GDP 2.412.27.45.45.36.1:7.3:Start-up and early-stage funding (market statistics) as % of GDP 61.940.960.364.857.354.8:44.0:Later stage and scale-up funding (market statistics) as % of GDP 35.64732.329.837.339.1:48.7:New graduates in science and engineering per thousand population aged 25-3412.611.713.113.212.9::17.5:Graduates in the field of computing per thousand population aged 25-341.41.51.82.32.4::3.6:2023EU average (1)USA2024Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed in businessesPublic support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationFinancing innovationInnovative talent20222021Belgium 201220172020 
 
  
 
ANNEX 4: MAKING BUSINESS EASIER 

Belgium’s  economy  continues 
to  grow, 
despite  political  uncertainty,  high  energy 
costs,  high  vacancy  rates  and  a  slight 
slowdown  since  2020 
in  manufacturing. 
Pharmaceuticals  as  well  as  a  good  level  of 
research and development and digital intensity are 
supporting 
this  progress.  Labour  productivity 
remains relatively high, despite a recent slowdown. 
from  a  highly  developed 
Belgium  benefits 
infrastructure  and  a  skilled  workforce.  Investment 
as  a  share  of  GDP  was  above  the  EU  average  in 
2023.  However, 
challenges 
labour  costs  and  an  ageing 
include  high 
population.  Political  uncertainties  and  the  climate 
transition are putting pressure on public finances.  

competitiveness 

Economic framework conditions 

is 

to 

related 

The investment climate is still rather positive 
compared  with  the  rest  of  the  EU,  but  much 
investment 
capacity 
(78). 
replacement  rather  than  expansion 
Belgium  ranked  8th  in  the  EU  in  terms  of 
investment as a share of GDP (gross fixed capital 
formation  as  %  of  GDP)  –  at  24.5%  in  2023 
(above the EU-27 average of 22%). In 2023, 88% 
of  total  investment  came  from  the  private  sector 
(including businesses and households), the second 
highest  share 
the  EU.  However,  Belgian 
investment  is  focused  on  capacity  replacement 
(equipment,  machinery,  etc.)  (61%  of  firms)  (79)). 
Belgium  leads  in  the  EU  in  the  share  of  firms’ 
investment in intangibles assets. 

in 

Belgian  firms  report  fewer 
investment 
barriers  than  the  EU  average  (energy  costs, 
availability  of  skilled  staff,  and  uncertainty 
about the future remain the main obstacles) 
and  supply  constraints  are  decreasing. 
According  to  the  EIB  investment  survey  (80),  the 
three  main  obstacles  to  investment  for  Belgian 
businesses are energy costs (for 47.1% of Belgian 
firms),  availability  of  skilled  staff  (for  37%)  and 
uncertainty  about  the  future  (for  18.6%).  Overall, 

however,  the  share  of  firms  reporting  long-term 
barriers  to  investment  is  lower  than  the  average 
for  EU  firms.  The  share  of  businesses  facing 
labour  supply  constraints  is  decreasing  (13.8%  in 
2024 vs 15.7% in 2023) and is smaller than in the 
rest of the EU (20.16% in the EU on average) (81). 
The  share  of  Belgian  businesses  facing  material 
supply  constraints  is  also  decreasing  (13.3%  in 
2024  vs  20.8%  in  2023)  but  remains  larger than 
the EU as a whole (the EU average is 10%) (82).  

EU 

and 

find 

transport 

Fewer  firms  in  Belgium  than  in  the  rest  of 
digital 
the 
infrastructure  are  obstacles  to  investment. 
19%  of  Belgium’s  businesses  see  transport 
infrastructure 
obstacle 
(compared to 45% in the EU) and 18% see access 
to  digital  infrastructure  as  an  obstacle  (against 
41%  in  the  EU)  (83).  Belgium  has  one  of  the  best 
infrastructures in the world, ranking among the top 
10  in  the  2024  logistic  performance  index,  and 
was the fifth best performing EU Member State. 

investment 

an 

as 

Belgian firms are among the least financially 
constrained  in  the  EU,  but  late  payments 
gaps  have  increased  and  are  above  the  EU 
average.  Belgium’s  share  of  finance-constrained 
firms  is  the  second  lowest  in  the  EU  (below  5%). 
Availability of finance is an obstacle to investment 
for only 23% of Belgian firms, (EU  average 45%) 
(84).  The  share  of  SMEs  in  Belgium  experiencing 
late  business-to-business  payments  (45.4%)  and 
late  government-to-business  payments  (14%)  is 
slightly lower (85) than in the EU as a whole (47.9% 
and  16.6%  respectively).  But  the  business-to-
business payment gap increased over the last five 
years  to  reach  16.5 days  in  2024  (above  the  EU 
average 
the 
government-to-business payment gap has slightly 
decreased  since  2023  to  16.9  days  but  remains 
above the EU average of 15.2 days.  

of  15.5 days).  By 

contrast, 

landscape  for  businesses 

The  digital 
in 
Belgium  is  positive  overall  (including  on  the 
cybersecurity  front)  but  Belgium  needs  to 

(81)  European Commission, ECFIN BCS. 

(82)  European Commission, ECFIN BCS. 

(78)  European Commission, Business and consumer survey (BCS), 

(83)  EIB investment survey 2024 (based on interviews carried out 

November 2024. 

between April and July 2024). 

(79)  EIB Investment Survey 2024 EU overview. 

(84)  EIB investment survey 2024 (based on interviews carried out 

(80)  EIB investment survey 2024 (based on interviews carried out 

between April and July 2024). 

between April and July 2024). 

(85)  SAFE Survey 2023. 

42 

 
 
 
 
 
progress  in  5G  and  fibre  coverage.  The 
number  of  SMEs  with  at  least  a  basic  level  of 
digital  intensity  is  74.5%,  well  above  the  EU 
average of 57.7% (see the Annex on Innovation to 
Business).  This  is  also  the  case  for  the  offer  of 
digital  public  services  for  businesses  (91.6%, 
compared with the EU average of 85.4%) (see the 
Annex on Effective Framework Conditions).  

59.97%).  In  2024,  3.96%  of  enterprises  reported 
caused  by  external 
ICT  security 
cyberattacks  (slightly  above  the  EU  average  of 
3.5%). 

incidents 

Graph A4.1: Making Business Easier: selected 
indicators. 

exchange 

is  making  progress 
automated 

in  enabling 
Belgium 
search-free 
of 
authentic  documents  and  data  between 
authorities  across  the  EU.  It  has  already 
successfully  tested  its  first  transactions  through 
the  Once-Only  Technical  System,  which  is  part  of 
the  European  Union's  Single  Digital  Gateway. 
Belgium  is  in  the  process  of  connecting  the  first 
authorities,  but  more  effort  is  needed  to  further 
reduce administrative burden. 

Belgium has made progress in its gigabit and 
5G  networks’  coverage,  but  more  effort  is 
needed.  While  Belgium  is  ahead  VHCN  (gigabit) 
coverage,  with  a  high  rate  of  96%  in  2023,  the 
country falls behind in 5G and FTTP coverage with 
only  40.4% 
(EU  average  89.3%);  and  25% 
respectively (EU average 64%). Improvement in 5G 
coverage  in  the  3.4-3.8  GHz  band  is  underway, 
increasing  from  14.2%  to  87%  by  January  2024, 
though  high-speed  broadband  take-up  remains 
low compared to EU averages. 

RRP, 

enhancing 

The  national  Broadband  Plan  funded  by 
Belgium’s 
VHCN 
is 
deployment in underserved areas. Through two 
project  calls in 2022 and 2023, with an allocated 
budget of EUR 26.5 million Belgium aims to bridge 
the  investment  gap  for  deploying  fixed  VHCN, 
connecting over 15,000 households without access 
to  100  Mbps  networks.  Despite  challenges, 
initiatives  are  boosting  infrastructure  in  federal 
and 
broader 
connectivity. 

regional 

aiming 

areas, 

for 

especially 

preparedness, 

On  the  cybersecurity  front,  many  initiatives 
are  in  place  to  raise  Belgium’s  capabilities 
through 
and 
awareness raising and educational efforts by 
the National Cybersecurity Centre.  96.12% of 
enterprises  had  deployed  some 
ICT  security 
measures (just above the EU  average of 92.76%) 
by  2022.  62.82%  of  enterprises  had  made  their 
employees  aware  of  their  obligations  in  issues 
related to ICT security (so above the EU average of 

Share of (1) enterprises, (2) average intra-EU exports and 
imports in GDP, (3) firms, (4) SMEs. 
Source: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE 
survey. 

Belgium  has  a  high  job  vacancy  rate, but  its 
low  employment  rate  suggests  there  are 
disincentives  to  work.  Belgium’s  job  vacancy 
rate  was  the  highest  in  the  EU  in  2024  (5.1% 
versus  the  EU  average  of  2.3%).  However,  its 
72,3%  employment  rate  was  the  fifth  lowest  in 
the EU in 2024 (below the EU average of 75.8%). 
Several indicators such as the unemployment trap, 
disability  employment  gap  and  low-wage  trap, 
point  to  working  disincentives  in  Belgium.  The 
complex social benefits system (some of which are 
not  based  on  the  recipient’s  income  or  financial 
situation) and easy access to some forms of early 
retirement  fail  to  incentivise  long-term  labour 
market  participation.  Additionally,  pensioners, 
under  certain  conditions,  working  beyond  an 
earning threshold (which is low) see their pensions 
reduced or suppressed, 

The  number  of  long-term  sick  leaves  in 
Belgium  has  increased  to  500 000 in  recent 

43 

45.413.913.352.35.147.916.61041.624.50102030405060from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27BE 
      
years and is one of the highest shares of the 
labour  force  in  the  EU.  The  share  of  disability 
beneficiaries among the working age population in 
Belgium in 2018 was of 4.8%, one of the highest 
in the EU (86). A study by the Conseil Supérieur de 
l’Emploi  (87)  shows  that  the  economic  context 
alone cannot explain this increase. The study  also 
points  to  structural  issues  and  advises  (among 
other points) that the disability regime should not 
be made more financially attractive than the other 
benefit  systems  (see  the  Annex  on  the  Labour 
Market). 

responsible 

strengthening 

Finding  skilled  staff 
(especially  STEM 
graduates)  remains  a  concern  for  firms.  The 
three  Belgian  Communities, 
for 
education  policies,  are  focusing  their  VET  reforms 
on 
and 
entrepreneurship  competences,  while  also  taking 
region-specific  needs  into  consideration.  Belgium 
has a high share of high education graduates but 
few  STEM  graduates. 
In  the  French-speaking 
community,  there  is  a  shortage  of  500  engineers 
each year in the labour market.  

STE(A)M 

digital, 

Despite  the  challenges,  Belgium  remains  an 
attractive EU country for foreign investment. 
Belgium  ranks  8  out  of  27  in  the  EU  with  215 
foreign  investments  in  2023  amid  a  general  EU 
declining  trend.  Belgium  scored  well  in  the  2023 
OECD  Product  Market  Regulation  indicators  on 
trade barriers facilitation, ease of FDP and tariffs. 
Flanders  attracted  3.5  times  more  investment 
projects  than  the  Brussels  region  and  5  times 
more than Wallonia (88). Projects focus on business 
and  professional  services,  transportation,  logistics 
and  pharmaceuticals.  In  2023,  France  surpassed 
the  US  as  Belgium  ‘s  main  foreign  investment 
source.  The 
investments 
interfederal  foreign 
screening  committee (89)  reported  no  blocked 
investments in its first report for 2023-2024.  

(86)  OECD 

(87)  Conseil supérieur de l’emploi, Incapacité de travail et 

réintégration des salariés sur le marché de l’emploi, March 
2024. 

(88)  EY Attractiveness Survey Belgium June 2024 

(89)  The main tasks of the Interfederal Screening Committee (ISC) 
are  to  (i) analyse  foreign  direct  investments  from  third 
countries  (whether  or  not  through  an  EU  company),  which 
acquire  a  certain  percentage  of  voting  rights  in  a  Belgian 
company;  and  (ii) assess  whether  they  pose  any  potential 
risks to Belgium’s national security and strategic interests. 

Regulatory and administrative 
barriers 

to 

Belgium  is  one  of  the  most  innovative 
Member  States  and  has  undertaken  several 
initiatives 
administrative 
simplify 
procedures,  but  its  indicators  point  to  a  low 
level  of  business  dynamism.    There  has  been 
no significant increase in business registrations in 
recent years. The increase in business registrations 
in  2024  (100  vs  103  for  the  EU)  and  the  overall 
five-year average were both below the EU average 
(92,5  and  98,6  for  the  EU).  A  suspension  of 
bankruptcy  filings  led  to  a  pause  in  business 
in  2020-2021  but  the  number 
bankruptcies 
increased since 2021 and the growth is now above 
the EU average. Overall, however, the 14.2% churn 
rate  in  2022  was  among  the  three  lowest  in  the 
EU and well below the EU average (19.2%) (90). 

regulatory 

businesses’ 

that  collectively 

initiatives  to 
Belgium  has  taken  recent 
reduce 
and 
administrative  burden.  Belgium  reformed  its 
company  law  in  2019,  reducing  the  number  of 
company  types  from  17  to  5  and  abolishing 
capital requirements for self-employed and limited 
liability  companies.  The  Federal  Action  Plan  for 
Administrative  Simplification  (PAFSA),  also  known 
as the Kafka Plan, was launched in January 2022 
to  pursue  administrative  simplification  and 
digitalisation.  PAFSA’s  first  report  (2022-2024) 
lists  16  measures 
reduced 
administrative  costs  by  EUR 116.2 million.  These 
measures  include  removing  certain  thresholds  for 
provisional  social  security  contributions  for  the 
self-employed,  simplifying  notarised  powers  of 
attorney;  and 
introducing  eBox  Entreprise,  a 
system  between 
centralised 
businesses  and  the  administration.  Belgium’s 
taxation 
and 
development  attracts  companies.  The  national 
recovery and resilience plan (RRP) includes several 
measures  for  administration  digitalisation  at 
federal  and  regional  levels.  Business  and  labour 
regulations  rank  fourth  and  fifth  among  barriers 
cited by firms in the EIB investment survey. 

communication 

research 

favours 

regime 

Despite  these  initiatives,  firms  still  face 
compliance. 
difficulties  with 

regulatory 

(90)  Eurostat. 

44 

 
 
 
Belgium’s  estimated  compliance  costs  for  SMEs 
are  the  third  highest  in  the  EU  and  above  the  EU 
average. 81% of exporting firms report challenges 
in complying with diverse regulatory requirements 
– well above the EU average of 60%. Belgium also 
ranks  24th  out  of  27  Member  States  in  the  2022 
Tax  Framework  Complexity  Index,  (see  Annex  on 
Taxation).  Belgium  has  the  second  highest  share 
of  SMEs  employing more than  10%  of  their  staff 
on regulatory compliance, and the second highest 
share  of  firms  employing  staff  overall  on  such 
matters overall. 

Competitiveness  is  affected  by  high  product 
market  regulations  (as  shown  in  the  OECD’s 
2023  PMR  data  and  the  services  trades 
restrictiveness indicator). The 2023-2024 PMR 
indicators  show  a  slight  decrease  on  2018,  but 
Belgium is still above the OECD average and is one 
of  the  five  EU  Member  States  with  the  most 
restrictive PMR score. As regards the key areas for 
SMEs,  Belgium  also  ranks  low  on  (i) simplification 
of  the  administrative  and  regulatory  burden; 
(ii) administrative  requirements  for  new  firms; 
(iii) barriers  to  entry  in  the  service  sector;  and 
(iv) lobbying regulations. The split of competences 
between  the  federal 
level  and  the  regions 
complicates  matters  because  several  different 
bodies need to be contacted.  

The  Belgian 
insolvency  framework  was, 
despite  its  reform,  assessed  as  being  less 
favourable  to  SMEs  than  those  of  many 
other  OECD  countries 
in  2022.  Despite 
introducing  a  distinction  between  SMEs  and  large 
enterprises  to  ease  some  aspects  for  SMEs,  the 
insolvency  framework  remains  quite  complicated 
and still resembles the procedure of reorganisation 
by  collective  agreement  with  creditors  that  was 
already in place before the new norm. 

The  rules  regarding  interactions  between 
public  officials  and  interest  groups  could  be 
more  transparent.  Such  rules  exist  in  Belgium, 
but  they  are  loose  because  they  are  voluntary. 
There  is  no  compulsory  public  register.  Public 
officials are not obliged to disclose their meetings 
agenda or the identity of the interest groups they 
consulted  during  the  regulatory  process.  Such  a 
loose  regime  may  well  favour  larger  and  existing 
firms at the expense of smaller and newer firms. 

The single market 

Belgium  is  well  integrated  into  the  single 
market.  In  2024,  intra-EU  imports  and  intra-EU 
exports  made  up  52%  of  Belgium’s  GDP.  This  is 
one  of  the  highest  shares  in  the  EU  and  higher 
than  the  2024  EU  average  of  42%.  In  2024, 
Belgium was one of the top  7 Member States for 
share  of  GDP  generated  from  intra-EU  goods 
trade. It was also one of the top 7 Member States 
for trade in services.  

Belgium  is  well  integrated  into  the  single 
market  but  performed  poorly  when  it  comes 
to transposing EU Law. Belgium has a deficit of 
1%  (the  EU  average  is  0.8%)  and  ranks  21st  out 
of  27  Member  States.  However,  its  performance 
has improved since last year, when it ranked 25th 
out of 27. It ranks 14th on conformity, with 1.2% 
of  directives  being  wrongly  transposed  (the  EU 
average  is  1.1%).  Belgium  resolved  59%  of  the 
SOLVIT cases it handled as lead centre in 2024 – 
well below the EU average of 84.9% and far lower 
than its own performance in 2023 (81%). 

In retail and price controls, Belgium is among 
the  most  restrictive  EU  Member  States. 
According  to  the  2023  OECD  PMR,  Belgium  could 
improve in reducing price controls and regulations, 
online sales, and the administrative and regulatory 
burden  on  retail  trade  establishment.  Retail  sales 
of  medicines  are  more  strictly  regulated  than  the 
OECD  average;  prescription  medicines  cannot  be 
sold  online,  and  all  medicines  are  subject  to 
maximum  prices  set  by  the  Economy  Minister. 
Notaries’ tariffs, book prices, gasoline and LPG are 
regulated  and  tariffs  for  fixed-line  services  and 
mobile  services  are  capped  for  social  benefit 
recipients.  Based  on  HICP  weights,  about  12 
percent  of  prices  were  at 
least  partially 
government-administered in Belgium in 2023(91). 

Belgium’s high service trade restrictions may 
contribute  to  low  level  business  dynamism. 
Belgium  has  one  of  the  highest  services  trade 
restrictiveness  indices  (STRI)  within  the  European 
Economic  Area  (EEA).  Belgium  ranks  worst  on  the 
intra-EEA STRI index in the EU for architecture, and 
for  courier  services.  It  is  among  the  three  most 
restrictive  Member  States  for  telecoms,  logistics 

(91)  IMF, Article IV report, 2023, Belgium. 

45 

 
 
(customs  brokerage  and  freight  forwarding)  and 
ranks 4th for air transport. It also performs poorly 
on service restrictions for construction, commercial 
banking,  accounting  services  and  engineering 
services. The arrival of a fourth telecoms player in 
autumn  2024 may  enhance  competition.  Reforms 
in  these  areas  and  those  covered  by  the  OECD 
PMR could raise total factor productivity  by about 
3.5  percent  to  7.5  percent  (92),  aligning  Belgium 
with the EU’s best-performing peers. 

regulations 

Belgium  remains  quite  restrictive  for  some 
regulated  professions.  According  to  the  2023-
2024  PMR  and in  line  with  the  2021 Commission 
communication  on  the  update  of  the  2017 
recommendation  on 
in  business 
services,  Belgium  remains  more  restrictive  for 
most  of 
the  analysed  professions,  namely 
architects,  accountants,  real  estate  agents  and 
tourist  guides 
requirements 
(Wallonia).  Entry 
remain  especially  high  for  these  professions,  as 
well 
entrance 
requirements eased slightly for real estate agents 
between 2018 and 2023. 

although 

lawyers, 

for 

as 

Public procurement  

Overall,  Belgium  is  an  average  performer  in 
public procurement.  The  share  of  direct  awards 
is  around  2%,  significantly  below  the  EU  average 
of  8%.  In  2023,  26%  of  contracts  were  awarded 
after single bids, a slight deterioration from  2022 
(24%) but better than the EU  average (29%). The 
e-procurement  platform  has  been  renewed  and 
modernised 
the  Annex  on  Effective 
Institutional  Framework).  The  OECD’s  PMR 
indicators 
rank  Belgian  public  procurement 
provisions  as  slightly  less  competition-friendly 
than the EU average.  

(see 

(92)  IMF, Article IV report, 2023, Belgium. 

46 

 
 
Table A4.1:  Making business easier: indicators 

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**Data on single bids for 2024 is provisional and subject to revision. Please note that approximately 52% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Source: Sources: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade country reports; target = 100%, (5) Intrum Payment 
Report, (6) SAFE survey, (7) OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data 
space (PPDS). 

47 

POLICY AREA20202021202220232024EU-27 average8.619.433.620.813.310.012.216.224.315.713.920.23.75.25.95.55.12.312.712.116.94.91.913.4-68.978.396.0-78.8-10.117.225.0-64.0-4.229.640.4-89.3Regulatory environment25.619.421.97.35.124.52.511.511.715.316.515.66.112.216.017.716.915.1from public or private entities in the last 6 months42.042.450.049.8--from private entities in the previous or current quarter----45.447.9from public entities in the previous or current quarter----13.916.651.658.561.355.052.341.60.0550.0550.0550.0550.0630.0501.52.82.31.61.00.81.11.21.11.21.30.989.891.288.281.059.084.938.032.033.031.034.024.42122242622-222237.0BelgiumINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
           
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

The  banking  sector  appears  relatively  sound 
and profitable. Banks have withstood the rise 
in  risk-free  interest  rates  but  continue  to 
face  significant  challenges.  Macroprudential 
policy  has  contributed  to  an  orderly  slowdown  in 
the  credit  and  residential  property  cycles.  The 
insurance  sector  currently  appears  sound  as  a 
whole,  but  the  legal  framework  governing  the 
insurance  of  natural  catastrophes  is  not  fully 
adequate  and  exposes  the  sector  to  unexpected 
losses in the case of adverse events like the floods 
of 2021. Like in most Member States, households 
in Belgium invest relatively little in financial assets 
and,  more  importantly,  equity.  They  invest  a  bit 
more in equity than the EU average, but much less 
than US households. Belgium’s tax system distorts 
investment choices and leads to overinvestment in 
certain  assets.  Also,  encouraging  the  build-up  of 
universal  funded  supplementary  pension  schemes 
would positively contribute to (i) the sustainability 
and  adequacy  of  pension  benefits;  (ii)  investment 
in equity; (iii) access to finance; (iv) growth; and (v) 
innovation. 

Availability and use of domestic 
savings 

The  Belgian  economy  borrows  as  much  from 
as it lends to the rest of the world. In the last 
decade,  the  private  savings  ratio,  net  of  fixed 
capital  consumption,  exhibited  some  volatility 
around  its  ten-year  average  of  8.6%  of  GDP.  It 
steeply increased to 13.4% of GDP in 2020 before 
progressively receding to 8.8% in 2023 (see Graph 
A5.1).  The  net  private  investment  ratio,  which 
measures the net contribution of the private sector 
to  capital  accumulation  in  the  country,  evolved 
quite  differently.  It  fluctuated  around  its  ten-year 
average of 5.1% of GDP, with a noticeable drop to 
3.6% of GDP in 2020 before increasing to 5.1% of 
GDP  in  2023.  At  the  same  time,  during  the  same 
period  the  government  budget  was  in  regular 
deficit that averaged 3.4% of GDP with a peak at 
9.0%  of  GDP  in  2020.  Thus,  the  high  positive 
balance  between  net  domestic  savings  and  net 
investment was almost fully offset by government 
deficits, which resulted in structural net lending by 
Belgium to foreigners that averaged 0.1% of GDP, 
with  a  peak  of  1.5%  in  2018  and  a  trough  of  -
2.1% in 2021.  

Graph A5.1: Net savings-investment balance in 
Belgium 

Source: AMECO. 

Consistent with its past regular position of a 
net  creditor  to  the  rest  of  the  world,  the 
Belgian economy has accumulated significant 
foreign  assets  and  exhibits  a  positive  net 
international  investment  position.  As  of  Q3-
2024, total assets on foreigners reached 415% of 
GDP,  while  liabilities  to  foreigners  stood  at  359% 
of GDP, resulting in a net international investment 
position  (NIIP)  equivalent  to  56%  of  GDP  (see 
Graph  A5.2).  The  net  accumulated  portfolio 
investments, which reached 32% of GDP as of Q3-
2024, accounted for most of the NIIP. Net foreign 
direct investment came second with 20% of GDP, 
while  the  magnitude  of  other  investments  was 
negligible.  As  a  result,  the  Belgian  economy 
appears  to  be  a  net  capital  exporter,  notably  by 
means  of  portfolio 
investments  and  direct 
investments abroad. 

Graph A5.2: International investment position of 
Belgium 

Source: ECB. 

48 

-5051015202530352017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate saving, netPrivate saving, grossBorrowing from the rest of the world-600-400-200020040060020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIP 
 
  
  
 
 
Structure of the capital markets and 
size of the financial sector 

sector 

financial 

is  well 
The  Belgian 
developed.  The  market  capitalisation  of  listed 
equity  reached  54%  of  GDP  at  end-2023. 
Characteristically, financial corporations accounted 
for  almost  30%  of  that  capitalisation,  which 
reflects  the  extent  to  which  the  stock  market  in 
Belgium  is  geared  towards  funding  the  financial 
segment  of  the  real  economy.  The  outstanding 
volume of debt securities reached 135% of GDP at 
end-2023.  Bonds 
issued  by  the  government 
accounted  for  65%  of  the  total.  This  reflects  the 
high  weight  of  the  gross  public  debt  in  the  bond 
market.  

Graph A5.3: Capital markets and financial 
intermediaries in Belgium 

Source: ECB, EIOPA, AMECO. 

Even  though  the  financial  sector  in  Belgium 
remains  dominated  by  banks,  insurers  and 
investment  funds  are  sizable.  Banks’  assets 
represented  226%  of  GDP  in  Q3-2024  (vs.  248% 
in  the  EU).  Banks  have  reduced  their  physical 
presence  and  significantly  developed  internet  and 
mobile  banking.  The  number  of  branches  and 
employees  have  declined.  The  banking  sector  is 
quite diversified with several domestic and foreign 
players  proposing  a  large  range  of  services.  The 
four leading banks represented about 72% of the 
sector (excluding Euroclear)’s total assets in 2023. 
They  offer  an  extensive  range  of  services  in  the 
field  of  retail  banking,  private  banking,  corporate 
finance and payment services. In addition, several 
smaller institutions are active in a limited number 
of market segments, while a few institutions have 
specialised in international niche activities, such as 

49 

Euroclear  (one  of  the  world’s  biggest  players  in 
clearing  and  settlement  services)  or  the  Bank  of 
New  York  Mellon 
(custody).  Domestic  banks 
represented  about  53%  of  the  banking  sector  in 
2023.  Most  banks  are  privately  owned,  with  the 
notable exception of Belfius, which is 100% state-
owned since 2012. The insurance sector, with total 
assets  of  56%  of  GDP  at  Q3-2024,  dominates 
non-bank intermediation and is in line with the EU 
average (55% of GDP). The pension funds’ assets 
are much smaller: they only represent 8% of GDP 
(vs 23% in the EU). Investment funds represent a 
bigger  share  of  39%  of  GDP,  above  the  EU 
median. 

Resilience of the banking sector 

The  banking  sector  appears  relatively  sound 
and  profitable.  Bank  solvency  is  satisfactory, 
with  a  relatively  stable,  albeit  slightly  decreasing, 
average  capital-adequacy  ratio  of  19.1%  in  Q3-
2024 (vs 20.1% in the EU). The average Minimum 
Requirement for own funds and Eligible Liabilities 
(MREL)  level  of  Belgian  banks  stood  at  33.0%  of 
Total  Risk  Exposure  Amount  (TREA)  in  September 
2024, up from 31.8% of TREA in December 2023. 
Against an average MREL binding target (including 
combined  buffer  requirements,  CBR)  of  29.7%  of 
TREA  in  September  2024,  no  bank  presented  a 
MREL  shortfall.  Belgium  published  in  July  2024 
information on its national bail-in mechanic in line 
with  EBA  guidelines.  Besides  capitalisation,  credit 
quality is strong, even though the non-performing-
loan  ratio  slightly  increased  from  a  record  low  of 
1.4% in Q2-2022 to 1.7% in Q3-2024 (vs 1.9% in 
the EU). With return on equity of 10.5% in the first 
three  quarters  of  2024,  Belgian  banks  were 
profitable, and performed better, on average, than 
their  EU  peers  (10.0%).  Funding  from  the  ECB 
dropped  from  a  peak  of  8.8%  in  April  2021  to 
0.23%  in  May  2024,  a  trend  which is common  to 
many  euro  area  Member  States.  Funding  from 
depositors  remains  comfortable,  with  a  loan-to-
deposit  ratio  of  91.5%  in  Q3-2024  (vs  95.5%  in 
the EU). 

rates  but 

Banks  have  withstood  the  rise  in  risk-free 
interest 
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 

continue 

to 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250Listed equity                  Bonds                        Assets by sector% of GDP 
  
rates.  However,  the  net  interest  income  of  banks 
most likely peaked in the second half of 2023 as 
the  high  degree  of  competition  in  the  credit 
market  is  squeezing  their  margins,  while  new 
lending volumes remain well below those seen up 
to  mid-2022.  Banks’  interest  income  and  general 
performance  in  the  future  will  also  depend  on 
other factors. More volatile depositor behaviour, a 
further  increase  in  political  pressure  on  banks  to 
raise  interest  rates  on  deposits  or  another  1-year 
government bond issuance targeted to households 
could have a significant impact on banks’ funding 
costs  and  profitability.  Finally,  digitalisation  and 
the drive for cost effectiveness continue to present 
structural  challenges  and  opportunities.  These 
challenges  could  put  renewed  pressure  on  the 
profitability and business models of Belgian banks 
in the future. 

property 

slowdown 

the 
cycles. 

Macroprudential policy has contributed to an 
credit  and 
in 
orderly 
residential 
The  NBB 
maintained in 2023 its prudential expectations for 
new mortgages. They had been introduced in 2020 
to  improve  the  average  credit  quality  of  new 
mortgage loans, in particular by reducing the share 
of loans with a high loan-to-value ratio. Thanks to 
the  lengthening  of  maturities  and  some  leeway 
left  to  lenders  to  grant  loans  with  a  higher  loan-
to-value  ratio,  these  restrictions  did  not  curb 
access  to  mortgages  for  creditworthy  borrowers. 
Given  the  generally  high  level  of  compliance  with 
supervisory  expectations  for  Belgian  mortgage 
loans,  the  NBB  decided  to  reduce  its  sectoral 
Systemic  Risk  Buffer  for  Belgian  mortgages  from 
9%  to  6%  as  of  1  April  2024.  At  the  same  time, 
due  to  the  progressive  tightening  of  financial 
conditions and the potential for unexpected losses, 
the  NBB  decided  to  increase  the  countercyclical 
capital buffer in two stages from 0% to 1% as of 
1 October 2024. As a result, the aggregate level of 
these  two  macroprudential  capital  buffers  rose 
from  EUR 2 bn  end  2023  to  EUR  3.8  bn  as  of  1 
October 2024. Finally, the NBB maintained and, in 
one  case  (Euroclear),  raised  the  buffer  applicable 
to  domestic  systemically  important  banks.  As  the 
systemic 
increased 
importance  of  Euroclear 
significantly  following  the  imposition  of  sanctions 
on Russia, the NBB increased the capital surcharge 
applicable  to  this  institution.  From  a  procedural 
point  of  view,  the  decision-making  process  for 
macroprudential policy seems not fully optimal as 
some  macroprudential  tools  are  formally  subject 
to  government  approval,  which  may  create  an 
inaction bias in some circumstances. 

Resilience of the non-bank financial 
intermediaries 

The insurance sector currently appears sound 
as  a  whole,  but  vulnerabilities  may  exist  at 
an  individual  level.  Insurers’  solvency  ratio 
slightly  decreased  from  215%  in  Q4-2023  to 
208%  in  Q3-2024.  This  ratio  remains  more  than 
twice  the  regulatory  requirement,  but  below  the 
EEA  average  (247%).  In  2023,  non-life  insurers’ 
profitability  improved,  as  their  combined  ratio 
decreased from 96% to 94% (vs. 96% in the EEA). 
Insurers 
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.  Therefore,  the  fact  that 
most of the surge in inflation seems to be over is 
a positive development for non-life insurers. 

(and  especially 

life 

The  financial  risks  resulting  from  both 
physical  climate  change  and  the  climate 
transition  are  considerable  for  insurers.  The 
insurance  sector  had  to  cope  with  the  impact  of 
the  floods  that  hit  Belgium  in  July  2021.  The 
damages  of  EUR  2.4  bn  largely  exceeded  the 
EUR 0.4  bn  contractual  ceiling  on  the  insurance 
coverage.  Insurers  exceptionally  agreed  to  bear  a 
greater share of the burden and paid EUR 2 bn of 
claims, of which EUR 1.03 bn will be progressively 
reimbursed by the Walloon Region to the insurers 
over time. This shows that the statutory insurance 
limit  is  not  a  firm,  reliable  limit  and  that  insurers 
can  be  pressured  to  intervene  beyond  it.  On  20 
July  2023,  the  Ministry  of  Economy  announced 
that the statutory limit would be quadrupled from 
EUR  0.4  bn  to  EUR  1.6  bn.  Insurers  will  have  to 
cover  100%  of  the  claims  up  to  that  ceiling.  The 
new framework does not provide for any public or 
private  intervention  if  the  damages  exceed  the 
ceiling, like it did in 2021. The federal level refuses 
to  intervene,  and  the  regions  failed  to  reach  an 
agreement  to  bear  (in  part  or  in  full)  the  cost  of 
future damages exceeding the ceiling. According to 
a study by the NBB, this increase of the ceiling will 
cause  premiums  to  rise  by  1.26%,  but  insurers 
expect a larger increase. 

50 

 
Sources of business funding and the 
role of banks 

Firms  in  Belgium  rely  more  than  the  EU 
average on funding from banks and less than 
the  EU  average  on  funding  from  capital 
markets.  More  specifically,  at  the  end  of  2023 
bank finance through loans constituted 34.7% (vs 
27.2% in the EU) of all funding sources for Belgian 
non-financial  corporations  (NFCs),  while 
listed 
shares  and  bonds  represented  only  16.7%  (vs 
23.8%  in  the  EU)  of  all  funding  sources.  When 
expressed in terms of GDP, the overall level of NFC 
funding  was  higher  in  Belgium  (254.0%  of  GDP) 
than in the EU (230.3%), see Graph A5.4. 

Graph A5.4: Composition of NFC funding as a % of 
GDP 

(1) Reference period 2023 
Source: Eurostat 

Belgian  businesses  depend  as  much  on 
internal  financing  as  their  European  peers. 
According  to  the  2024  EIB  Investment  Survey, 
65%  of  Belgian  firms’  investment  needs  are 
covered by internal funding, compared with an EU 
average  of  66%.  At  the  same  time,  88%  of 
Belgian  firms  believe 
investment 
activities over the last three years were about the 
right  amount,  better  than  the  EU  average  (80%), 
suggesting that there is no material financing gap 
relative  to  investment  demand  in  the  country. 
However,  this  is  probably  not  the  case  for  firms 
with  no  or  limited  capacity  for  internal  funding, 
such  as  innovative  start-up  firms  (see  further 
below). 

their 

that 

than it was before the global financial crisis, which 
triggered  a  massive  deleveraging  and  downsizing 
of  the  country’s  four  main  banks.  The  banking 
market  is  quite  diversified,  with  several  domestic 
and  foreign  players  proposing  a  large  range  of 
services. The banking sector is relatively sound and 
quite  profitable  (see  Table  1).  Credit  quality  is 
strong,  despite  the  slight  increase  in  the  non-
performing-loans  ratio  from  its  record  low  of 
2022. 

(vs  4.3% 

in  the  euro  area) 

Credit  growth  has  slowed  down  in  the  past 
two  years  due  to  less  attractive  lending 
conditions,  but  it  remains  stronger  than  in 
the rest of the euro area. Due to the recent rise 
in  interest  rates,  year-on-year  household  credit 
growth  in  Belgium  has  significantly  slowed  down 
from  6.8% 
in 
September  2022  to  2.7%  in  January  2025  (vs 
1.3%  in  the  euro  area).  Lending  to  non-financial 
corporations  was  more  resilient,  and  its  year-on-
year  growth  reached  4.4%  in  January  2025  (vs 
1.4% in the euro area), slightly down from its peak 
of 6.8% in September 2022. Interest rates on new 
loans  to  households  and  SMEs  have  soared  by 
about  3.5  percentage  points  since  2022  to  levels 
unseen  since  the  global  financial  crisis,  but  have 
partially  receded  since  their  peak  in  December 
2023. In May 2024, interest rates on new loans to 
Belgian  households  for  house  purchases  at 
floating  rates  reached  3.16%  (vs  3.35%  in  the 
euro  area),  while  interest  rates  on  new  loans  to 
SMEs  reached  4.24%,  in  line  with  the  4.07% 
observed on average in the euro area. 

Belgian  banks  reported  no  change  in  their 
credit standards for NFC loans and household 
loans  in  Q2-2024.  In  the  July  2024  Bank 
Lending  Survey  (93),  Belgian  banks  indicated  that 
their credit standards for NFC loans had remained 
neutral  in  Q2-2024  compared  with  Q1-2024, 
while the euro area reported a slight tightening on 
average. Belgian banks also reported no change in 
credit  standards  for  loans  to  households  in  Q2-
2024.  Firms’  net  demand  for  corporate  loans 
continued  to  fall  sharply  in  Q2-2024,  the  sixth 
quarter  in  a  row.  The  demand  for  housing  loans 
in  Q2-2024,  after  several 
slightly 
quarters of continuous declines. 

increased 

Belgium’s banking sector plays an important 
role  in  financing  the  economy.  The  Belgian 
banking sector is sizeable but much smaller today 

(93)https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_s
urvey/html/ecb.blssurvey2024q2~f97cb321f1.en.html 

51 

050100150200250300BEEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
 
 
not universal and accumulated rights often remain 
limited  for  those  covered.  As  a  result,  they  only 
contribute  to  a  moderate  extent  to  the  total 
pension  income  and  do  not  fully  foster  the 
development  of  capital  markets.  Encouraging  the 
funded  supplementary 
build-up  of  universal 
pension schemes would positively contribute to (i) 
the  sustainability  and  adequacy  of  pensions 
benefits;  (ii)  investment  in  equity;  (iii)  access  to 
finance; (iv) growth; and (v) innovation. 

Graph A5.5: Composition of household financial 
assets per capita and as a % of GDP 

(1) Reference period 2023 
Source: Eurostat 

tax 

system 

Belgium’s 
discourages 
investment  in  equity.  Some  features  of  the  tax 
system  distort  investment  choices  and  lead  to 
relative  overinvestment  or  underinvestment  in 
certain assets. Equity income is currently taxed at 
relatively  high  rates,  which  contrasts  with  the 
lower  tax  rate  applicable  to  income  from  bonds 
and  deposit-account  interest.  The  taxation  of 
equity is also less favourable than the taxation of 
owner-occupied 
incentivises 
households to own their place of residence rather 
than  rent  it  and  invest  in other  assets like  equity. 
In  the  area  of  pensions,  some  tax  incentives 
favour specific schemes, creating obstacles to the 
better  allocation  of  capital.  Finally,  the  tax  on 
securities  accounts  introduces  a  bias  against 
investment  in  securities.  There  is  therefore  room 
to  simplify  the  tax  system  and  make  it  less 
distortive across asset classes. 

dwellings. 

This 

Capital markets and the participation 
of retail investors 

The  Belgian  capital  markets  are  relatively 
small.  The  main  stock  exchange  in  Belgium  is 
Euronext  Brussels.  The  equity  market  is  relatively 
modest  in  terms  of  capitalisation  (equivalent  to 
54.7%  of  GDP  vs  an  EU  average  of  68%  as  of 
end-2023)  and  volumes  traded,  even  more  so 
when  compared  with  the  US  (US  equity  market 
capitalisation is equivalent to 170.4% of US GDP). 
The  market  breadth(94)  of  Belgian  bond  markets 
has  steadily  decreased  since  2018  and  is  now 
below  the  EU  average  (1.2  vs  1.5).  The  bid-ask 
spread(95) on Belgian equity markets is lower than 
the EU average (1.3% vs 1.6%). The use of equity 
by  SMEs  in  the  country  is  relatively  low,  as  only 
8.8%  of  SMEs  indicated  in  the  2023  SAFE  survey 
that equity was a relevant source of financing for 
them, compared with an EU average of 10.1% (96). 
There  was  no  SME  initial  public  offering  (IPO)  in 
2023 in Belgium (vs IPOs of SMEs equivalent to an 
average of 0.01% of GDP in the EU). 

Like  in  most  Member  States,  households  in 
Belgium  invest  relatively  little  in  financial 
assets and equity. Belgian households’ financial 
assets  were  equivalent  to  only  257.7%  of  GDP  in 
2023,  more  than  the  EU  average  (209.4%),  but 
much less than the US (435% (97)). Assets invested 
in  equity  were  equivalent  to  only  147%  of  GDP, 
above  the  EU  average  (118%)  but  much  lower 
than  the  US  (334%).  Belgian  households’  asset 
allocation is broadly similar to that of the average 
EU  household,  except  that  Belgian  households 
invest  less  in  insurance  and  pension  funds,  and 
more in investment funds. 

The  design  of  the  overall  pension  system  is 
not  geared  towards  equity  investment  and 
the development of capital markets. The pay-
as-you-go  nature  of  the  public  pension  system 
means  that  only  the  supplementary  private 
schemes  invest  in  high-return  assets  like  equity. 
However,  the  supplementary  private  schemes  are 

(94)  The ratio of bonds outstanding to GDP. 

(95)  Median of bid-ask spread as a % of the mid-price. 

(96)  Data and surveys - SAFE - European Commission, 2023, 

Results by country, T27. 

(97)  US figures are from 2022. 

52 

050100150BEEUper capita (000 EUR)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
 
  
The role of domestic institutional 
investors 

that  falls  substantially  short  of  the  19%  in  the 
Baltic  states  or  +20%  shares  for  Nordic  Member 
States (100). 

The  investment  portfolio  of  Belgian  insurers 
is  mostly  composed  of  bond  holdings.  The 
Belgian  insurance  sector,  which  is  moderately 
large by EU standards (58.2% of assets-to-GDP vs 
an  EU  average  of  55.3%)  invested  49.1%  of  its 
assets in bonds in Q2-2024 (on average, insurers 
in  the  European  Economic  Area  invest  36.9%  of 
their assets in bonds) (98). Government bonds (with 
domestic  Belgian  government  bonds  accounting 
for  41%  of  the  government  bond  holdings) 
represented 32.5% of the total asset portfolio (vs 
18.9%  for  insurers  in  the  EEA  on  average).  The 
rest of the asset portfolio comprised: (i) corporate 
bonds at 16.6% (vs 18.0% for insurers in the EEA); 
(ii)  equity  at  7.9%  (vs  15.9%  for  insurers  in  the 
EEA); (iii) investment funds at 24.7% (vs 35.4% for 
insurers in the EEA); (iv) cash and deposits at 2.1% 
(vs  3.7%  for 
in  the  EEA);  and  (v) 
mortgages  and  loans  at  13.1%  (vs  3.9%  for 
insurers in the EEA).  

insurers 

The  domestic  pension  fund  industry  has  a 
much  more  dynamic  investment  profile  than 
Belgian  insurers,  with  a  much  greater  focus 
on  investment  funds.  The  assets  of  Belgian 
pension funds were equivalent to 6.5% of GDP at 
the end of 2023, and bonds (99) accounted for only 
11.8%  of  these  pension  funds’  assets  (bonds  on 
average account for 35.2% of pension fund assets 
in the EEA). Investment funds accounted for 79.6% 
of  the  assets  (vs  37.9%  in  the  EEA),  with 
government bonds at 6.5% (vs 22.8% in the EEA), 
corporate  bonds  at  5.3%  (vs  12.4%  in  the  EEA), 
equity at 5.8% (vs 19.4% in the EEA) and cash and 
deposits at 1.4% (vs 4.5% in the EEA). 

The depth of venture and growth 
capital  

The  domestic  markets  for  venture  and 
growth capital are moderately developed. The 
average value of annual private-equity investment 
relative  to  nominal  GDP  went  up  to  0.59%  in 
2021-2023  from  0.39%  in  2015-2020,  which  is 
relatively  close  to  the  equivalent  EU  average  for 
2021-2023  of  0.6%.  And  the  average  value  of 
annual  venture-capital 
investment  relative  to 
nominal  GDP  was  unchanged  at  0.06%  in  2021-
2023  from  0.06%  in  2015-2020,  close  to  the 
equivalent  EU  average  for  2021-2023  of  0.08%). 
As  a  consequence,  the  financing  gap  in  Belgium 
for  early-stage  innovative  firms  in  need  of  risk 
capital is comparable to the EU average.  

There  are  some  policies  in  place  to  promote 
start-up  funding.  Support  programmes  and 
policies are usually drawn up at regional level, and 
are  therefore  different  in  Flanders,  Brussels  and 
Wallonia. Start-up funding is typically  provided by 
the 
and 
Entrepreneurship,  Wallonia  Innovation  and Growth 
and  finance&invest.brussels.  The  Belgian  start-up 
ecosystem  is  supported  by  Start  it  X,  the  nation’s 
largest  accelerator  helping  start-ups  to  develop, 
accelerate and expand. 

Flemish  Agency 

Innovation 

for 

Financing the green transition  

The  participation  of  domestic  institutional 
investors  in  providing  funding  for  Belgian 
start-ups  and  venture-capital  investors  is 
low.  A  recent  Centre  for  European  Policy  Studies 
paper  showed  that  pension  funds  in  Belgium 
accounted  on  average  for  only  7%  of  private-
equity  and  venture-capital  funds  raised  annually 
by  Belgian  start-ups  over  2007-2023,  a  figure 

Sustainable  finance  in  Belgium  is  beginning 
to grow. The share of green bonds in total bonds 
outstanding  issued  by  Belgian  issuers  rose  from 
2.9% in 2022 to 3.3% in 2023, but remains below 
the  euro  area  average  of  4.0%.  However,  the 
issuance of bonds with environmental,  social, and 
governance  objectives  as  a  share  of  total  bond 
issuance  was  a  bit  lower  in  H1  2024  than  its 

(98)  Source: EIOPA Insurance Statistics. 

(99)  By bonds and equity we mean bonds and equity outside 

those held via an investment fund. 

(100) Source: Closing the gaping hole in the capital market for EU 

start-ups – the role of pension funds – CEPS.  

53 

 
 
 
progressively  integrated  since  2019,  in  the  first 
and  third  grades  of  secondary  school.  In  the 
French-speaking  educational  system,  it  has  been 
progressively incorporated since 2022, through the 
Pacte  d’excellence.  More  broadly, 
in  2013 
Belgium’s Financial Services and Markets Authority 
launched  the  Wikifin  programme  to  contribute  to 
financial education in Belgium. This programme is 
structured  around  three  main  pillars:  (i)  a  section 
aimed  at  the  general  public,  notably  through  the 
Wikifin.be  website;  (ii)  a  Wikifin  school  platform 
that provides free educational support to teachers; 
and  (iii)  the  Wikifin  Lab,  an  interactive  financial 
education centre in which secondary school pupils 
experiment  with  various  financial  situations  in 
everyday life. 

average 

circa  15% 

(101). 
three-year 
of 
Environmental, social and governance (ESG) funds 
gained  some  traction  between  March  2023  and 
March  2024,  but  money  flows  preferentially  to 
funds with less stringent ESG standards (Article  8 
of  the  Sustainable  Finance  Disclosures  Regulation 
(SFDR)) rather than funds with more stringent ESG 
standards  (Article  9  of  the  SFDR)  funds.  As  of 
March 2024, about 72% of the total net assets of 
the sustainable finance sector were held in Article 
8  funds  (up  from  69%  in  March  2023),  while 
Article  9  funds  accounted  for  about  1%  of  the 
sector (sharply down from 4% in March 2023). The 
contrasting  fortunes  of  Article  8  and  Article  9 
funds  are  mainly  due  to  a  reclassification  of 
Article 9 funds into Article 8 funds between March 
2023  and  March  2024.  Non-ESG  funds  were  the 
hardest hit with a cumulated  outflow of EUR 534 
million  over  the  same  period,  while  Article  8  and 
Article  9 
experienced  outflows  of 
EUR 202 million  and  EUR  21  million  respectively. 
The  lower  outflow  figures  are  an  indication  of 
increasing  investor  interest  and  participation  in 
sustainable types of funds. 

funds 

Financial literacy  

The  level  of  financial  literacy  among  the 
Belgian  public 
is  average,  but  several 
initiatives are underway to promote financial 
education. Financial literacy is crucial to promote 
retail-investor participation  in capital markets and 
familiarise  SMEs  with  alternatives 
to  bank 
financing.  A  recent  Eurobarometer  survey  (102) 
shows  that  22%  of  Belgians  have  a  high  level  of 
financial  literacy,  58%  a  medium  level,  and  the 
remaining 20% a low level, compared with the EU 
averages  of  18%  for  high  literacy,  64%  for 
medium  literacy,  and  18%  for  low  literacy.  This 
leads  to  an  overall  financial  literacy  indicator  for 
Belgium  of  45.5,  identical  to  the  EU  average. 
Belgium  has  taken  several  initiatives  to  improve 
financial  literacy.  For  example,  financial  literacy 
has  been 
the 
educational  curriculum.  In  the  Flemish-speaking 
educational  system,  financial  literacy  has  been 

increasingly 

integrated 

into 

(101) Source: AFME CMU Key Performance Indicators, Seventh 

Edition, November 2024. 

(102) Source: Monitoring the level of financial literacy in the EU - 

July 2023 - Eurobarometer survey 

54 

 
 
Table A5.1:  Financial indicators 

(1) Annualised data.   
Credit growth and pension funds EU data refer to the EA average 

Source: ECB, ESTAT, EIOPA, DG FISMA CMU Dashboard,  AMECO.  

55 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)230,0218,0214,8240,2229,5226,5219,0225,8248,4Common Equity Tier 1 ratio16,215,615,517,117,617,316,815,616,6Total capital adequacy ratio19,018,818,720,320,420,119,519,120,1Overall NPL ratio (% of all loans)2,72,32,12,11,61,51,61,71,9NPL (% loans to NFC-Non financial corporations)4,33,73,64,03,22,82,93,43,5NPL (% loans to HH-Households)3,02,32,02,01,41,11,31,42,2NPL-Non performing loans coverage ratio42,744,142,941,145,044,142,940,942,1Return on equity18,88,28,65,99,99,911,410,510,0Loans to NFCs (% of GDP)29,630,530,532,431,529,929,328,730,0Loans to HHs (% of GDP)48,549,650,253,551,749,047,045,844,5NFC credit annual % growth6,46,94,11,83,86,34,04,10,8HH credit annual % growth5,15,76,84,56,46,42,32,20,7Stock market capitalisation (% of GDP)87,863,875,869,370,855,953,655,369,3Initial public offerings (% of GDP)0,340,010,020,301,330,000,00-0,05Market funding ratio65,063,762,662,361,058,957,8-49,6Private equity (% of GDP)0,440,460,380,310,880,500,39-0,41Venture capital (% of GDP)0,050,070,090,090,080,070,04-0,05Financial literacy (composite)------45,5-45,5Bonds (as % of HH financial assets)3,63,22,82,31,81,94,0-2,7Listed shares (as % of HH financial assets)5,04,55,05,15,95,35,5-4,8Investment funds (as % of HH financial assets)15,815,015,616,018,116,917,7-10,0Insurance/pension funds (as % of HH financial assets)22,922,722,922,821,518,318,6-27,8Total assets of all insurers (% of GDP)72,570,275,281,374,857,857,156,354,8Pension funds assets (% of GDP)--8,49,29,27,07,67,723,41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.1 Annualised data.Banking sectorNon-banks sector 
 
 
 
   
 
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

in 

relation 

Belgium’s institutional framework influences 
its  competitiveness.  The  perceived  quality  of 
public  institutions  is  above  the  EU-27  average. 
Regulatory  governance  is  good,  but  challenges 
and 
persist 
transparency.  Efforts  are  underway 
towards 
administrative  simplification.  Belgium  has  strong 
track  record  in  provision  of  online  public  services 
and  digitalising  health  services.  However,  the 
efficiency  of  the  justice  system  would  benefit 
from improvement. 

coordination 

to 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

(1) EU27 from 2019; EU28 before 
Source: Standard Eurobarometer surveys 

Trust in Belgium’s public institutions remains 
above  the  EU  average.  Trust  in  its  national 
government grew significantly after the COVID-19 
pandemic  and  has  continued  this  trajectory  ever 
since.  Trust  has  been  consistently  higher  in  its 
regional  and  local  authorities  and  increased  to 
65% in the fall of 2024 (Graph A6.1). When asked 
about  improvements  that  can  increase  trust  in 
Belgium’s  public  administration,  57%  of  citizens 
pointed to more transparency about decisions and 
the  use  of  public  money  (EU:  44%),  38%  to  less 
to  more 
bureaucracy 
(103). 
communication  with  citizens 

(EU  52%)  and  41% 

(EU  31%) 

Overall,  the  perceived  quality  of  government  has 
improved and ranks above the EU average (104). 

Quality of legislation and regulatory 
simplification 

has 

Overall, 

Belgium 

Belgium  performs  around  the  EU27  average 
in  developing  and  evaluating  adopted 
an 
legislation. 
underdeveloped  oversight  and  quality  control 
system for public consultation and ex ante and ex 
post reviews of existing regulations with respect to 
the  EU  average.  There  is also  room  for improving 
the  requirements  for  adopting  systematically 
regulatory  impact  assessments  of  both  primary 
and secondary legislation (Graph  A6.2). As part of 
is 
its  recovery  and  resilience  plan,  Belgium 
reinforcing policy evaluation with regular spending 
reviews  at  federal  and  regional  level.  These 
reviews will be integrated in the budgetary process 
(105).  Key  challenges  in  policy  formulation  remain 
due  to  ineffective  coordination  across  federal 
government departments and limited transparency 
(106). Moreover, ex post evaluations do not have to 
cover  an  assessment  of  administrative  burdens 
and  of  substantive  compliance  costs  (Table  A6.1) 
Against 
this  backdrop,  a  government-wide 
initiative  on  administrative  simplification  and 
reduction  of  regulatory  burden  called  ‘Regelrecht’ 
(107) has been announced in Flanders.  

Belgium has been implementing measures to 
reduce  administrative  burden  for  businesses 
(108).  The  OECD  product  market 
regulation 
indicators show that Belgium’s licensing system is 
aligned with most, but not all, best practices. Areas 
for 
regularly  assessing 
include 
whether  such 
licences  and  permits  are  still 
required or should be removed (see also Annex 4). 

improvement 

(104) Inforegio – European Quality of Government Index 

(105) Spending review : assessment report - RRF étape 208 | BOSA 

(106) OECD (2023) Improving decision making through policy 

evaluation in Belgium: link  

(107) Beslissingen van de Vlaamse Regering | Vlaanderen.be 

(103) https://europa.eu/eurobarometer/surveys/detail/3054  

(108) Bilan FAAV 2022-2024 FR.pdf 

56 

00.10.20.30.40.50.60.7AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system BERegional or local public authorities EU27Regional or local public authorities BEGovernment  EU27Government  BE 
 
        
 
 
 
  
 
Table A6.1:  Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation.  
Source: OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

level 

Labour 

bargaining.  Belgium’s  comprehensive,  multi-
tiered  institutional  set-up  operates  at  various 
levels:  federal 
(Federal  Public  Service 
Employment,  Labour  and  Social  Dialogue), 
interprofessional 
Council), 
(National 
sectoral  level  (Joint  Committees),  company  level 
(Works  Councils 
comprising  employer  and 
employee representatives in companies employing 
100+  workers),  interregional  level  (Consultative 
Committee, 
from 
federal  and  regional  governments)  and  several 
sector, 
major 
professional  status  and  profession).  Despite  this 
complex institutional set-up, the level of collective 
bargaining  is  exceptionally  high  (over  95%  of 
employees  (109),  and  almost  100%  in  the  public 
sector).(110) 

(organised  by 

representatives 

trade  unions 

comprising 

Employers'  organisations  and  trade  unions 
have 
of 
representativeness.  Around  70%  of  companies 
in  Belgium  are  members  of  an  employers' 

relatively 

level 

high 

a 

Social dialogue 

Belgium has a generally well-established and 
structured  framework  for  social  dialogue, 
with an exceptionally high level of collective 

(109) Source: 580056-collective-bargaining-database-Belgium.pdf 

(110) For  an  analysis  of  the  involvement  of  Belgium’s  social 
partners at national level in the European Semester and the 
Recovery  and  Resilience  Facility,  see  Eurofound  (2025), 
National-level  social  governance  of  the  European  Semester 
and the Recovery and Resilience Facility. 

57 

0,00,51,01,52,02,53,03,54,0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsBE_StakeholderengagementBE_Regulatory ImpactAssessmentBE_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
     
 
 
 
   
 
Table A6.2:  Key Digital Decade targets monitored through the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

organisation. While unionisation has been declining 
in recent decades, trade union density is currently 
just under 50%, one of the highest in the EU (111).  

Digital public services 

Belgium stands out in providing digital public 
services  to  businesses  and  citizens,  with  a 
score  of  92  and  82  compared  to  85  and  79 
respectively  for  the  EU  27  (Table  A6.2).  In  2023, 
Belgium  was  the  first  EU  Member  State  to  score 
100 for the maturity of its e-health system on the 
e-health indicator, in line with the EU target. (Table 
A6.2). This compared to a maturity score of 85 the 
previous year and exceeded the EU average of 79. 

The share of e-government users is also very 
high.  85.85%  of  Belgian  internet  users  engage 
with  digital  government  services,  well  above  the 
EU  average  of  75%  (112).  Belgium’s  largest  digital 
investment  (EUR 391.2 million)  under  its  recovery 
is  dedicated  to  further 
and  resilience  plan 
increasing  the  use  of  digital  public  services.  In 
2023,  77%  of  Belgians  had  used  existing  eID 
systems  to  access  digital  services  for  private 
purposes  in  the  last  12  months,  compared  to  an 
EU  average  of  41.11%.  Use  of  eID  to  access 
services  provided  by  national  public  authorities  or 
public  services  was  slightly  lower  at  59.1%  of 
Belgians,  but  still  well  above  the  EU  average  of 
36.14%.  

100% of Belgians currently have access to a 
form  of  eID  notified  under  the  eIDAS 
Regulation.  Belgium  offers  six  eID  schemes  (e-
Cards,  itsme®,  email  one-time  password  (OTP), 
SMS OTP, TOTP and Username/Password). Itsme in 
particular 
remains  a  success  as  Belgium’s 
authentication  app  and  is  a  good  example  of 
collaboration  between  the  public  and  private 
sector.  It  is  now  regularly  used  by  7  million 
Belgians  –  about  90%  of  the  active  population 
over  16  years  of  age.  However,  Belgium  has  not 
yet  set  up  and  notified  eID  schemes  for  legal 
persons  under  the  eIDAS  Regulation  (113).  This 
means 
cannot 
authenticate  themselves  to  access  public  services 
offered  by  other  Member  States,  including  those 
enabled  by  the  Once-Only  Technical  System,  part 
of the EU Single Digital Gateway (114). 

businesses 

Belgian 

that 

Belgium  is  making  good  progress  towards 
seamless,  automated  exchange  of  authentic 
documents  and  data  across  the  EU.  It  has 
already  successfully  tested  its  first  transactions 
through the Once-Only Technical  System. Belgium 
is  in  the  process  of  connecting  up  the  first 
authorities (115). 

(111) Source: https://hiva.kuleuven.be/sites/bfore/docs/d3-1-

breakthrough for the EU’s Digital Single Market 

national-report-for-belgium 

(115) European Commission, Once-Only Technical System 

(112) European Commission. Digital Decade 2024: Country reports 

Acceleratormeter, Ec.europa.eu. 

(113) European Commission, eIDAS Dashboard. 

(114) European Commission, The Once Only Principle System: A 

58 

Digital Decadetarget by 20302022202320242024EU-27Digitalisation of public services172818279100Score (0 to 100)20212022202320232030281889285100Score (0 to 100)202120222023202320303na8510079100Score (0 to 100)20212022202320232030BelgiumEU-27Digital public services for citizensDigital public services for businessesAccess to e-health records 
 
 
 
  
 
Graph A6.3: Participation rate of 25-64 year olds 
in adult learning (%) by occupation 

Commissioner General for Refugees and Stateless 
Persons.  

Integrity 

Business  perception  of  corruption  is  below 
the  EU  average,  while  there  are  limited 
resources. 
In  Belgium,  56%  of  companies 
consider that corruption is widespread (EU average 
64%),  while  24%  consider  that  corruption  is  a 
(EU  average 
problem  when  doing  business 
36%) (118).  Moreover,  37%  of  companies  believe 
that  people  and  businesses  caught  for  bribing  a 
senior  official  are  appropriately  punished  (EU 
average  31%) (119).  The  Central  Office  for  the 
Repression  of  Corruption  and  the  prosecution 
services  have  continued 
tackle  several 
prominent  high-level  corruption  cases,  despite 
overall  limited  resources  (120).  The  investigation 
and  prosecution  of  foreign  bribery  cases  has 
remained  difficult  due  to  a  lack  of  resources  and 
complex  operations  with  third  countries,  with  few 
cases moving forward (121). 

to 

Public  procurement  is  considered  to  be  an 
area  at  high  risk  of  corruption  in  Belgium 
(122).  28%  of  companies  (EU  average  27%)  think 
that  corruption  has  prevented  them  from  winning 
a public tender or a public procurement contract in 
practice  in  the  last  three  years  (123).  Stakeholders 
have  signalled  low  transparency  of  government 
contracts, both those high-value contracts included 
in transparency obligations under EU legislation as 
those  below  the  threshold.  The  local  government 
level  is  also  considered  to  be  a  high-risk  area  of 
corruption  after  a  number  of  allegations  of 
conflicts  of  interest  cases  were  detected  by  the 
oversight  body.  While  stakeholders  indicated  that 
the response of audit institutions and the regional 
governments  charged  with  oversight  of  these 

(118) Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024). 

(119) Ibid. 

(120) See the 2024 country-specific chapter for Belgium of the 

Rule of Law Report, pp. 13-14.  

(121) Ibid., p. 15. 

(122) Ibid, p. 20. 

(123) Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024). 

Source: European Commission, based on the Labour Force 
Survey 

Civil service  

The  participation  rate  of  civil  servants  in 
adult  learning  is  still  below  the  EU  average 
albeit  increasing  (Graph  A6.3).  The  federal 
competency 
introduced  a  new 
government 
framework 
the 
in  2024  aiming 
administration  attract  and  retain  talent.  The 
framework  complements  technical  abilities  with 
soft  skills  and  will  be  used  for  recruitment, 
selection, 
and 
performance  management (116).  The  share  of 
employees  who  telework  has  been  decreasing 
since  the  COVID-19  pandemic  but  remains  higher 
than in the business sector.  

development, 

professional 

to  help 

To  strengthen  its  preparedness,  the  federal 
government 
set  up  a  Federal  Crisis 
Reserve (117)  under  which  volunteers  are  pooled 
in 
from  all  federal 
administrative  tasks,  logistics,  health  and  IT  for  a 
maximum  of  four  weeks  per  year.  In  2024,  in 
response  to  flooding  in  the  country,  the  reserve 
was  activated  to  support  the  Office  of  the 

levels  with  experience 

(116) Federal Public Service Policy and Support (FPS BOSA): link 

(117)  Federal  Public  Service  Policy  and  Support  (FPS  BOSA).  (2023). 

https://bosa.belgium.be/nl/regulations/omzendbrief-nr-724-
van-12-oktober-2023  

59 

02468101214161820BEEU-27BEEU-27BEEU-27BEEU-272021202220232024Public administration and defence; compulsory social securityHigh-skilled occupationsMedium-skilled occupationsUnskilled occupationsArmed forcesTotal economy 
     
 
 
cases  was  on  point  and  appropriate,  these  cases 
raise  concerns  about  a  low  awareness  of  the 
concept of conflict of interest at local government 
level. (124)  

room  for  improvement  remains  in  the  use  of 
electronic communication tools, digital solutions to 
initiate and follow court proceedings, online access 
to  published  judgments  and  arrangements  for 
producing machine-readable judicial decisions (127). 

lobbying 

Progress  has  been  made  concerning  the 
reform  of  lobbying  legislation,  as  additional 
draft 
for  Government 
rules 
members were recently put forward, but the 
completion  of  the  legislative  reform  is  still 
pending. Unlike most EU Member States, Belgium 
does  not  have  rules  on  lobbying  members  of 
transparency 
a 
government.  While 
framework on lobbying as regards members of the 
Federal  Parliament  is  in  place,  it  is  outdated  and 
undergoing  reform. 
In  particular,  a  complete 
framework including a transparency register and a 
legislative  footprint  covering  members  both  of 
parliament  and  of  government  is  not  yet  in 
place (125).  Such  a  transparency  framework  can 
help  preserve  a  level  playing  field  for  businesses 
regarding access to policymakers. 

basic 

Justice 

The justice system continues to face several 
challenges  as  regards  its  overall  efficiency. 
An  overview  of  the  efficiency  of  justice  remains 
unavailable  due  to  a  persistent  lack  of  data  on 
court  proceedings,  while  efforts  are  ongoing  to 
map judicial backlogs. The disposition time in civil 
and commercial cases at first instance courts was 
246  days  in  2023.  No  data  were  available  for 
previous  years.  The  estimated  time  to  resolve 
administrative  cases  at  first  instance  courts  rose 
(288 days in 2023 compared to 235 in 2022). The 
quality of the justice system is faced with several 
challenges. Some further progress has been made 
on  providing  adequate  resources  for  the  justice 
system,  while  a  workload  measurement  has 
confirmed  structural  resource  deficiencies  (126). 
Further steps have been taken towards improving 
the  digitalisation  of  justice,  notably  under  the 
recovery  and  resilience  plan  (RRP):  judges  and 
prosecutors  can  work  remotely  and  make  use  of 
an  electronic  case  management  system,  while 

(124) Ibid., pp. 20-21. 

(125) Ibid., p. 17. 

(126) See the 2024 country-specific chapter for Belgium of the 

Rule of Law Report, pp. 6-7. 

(127) For more detailed analysis of the performance of the justice 
system  in  Belgium,  see  the  upcoming  2025  EU  Justice 
Scoreboard and the 2024 Rule of Law Report. 

60 

 
 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

faces 

significant 

Belgium 
challenges 
regarding  its  clean  industry  transition  and 
climate mitigation: its heavy reliance on imports 
for  critical  raw  materials  essential  for  green 
technologies  leads  to  supply  chain  vulnerabilities; 
its policy framework to support the scale up of net 
zero manufacturing industry is limited, high energy 
prices 
threaten 
competitiveness, and while Belgium excels in some 
circular  economy  practices,  there  remain  gaps  in 
investment and policy support for reducing air and 
water  pollution  in  particular.  This  annex  reviews 
the areas in need of urgent attention in Belgium’s 
clean  industry  transition  and  climate  mitigation, 
looking at different dimensions. 

emissions 

intensity 

and 

Strategic autonomy and technology 
for the green transition  

to 

support 

investment 

provides 
companies 
producing batteries. However, no one-stop shop for 
industrial  permitting  has  been  established,  and 
there  are  no  resilience  criteria  in  procurement 
rules  to  foster  the  development  of  net  zero 
manufacturing capacity. 

while 

maintaining 

Belgium’s  energy  research  and  development 
the  energy 
efforts  focus  on  ensuring 
transition 
the 
competitiveness  of  the  country’s  energy-
intensive industries. While the Energy Transition 
Fund  supports  efforts  in  energy  research  and 
development  at 
level,  Flanders 
prioritises energy innovation clusters and boosting 
the  competitiveness  of  Flemish  companies  by 
fostering  cross-sector  collaboration.  Wallonia’s 
smart  specialisation  strategy  supports  energy 
research  and  development  in  PV,  grid  and  carbon 
capture  and  storage  technologies,  and  fosters 
private efforts through competitive clusters. 

federal 

the 

Net zero industry 

Transforming the car industry 

Belgium  is  a  major  supplier  of  electrolysers 
and  has  untapped  potential  for  diversified 
manufacturing  of  net  zero  technologies (128) 
Belgium’s  manufacturing  capacity  amounts  to 
between  250  and  650  MW/y  (4%-11%  of  EU 
capacity) for electrolysers. The future of the sector 
is promising as additional output in electrolysers is 
expected  from  Plug  Power’s  planned  large-scale 
100  MW  hydrogen  generation  plant  in  Antwerp. 
Belgium is  also  emerging as  a  transportation hub 
for  hydrogen  and  has  signed  a  Memorandum  of 
Understanding with Germany and the Netherlands. 
With  manufacturing 
solar 
photovoltaics  (PV),  a  battery  production  facility 
and three factories for heat pumps, Belgium has a 
diversified net zero manufacturing portfolio. 

capacity 

for 

However,  Belgium’s  scale  up  of  clean  tech 
manufacturing capacity  is  supported  by  only 
a  few  policy  frameworks  and  investments. 
The  draft  national  energy  and  climate  plan 
addresses  the  manufacturing  of  several  net  zero 
technologies,  including  carbon  capture,  utilisation 
and storage, as well as electrolysers and fuel cells. 
In  terms  of  incentives,  a  programme  in  Wallonia 

Belgium’s  position  as  an  assembly  and 
exporter of cars is changing and the Belgian 
automotive industry needs to reinvent itself. 
The  number  of  cars  assembled  in  Belgium  has 
decreased  by  almost  a  quarter  since  2002,  from 
less  than 
more  than  1 000 000  vehicles  to 
in  2020 (129).  Vehicle 
268 000 
production 
decreased from 36 per 1 000 inhabitants in 2016 
to  25  per  1 000 in  2020.  Emblematic  factories 
have  closed  or  are  struggling  because  of  loss  of 
competitiveness due to high labour costs and high 
energy  prices.  Employment  in the manufacture  of 
vehicles,  trailers  and  semi-trailers  has  decreased 
by more  than  50%  between  2000  and  2023 (130). 
The sector is in phase of restructuring. 

Car  purchases 
in  Belgium  have  shifted 
towards  electrified  vehicles,  mainly  thanks 
to  a  shift  to  zero  emission  tax  policy 
including  under  Belgium’s  recovery  and 
resilience  plan.  The  For  the  first  time  in  2024, 
the  majority 
electrified  vehicles 
(52.6%)  of  new  car  registrations.  A  number  of 

represented 

(128) European Commission, ‘The net-zero manufacturing industry 

(130)Eurostat, National accounts employment data by industry 

landscape across the Member States’, 14/1/2025 

(up to NACE A*64) [nama_10_a64_e__custom_15039797] 

(129) Statistiques | FEBIAC 

61 

 
 
 
 
 
 
 
tax 

prominent measures under the plan support green 
mobility.  Investments  and  reforms  include  the 
installation  of  several  thousand  charging  points 
for battery electric vehicles (BEV); the deployment 
of  green  buses;  and  crucially, 
reforms 
supporting  a  zero-emission  company  car  policy. 
Belgium ranks among the top five EU Members for 
the number of electric vehicle  charging points per 
inhabitant. It also has some of the largest market 
shares for BEV. By April 2025, the market share of 
BEV  was  32.4%,  a  new  record,  placing  Belgium 
well  ahead  of  the  European  market  where  the 
share of BEV car registrations was 15.5%. Thanks 
to  the  regional  premium,  registrations  of  new 
electric 
customers 
cars 
increased (131). 

individual 

by 

Critical raw materials  

Belgian  manufacturing  depends  heavily  on 
imports  of  critical  raw  materials  needed  for 
the  green  and  digital  transitions.  Belgium's 
manufacturing  industry  is  reliant  on  critical  raw 
materials  needed  for  the  green  and  digital 
transition, such as lithium, cobalt and rare earths, 
which are essential for the production of high-tech 
products,  including  electric  vehicles,  wind  turbines 
and 
significant 
challenges  for  sustainability  and  resilience,  such 
as  supply  chain  risks,  environmental  degradation 
and social concerns. With 75.6% of material inputs 
in  manufacturing  production  stemming  from 
imports  in  2023,  compared  to  the  EU  average  of 
22%,  Belgium  is  particularly  vulnerable  to  supply 
chain disruptions. 

electronics. 

presents 

This 

is 

policies 

Belgium 
to 
implementing 
strengthen  supply  chains  and  the  uptake  of 
circular  solutions  for  critical  raw  materials. 
The  government  encourages  the  de-risking  and 
diversification  of  Belgian  industry,  notably  for 
strategic  value  chains,  and  has  implemented 
various  policy  measures (132)  aimed  at  reducing 
reliance  on  imports  and  promoting  the  use  of 
recycled  materials.  For  example,  the  Regions 
impose  recycling  targets  of  95%  for  ferrous  and 
dismantling 
non-ferrous  metals 

from 

the 

(131) FEBIAC Communique de presse-07-2024.pdf 

(132) Walloon Decree of 9 March 2023 on waste, material 

circularity and public cleanliness specifically mentions CRM 

62 

treatment  of  waste  from  electrical  and  electronic 
equipment, batteries and end-of-life vehicles.  

Currently,  the  Brussels-Capital  Region  has  no 
specific  critical  raw  materials  strategy.  A  new 
waste  management  plan  to  be  adopted  by  the 
regional government in 2025 will include a specific 
strategy  on  critical  raw  materials,  in  accordance 
with  the  relevant  EU  legislation.  Under  Circular 
Flanders, a study was carried out (133), which found 
that,  at  73.2%  in  2022,  the  recycling  rate  for  e-
waste,  a key source of critical  raw materials, was 
below the  EU  average  of 81%.  At the  same time, 
the  reuse  and  recycling  rate  for  end-of-life 
vehicles was well above the EU average (93.5% vs. 
89% in 2022). This points to the need to avoid the 
leakage of critical raw materials, especially as the 
car industry shifts to battery-electric vehicles. 

Climate mitigation  

Industry decarbonisation 

The strong role of manufacturing in Belgium 
is  reflected  in  its  large  share  in  total 
greenhouse  gas  emissions;  its  manufacturing 
production  is  fairly  emissions  intensive.  Almost 
30%  of  Belgium's  total  greenhouse  emissions 
came from manufacturing, the third highest in the 
EU (134). At 460 g CO2eq per euro (70% above the 
EU  average), 
intensity  of 
manufacturing in Belgium is among the highest in 
the  EU.  Since  2017,  by  2022  the  emissions 
intensity  of  Belgium’s  industry  declined  by  about 
19%, in line with the overall EU trend. A high share 
of 
Belgium’s 
emissions 
manufacturing industry, 57% in 2023, come from 
industrial processes (i.e. not from energy use).  

greenhouse 

emissions 

the 

in 

(133) https://ce-center.vlaanderen-

circulair.be/nl/publicaties/publicatie-2/17-circular-economy-
and-the-energy-transition-potential-of-a-flemish-circularity-
hub-for-ev-li-ion-batteries 

(134) In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat.  

 
 
 
in 

of 

emissions 

Belgium’s  manufacturing  production 
is 
becoming  more  energy  efficient,  but  a  shift 
to  cleaner  energy  is  yet  to  happen.  Between 
2017  and  2022,  the  energy-related  greenhouse 
Belgium’s 
intensity 
gas 
manufacturing industry declined by 14%, a bit less 
than  in  the  EU  overall  (16 %) (135).  In  the  same 
period,  the  share  of  electricity  and  renewables  in 
final  energy  consumption  in  manufacturing  was 
broadly  stable  at  around 38%.  This  suggests that 
the  decline 
the  energy-related  emissions 
intensity  of  manufacturing  was  mainly  due  to 
improvements,  or  product 
energy  efficiency 
improvements reflected in the value added, rather 
than a shift to green energy. This is in line with the 
decrease in the energy intensity of manufacturing 
in  Belgium,  which  went  down  by  about  14% 
between  2018  and  2023,  to  1.9  GWh/€  of  gross 
value  added 
(EU  average:  1.1  GWh/€).  For 
industrial  processes  and  product  use,  greenhouse 
emissions  intensity  decreased  by  23%  between 
2017 and 2022, in line with the EU average. This 
may  reflect  both  efficiency  improvements  and 
process innovations.  

lately. 

Energy-intensive  industries  have  a  strong 
presence  in  Belgium;  they  have  been  facing 
Energy-intensive 
challenges 
industries (136) account for 22% of Belgium’s total 
manufacturing  gross  value  added  (2022),  the 
second  highest  value  in  the  EU.  Among  these 
the  manufacture  of  non-metallic 
industries, 
mineral  products  and  the  manufacture  of  basic 
metals account for about 4% to 4.5% of Belgium’s 
manufacturing GVA each; they emitted 2.6 kg and 

(135) For the GHG emissions intensity of GVA related to energy use 
and industrial processes and product use respectively, GHG 
emissions are from inventory data in line with the UNFCCC 
Common Reporting Format (CRF), notably referring to the 
source sectors CRF1.A.2 –  fuel combustion in manufacturing 
industries and construction and CRF2 – industrial processes 
and product use. The CRF1.A.2 data broadly correspond to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator for both intensities) are aligned with this 
sectoral coverage. Therefore, they are not fully consistent 
with the data referred to in other part of this section.  

(136) Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing  activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

2.2  kg  CO2eq  per  euro  of  GVA  respectively, 
compared to the EU average of 2.2 kg and 3.5 kg.  

Graph A7.1: GHG emission intensity of manu-
facturing and energy-intensive sectors, 2022 

Source: Eurostat. 

Belgium’s  energy  prices  are  significantly 
higher than those of its neighbours, which is a 
major 
impediment  to  the  competitiveness  of 
companies (137).  This  and  global 
Belgium’s 
competition more broadly put pressure on energy-
intensive  industries.  Since  2021,  production  in 
these  industries  has  declined  by  between  a  few 
percentage  points  (paper  and  paper  products, 
chemicals  and  chemical  products)  to  more  than 
10%  (basic  metals  and  non-metallic  mineral 
products). 

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

Source: Eurostat. 

(137) For a detailed analysis of energy prices, see Annex 8 on the 

affordable energy transition 

63 

00.511.522.533.54C-C19C17C20C23C24KG CO2eq / €BelgiumEU-277075808590951001051102017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of other non-metallic mineral productsManufacture of basic metals 
 
   
        
 
the  development  of  CO2 

Belgium  has  put  in  place  policies  to  support 
industry.  Belgian 
the  decarbonisation  of 
policymakers  in  different  federated  entities  have 
implemented  various  measures  such  as:  support 
for 
infrastructure 
(covering  transport,  distribution,  and  utilisation) 
and  a  green  hydrogen  sector;  energy  policy 
agreements with industry for the adoption of more 
solar 
efficient  processes: 
large  electricity  consumers; 
installations 
incentive  programmes  for 
to 
sustainable  heating  and  cooling;  support  for 
innovative  and  collaborative  industrial  projects 
aimed at sustainability in chemicals, materials and 
construction;  support  for  the  development  of  new 
technologies  to  reduce  emissions;  and  company 
subsidies for companies adopting a climate plan.  

requirements 

transition 

the 

for 

for 

particularly 

Further  effort  is  still  needed  to  encourage 
investment  in  decarbonising  manufacturing 
energy-intensive 
processes, 
sectors,  for  example  in  the  form  of  support  to 
developing  new  low-carbon  technologies;  scaling 
up  existing  solutions  (e.g.,  under  the  Innovation 
Fund);  and  promoting  sustainable  supply  chains 
and circular economy practices. 

in 

Reduction  of  emissions  in  the  effort  sharing 
sectors 

To  attain  its  2030  target  for  the  effort 
sharing  sectors,  Belgium  needs  to  specify 
further  climate  mitigation  policies  and 
swiftly  adopt  and  implement  the  planned 
measures (138).  GHG  emissions  from  Belgium’s 
effort  sharing  sectors  in  2023  are  expected  to 
have  been  23.3%  below 
those  of  2005, 
significantly short of its effort sharing target of a 
47%  reduction.  If  additional  policies  currently 
considered  by  Belgium  are  implemented,  the 
projected  reduction  by  2030  is  42.6%  relative  to 
2005  levels.  This  results  in  a  shortfall  of  4.4 
percentage  points  against  the  target (139).  While 

in  Regulation 

(138) The national greenhouse gas emission reduction target is set 
out 
(the  Effort  Sharing 
(EU)  2023/857 
Regulation).  It  applies  jointly  to  buildings  (heating  and 
cooling); road transport, agriculture; waste; and small industry 
(known as the effort sharing sectors). 

(139) The emissions from effort sharing sectors for 2023 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 las updated national 
energy and climate plan. 

64 

Belgium  could  reach  its  target  by  using  domestic 
flexibilities  available  under  the  Effort  Sharing 
Regulation,  swift  and  steady  adoption  of  the  full 
set  of  measures  will  be  critical.  Belgium  is  yet  to 
submit  its  final  updated  national  energy  and 
climate plan. 

Graph A7.3: Greenhouse gas emissions in the 
effort sharing sectors, 2005 and 2023 

Source: European Environment Agency 

Sustainable industry 

Circular economy transition 

Belgium is one of the best performers in the 
EU  on  the  circular  economy  and  waste 
recycling.  In  2023,  the  circular  use  of  materials 
rate (140) in Belgium, at 19.7%, was well above the 
In  addition,  resource 
EU  average  of  11.8%. 
productivity was EUR 2.84 per kg of consumed raw 
materials (141).  Belgium  adopted 
in  December 
2021  a  new  fully-fledged  action  plan  on  the 
circular  economy  for  2021-2024  at  the  federal 
level (142) activating 
in  product  policy, 
levers 

(140) This indicator, also known as the circularity rate, measures 
the share of material recycled and fed back into the 
economy and reflects Belgium’s overall progress towards a 
circular economy.  

(141) It shows the additional wealth (in EUR) that a country 

produces (GDP) consuming raw materials (in kg) during the 
production process. In other words, this indicator shows how 
efficiently the economy uses raw materials and how 
productive its economy is in producing more added value 
than the EU economy. 

(142) Santé publique, Sécurité de la chaîne alimentaire et 
Environnement, 2023, Plan d’action fédéral pour une 
économie circulaire 2021-2024, Link. 

010203040506070809020052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
       
 
sectors. 

in  supporting 

imports 
food  and 

linear  economy 
to 
fuels 

consumer  protection  policy,  public  procurement, 
and  tax  policy.  Currently,  regional  plans  are  the 
driving  force  behind  Belgium's  circular  economy 
transition.  In  the  Brussels-Capital  Region,  despite 
the  proliferation  of  circular  initiatives (143),  the 
is  heavily 
Region’s  highly 
the  construction, 
dependent  on 
agriculture, 
The 
circularisation  of  these  flows  through  reuse  and 
their transformation into secondary raw materials 
makes it possible, for each ton of waste recovered, 
to avoid the use of 60 tons of resources (144). The 
Circular Wallonia regional strategy (2021) (145) and 
its implementation report (2024) (146) note that 86 
of Wallonia's 262 municipalities implement a zero 
waste  approach,  covering  more  than  53%  of  the 
Walloon population. By the end of 2023, EUR 136 
million  allocated 
the  circular 
transition, either granted to 648 private and public 
companies, or to research and innovation projects 
and  1  367  circular  public  procurement  contracts 
were launched between 2021-2023. The Research, 
(RDI)  budget 
Development  and 
dedicated 
economy 
approaches  was  doubled  in  order  to  achieve  an 
annual budget of EUR 14 million over 2020-2025. 
All  demolition 
clause 
identifying  and  classifying  the  materials  that  can 
be reused. Important circular economy policies and 
measures in Flanders can be found in the “Circular 
Economy  Country  Profile  –  Belgium” 
report 
(2024) (147).  The 
‘Lokaal  Materialenplan’ (148), 
action  plans  on  circular  food  loss,  biomass  and 
plastics (149) set goals for 2025. Belgium is one of 
the top EU performers in municipal waste recycling 
with 55% in 2023. However, there is still room for 
improvement,  especially  by  diverting  waste  from 
incineration to recycling. Further progress could be 
made by introducing new economic instruments to 
prevent  waste  by:  (i)  avoiding  the  incineration  of 

include  a 

supporting 

Innovation 

contracts 

circular 

to 

(143) Shifting Economy Brussels, Link.  

(144) Many results of the economic instruments and access to 
sustainable raw and secondary materials in the Rapport-
dactivite_FR_web.pdf 

(145) Circular Wallonia, 2021, Stratégie de déploiement de 

l’économie circulaire, Link. 

reusable  or  recyclable  waste;  and  (ii)  making  the 
reuse  and  recycling  of  waste  more  economically 
attractive.  The  national  energy  and  climate 
plan (150) sets a target of 25% reduction of waste 
incineration  and  includes  measures  for  treatment 
of organic waste. 

Current investments in the circular transition 
have been insufficient. Belgium is estimated to 
need a total additional investment of at least EUR 
886  million  a  year  for  the  circular  economy 
transition, including for waste management, which 
represents  0.16%  of  Belgium’s  GDP.  To  close  the 
circular  economy  investment  gap  to  attain  policy 
targets that are not yet budgeted, EUR 214 million 
are  needed  for  recent  initiatives  such  as  eco-
design  for  sustainable products;  packaging  waste; 
labelling  and  digital  tools;  critical  raw  materials 
recycling;  and  measures  proposed  under  the 
amended  Waste 
Framework  Directive.  An 
additional  EUR  604  million  are  needed  to  unlock 
Belgium’s circular economy potential (151). 

Zero pollution industry 

for 

for  all 

the  2030s 

reduction  commitments  under 

Belgium  has  made  considerable  progress  in 
reducing  air  pollution,  which 
is  now 
decoupled  from  GDP  growth.  The  2020-2029 
the 
emission 
national  air  pollution  control  programme  have 
been  met.  Belgium  is  on  track  to  meet  its 
five 
commitments 
pollutants (152).  However,  in  2023,  limits  for  NO2 
set  by  the  Ambient  Air  Quality  Directive  were 
breached  in  two  air  quality  zones  (Antwerp  and 
Ghent).  Furthermore,  the  target  value  for  arsenic 
concentration  was  not  met  in  one  air  quality 
zone (153). Car transport remains the most frequent 
mode of transportation, due to widespread use of 
company  cars  and  an  important  source  of  GHG. 
The  GHG  emission  reduction  was  only  8% 
compared to 2022. The reform of the company car 
tax scheme, planned in the Recovery and resilience 

(150) PNEC 2021-2030, pp. 86, 96, 224 and in particular for 

(146) Consultez le rapport de mise en œuvre de Circular Wallonia 

Brussels C.R. pp. 201-202. 

(2021-2023) | Circular Wallonia 

(147) EEA, 2024, Circular economy country profile 2024 – Belgium, 

Link. 

(151) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

(148) Vlaamse overheid, Lokaal Materialenplan 2023 – 2030, Link. 

(152) European Commission, 2022, The Third Clean Air Outlook,  

(149) Vlaamse Regering, Relanceplan Vlaamse Regering – 

Vlaamse Veerkracht, Link. 

Link. 

(153) EEA, Eionet Central Data Repository, Link. 

65 

 
 
 
to  ozone.  To  meet 

attribute 4 100 deaths each year (or 41 300 years 
of  life  lost  (YLL))  to  fine  particulate  matter 
(PM2.5) (159);  1 200  deaths  each  year  (or  12 300 
YLL)  to  nitrogen  dioxide  (NO2) (160);  1 400  deaths 
(or  13 700  YLL) 
its 
environmental  objectives  for  pollution  prevention 
and  control  (towards  zero  pollution),  Belgium 
needs to provide an additional  EUR 1.5 billion per 
year  (0.28%  of  GDP),  mostly  for  measures  on 
clean air and noise (161). The implementation of the 
national  climate  and  energy  plan  (NECP),  which 
includes  investments  for  sustainable  energy  and 
transport, would largely deliver this. 

plan, entered into force on 1 January 2023 (154) It 
includes  a  progressive  reduction  of  the  tax 
deductibility  of 
cars 
conventional 
(thermic engine)  until full exclusion and limiting it 
as from 2026 to electric cars  

company 

industrial 

Belgium’s industry continues to release large 
amounts  of  air  and  water  pollutants.  In 
installations 
Belgium  around  2 457 
required  to  have  a  permit  under  the  Industrial 
Emissions  Directive  (IED)  don’t  have  it.  Most  of 
these are from the intensive rearing of poultry and 
the  waste-
(44%),  followed  by 
pig  sector 
management  sector  (19.6%).  Belgium  has  a 
relatively  high  indicator  of  damage  to  health  and 
the environment (155) (the seventh highest damage 
level  in  the  EU)  and  Belgium  has  the  seventh 
highest emissions intensity  above the EU  average 
of  27.5  EUR/thousand  EUR  GVA).  The  main 
emissions  contributors  are  the  intensive  rearing 
sector;  the  electricity  production  sector;  the metal 
sector; the chemicals production. Concerning water 
pollution,  given  the  distribution  of  competences, 
the  management  of  the  water  bodies  is  quite 
compartmentalised.  The  pressures  in  different 
parts of the country are similar but their intensity 
varies considerably. Indeed, the population density 
in  Flanders  is  more  than  twice  the  density  in 
Wallonia.  Belgium’s  main  challenges  relate  to 
massive  pressures  from  agriculture  (nitrates  and 
pesticides  pollution),  dense  population  (land  use 
and  wastewater 
related 
hydromorphological  pressures.  Legacy  pollution 
and 
cause  specific 
problems (156) (157).  

transboundary  pollution 

discharges) 

and 

The costs of pollution remain far higher than 
the  investments  in  pollution  prevention  and 
control. The latest available annual estimates (for 
2022)  by  the  European  Environment  Agency (158) 

(154) The federal Law of 25 November 2021: Loi organisant le 

verdissement fiscal et social de la mobilité / Wet houdende 
fiscale en sociale vergroening van de mobiliteit, published in 
the Official Journal on 3 December 2021. 

(155) The indicator reflects the ratio between the damage and the 
industrial activity (expressed in gross value added (GVA)), 
which gives an indication of the emissions intensity.  

(156) SWD (2025)16 final Report from the Commission on the 
implementation of the Water Framework Directive 
(2000/60/EC) and the Floods Directive (2007/60/EC) 

(157) European Commission, Report on 3rd RBMP and 2nd FRMP for 

Belgium, SWD(2025) 16 final, 4.2.2025, pp. 10-11. 

(158) EEA, 2024, Harm to human health from air pollution in 

Europe: burden of disease status, Link. 

(159) Particulate matter (PM) is a mixture of aerosol particles (solid 
and liquid) covering a wide range of sizes and chemical 
compositions. PM10 refers to particles with a diameter of 10 
micrometres or less. PM2.5 refers to particles with a 
diameter of 2.5 micrometres or less. PM is emitted from 
many human sources, including combustion 

(160) Nitrogen dioxide (NO2) pertains to a group of gases called 
NOx, which also comprises nitrogen monoxide (NO). NOx is 
emitted during fuel combustion e.g. from industrial facilities 
and the road transport sector. 

(161) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

66 

 
 
 
Table A7.1:  Key clean industry and climate mitigation indicators: Belgium 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

67 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW100-150 (m)- Electrolyzer, MW250-650- Wind (b: blade, t: turbine, n: nacelle), MW-- battery, MWh-Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %509511510510510507511539561New zero-emission vehicles, electricity motor, %0.490.671.593.435.8010.0819.291.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %72.772.572.372.975.275.624.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.560.550.520.510.550.460.440.340.27Share of energy-related emissions in industrial GHG emissions60.560.260.058.858.056.357.344.842.5Energy-related GHG emissions intensity of manufacturing175.3175.8168.3172.3184.5151.2-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption38.438.037.337.036.838.838.843.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€2.132.142.072.112.341.921.851.291.09Share of energy-intensive industries in manufacturing production21.87.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.330.340.370.400.420.40--0.730.68- chemicals and chemical products (NACE C20)1.421.411.361.351.651.481.52-1.251.26- other non-metallic mineral products (NACE C23)2.632.702.762.722.532.61--2.532.24- basic metals (NACE C24)2.242.342.192.202.562.18--2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -15.7-21.8-21.7- domestic road transport-1.8-2.7-18.9-10.7-9.5-8.11.45.2- buildings-18.1-20.2-22.3-19.1-32.3-32.721.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %81.668.863.863.9-47.000Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person14.912.813.014.012.913.814.715.0Circular material use rate, %20.6      20.5      22.9      21.4      18.3      19.7      11.611.1Resource productivity, €/kg3.2        3.2        3.4        3.8        3.7        3.5        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants538      415      308      415      541      -702571Air pollution damage cost intensity, per thousand € of GVA    46.8          27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.9   0.9BelgiumEU-27BelgiumEU-27BelgiumEU-27 
 
 
   
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the  final  (draft)  updates  to  the  national  energy 
and climate plans (NECPs) for 2030. 

Belgium  has  taken  further  steps  to  upgrade 
its  energy  infrastructure,  to  increase  its 
energy  efficiency,  and  to  improve  non-fossil 
flexibility.  The number of prosumers and energy 
communities is steadily increasing. 

in  relation  to 

However,  Belgium  is  facing  a  number  of 
challenges 
its  affordable 
energy transition, in particular slow deployment 
of  renewable  energy  sources  (RES),  limited  cross-
border 
consumer 
trade, 
empowerment,  and  higher  fiscal  burden  on 
electricity, 
for 
electrification. 

distorting 

signals 

energy 

weak 

price 

Energy prices and costs  

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Belgium’s 
retail  energy  prices  dropped 
significantly  in  2024,  falling  below  the  EU 
average for  non-household consumers, while 
household  prices  for  electricity  remained 
above  the  EU  average,  the  fourth  highest  in 
for  non-household 
the  EU.  Network  costs 

consumers  below  the  EU  average,  especially  for 
gas  (1,4%  of  the  total  gas  price  against  an  EU 
average of 7,1%), resulted in  slightly lower prices 
for  industrial  consumers  compared  to  the  EU 
average.  Taxes  and  levies  (excluding  VAT)  are 
disproportionally  tilted  toward  electricity:  they 
made  up  only  2,4%  for  gas  prices  for  industrial 
consumers (significantly lower than the 11,6% EU 
average), while they account for 18% of electricity 
prices  (above  the  15,4%  EU  average).  Although 
household  electricity  and  gas  retail  prices  also 
decreased  compared 
former 
remained  significantly  above  the  EU  average. 
Taxes and levies accounted for 26,9% of the retail 
electricity  price  for  household,  higher  than the  EU 
average of 25%.   

to  2023, 

the 

(CWE) 

European 

EUR/MWh 

averaged  70.3 

Thanks  to  a  significant  share  of  renewables 
(35.8%)  and  nuclear  power  (42.0%)  in  its 
electricity mix, wholesale electricity prices in 
in 
Belgium 
2024 (162),  below  the  EU  average  of  84.7 
the  broader  Central 
EUR/MWh.  Along  with 
Western 
region,  Belgium 
experienced  price  spikes  in  the  winter  months  of 
early  2024,  which  occurred  amid  demand 
increases due to a cold winter (+3.6% in Jan 2024. 
vs Jan. 2023). Prices picked up again in the second 
half  of  the  year  as  Belgium  ramped  up  costly 
natural  gas-fired  generation  (+80%  and  +25%  in 
Nov.  and  Dec.  vs  same  period 
in  2023, 
respectively)  to  cover  for  lower  wind  output  (-
41.4%  and  -19.3%  in  Nov.  and  Dec.  vs  same 
period 
the 
Dunkelflaute experienced in the region (163). 

respectively)  due 

in  2023, 

to 

(162) 
(163) 
generation data throughout the paragraph) 

Fraunhofer (ENTSO-E data) 
Yearly electricity data, Ember (consumption and 

68 

 
 
 
 
 
 
Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) CWE gives average prices in the central-western European 
market (Belgium, France, Germany, Luxembourg, the 
Netherlands and Austria). 
Source: S&P Platts and ENTSO-E 

 Flexibility and electricity grids  

Belgium  is  part  of  the  Core (164)  capacity 
calculation region (CCR). Member States should 
ensure that a minimum of 70% of technical cross-
border  capacity  is  available  for  trading.  In  2023, 
Belgium still had a derogation  from the minimum 
70%  threshold  rule,  due  to  excessive  loop  flows 
from neighbouring Member States (165). 

is  further  upgrading 

its  grid 
Belgium 
infrastructure  and  further 
infrastructure 
investment  would  allow  it  to  have  a  higher 
share of renewable electricity. One key project 
is  the  offshore  energy  island  Princess  Elisabeth 
Island,  a  first-of-its-kind  artificial  energy  island 
that  will  integrate  additional  offshore  wind  farms 
of  up  to  3.5 GW.  Nautilus  is  a  subsea  hybrid 
interconnector connecting Belgium with the UK via 

(164) 
Core  is  the  core  capacity  region  (CCR)  which  covers 
Belgium,  Czechia,  Germany,  France,  Croatia,  Hungary,  the 
Netherlands,  Austria,  Poland,  Romania,  Slovenia  and  Slovakia 
(and, once connected, Ireland). A CCR is a group of countries that 
calculate cross-border electricity trade flows together. 
(165) 
This  derogation  deducts  the  forecasted  loop  flows 
above  a  certain  acceptable  threshold  from  70%.  It  has  been 
granted  on  the  assumption  that  the  local  remedial  action 
potential  is insufficient  to  alleviate  the  impact  of  such  flows.  A 
derogation enables lower level of trades for a time limited period 
if needed for operational security reasons. 

Princess  Elisabeth 
Island.  The  project  has 
benefited  from  support  from  EU  funds (166)  for 
studies  and  is  a  project  of  mutual  interest  (PMI). 
TritonLink has PCI status and concerns an offshore 
hybrid 
interconnector  between  Belgium  and 
Denmark that links two offshore energy hubs: the 
Danish  Energy  Hub  and  Princess  Elisabeth  Island. 
The  model  for  the  project  is  currently  being 
reviewed  due  to  cost  concerns.  Belgium  has 
implemented  the  permitting  provisions  of  the 
TEN-E  Regulation,  but  there  is  room  for  more 
streamlining between Flanders and Wallonia.  

Constraints  in  the  grid  remain  significant.  In 
2023  there  were  221 occurrences  of  negative 
electricity  prices  in  Belgium  (167)  and  curtailment 
of  solar  PV  became  a  serious  issue.  In  2024, 
Fluvius  (the  electricity  grid  operator  in  Flanders) 
decided  to  compensate  residential  PV  systems  if 
they  are  not  reconnected  within  30  working  days 
of a curtailment event. 

Despite  the  remaining  challenges,  Belgium 
has  taken  steps  to  support  non-fossil 
flexibility.  Belgium  does  not  report  on  the 
installed  non-fossil  flexibility  capacity  in  the  draft 
NECP. However, Belgium has made a commitment 
to  promote  the  installation  of  electricity  storage 
example, 
response  by, 
and  demand 
encouraging energy storage (through an incentives 
system);  establishing  a  regulatory  framework  for 
regulatory 
storage; 
energy 
frameworks  for  flexibility 
in  the  distribution 
system.  

designing 

and 

for 

regulatory 

framework 

still 
Belgium’s 
contains  barriers  to  the  development  of 
flexible resources. Demand-side response (DSR) 
and  storage  installed  at  the  distribution  level  are 
also allowed to participate in all ancillary services 
but  are  not  eligible 
to  provide  congestion 
management  services  to  transmission  system 
operators (TSOs). 

The slow (albeit accelerating) deployment of 
smart  meters  impacts  the  availability  of 
dynamic  retail  contracts.  In  2023,  the  roll-out 
of smart meters reached 35%. Belgium is making 
progress with measures to empower consumers in 

(166) Connecting Europe Facility (CEF) and Recovery and Resilience 

Facility (RRF) 

(167) 

ACER Monitoring Report.( 

69 

 
 
 
 
demand  response,  dynamic  pricing  and  smart 
grids. 

Renewables and long-term contracts 

Graph A8.3: Belgium’s installed renewable capacity 
(left) and electricity generation mix (right) 

The  number  of  prosumers  and  energy 
communities is steadily increasing. A share of 
24%  of  household  prosumers  and  81  active 
energy  communities  was  recorded  in  2023.  The 
regional frameworks in Brussels and Flanders also 
allow  energy  sharing  between  final  customers, 
independent  from  their  supplier,  and  there  were 
reportedly  177  active  projects  in  the  Brussels 
region in 2024 (168) 

to 

due 

partly 

decade (169), 

Electricity accounted for 21.3% of Belgium's 
final  energy  consumption  (FEC)  in  2023 
(below  the  EU  average  of  22.9%),  and  this 
share  has  remained  largely  stagnant  in  the 
last 
an 
unfavourable  electricity-to-gas  price  ratio 
that  disincentivizes  electrification  and  cost-
effective  decarbonization.  Electricity  accounts 
for  19.6%  and  31.1%  of  households’  and 
industry’s  FEC  respectively  (see  also  the  Effective 
Institutional  Framework  Annex).  For  the  transport 
sector,  this  share  remained  negligible  at  2.5%. 
Further  progress 
in  electrification  across  all 
sectors  is  required  in  order  to  cost-effectively 
decarbonise the economy and bring the benefits of 
affordable renewable generation to consumers. In 
2024’s second semester, Belgium had some of the 
highest household electricity prices in the EU, with 
the  third  highest  electricity-to-gas  price  ratio. 
Taxes  and  levies  made  up  31,7%  of  electricity 
costs but only 19,3% for gas. For energy-intensive 
industries,  electricity  prices  aligned  with  the  EU 
average,  but  the  electricity-to-gas  price  ratio  was 
the third highest. Non-recoverable taxes and levies 
raised  this  ratio  from  3.2  to  3,8,  undermining 
incentives for businesses and households to switch 
to electricity over fossil fuels (170).  

(168)Brugel – Cartografie. 
(169)The  CAGR  (compound  annual  growth  rate)  was  0.2% 
between  2013  and  2023.  The  minimum/maximum  shares 
were  20.8%  and  21.9%  respectively.  Source:  Final  energy 
balances, Eurostat. 

(170) Analysis based on Eurostat data for the second semester of 
2024. For household consumers, consumption band is DC for 
electricity  and  D2  for  gas,  which  refer  to  medium-sized 
consumers and provide an insight into affordability. For non-
household consumers, consumption band is ID for electricity 
and I4 for gas, referring to large-sized consumers, providing 
an  insight  into  international  competitiveness  (price  used  for 
the  calculation  excludes  VAT  and  other 
recoverable 
taxes/levies/fees  as  non-household  consumers  are  usually 
able to recover VAT and some other taxes). 

70 

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

•  In  2024,  renewable  energy  sources  (RES) 
accounted  for  36%  of  the  electricity  mix 
(vs the EU’s overall RES share of 47%) an 
increase  from  33%  in  2023 (171)  (mainly 
wind  and  solar).  RES  shares  in  heating  and 
cooling,  and  in  the  transport  sector  remained 
limited. 

The RES installed capacity increased by 10% 
in  Belgium  in  2024,  below  the  EU  average 
(11.5%).  This  was  driven  mainly  by  a  16.8% 
increase in solar capacity, and a 4.5% increase of 
onshore wind (172). 

Belgium has made some progress in speeding 
up  RES  permit-granting  procedures,  but 
further steps are  needed.  Public  acceptance  of 
renewables  remains  a  challenge  for  the  further 
expansion of onshore utility-scale projects. On the 
positive  side,  plug-in  solar  systems  are  being 
legalised  in  2025.  The  digital  one-stop  shop  for 
permit-granting  in  Flanders  is  also  working  well 
and  the  administrative  procedures  are  swift 
overall  (unless  they  are  prolonged  by  court 
appeals). 

Belgium’s  recovery  and  resilience  plan  (RRP) 
includes  reforms  aimed  at  accelerating 
permit-granting. There is namely a reform of the 
(as  part  of  a  more 
appeal  procedures 
comprehensive  reform  aimed  at  accelerating  the 
energy  transition  in  Wallonia)  and  a  reform  that 

(171)Yearly electricity data, Ember. 
(172) IRENA Renewable Capacity Statistics 2025 

 
 
 
 
imposes  a  PV-obligation  on  large  consumers  in 
Flanders. 

Belgium has raised its target for the share of 
renewables  in  2030  in  its  draft  updated 
NECP  from  17.5%  to  21.7%,  but  this  is  still 
below  its  expected  national  contribution  to 
the EU’s 2030 target (33%). By 2030, Belgium 
aims  to  have  11.8 GW  of  wind  capacity  and 
8.5 GW  of  solar  capacity  installed.  The  draft 
updated  NECP  also  sets  a  target  of  15.6 GW  of 
installed  wind  capacity  by  2040.  As  part  of  the 
Wind  Pledges  under  the  European  Wind  Power 
Action, Belgium has made a commitment to install 
0.3 GW of onshore wind capacity per year between 
2024  and  2026  and  to  reach  6 GW  of  offshore 
wind capacity by 2028.  

efficiency cogeneration  and  efficient  district 
heating  and  cooling  in  line  with  Energy 
Efficiency  Directive  (EU).  There  is  no  estimate 
available  of  when  the  assessment  will  be  done. 
The targets stated in the latest (2023) draft NECP 
were 
rather  unambitious,  despite  significant 
growth  in  heat  pumps,  and  showed  a  continuing 
reliance  on  biomass  as  the  first  contributor  to 
renewable heat. 

There  was  no  visible  progress  on  FEC  in  the 
residential  sector  between  2022  and  2023 
(when  one  uses  climate-corrected  data). 
Unless  it  steps  up  its  efforts  in  the  residential 
sector,  Belgium  is  unlikely  to  achieve  its  2030 
reduction  target  for  energy  consumption  by 
buildings. 

Belgium  has  made  progress  in  terms  of 
support for RES, especially when it comes to 
Contract  for  Difference  (CfD)  and  power 
purchase agreements. Belgium is using two-way 
CfDs  to  support  offshore  wind  development;  one 
auction  was  launched  in  2024  and  two  more  will 
follow  in  2026.  The  solar  market  is  transitioning 
away from government-supported growth. The use 
of  renewable  power  purchase  agreements  has 
picked up in Belgium, with a contracted capacity of 
1 GW so far (mostly in the wind sector) (173). 

residential 

Heating  and  cooling  account  for  86%  of  the 
country’s 
FEC.  Approximately 
103 000  heat  pumps  were  sold  in  2023  (an 
increase  of  72%  on  2022),  continuing  the  strong 
trend of increased sales, albeit at a slightly lower 
pace than the previous year. Electricity in Belgium 
was  3.8 times  more  expensive  than  gas  in  2023 
and  this  difference  increased  to  4.2 times  in  the 
first half of 2024. This means that end users save 
energy but pay more if they choose a heat pump 
for heating. 

Energy efficiency 

Belgium  is  continuing  to  make  significant 
progress in its efforts to reach the 2030 EU 
energy  efficiency  targets.  In  2023,  primary 
energy  consumption  (PEC)  decreased  by  7.0%  to 
42.06 Mtoe.  Final  energy  consumption 
(FEC) 
decreased by 1.8% to 31.3 Mtoe. FEC decreased in 
2023 in most main sectors: in industrial  by  5.4%, 
in  residential  by  1.8%  and  in  services  by  3.9%. 
However,  FEC  increased  by  1.8%  in  the  transport 
sector. This  overall  progress is in line with the EU 
average  and  highlights  Belgium’s  commitment  to 
the  Energy 
energy  efficiency.  According 
Efficiency  Directive  (EED)  recast,  Belgium  should 
try  to  reach  a  PEC  of  34.66 Mtoe  and  a  FEC  of 
28.82 Mtoe by 2030. This would require decreases 
of 23.4% and 13.8% respectively. 

to 

Belgium  has  not  notified  its  comprehensive 
heating  and  cooling  assessment  to  identify 
potential  for  the  application  of  high-

(173) 

PPA deal tracker – RE-Source Platform. 

71 

Financial  support  for  condensing  gas  boilers 
in  buildings  ended  in  2023.  There  are  several 
measures in place to support increased uptake of 
renewable  energy 
instance 
through  solar  installations  (PV  and  solar  thermal) 
is  an 
and  heat  pumps.  Building  renovation 
important part of the Belgian RRP, with investment 
of  over  EUR 1 billion 
in  the  energy-efficient 
renovation of buildings (including social housing).  

in  buildings,  for 

financial 

implementing 

Belgium relies mostly on grant-based energy 
efficiency 
schemes,  with  a 
particular  focus  on  residential  buildings.  In 
the 
2024,  Belgium  continued 
planned  energy  efficiency  financing  schemes, 
especially  as  part  of  its  RRP.  In  addition,  Belgian 
government  initially  abolished  the  reduced  VAT 
rate  of  6%  for  demolition  and  reconstruction  of 
dwellings,  but  then  decided  to  reinstate  it  and 
extend  it  until  June  2025.  The  new  federal 
government  indicated  plans  to  further  extend  the 
VAT 
and 
reconstruction. It has also announced that from 1 
July  2025  the  reduced  VAT  rate  on  fossil-fuel 
boilers  will  be  eliminated  and  VAT  rates  on  heat 

demolition 

reduced 

rate 

for 

 
 
pumps  will  decrease.  In  parallel,  the  Belgian 
authorities  are  working  on  establishing  additional 
financial 
the  energy 
renovation of public buildings and infrastructure. 

instruments 

targeting 

Security of supply and diversification  

Renewables  (together  with  biofuels)  counted 
for  a  small  share  of  the  energy  mix (174)  (175) 
in  Belgium  in  2024,  remaining  at  11%  (a 
similar  percentage  as  during  the  previous 
year).  The  share  of  nuclear  energy  decreased  to 
16%  (from  20%  the  previous  year).  Natural  gas 
constituted  25%  of  the  energy  mix,  a  slight 
increase  on  the  previous  year,  while  oil  and 
petroleum products (excluding biofuels) accounted 
for more than 41%. 

There  are  currently  five  nuclear  power 
reactors (pressurised light 

the  Treaty  on 

the  European  Union 

 water) in operation, with a diversified supply 
of  nuclear  fuel.  They  are  located  in  two  sites 
(two units in Tihange and three units in Doel) with 
~4 GWe  of  total  installed  nominal  capacity.  In 
2022, the federal government decided to take the 
necessary  steps  to  extend  the  operational  life  of 
the  two  youngest  nuclear  power  reactors,  Doel 4 
and  Tihange  3  by  10 years  until  2035.  In  June 
2024,  Belgium  notified  to  the  Commission  its 
plans to support the lifetime extension of the two 
nuclear  reactors.  Following  a  formal  investigation 
the 
under  Article 108(2)  of 
Functioning  of 
(TFEU) 
(SA.106107), the European Commission reached a 
final  decision  in  February  2025,  approving  the 
requested  extension.  In  2023,  the  five  nuclear 
reactors  in  operation  produced  31 320 GWh  or 
41.2%  of  total  electricity  production (176). 
In 
Commission  Recommendation  2024/1042  of 
23 February 2024,  Belgium  was  requested  to 
(i) specify 
the 
appropriate  measures 
diversification  and  long-term  supply  of  nuclear 
materials,  fuel,  spare  parts  and  services,  and  for 
the long-term management of nuclear waste; and 
(ii) provide  more  details  on  ongoing  research 
activities related to small modular reactors (SMRs). 
According to the Euratom Supply Agency, Belgium 
has 
supply 
strategy  based  on  contracts  with  EU  or  other 

implemented  a  well-diversified 

for 

(174) Electricity  and  heat  have  been  excluded  to  avoid  double-

counting. The focus is on primary energy sources. 

(175) Gross inland consumption, Eurostat. 
(176) https://cnpp.iaea.org/public/countries/BE/profile/preview. 

72 

western  providers  at  each  stage  of  the  nuclear 
fuel cycle. 

Fossil fuel subsidies  

In  2023,  environmentally  harmful (177)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 
represented  0.85% (178)  of  Belgium’s 
2030 
GDP (179),  above  the  EU  weighted  average  of 
0.49%.  Tax  measures  accounted  for  81%  of  this 
volume,  while  direct  grants  represented  18%. 
Fossil  fuel  subsidies  without  a  planned  phase-out 
before 2030 and which do not specifically address, 
in  a  targeted  way,  energy  poverty  nor  genuine 
energy  security  concerns  included  reduced  excise 
taxes  on  heavy  and  light  fuel  oil,  fuel  company 
cards  with  tax  benefits  for  employees,  partial 
excise  duty  refunds  on  diesel  for  taxi  drivers  and 
freight  as  well  as  exemption  of  excise  duties  for 
agricultural  and  horticultural  work,  fish  farming 
forestry.  Additionally,  Belgium’s  2023 
and 
Effective  Carbon  Rate (180)  averaged  EUR  74  per 
tonne of CO₂, below the EU weighted mean of EUR 
84.80 (181). 

(177) Direct fossil fuel subsidies that incentivise maintaining or 
increasing in the availability of fossil fuels and/or use of 
fossil fuels. 

(178) Numerator is based on volumes cross-checked with the 

Belgian authorities. For all Member States, it includes public 
R&D expenditures for fossil fuels as reported by the IEA 
(Energy Technology RD&D Budgets) and excludes, for 
methodological consistency, excise tax exemption on 
kerosene consumed in intra-EU27 air traffic. 

(179) 2023 Gross Domestic Product at market prices, Eurostat. 

(180) The Effective Carbon Rate is the sum of carbon taxes, ETS 
permit prices and fuel excise taxes, representing the 
aggregate effective carbon rate paid on emissions. 

(181) OECD (2024), Pricing Greenhouse Gas Emissions 2024 

 
 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

73 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0,2847          0,3963              0,4064              0,3333          0,2314              0,2649          0,2877          0,2879          Energy & supply [%]29,6%57,9%57,0%46,9%36,6%54,3%55,6%47,8%Network costs36,7%23,1%21,5%26,1%26,7%25,3%24,8%27,2%Taxes and levies including VAT33,6%19,1%21,5%26,9%36,7%20,3%19,6%25,0%VAT17,0%7,9%5,6%5,6%14,5%13,4%13,8%14,6%Household consumer - Gas retail price0,0572          0,1152              0,1069              0,0852          0,0684              0,0948          0,1121          0,1128          Energy & supply54,2%75,0%72,9%63,4%43,7%61,0%64,5%53,9%Network costs24,7%13,7%15,2%19,5%22,5%17,3%17,1%18,3%Taxes and levies including VAT21,2%11,3%11,9%17,1%33,8%21,7%18,4%27,8%VAT17,1%9,5%5,7%5,6%15,5%11,6%10,2%13,6%Non-household consumer - Electricity retail price0,1085          0,1785              0,2141              0,1616          0,1242              0,1895          0,1971          0,1661          Energy & supply40,5%60,4%63,4%56,7%43,0%66,5%63,0%55,8%Network costs19,8%8,3%8,0%11,1%15,8%10,7%11,9%15,5%Taxes and levies excluding VAT27,5%16,9%13,6%18,0%30,4%9,9%11,2%15,4%Non-household consumer - Gas retail price0,0273          0,0555              0,0539              0,0413          0,0328              0,0722          0,0672          0,0517          Energy & supply76,9%85,4%86,3%79,2%66,2%77,3%77,3%68,7%Network costs2,4%1,3%1,2%1,4%7,7%3,8%5,3%7,1%Taxes and levies excluding VAT4,4%1,6%1,5%2,4%12,5%6,1%7,3%11,6%Wholesale electrity price (EUR/MWh)103,8243,897,670,5111,0233,299,184,7Dutch TTF (EUR/MWh)n/an/an/an/a46,9123,140,534,420172018201920202021202220232024Gross Electricity Production (GWh) (2)86.619          75.040              93.644              89.454          100.482           95.948          83.669          -Combustible Fuels32.615       33.171           34.497           35.275       30.677          30.773       25.407       -Nuclear42.227       28.597           43.524           34.435       50.326          43.879       32.928       -Hydro1.397         1.308             1.180             1.315         1.350            1.646         1.656         -Wind6.521         7.574             9.755             12.819       11.998          12.353       15.444       -Solar3.308         3.904             4.252             5.113         5.623            6.879         7.820         -Geothermal-              -                 -                 -              -                 -              -              -Other Sources551             487                436                498             508                418             415             Gross Electricity Production [%]Combustible Fuels37,7%44,2%36,8%39,4%30,5%32,1%30,4%-Nuclear48,8%38,1%46,5%38,5%50,1%45,7%39,4%-Hydro1,6%1,7%1,3%1,5%1,3%1,7%2,0%-Wind7,5%10,1%10,4%14,3%11,9%12,9%18,5%-Solar3,8%5,2%4,5%5,7%5,6%7,2%9,3%-Geothermal0,0%0,0%0,0%0,0%0,0%0,0%0,0%-Other Sources0,6%0,6%0,5%0,6%0,5%0,4%0,5%-Net Imports of Electricity (GWh)6.02217.328-1.855-333-7.877-7.5281.638-As a % of electricity available for final consumption 7,2%20,6%-2,2%-0,4%-9,4%-9,5%2,1%-Electricity Interconnection [%]18,9%9,5%18,3%14,2%16,1%14,8%15,4%15,9%Share of renewable energy consumption - by sector [%]Electricity17,2%18,9%20,8%25,1%26,0%29,1%31,4%-Heating and cooling8,2%8,3%8,3%8,4%9,3%10,6%11,3%-Transport6,6%6,7%6,8%11,0%10,3%10,4%12,1%-Overall9,1%9,5%9,9%13,0%13,1%13,8%14,7%-20202021202220232020202120222023Import Dependency [%] 78,1%70,9%74,0%76,1%57,5%55,5%62,5%58,3%of Solid fossil fuels 102,1%92,6%99,5%102,5%35,8%37,2%45,9%40,8%of Oil and petroleum products 102,7%95,8%100,6%100,1%96,8%91,7%97,8%94,5%of Natural Gas 99,1%99,9%100,8%100,6%83,6%83,6%97,6%90,0%Dependency from Russian Fossil Fuels [%]of Natural Gas 13,0%11,3%11,7%17,6%41,0%40,9%20,7%9,3%of Crude Oil29,9%29,2%22,1%0,0%25,7%25,2%18,4%3,0%of Hard Coal38,9%42,9%24,5%0,0%49,1%47,4%21,5%1,0%2017201820192020202120222023Gas Consumption (in bcm)17,8               18,4                  18,5                  18,4               18,5                  15,6               14,6               Gas Consumption year-on-year change [%]2,4%3,0%0,9%-0,7%0,4%-15,6%-6,2%Gas Imports - by type (in bcm)17,9               19,8                  23,3                  21,7               21,3                  24,2               22,8               Gas imports - pipeline16,7               17,3                  16,5                  17,0               17,1                  12,9               11,6               Gas imports - LNG1,12,56,74,74,211,211,2Gas Imports - by main source supplier [%]Norway53,0%52,9%39,9%52,4%54,3%21,4%22,6%Qatar6,3%10,2%19,3%11,6%12,0%23,9%18,7%Russia8,3%12,1%16,2%13,0%11,3%11,7%17,6%United Kingdom8,4%4,2%5,9%4,7%3,9%15,6%11,5%BelgiumEU 
 
   
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

low-lying  coastal  region 

Belgium’s 
is  a 
climate risk hotspot, primarily threatened by 
water-related  hazards  such  as  floods  and 
droughts.  The  country  also  faces  ongoing  water 
to  diffuse  pollution. 
quality  challenges  due 
Belgium  is  in  one  of  three  regions  (low-lying 
coastal  regions)  identified  as  hotspots  of  risk, 
highly  affected  by  climate  change (182).  Water 
management  is  increasingly  identified  as  a  key 
affected sector, with water-related hazards, fluvial 
and  pluvial  floods  and  droughts  signalled  in  all 
sectors.  Water  quality 
remains  problematic. 
Effective  action  is  needed  to  improve  the  quality 
of both surface and groundwater bodies, since the 
majority of water bodies in Belgium are subject to 
pressure caused by diffuse pollution sources. 

Climate adaptation and preparedness 

Belgium  is  experiencing  more  frequent  and 
longer  periods  of  extreme  weather  events 
such  as  drought,  extreme  heat,  heatwaves 
and  heavy  rainfall  causing  floods.  It  is  also 
experiencing  slow-onset  changes  such  as  a 
general  temperature  rise  and  sea-level  rise. 
A  comprehensive  climate  risk  assessment  was 
conducted 
in  2023  highlighting  several  key 
vulnerabilities  for  Belgium.  Urban  areas  are 
increasingly  experiencing  more  frequent  and 
intense heat waves, which significantly exacerbate 
health risks, especially for elderly populations and 
regions with limited green space. This also strains 
the  healthcare  system’s  capacity  to  cope  during 
extreme weather events, as evidenced by a rise in 
heat-related mortality to an average of 25 deaths 
per 100 000 inhabitants between 2013 and 2022. 
The  assessment  also  revealed  significant  threats 
from riverine and pluvial  flooding in Wallonia and 
Flanders,  contributing  to  substantial  economic 
losses. Of the EUR 17 billion in economic damages 
recorded  between  1980  and  2023,  EUR 11.7 
billion  resulted  from  river  flooding.  Insurance 
coverage is high for most risks (e.g. wildfires), but 
there  is  notably  less  coverage  against  the  risk  of 
flooding (183). In the agricultural sector, resilience is 
declining,  as  indicated  by  the  resilience  score  of 
1.5,  reflecting  the  challenges  posed  by  changing 

(182) EEA, 2024, European Climate Risk Assessment. 

(183) The overall insurance protection gap score estimated by 

EIOPA is 1.00, and 1.5 for flood protection. 

affect 

precipitation 
crop 
patterns,  which 
yields (184). The sector also faces an increased risk 
of  droughts  and  heightened  pest  prevalence. 
Recent  years  have  seen  severe  droughts  that 
significantly  impact  Belgium’s  ecosystems,  with 
38.6% of the country affected in 2020 and 57% in 
2022. 

having 

reports 

Belgium 
implemented 
measures  at  federal  and  regional  level  to 
help  reduce  climate  impacts,  vulnerabilities 
and risks. It is recognised that more needs to be 
done to increase adaptive capacity. Although more 
knowledge is  now  available, more  work  is  needed 
on awareness raising and supporting municipalities 
to carry out adaptation action. 

include  multidisciplinary 

The adaptation priorities, strategies, policies, 
plans  and  measures  taken  by  Belgium 
correlate  well  with  the  vulnerabilities  and 
risks  identified.  A  federal  adaptation  plan  (for 
2023-2026)  was  adopted 
in  spring  2023, 
identifying 28 adaptation measures in eight areas. 
The  measures 
risk 
assessments,  an  analysis  of  the  climate  change 
impacts  on  essential  services 
for  society, 
assessing the impact of climate change on energy 
security and infrastructure, and developing natural 
disaster  risk-zone  criteria.  The  plan  also  includes 
measures 
improve  sectoral  coordination, 
including  by  organising  information  sessions  on 
climate  change  adaptation  and  making  more 
information  on  adaptation  to  climate  change 
available,  for  example  on  a  national  online 
platform. 

to 

Belgium’s  three  regions  have  also  identified 
adaptation  priorities,  strategies,  policies, 
plans  and  actions.  The  Flemish  climate 
adaptation  plan  was  adopted  in  October  2022, 
focusing  on  2030  and  setting  out  a  vision  for  a 
climate-resilient Flanders by 2050 through nature-
based  solutions  and  technological  innovation.  The 
plan sets out six strategies, including building and 
connecting  green-blue  infrastructure,  space  for 
water  to  carry  out  functions  of  water  safety  and 
drought prevention, collaboration and coordination. 

(184) The score on a scale between 0 and 4 compares each 

country’s position relative to the EU’s median for a reference 
period (2001-2015) and an evaluation period (2007-2021), 
highlighting the direction of progress in relation to the 
country’s reference period. Values below 2 indicate a 
decrease in resilience. 

74 

 
 
 
 
 
 
Each  strategy  identifies  tangible  measures  to 
achieve the plan’s objectives. The plan is based on 
a  cost-benefit  analysis  of  climate  adaptation 
measures  and  has  an  overall  budget  of  EUR 150 
million for 2023-2024. In the Brussels region, the 
water  management  plan  for  2022-2027  has  a 
chapter on climate adaptation with a specific aim 
to increase action to combat drought. The new air 
climate  energy  plan  also  has  a  chapter  on 
adaptation.  The  plan  includes  measures  such  as 
developing  nature-based  solutions,  increasing  the 
climate change resilience of natural resources and 
to 
infrastructure,  and  developing 
monitor  adaptation  policy.  Wallonia  has  made 
available  a  budget  of  EUR  737  million  from  its 
“Plan  Relance”  for  the  reconstruction  of  zones 
affected  by  the  historic  floods  of  July  2021 (185). 
Brussels,  Wallonia  and  Flanders  have  integrated 
climate  change  impacts  into  their  river  basin  and 
flood  risk  management  plans  for  2022-2027. 
Flanders  also  launched  the  Blue  Deal  initiative  to 
increase  action  to  combat  drought  and  water 
scarcity,  which 
the 
Recovery  and  Resilience  Facility (186).  Brussels  has 
measures  in  place  to  integrate  action  on  climate 
change  adaptation  into  land-use  plans,  urban 
planning regulations and the construction sector. 

receives  support  under 

indicators 

Belgium  has  national  governance  structures 
in  place  to  support  adaptation  action.  It  has 
created several coordination mechanisms between 
the  federal  and  regional 
levels  on  climate 
the  National  Climate 
adaptation,  such  as 
Commission  that  includes  a  working  group  on 
adaptation,  CONCERE-ENOVER  that  helps  align 
adaptation  measures  that  intersect  with  energy 
policy,  and  an  adaptation  working  group  in  the 
Coordination  Committee  for  International  Climate 
Policy.  The  structure  is  quite  complex  due  to 
Belgium’s  federal  system.  Regions  have  primary 
responsibility  for  adaptation  in  areas  such  as 
water  management  and  agriculture,  while  the 
federal  level  handles  areas  such  as  emergency 
Some 
and 
planning 
responsibilities 
careful 
coordination. 

infrastructure. 
requiring 

some 
overlap, 

also 

for 
provides 
Belgium 
subnational  governance  structures.  This 
includes support to prepare the legal requirements 
and  strategic  documents  at  various  levels  of 

support 

governance,  adaptation  plans  for  provinces  and 
municipalities,  and  collaboration  across  national 
and 
regional  authorities.  Examples  of  good 
practice include knowledge platforms and tools to 
support adaptation policies. 

Water resilience 

(WEI+),  which  measures 

Large areas of Belgium are subject to water 
stress  due  to  demand  for  water  from 
manufacturing,  energy  and  the  public  water 
supply.  Belgium’s  water  productivity  is  not  high 
(17th  in  the  EU),  at  EUR 75  per  m3  of  abstracted 
water  in  2022,  and  on  a  downward  trend  over  a 
five-year period (187). The Water Exploitation Index 
Plus 
total  water 
consumption  as  a  percentage  of  the  available 
renewable freshwater resources in a specific area 
over a set period, was 5.2 in 2022. This represents 
the  8th  highest  WEI+  in  the  EU  and  has  been 
increasing  in  recent  years.  During  the  summer 
months  of  2022,  the  seasonal  WEI+  was  even 
higher,  reaching  10.3.  While  these  values  are  still 
below  the  critical  threshold  of  20%,  they  exceed 
those  of  most  other  EU  Member  States. 
Furthermore,  the  average  WEI+  conceals  regional 
variations 
in  water  resource  distribution  and 
consumption, with manufacturing being the largest 
water  consumer.  Between  2018  and  2022,  water 
abstraction  in the manufacturing  sector increased 
by 61%. The sector accounts for the highest share 
of water consumption at 656 million m3, i.e. 50% 
of  all  consumption  in  2022,  putting  a  significant 
strain  on  the  country’s  water  resources.  The 
manufacturing  plus  the  energy  sector  together 
consume  76%  of  total  water  consumption.  The 
challenges 
in 
regions with high levels of water stress. 

remain  significant,  particularly 

of 

for 

surface 

concern 

Water  quality  in  Belgium  remains  a  major 
and 
cause 
groundwater  bodies.  The  third  river  basin 
management  plan  shows  that  effective  action  is 
needed  to  improve  water  quality  both  in  surface 
and  groundwater  bodies,  since  the  majority  of 
water  bodies  in  Belgium  are  affected  by  pressure 
caused  by  diffuse  pollution 
sources.  The 
assessment of the third plan reveals only a minor 

(185)Wallonie service public, 2022, Bilan des émissions, Link. 

(186) Integraal Waterbeleid, About Blue Deal, Link. 

(187) Measured as GDP in 2010 chain linked volumes over total 

fresh surface water abstracted in cubic metres. 

75 

 
 
 
improvement  in  the  ecological  status/potential  of 
surface water bodies, and no improvement in their 
chemical  status  since  the  status  reported  in  the 
second  river  basin  management  plan  (covering 
2015-2021).  In  2021,  71%  of  surface  water 
bodies  were  classified  as  failing  to  achieve  good 
ecological  status  and  100%  as  failing  to  achieve 
good  chemical  status.  The  percentages  are  12% 
and 47% respectively for groundwater bodies. The 
Commission’s  assessment  indicates  that  it  would 
be  beneficial  for  Belgium  to  tackle  challenges 
related  to  hydromorphology  (i.e.  altering  river 
flows and riverbanks) and to the levels of nutrients 
and chemicals in surface waters. It would also be 
beneficial to make better use of cost recovery and 
the  polluter-pays  principle  in  groundwater  bodies 
and  during  water  shortages  in  dry  periods.  In 
addition,  it  would  be  beneficial  to  subject  permits 
for  abstraction,  impoundment  and  discharges  to 
mandatory  periodic 
in 
particular,  nitrates  pollution  of  water  is  very 
serious, and water quality is steadily deteriorating. 
In the two Flemish river basin districts, none of the 
surface  water  bodies  is  in  good  chemical  status, 
compared to 93% in the second assessment. This 
pollution  is  directly  caused  by  excess  levels  of 
nitrogen  deposits,  which  threaten  biodiversity  and 
impair  surface  water  quantity  and  quality.  The 
revised  7th  nitrates  action  programme  (MAP7) 
adopted 
in  December  2024  will  not  ensure 
compliance with the EU Nitrates Directive (188). 

In  Flanders 

review. 

is 

in 

line  with 

The  quality  of  drinking  water  is  currently 
satisfactory, but substantial investments are 
needed  to  maintain  the  high  standards  of 
water treatment (189). In Belgium, 95% of urban 
waste  water 
the 
treated 
requirements of the Urban Wastewater Treatment 
Directive.  This  is  above  the  EU  average  of  76%. 
The  annual  water  investment  needs  reach  an 
estimated EUR 2.3 billion in Belgium for the 2021-
2027 period. This comprises investment needs for 
the  water  industry  and  for  water  protection  and 
management.  The  largest  share  of  the  total 
annual  need,  EUR 1.8  billion,  is  for  wastewater 
management 
to 
implement the revised Directive). A further EUR 59 
is  needed  for  drinking  water-related 
million 

(including  additional 

costs 

(188) Vlaamse Land Maatschappij, 2024, Nieuwe 

mestmaatregelen vanaf 2025, Link. 

investments and around EUR 363 million for water 
protection and management. Water investments in 
Belgium  are  estimated  to  be  around  EUR 868 
million  per  year  for  the  2021-2027  period.  To 
meet  the  environmental  objectives  under  the 
the  Floods 
Water  Framework  Directive  and 
Directive, Belgium’s water investment gap reaches 
EUR 1.4 billion per year (0.25% of GDP), with most 
related  to  waste  water  (EUR 1.2  billion  per  year). 
Additional  provisions  under  the  Water  Framework 
Directive  require  around  EUR 217 million  per  year 
over existing levels of financing (190). 

Biodiversity and ecosystems 

The decline in biodiversity remains a serious 
concern in Belgium. Only 4.3% of habitats were 
reported  as  having  a  good  conservation  status  in 
the reporting period 2013-2018. This is the lowest 
share  in  the  EU.  The  share  of  protected  species 
reported  as  having  a  good  conservation  status  is 
25%,  an  increase  since  the  previous  assessment, 
which  reported  19%  as  having  good  status.  The 
common  farmland  bird  index  declined  between 
2018  and  2020  from  60.9  to  56.6.  This  is 
significantly  below  the  EU-27  average  of  74.6  in 
the  same  year  and 
indicates  a  significant 
deterioration in the population abundance and the 
diversity of common farmland bird species. 

Nature  degradation  creates  significant  risks 
to the economy and to competitiveness. 20% 
of  the  gross  value  of  Belgian  supply  chain’s  is 
highly dependent on ecosystem services, a similar 
level of dependency to the EU-27 average of 22%. 
Overall,  38% of  Belgium’s economy is very highly 
dependent  on  ecosystem  services  to  create  gross 
value  added.  Several  sectors  such  as  agriculture, 
forestry  and 
fisheries,  mining  and  metals, 
construction,  water  utilities  and  healthcare  (see 
graph  A9.1)  are  particularly  dependent.  100%  of 
the gross value added by these sectors is directly 
dependent on ecosystem services. This means that 
failure  to  maintain  the  capacity  of  ecosystems  to 
deliver  services  could  entail  significant  costs  or 
even  stop  production  in  these  sectors.  Protecting 
and restoring key ecosystems would help maintain 
the long-term competitiveness of these sectors. 

(189) In summary, the compliance rate for all parameter groups in 
Belgium was at least 98.5% in 2017, 98.8% in 2018 and 
98.7% in 2019. 

(190) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

76 

 
 
 
Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

the  country’s 

ecosystem services decreased by 67% due to soil 
sealing (192). The Commission’s impact assessment 
shows  that  up  to  2 925  km2  of  habitats  listed  in 
Annex I to the Habitats Directive need restoration, 
corresponding to up to 9.5% of land (193). Belgium 
requires EUR 491 million of investment per year to 
effectively  protect  and  restore  its  natural  capital, 
mitigate  the  impacts  of  climate  change,  and 
protect 
rich  biodiversity.  The 
‘Biodiversity  and 
investment  measure 
adaptation  to  climate  change’  of  the  Wallonia 
Region aims to fund the protection, restoration and 
sustainable  use  of  biodiversity  and  ecosystem 
services,  to  improve  the  carbon  storage  capacity 
and  resilience  to  climate  change  effects  such  as 
floods  and  droughts.  It  consists  of  two  sub-
measures:  Forests  &  Remeandering  (EUR 24.05 
million)  and  Protected  areas  &  National  parks 
(EUR 50 million) (194). 

I-1.22: 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

Targeted  action  on  nature  protection  and 
restoration  is  necessary  to  meet  Belgium’s 
nature  restoration  targets.  In  2022,  15%  of 
land in Belgium was protected, much less than the 
EU  average  (26%).  Belgium  is  in  the  process  of 
updating its  national  biodiversity  strategy to align 
its objectives with the EU and global 2030 targets. 
A  revised  draft  of  the  national  biodiversity 
strategy is available, with input received during the 
public  consultations (191).  Adoption  is  envisaged  in 
early  2025.  However,  between  2006  and  2012, 
the  extent  of  soil  areas  providing  flood  control 

(191) SPF Santé publique, Sécurité de la chaîne alimentaire et 

Environnement, 2024, Consultation publique sur le projet de 
«la mise à jour de la stratégie nationale de la Belgique sur la 
biodiversité jusqu’en 2030», Link. 

Sustainable agriculture and land use 

Belgium’s  carbon  removals  fall  short  of  the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land-use  change  and 
forestry (LULUCF). Belgium’s LULUCF sector has 
been a net carbon sink since 1990, but the volume 
of carbon removals has been decreasing. To meet 
its  2030  LULUCF 
target,  additional  carbon 
removals of  -0.3 million tonnes of CO2 equivalent 
(CO2eq)  are  needed (195).  The 
latest  available 
projections  show  a  surplus  over  the  target  of  0.3 
million  tonnes  of  CO2eq  for  2030 (196).  Therefore, 
Belgium is on track to meet this objective. 

Belgian  agriculture  is  still  a  notable  source 
of  greenhouse  gas  emissions  and  continues 
to  have  a  significant  impact  on  air,  water 
and  soils.  In  2022,  agriculture  generated  9.1 

(192) European Commission, European Environment Agency, 2021, 

Accounting for ecosystems and their services in the 
European Union. 

(193) European Commission, 2022, Impact assessment 

accompanying the proposal for a Regulation on nature 
restoration. 

(194) Next Gen Belgique, Forêts et nature résilientes en Wallonie 
comme tampon contre le réchauffement climatique, Link. 

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

Regulation (EU) 2023/839. 

(196) Climate Action Progress Report 2024, COM/2024/498. 

77 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
  
 
 
to 

funding) 

implement 

(CAP).  The  aims 

coming  years (197)(198).  Belgium  has  two  regional 
the  common 
strategic  plans 
agricultural  policy 
include 
environmental  benefits  and  the  protection  of 
natural  resources.  Wallonia’s  CAP  strategic  plan 
rural 
(56%  of 
allocates  EUR 110  million 
development 
to  environmental  and 
climate  objectives  and  EUR 345  million  (26%  of 
direct  payments).  Flanders’  CAP  strategic  plan 
rural 
(54%  of 
allocates  EUR 185  million 
development 
to  environmental  and 
climate  objectives  and  EUR 261  million  (25%  of 
direct  payments).  The  plans  support  action  to 
protect  biodiversity,  increase  the  share  of  organic 
farming,  the  use  of  soil  cover,  crop  rotation  and 
diversification, help to reduce nutrient loss, and to 
promote other sustainable agriculture practices. 

funding) 

impacted  by  nutrient 

million  tonnes  of  CO2eq,  accounting  for  around 
8.4%  of  the  country’s  total  emissions.  This 
includes  6.3  million  tonnes  of  CO2eq  from 
livestock.  The  utilised  agricultural  area  (UAA)  in 
Belgium has been relatively stable but on a slight 
downward  trend  in  recent  years,  reaching  1.35 
million hectares in 2023. However, Belgium’s soils 
were  significantly 
loss, 
mainly  from  mineral  fertilisers  and  manure.  This 
poses  a  significant  environmental  concern  and  a 
threat  to  human  health.  This  is  reflected  in  the 
country’s  nitrogen  balance  of  132 kg  of  nitrogen 
per  hectare  of  UAA  (last  available  estimate  from 
2015).  According  to  data  collected  under  the 
Nitrates Directive, 16% of groundwater monitoring 
stations  in  Belgium  recorded  average  nitrate 
concentrations  above  50 mg/l  between  2016  and 
2019, exceeding the healthy threshold for human 
consumption.  Despite  the  downward  trend,  the 
livestock density index was 2.68 in 2020, the third 
highest  and  above  the  EU  average  of  0.75. 
Ammonia emissions also fell by 5% between 2016 
and  2022.  Between  2017-2022,  pesticides  were 
detected in 49% of surface water bodies at levels 
exceeding the thresholds. 

is 

and 

non-productive 

Belgium 
to  a  more 
transitioning 
sustainable  food  system  by  implementing 
policies  and  allocating  funds  to  reduce 
agriculture's  environmental  impact,  but  it 
faces challenges such as regional disparities 
in  organic farming adoption.  In  2022,  5.6%  of 
agricultural  land  had  landscape  features  such  as 
woods 
grasslands, 
corresponding  to  the  EU  average  of  5.64%. 
Organic  farming,  which  reduces  the  use  of 
synthetic fertilisers and pesticides, made up 7.6% 
of  Belgium’s  agricultural  land,  a  69%  increase 
since 2012. Wallonia performs well with 12.5% of 
all  agricultural  land  used for  organic  farming,  but 
in  Flanders  only  1.5%  of  all  agricultural  land  is 
under  organic  farming.  Further  growth  in  organic 
farming is expected in Flanders (with the objective 
to  almost  quadruple  the  current  area)  and  more 
moderately in Wallonia to reach 18%, contributing 
to less use of fertilisers and nutrient loss. Belgium 
aims to reach 30% of UAA under organic farming 
by 2030 in Wallonia and 5% in Flanders by 2027. 
This seems achievable, if the current growth trend 
in  organic  farming  surface  continues  over  the 

(197) Department of Agriculture and Fisheries, 2023, Strategisch 

plan bio 2023-2027. Bio van boer tot bord: 5 x 5% Vlaamse 
ambities op maat, Link. 

(198) Le site officiel de la Wallonie - Agriculture en Wallonie, 2021, 
Plan de développement de la production biologique en 
Wallonie à l’horizon 2030, Link. 

78 

 
 
Table A9.1:  Key indicators tracking progress on climate adaptation, resilience and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action, The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, 7th Implementation Report from the Commission to the Council and the European Parliament on 
the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third River Basin 
Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) 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. 
Source: Eurostat, EEA. 

79 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems11.64.6938.560.0156.9906.772.76[area impacted by drought as % of total]Forest fires burned area (1)225          225          225          225          225          225          [ha, annual average 2006-2023]Economic losses from extreme events212          288          536          11 159     840          99            24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----1.00         1.00         [composite score between 0 and 4]Heat-related mortality (3)25            25            25            25            25            [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action92            90            93            95            93            93            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)4.24.23.83.35.2-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption1 019       990          976          988          1 291       -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---70%---59%Groundwater bodies---12%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)4.3-----14.7-[% of habitats having a good conservation status]Common farmland bird index60.958.856.6---72.274.42000=100Protected areas---1515--26[% of terrestrial protected areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)20 723     23 191     23 543     24 618     634 378     716 124     [EUR million]Landscape features----6              -[% of agricultural land covered with landscape features]Food waste------[kg per capita]Area under organic farming6.66.97.37.57.67.99-[% of total UAA]Nitrogen balance------[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)28.628.327.928.6--[mgNO3/l]Net greenhouse gas removals from LULUCF (9)555-          400-          374-          270-          408-          -           256 077-     240 984-     [Kt CO2-eq]BelgiumEU-27BelgiumEU-27BelgiumEU-27BelgiumEU-27 
 
  
 
FAIRNESS 
ANNEX 10: LABOUR MARKET 

labour  market  dynamism 

After  a  strong  post-pandemic  recovery, 
Belgium’s labour market growth slowed down 
in 2024 in line with economic growth. Despite 
most  employment  indicators  reaching  historical 
highs,  Belgium’s 
in 
recent  years  has  lagged  behind  the  EU  average, 
and significant efforts will be  needed  to reach its 
2030 target of an 80% employment rate. It will be 
key to improving the labour market participation of 
under-represented groups, particularly by reducing 
disincentives to work, strengthening cross-regional 
cooperation  in  employment  services  and  stepping 
up  reskilling  and  upskilling  opportunities.  Such 
initiatives  would  also  help  address  high  skills 
that  are 
mismatches  and 
constraining  economic  growth (199).  The  newly-
formed Federal coalition government announced in 
early  2025  several  significant  reforms  of  the 
taxation  and  unemployment  benefits 
labour 
system  which  could  have  positive  impacts  on  the 
labour market. 

labour  shortages 

Graph A10.1: Key labour market indicators 

Source: Eurostat, LFS (%) 

Belgium’s  employment  has  reached  historic 
highs,  but  its  growth  has  slowed  in  an 
environment  where  structural  challenges 
exist.  Although  the  employment  rate  (for  people 

(199) National Bank of Belgium, Economic projections for Belgium, 

December 2024. 

80 

aged 20-64)  has risen to a record level, it stalled 
at 72.3% in 2024, lagging behind the EU average 
(75.8%)  in  both  level  and  growth  over  the  past 
(+5.1  percentage  points (pps)  vs 
nine  years 
+7.3 pps between 2015 and 2024) and below the 
country’s  2030  target  of  80%.  The  employment 
rate continues to be held back by a long-standing 
the  working-age 
level  of 
low  participation 
population  (aged  20-64)  in  the  labour  market, 
which  was  76.4%  in  2024,  compared  to  the  EU 
average of 80.4%, reflecting an increase of 3 pps 
over nine years vs 4.3 pps for the EU. The gender 
employment  gap  is  narrower  than  in  most  other 
Member States (8 pps vs EU: 10 pps in 2024) but 
showed no improvement from 2023. Employment 
growth slowed down to 0.3% in 2024, mainly due 
to workforce reductions in the industrial and retail 
sectors. Looking ahead, despite announcements of 
or actual industrial closures, overall employment is 
projected to increase by 0.5% in 2025. 

low 

levels. 

labour  market  slack 
Unemployment  and 
the 
In  2024, 
remain  at 
unemployment  rate  stood  at  5.7%,  up  from  5.5% 
in 2023, yet it remains close to the low levels seen 
in recent years and around the EU  average (5.9% 
is  at  a 
in  2024).  Long-term  unemployment 
historical low of 2% in 2024, although with the EU 
outperforming Belgium for a second year in a row 
for  the  first  time  since  2009  (1.9%).  The  youth 
unemployment  rate  has  risen  again  and  is  at 
17.4% in 2024 (vs EU 14.9%). While the share of 
young  people  not  in  employment,  education  or 
training  (NEET)  dropped  in  2021  and  2022,  it 
slightly increased since then, to 9.9% in 2024, up 
0.7 pps  over  two  years.  However,  it  is  still  below 
the EU average of 11%. Labour market slack was 
11.2%  in  2024,  a  slight  increase  from  10.8%  in 
2023,  and  only  slightly  below  the  EU  average  of 
11.7%. 

The  labour  market  remains  tight  with  high 
labour  and  skills  shortages,  despite  some 
signs of easing. Labour shortages continue to be 
among  the  highest  in  the  EU,  with  a  job  vacancy 
rate of 4.1% in Q4-2024, compared to 2.3% in the 
EU, and increasing demand for labour in the green, 
digital  and  demographic  transitions.  At  sectoral 
level, 
in 
administrative  and  support  service  activities, 
professional,  scientific  and  technical  activities,  as 
well  as  the  construction,  energy  and  the  ICT 
sectors. In all these sectors, job vacancy rates are 

particularly  high 

shortages  are 

71,57272,57373,57474,57575,57676,577051015202530201320142015201620172018201920202021202220232024%%BEActivity rate 20-64 (rhs)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)Youth unemployment rate 15-24 (lhs)NEET rate 15-29 (lhs) 
 
 
   
 
 
 
office 

included 

well  above  EU  averages.  According  to  CEDEFOP-
EURES  data (200),  in  2024  the  most  requested 
occupations 
associate 
professionals,  metal  and  machinery  workers,  as 
well  as  accounting  clerks,  sales  workers,  office 
researchers  and  engineers (201). 
professionals, 
Employers’  perceptions  in  January  2025  that 
labour  shortages  were  expected  to  limit  their 
production  were  the  highest  in  the  service  sector 
(17%) and the industry sector (14.7%), while being 
relatively  low  in  construction  (6.4%) (202).  There  is 
also  a  high  overqualification  rate,  underlining  the 
scope  for  more  matching  of  education  courses 
with  the  labour  market  needs.  Macroeconomic 
skills  mismatch  remained  broadly  unchanged  in 
2023 (25.9% vs 26% in 2022), though still among 
the highest in the EU (EU: 19.6% in 2023). 

Graph A10.2: Labour shortages and job vacancy 
rate 

Source: Eurostat; European Business and Consumer Survey 

While  the  green  and  digital  transitions  are 
the  country’s 
key  drivers  of  change, 
competitiveness  can  be  hampered  by  a  lack 
of  appropriate  skills.  In  the  digital  sector, 
Belgium counted 273 600 ICT specialists in 2023, 
accounting  for  5.4%  of  employment  (EU:  4.8%). 
However,  the  sector  suffers  from  a  shortage  of 
women,  with  Belgium  having  one  of  the  lowest 
graduation rates in ICT-related subjects for women 
in  the  EU.  Women  represented  only  19.4%  of  ICT 
graduates 
this  was  an 
improvement from 18.7% in the previous year. The 
proportion of individuals with at least basic digital 
skills in 2023 was above the EU average – 59.4% 

in  2023,  although 

(200) EURES – Countries and occupations | CEDEFOP. 

(201) From January to September 2024. 

vs  55.6%.  Given  the  country’s  gender  gap  and 
labour  shortages,  serious  action  would  help 
Belgium to achieve its target of over 500 000 ICT 
specialists by 2030. On the green transition front, 
a  positive  development  is  seen  in  the  average 
greenhouse  gas  emissions  intensity  per  worker 
falling from 20.7 tonnes in 2011 to 14.8 in 2023 
(27.8  to  22.1  for  the  EU).  Despite  this  progress, 
employment  in  energy-intensive  industries  still 
represented 3.0% of total employment in 2023. By 
contrast,  the  environmental  goods  and  services 
sector 
full-time 
about 
equivalents  in  2022.  Shortages  were  reported  in 
2023  in  the  sectors  most  affected  by  and  key  to 
the 
in 
construction (5.9%) and the electricity, gas, steam 
(5.1%), 
and  air  conditioning  supply  sectors 
significantly  hampering  the  prospects  for  the 
country to rapidly reap the benefits of investments 
in these future-oriented sectors. 

transformation, 

particularly 

employed 

89.000 

green 

for 

challenges 

The  tax  and  benefits  system  is  complex  and 
does not sufficiently incentivise employment, 
posing 
labour  market 
low-wage 
participation.  The  tax  wedge  on 
earners (203) is one the highest in the EU at 45.8% 
in 2024 (EU: 38.8%). The unemployment trap (204) 
for low-wage earners is also among the highest in 
the  EU  standing  at  85.8%  for  single  people  (EU: 
74.4%),  significantly  reducing  the  incentive  to 
transition  from  unemployment  to  employment. 
The  complexity  of  the  tax  and  benefits  system, 
particularly 
the  emphasis  on  non-financial 
benefits, some of which are not means-tested but 
linked  to  status,  complicates  the  assessment  of 
the effects of employment over unemployment or 
inactivity  (see  also  Annex  13  on  Taxation).  At 
federal level, the ‘working bonus’ system aiming at 
incentivising  unemployed  people  to  take  up  a  job 
has been analysed by the Federal Plan Bureau (205) 
as having a positive impact for some categories of 
workers.  The  2025  new  federal  government 
coalition  agreement  includes  a  broad  tax  reform 

(203) The percentage of gross earnings which is taxed away 
through the combined effects of income taxes, social 
contributions and any withdrawal of benefits when gross 
earnings increase from 33% to 67% of average wage. 

(204) The percentage of gross earnings which is taxed away 
through higher tax and social contributions and the 
withdrawal of unemployment and other benefits when an 
unemployed individual returns to employment. 

(202) Source: European Business and Consumer Surveys. 

(205) BFP, working paper 11-24, July 2024 [www.plan.be]. 

81 

2,53,3,54,4,55,0510152025303540452019-Q42020-Q42021-Q42022-Q42023-Q42024-Q4Industry (lhs)Construction (lhs)Services (lhs)Job Vacancy Rate (rhs) 
   
 
 
aiming  at  alleviating  the  labour  tax  burden  and 
simplifying the unemployment benefits system. 

Well-targeted  activation, 
integration  and 
incentivisation  could  help  to  fully  tap  into 
the  potential  of  disadvantaged  groups. 
Activation  and  incentivising  efforts  can  be  paired 
with 
reskilling  and  upskilling  opportunities, 
especially  given  the  high  level  of  unfilled  job 
vacancies  due  to  skills  shortages  and  the  low 
number  of  students  graduating  in  the  fields  of 
science, technology, engineering and mathematics 
(STEM).  The  employment  rate  for  people  with 
lower-level qualifications is significantly below the 
EU  average  (47.5%  vs  58.7%  in  2024).  Similarly, 
the  employment  rate  for  people  born  outside  the 
EU  lags  behind  (59.4%  vs  67.9%  in  the  EU  in 
2024),  particularly  for  women,  with  only  50.2% 
employed  compared  to  58.8%  in  the  EU  in  2024. 
An  OECD  report (206)  noted  improvements  in  the 
Flemish  integration  framework  for  newcomers 
over  the  past  decade,  particularly  in  language 
training, upskilling and reskilling opportunities and 
civic  integration.  However,  it  highlighted  further 
long-standing 
scope 
immigrants  and 
their  children.  The  Flemish 
government  has  taken  steps  to  strengthen  its 
integration  framework,  especially  for  newcomers, 
and  has  facilitated  the  recognition  of  foreign 
diplomas.  The  federal  government  has  increased 
employment  and 
penalties  against 
illegal 
Second-generation 
economic 
immigrants  (born  in  Belgium)  face  discrimination 
and  difficulties  in  finding  a  job,  with  only  57.8% 
employed  in  2024  if  both  parents  were  born 
abroad  (EU:  73.0%),  compared  to  77.1%  if  both 
parents  were  born  in  Belgium  (EU:  77.1%).  This 
points  to  integration  issues  in  the  education 
system.  A  reinforcement  of  the  federal  legal 
framework  against  discrimination  at  work  was 
adopted in June 2024, offering broader protection 
to  victims.  However,  in  2023  the  federal  agency 
against  discrimination  (Unia)  called  for  an  inter-
federal plan to consolidate efforts in this area. 

improvement 

exploitation. 

for 

for 

The  labour  force  is  ageing,  but  a  positive 
migration balance helps to offset this trend. 
In  2023,  population  movements  resulted  in  a  net 
gain  of  around  66 000  people,  with  128 000 
departures  and  195 000  arrivals (207).  This 

(206) OECD, Skills and Labour Market integration of Immigrants 

and their Children in Flanders, June 2023. 

migration  gain  compensated  for  the  negative 
natural  balance,  leading  to  a  population  increase 
of  around  66 000  people,  or  0.57%.  Belgium’s 
population, like those in most of Europe, is ageing, 
with no growth in the working-age population (20-
64)  expected  from  2024  onwards.  The  old-age 
dependency  ratio  is  projected  to  rise  from  34.9% 
in  2024  to  39%  by  2030  and  43.5%  by  2040. 
Immigration  acts  as  a  counterbalance  to  the 
natural  population  ageing  by  bringing  in  much 
younger  cohorts.  To  improve  economic  migration 
policies,  amendments  were  made  in  2023  to  the 
for 
procedures, 
single 
bottleneck  professions.  The  Flemish  Region  has 
also  improved  the  way  it  provides  information  to 
foreigners seeking to move to Belgium for work. 

particularly 

permit 

Graph A10.3: Employment rate of specific groups 

Source: Eurostat, LFS (%, 2024) 

the  EU  average 

Keeping  older  workers  in  employment  for 
longer  poses  significant  challenges.  In  2024, 
only 59.4% of people aged 55-64 were employed, 
below 
(65.2%).  Although 
employment  for  this  age  group  has  increased  by 
16.1 pps  between  2013  and  2023,  about  the 
same  as  the  EU’s  increase  of  16 pps,  recent 
growth  has  been  modest,  with  a  1.6 pps  rise 
between 2023 and 2024. The legal pension age is 
set  to  increase  from  65  to  66  in  2025  and  67  in 
2030,  which  should  positively 
the 
employment  rate (208).  However,  additional  efforts 
would  help  keep  older  workers  in  employment. 
Various  measures  and  incentives  are  already  in 
place,  and  a  federal  action  plan  was  adopted  in 

impact 

(208) National Bank of Belgium, Economic projections for Belgium, 

(207) According to national statistics (Statbel). 

December 2024. 

82 

58.765.267.97347.559.459.457.820304050607080Low-qualifiedOlder peopleNon-EU born2nd generationmigrantEU27BE 
 
  
 
2023,  following  discussions  with 
the  social 
partners,  to  improve  the  working  conditions  of 
older people. 

leave 

long-term  sick 

There  are  still  significant  gaps  to  address 
regarding  the  labour  market  situation  of 
persons  with  disabilities,  and  the  number  of 
people  taking 
is 
worryingly high. In 2023, the number of workers 
on  long-term  sick  leave  exceeded  half  a  million, 
prompting  recent  actions  to  help  reintegration, 
such  as  the  framework  agreements  between  the 
federal authority and the regions to implement the 
‘Back-To-Work'  plan,  with  the  specific  effects  yet 
to  be  analysed.  For  persons  with  disabilities,  the 
employment  gap  compared  to  those  without 
disabilities  is  still  one  of  the  highest  among 
Member  States  (33.5 pps  in  2024  vs  24.0 pps  in 
the  EU).  Belgium  set  the  target  to  reduce  the 
disability  employment  gap  to  24.5  pps  by  2030. 
The  NEET  rate  for  young  persons  with  disabilities 
also  remains  high  at  27.2%  in  2022 (209).  Public 
services were identified as a key area for action in 
2024, but they remain far from their target of 3% 
disabilities, 
employment 
achieving only 1.44% in 2023 (210).  About 62% of 
persons with disabilities were active in Belgium in 
2023  in  spite  of  majority  of  them  wanting  to 
work (211).  Measures 
the 
employment  of  persons  with  disabilities  include 
reforms  and  clarifications  to  the  system  of 
combining  work  and  benefits.  Recent  initiatives 
also involve a reform of employment financial aid 
public 
of 
the 
employment  service,  with  funding  from 
the 
(ESF+)  and 
European  Social  Fund  Plus 
Recovery  and  Resilience  Facility  (RRF),  to  support 
the  costs  of  equipment  adaptations  and  to 
incentivise  the  recruitment  of  jobseekers  with 
disabilities  to  employers  and  increase  sustainable 
labour  market  integration.  Following  the  final 
report  of  the  federal  action  plan  for  disabilities 
2021-2024,  a  new  law  was  adopted  in  2024, 
mandating  every  new  government  to  draft  an 
action plan on the issue. 

the  Brussels  Capital 

persons  with 

Region's 

improve 

taken 

for 

to 

(209) European comparative data on persons with disabilities, 

2022, European Disability Expertise. 

(210) SPF Sécurité Sociale, Final report of the federal action plan 

for disabilities 2021-2024. 

(211) King Baudouin Foundation (2024), Survey on the 

employment of people with disabilities in Belgium. 

83 

Stark regional differences underline the need 
cross-regional  mobility. 
improve 
to 
Unemployment  rates 
in  the  Brussels  Capital 
Region  and  the  Walloon  region  were  significantly 
higher  in  2024,  at  11.8%  and  7.4%,  respectively, 
than  in  Flanders,  at  3.8%,  making  the  regional 
disparity one of the highest in the EU. On the other 
hand,  the  job  vacancy  rate  in  Flanders  is  higher, 
with  4.6%  in  Q4-2024,  than  in  Wallonia  and  the 
Brussels Capital Region (3.5% and 3.4%), although 
all  are  still  higher  than  the  EU  average  (2.3%). 
Limited  cross-regional  mobility  weighs  on  labour 
market  dynamism  and  hinders  the  country’s 
competitiveness.  Recent  initiatives  by  the  Flemish 
and Brussels public employment services, such as 
‘Employing 
and 
‘Activa.Brussels’,  aim  to  address  these  issues,  as 
does the existing cooperation agreement between 
the Flemish and Brussels PES that strives for more 
mobility  of 
jobseekers  between  the  regions. 
However,  there  remains  substantial  room  for 
improvement (212), 
increasing 
language  learning,  cooperation  between  regional 
public  employment  services  and  by  considering 
mobility offers and early childhood care (213). 

in  particular  by 

Foreign-language 

Talents’ 

Belgium’s  robust  wage  growth  in  recent 
years  moderated  significantly 
in  2024. 
Nominal  wage  growth  is  projected  to  be  2.9%  in 
2025,  remaining  stable  to  the  level  of  2024, 
following  substantial  increases  of  7.5%  in  2022 
and  8.0%  in  2023.  These  wage  developments 
align  with  EU  averages, though  wage  growth  was 
noticeably  higher  than  the  EU  averages  in  2022 
and  2023  (partly  due  to  automatic  indexation), 
before falling below the EU average in 2024. The 
projected  growth  for  2025  is  also  among  the 
lowest  rates  across  Member  States  (214).  Real 
wages contracted the most in the EU in 2024, by 
1.6%,  and  are  forecast  to  increase  the  least  in 
2025,  by  0.1%.  This  follows  a  strong  rebound  in 
2023  (5.8%),  after  relatively  moderate  losses  in 
2022  (2.3%,  compared  to  3.7%  for  the  EU)  in  a 
context of high inflation. The recent deceleration in 

(212) SPF Emploi, Etat des lieux de la mobilité professionnelle en 
Belgique, 2022; Carpentier, M. et al., (2023), Interregionale 
tewerkstellingszones op basis van een vraag- en 
aanbodanalyse: link. 

(213) See: National Bank of Belgium, Economic Flows Between 
Regions in Belgium, 2019; Carpentier et al. (2023); OECD 
(2023) Unleashing Talent in Brussels, Belgium: link. 

(214)Based on the European Commission Autumn 2024 economic 

forecast. 

 
 
 
real  wages  is  driven  by  slowing  nominal  wages 
and  persisting  inflation  that  has  increased  again 
(from 2.3% in 2023 to 4.4% in 2024). In turn, the 
statutory minimum wage increased by nearly 25% 
between January 2022 and July 2024, an increase 
of around 12% in real terms. 

84 

 
ANNEX 11: SOCIAL POLICIES 

good 

social 

overall 

Belgium’s 
policy 
outcomes hide uneven opportunities between 
groups based on socio-economic, migrant and 
parental  backgrounds.  Vulnerable  groups  are 
more  prone  to  poverty  and  social  exclusion  risks 
and the regional differences are quite pronounced. 
The  social  protection  and  related  benefits  are 
effective  but  face  increasing  challenges  linked  to 
persistent gaps in coverage. Promoting active and 
healthy  ageing,  prolonging  working  lives,  and 
supporting  inclusive  growth  and  competitiveness 
will  help  ensure 
fiscal 
sustainability  of  pensions  and  long-term  care, 
while 
and 
competitiveness. 

the  adequacy  and 

supporting 

inclusive 

growth 

Graph A11.1: Populations at risk of poverty or 
social exclusion 

Source: Eurostat, EU-SILC [ilc_peps01n, ilc_li02, ilc_mdsd11, 
ilc_lvhl11n] 

Poverty and social exclusion risks in Belgium 
are  relatively 
improving,  but 
low  and 
considerable regional differences persist. The 
rate  of  persons  at  risk  of  poverty  or  social 
exclusion  (AROPE)  has  been  decreasing  since 
2020,  reaching  18.2%  in  2024,  2.8 percentage 
points  (pps)  below  the  EU  average  of  21.0%. 
Similarly, the share of people under the at-risk-of-
poverty  (AROP)  threshold  was  low  overall  (11.5% 
vs 16.2% for the EU) and has been in decline since 
2020.  Poverty  and  social  exclusion  risks  and 
trends  are  strikingly  different  across  regions, 
linked  to  labour  market  outcomes.  In  Flanders, 
despite  the lowest  national  level  (12.8% in 2024) 
a  third  consecutive  increase  is  observed  in  2024 
in 
reaching  above  the  2021 

level,  whereas 

85 

Wallonia  (21.8%)  the  risk  of  poverty  or  social 
exclusion  continues  to  decline  since  2020,  as  in 
the  Brussels  Capital  Region  where  the 
level 
decreased for the third year in a row to  37.2% in 
2024  but  still  remains  above  the  2020  level  of 
36.4%.  The  overall  number  of  people  at  risk  of 
poverty  or  social  exclusion  declined  steadily  from 
2.47  million  in  2016  to  2.14  million  in  2021  but 
stagnated  until  2023  followed  by  a  drop  to  2.12 
million  in  2024.  It  will  take  sustained  action  for 
Belgium  to  reach  its  national  2030  target  of 
279 000 fewer people  at risk of poverty  or social 
exclusion (from 2.26 million in 2019). In 2023, the 
number  of  children  at  risk  of  poverty  or  social 
exclusion  decreased  to  460 000,  thereby  already 
meeting  the  national  2030  target.  In  order  to 
impact  of  poverty  on  children, 
mitigate  the 
Belgium 
implementing  the  European  Child 
Guarantee  (ECG)  as  part  of  its  2022  action  plan. 
The  2024 
implementation  report  focuses  on 
measures which had already been in place before 
the creation of ECG and highlights the challenge in 
service delivery due to institutional complexity. 

is 

Particular challenges are associated with low 
work  intensity,  especially  in  single-parent 
households.  The  number  of  people  (under  65 
years old) living in households with very low work 
intensity (215) rose by 0.8 pps since 2023 to reach 
11.3%  in  2024,  becoming  the  highest  in  Europe 
(EU:  7.9%).  In  Flanders  6.9%  of  people  under  64 
years  old  live  in  a  household  with  very  low  work 
intensity,  compared  to  15.8%  in  Wallonia  and 
20.3%  in  the  Brussels  Capital  Region.  Single 
parents are also more at risk with 23.7% of people 
living in a household composed of a single parent 
with dependent children affected by very low work 
intensity  (EU:  22.3%).  Single-parent  households 
are also much more likely to find themselves in in-
work  poverty  (13.9%  in  2024)  than  households 
with two parents (3.5%). This underlines the need 
for  well-designed  family-oriented  social  policies. 
The  share  of  non-EU-born  adults  (18  to  64  years 
old)  living  in  such  households  is  also  one  of  the 
highest  in  Europe  (22.2%  vs  13.6%  for  the  EU), 
which  points  to  the  need  for  targeted  active 
inclusion  policies,  including  active  job  market 
policies (see Annex 8). 

(215) People from 0-64 years living in households where the 

adults (excluding students aged 18-24 and people who are 
retired) had a working time equal to or less than 20% of their 
total combined work-time potential during the previous year. 

05101520252015201620172018201920202021202220232024% of populationBEAt-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
   
 
 
 
People in a more vulnerable situation on the 
labour market, such as those with a migrant 
those  with  disabilities, 
background  or 
experience  higher  poverty  and 
social 
exclusion  risks.  For  non-EU-born  people,  the 
AROPE rate in 2024 was 26.2 pps higher than the 
risk  for  those  born  in  Belgium  (40.5%  vs  14.3%). 
There  is  also  a  significant  gap  of  11.8 pps 
between  the  rate  of  in-work  poverty  among 
workers  from  non-EU  countries  and  those  born  in 
Belgium  (14.6%  vs  2.8%  in  2024).  Concerning 
persons  with  disabilities,  despite  a  continuous, 
albeit small, decline since 2020, 30.0% of persons 
with  disabilities  were  at  risk  of  poverty  or  social 
exclusion  (EU  28.8%)  in  2024.  This  is  linked  to 
lower  employment  and  a  high  disability 
employment  gap  in  Belgium  (see  Annex  10).  The 
AROPE  gap  for  the  population  aged  16-64  was 
27 pps (2022). At 6.8%, their in-work AROP rate is 
below  the  EU  average  of  9.7%  but  has  been 
increasing in recent years. Workers with temporary 
contracts  have  seen  their  in-work  poverty  rate 
drop  by  7.4 pps.  The  European  Social  Fund  Plus 
(ESF+) is allocating EUR 836 million for measures 
that  aim  to  improve  access  to  the  job  market, 
especially  for  the  long-term  unemployed,  young 
and  older  people,  those  with  a  low  level  of 
education,  persons  with  disabilities  and  inactive 
persons.  

Graph A11.2: In-work poverty in Belgium according 
to socio-economic characteristics 

Source: Eurostat, EU-SILC [ilc_iw01, ilc_iw05, ilc_iw07, 
ilc_iw02] 

not 

formally 

equally served. In 2023, an estimated 28.4% of 
GDP  was  spent  on  social  benefits,  above  the  EU 
average of 26.8%, and one of the highest rates in 
the  EU.  Access  to  social  benefits  is  not  equal  for 
all. For the self-employed, unemployment benefits 
are limited to those who were previously employed 
or  only  available  as  a  lump-sum  for  a  specific 
category  of  self-employed  persons.  Benefits  for 
accidents  at  work  and  occupational  diseases  are 
also subject to some restrictions. The most recent 
data showed that 795 300 self-employed persons 
were 
for 
unemployment  benefits  or  for  accidents  at  work 
and  occupational  diseases  benefits,  even  though 
some  of  them  did  benefit  from  coverage  through 
other  schemes (216).  In  2024,  part-time  workers 
had  double  the  AROP  rate  after  social  benefits 
compared to full-time workers (4.7% vs 3.6%) and 
temporary  workers  had  an  AROP  rate  higher than 
permanent  workers 
(7.2%  vs  2.2%).  The 
unemployed had an AROP rate of 43%, lower than 
the  EU  average  of  48.7%,  and  this  was  also  the 
case  for  inactive  persons  (other  than  the  retired) 
whose  AROP  rate  was  below  the  EU  average 
(22.7% against 31.1%). 

covered 

either 

Adequate pensions are crucial for mitigating 
the risks of poverty and inequality in old age. 
In 2024, 14.4% of over 65-year-olds  were at risk 
of  poverty  or  social  exclusion 
(EU:  19.4%), 
fluctuating  between  17%  and  21.3%  over  the 
previous  four  years.  In  2024,  12.2%  of  over  65-
year-olds were at risk of poverty against 15.8% in 
2023.  Between  2021  and  2024  the  pension 
system  was  reformed  with  particular  focus  on 
minimum  pensions.  The  aggregate  replacement 
ratio for pensions (excluding other social benefits) 
of 0.48 remains below the EU average of 0.61 and 
demonstrates  the  significant  income  drop  among 
those  over  65  years  old.  Pensioners  on  average 
have  an  active  working  life  of  40  years  followed 
by  22.4  years  of  retirement  (2022),  positioning 
Belgium’s  ratio  of  working  life  to  retired  life 
among  the  lowest  in  the  EU  (2024  Pension 
Adequacy Report). In 2024 the gender pension gap 
among  people  over  65  years  old  increased  from 
27.7% to 31.3% after showing an annual decrease 
between  2020  and  2022.  In  2021  and  2022  the 
gap  remained  under  the  EU  average  whereas  in 
2023  and  2024  it  surpassed  the  EU  average  of 
respectively  25.4%  and  24.7%.  Future  pension 
reforms  focusing,  among  other  things,  on  longer 

While  social  benefits  provide  effective 
labour  statuses  are 
protection,  not  all 

(216) National statistics, end 2022. 

86 

0510152025201320142015201620172018201920202021202220232024% of employedBETotalTemporaryPart-timeLone parentsYoung (18-24) 
   
 
working  lives  in  order  to  be  eligible  for  a  full 
pension might further increase this gap. As part of 
the  recovery  and  resilience  plan,  the  recent 
pension  reform  aims  to  encourage  a  longer 
working  life  while  also  guaranteeing  an  adequate 
minimum pension. 

the  proportion  of 

Population  ageing  is  expected  to  put  the 
long-term  care  system  under  strain.  In  2022 
2.3%  of  GDP  was  spent  on  long-term  care  (EU: 
1.7%) and it is projected to increase by 0.2 pps by 
2030 and by 1.8 pps by 2070 to a total of 4.1% of 
GDP (EU: 2.7%). This means that Belgium would be 
among the Member States projected to spend the 
highest proportion of their GDP on long-term care. 
According to the most recent data, close to 30% of 
people  aged  65  or  over  suffered  some  form  of 
severe  difficulty  in  personal  care  activities  or 
the  demographic 
household  activities.  Given 
ageing, 
the  population 
experiencing  this  kind  of  difficulty  is  expected  to 
increase. 
In  2023,  those  aged  65  or  over 
accounted for 19.8% of the population and this is 
expected to rise to 22.6% by 2030 before reaching 
26.3% by 2050, while the share of the population 
aged 75 or over, much more likely to be in need of 
long-term care, will increase from 8.8% in 2023 to 
11%  by  2030  and  then  15.3%  by  2050 (217).  In 
2022,  460 000  people  over  65  years  old  were 
considered  as  dependent,  of  which  118 000 
receive institutional care, 349 000 home care and 
194 000  cash  benefits.  The  impact  of  population 
ageing  on  the  long-term  care  system  (financial 
and  fiscal  sustainability,  staff  shortages,  medical 
overconsumption)  will  be  considerable,  notably  in 
terms  of  ensuring  the  right  to  affordable,  good-
quality  long-term  care  services (218),  in  particular 
home  care  and  community-based  services.  In 
recent  years,  Belgium  increased  the  provision  of, 
and  raised  awareness  about,  home  care,  with 
concrete 
to  be  assessed.  The 
forecasting  and  planning  mechanisms  envisaged 
by Belgium and its federated entities were still in 
their  early  stages  in  2024  and  would  need  to  be 
appropriately 
impactful 
actions, notably in terms of the cost-effectiveness 
of  certain 
long-term  care  options  such  as 
institutional  care.  It  will  be  essential  to  continue 

implemented 

results  yet 

through 

and 

improving 
collaboration 
between  the  different  levels  of  government  and 
authorities responsible for long-term care. 

strengthening 

Graph A11.3: Impact of population ageing on long-
term care (LTC) 

Source: Belgium, 2024 country report on LTC 

Housing  market  dynamics  have  remained 
contained  in  the  context  of  high  interest 
rates.  House  prices  have  increased  by  36%  in 
nominal  terms since 2015. They  are estimated to 
be  slightly  overvalued,  by  10-15%.  House  price 
growth was moderate and below inflation in 2023, 
at 2.3% (after 6.7% and 5.5% in 2021 and 2022, 
respectively).  House  prices  continued  to be  muted 
in  2024,  growing  by  3.6%  in  Q3-2024,  year-on-
year. The housing market has also adjusted to the 
higher level of interest rates since mid-2022, with 
a  significantly  lower  number  of  transactions  and 
the  number  of  building  permits  decreasing  by 
12.1%  in  2022  and  7.2%  2023.  In  terms  of 
financial  stability,  in  February  2024  the  European 
Systemic Risk Board concluded that the residential 
housing market in Belgium was subject to medium 
risks  and  the  macroprudential  policy  mix  was 
partially  appropriate  and  partially  sufficient  to 
mitigate the situation (219). 

(217) Belgium, Long-term care report 2024. 

(218) Council Recommendation of 8 December 2022 on access to 
affordable high-quality long-term care; SPF Sécurité Sociale 
(2024): Belgian Report 2024 on the Council 
Recommendation. 

(219) ESRB (2024): Follow-up report on vulnerabilities in the 

residential real estate sectors of the EEA countries, February 
2024. 

87 

0510152025303540455000,511,522,533,54202320302050%%BEShare of population over 65 - rhsShare of population over 75 - rhsPublic spending on LTC as % of GDP (reference scenario) -lhsOld-age dependency ratio - rhs 
 
   
 
Overall,  housing  affordability  has  not 
deteriorated  visibly  in  recent  years.  House 
prices  have  been  increasing  broadly  in  line  with 
household income for several years and the house 
price-to-income ratio has been stable over the last 
decade, slightly above the long-term average. The 
price-to-income 
values 
comparable  to  the  ones  observed  in  many  other 
EU  countries.  Taking  into  account  the  cost  of 
mortgage  funding,  the  borrowing  capacity  of 
households  remained  largely  stable  over  the  last 
ten years. While the rental market is rather small, 
the ratio of new rents to incomes decreased over 
the  last  decade,  both  in  the  city  centres  and 
outside of them. 

attains 

levels 

in 

Housing  cost  overburden  remains  relatively 
low,  despite  gradual  increases  over  the  last 
decade  and  long  waiting  time  to  access  to 
social housing. Although the overall housing cost 
overburden  remains  below  the  EU  average  (6.8% 
vs 8.2%), 33.2% of those living below the poverty 
line  are  confronted  with  housing  cost  overburden 
(EU:  31.1%).  Furthermore,  individuals  over  16 
years  of  age  with  disabilities  suffer  an  above  EU 
average  housing  cost  overburden 
(12.0%  vs 
10.4%).  The  severe  housing  deprivation  rate 
(1.7%)  is well below the EU  average of 4.0% and 
back at the 2016 level. In 2024, 18.1% of people 
with  lower  income  were  at  risk  of  living  in 
overcrowded  housing  whereas  those  with  an 
income above 60% of equivalised income showed 
an overcrowding rate of 5.1% (both well below the 
respective  EU  averages  of  28.8%  and  14.6%).  At 
the  same  time,  in  all  regions  affordable  public 
housing  is  scarce,  with  very  long  waiting  lists. 
Finally, an estimated 45 860 people are homeless 
in  Belgium,  of  which  29.4%  live  temporarily  with 
family 
in 
accommodation  for  the  homeless.  The  remainder 
live  in  non-conventional  accommodation  (e.g.  in 
camps  or  squats),  in  institutions  due  to  a  lack  of 
housing (penal or medical institutions), or they live 
rough or in emergency accommodation. 

friends 

27.4% 

and 

are 

or 

population in 2024, the lowest level in three years 
but still 1.4 pps above the 2021 level though well 
below  the  EU  average  (9.2%).  Arrears  on  utility 
bills  increased  to  4.0%  in  2024,  an  increase  of 
1.1 pp.  compared  to  2021.  The  proportion  of  the 
population  living  in  dwellings  with  leaks,  damp  or 
rot  decreased  from  15.5%  in  2017  to  14.5%  in 
2020.  Belgium  implemented  at  the  height  of  the 
crisis  a  range  of  measures  to  combat  energy 
poverty  at  federal,  regional  and  local  level.  These 
included  a  federal  social  tariff  for  gas  and 
electricity, regional winter disconnection prevention 
programmes,  and  local  initiatives  such  as Ghent’s 
Energy  Performance  Criteria.  Measures  adopted 
during 
further  supported 
vulnerable  households  at  the  time,  such  as  the 
extension  of  social  tariffs  and  universal  energy 
bonuses  (not  targeted).  However,  the  lack  of  a 
national definition of energy poverty and a unified 
federal strategy remains a challenge. 

the  energy  crisis 

in 

risks 

income  groups 

face  higher 
Vulnerable 
transport  poverty 
the  green 
transition.  The  proportion  of  people  who  could 
not afford a car was 6.1% in 2024, slightly above 
the  EU  average  of  5.6%.  However,  the  share  of 
people at risk of poverty who cannot afford a car 
was  substantially  higher,  standing  at  23.4%  in 
2024, compared to 15.9% for the EU overall. This 
suggests  that,  in  general,  people  do  not  face 
significant challenges in affording a car but that it 
is a significant problem among vulnerable income 
groups. Moreover, people’s reliance on private cars 
for  inland  transport  has  increased  over  time 
(79.5%  in  2011  compared  to  82.5%  in  2022) 
whereas  the  use  of  trains,  motor  coaches  and 
trolleybuses has decreased. The increasing reliance 
on  private  cars,  coupled  with  a  decline  in  public 
transport  use,  underscores  the  growing  need  for 
public  transportation  to  meet  the  needs  of  the 
population  more  effectively.  This  is  especially 
important  given  that,  in  2024,  the  majority  of 
people  lived  in  towns  and  suburbs  (55.5%)  and 
only 14.7% lived in rural areas. 

relatively 

Energy  poverty 
low 
remains 
overall,  but  with  stark  regional  differences. 
In  2022,  13.5%  of  Belgian  households  were 
estimated to experience energy poverty, with rates 
reaching  21%  in  Wallonia.  Vulnerable  groups 
include  single-parent  families,  elderly  single-
person  households,  tenants  –  especially  social-
housing 
tenants  –  and  households  with 
unemployed  individuals.  The  inability  to  keep 
homes  sufficiently  warm  affected  4.9%  of  the 

88 

 
ANNEX 12: EDUCATION AND SKILLS 

Belgium’s  education  and  training  systems 
struggle  to  keep  up  with  growing  demands 
for  highly  qualified  professionals,  especially 
in  science,  technology,  engineering  and 
mathematics  (STEM)  and  in  view  of  the 
growing  green  and  digital  transition  needs. 
Young  people's  basic  skills  are  declining  at  an 
alarming  rate,  which  is  damaging  the  country’s 
competitiveness. Despite targeted  action  to  tackle 
the issue,  the  share  of students  and  graduates in 
STEM  fields  remains  low,  and  women  are  under-
represented.  Teacher  shortages  remain  critical. 
Adult  learning,  particularly  among  low-educated 
people,  is  also  insufficient  to  meet  the  increasing 
needs  of  companies  involved  in  the  green  and 
digital transitions. 

in 

early 

taken  measures 

High  participation 
childhood 
education  care  (ECEC)  has  set  a  strong 
foundation  for  skills  development,  and  the 
Communities  have 
to 
improve  its  affordability.  In  2022,  98.4%  of 
children  aged  three  to  the  start  of  compulsory 
education  attended  ECEC,  exceeding  the  EU 
average  of  93.3%.  In  2023,  Belgium  reached  its 
national  Barcelona 
(53.9%),  with  a 
target 
participation  rate  in  formal  childcare  of  56.3% 
among  children  under  three.  However,  a  gap 
remains between the attendance of children at risk 
of  poverty  and  social  inclusion  (AROPE)  and  non-
AROPE  children  (42.5%  vs  58.6%).  Both  the 
Flemish and French Community governments have 
mobilised  additional  funding  to 
improve  the 
affordability  of  ECEC  for  vulnerable  families (220). 
However,  the  shortage  of  childcare  workers  and 
their  working  conditions  still  present  challenges, 
especially in Flanders and the Brussels Region (221), 
which may affect the quality of care provided. 

A rapid decline in young people’s basic skills 
has serious implications for competitiveness. 
Large-scale 
indicate  a 
international  studies 
general decline in basic skills among young people. 
According  to  the  2022  OECD  Programme  for 
International Student Assessment (PISA), the share 
of  underachievers  in  mathematics  (25% (222)), 

reading 

(22.4%)  and 

science 
(25.3%)  has 
increased  in  both  the  Flemish  and  the  French 
Communities  compared  to  2018 (223).  Average 
results  in  Flanders  have  dropped  more  sharply. 
Worryingly,  the  share  of  top  performers 
in 
mathematics  –  which  has  long  been  one  of  the 
highest in the EU - has also declined rapidly in the 
past  10  years  (from  19.5%  to  11.5%).  The 
deterioration  of  student  performance  among 
younger pupils (fourth graders) is evidenced by the 
2023  Trends  in  Mathematics  and  Science  Study 
(TIMSS). In mathematics and science, the average 
scores  of  pupils  in  Flanders  are  around  the 
average  of  participating  EU  countries,  but  the 
French  Community  ranks  among  the  weakest 
performers.  

correlated 

less  confidence 

Gender  differences 
in  mathematics  and 
science  manifest  at  an  early  age.  Boys 
outperform girls in mathematics and science by a 
significant  margin  in  both  Communities  (TIMSS 
in  these 
2023).  Girls  show 
subjects, 
with 
is 
which 
performance (224).  There  are  also  clear  gender 
differences  related  to  future  career  aspirations 
among top performers: for example, in the French 
Community,  top-performing  15-year-old  girls  in 
science  or  mathematics  are  almost  half  as  likely 
as  their  male  peers  to  work  as  science  or 
engineering  professionals  (PISA  2018).  However, 
they  are  more  motivated  to  work  as  healthcare 
professionals (225). 

completing 

remains  below 

school  without 

Inequalities  in  education  remain  significant 
and are key determinants of skills gaps later 
in  life.  Although  the  number  of  young  people 
upper 
leaving 
secondary  education 
the  EU 
average (7% in 2024 vs EU 9.3%) (226), the school 
persisting 
characterised 
systems 
inequalities.  Socio-economic  status  and  migrant 
background  are 
still  major  predictors  of 
educational  outcome  and  employment  prospects. 
One  of  the  fundamental  drivers  of  inequalities  is 
tracking  students  by performance,  which is  highly 
correlated  with  socio-economic  status.  This  leads 

are 

by 

(223) BEfr 27.1%, BEnl 23.9%, BEde 24.8%, EU: 24.2%. 

(220) Education and Training Monitor 2024. 

(224) Dupont et al., 2024, TIMSS 2023, Note de synthèse. 

(221) Pirard, F., B. Peleman, N. Sharmahd, K. van Laere, C. Reinertz, 
and  J.  Backes.  2024.  ‘Belgium  –  ECEC  Workforce  Profile.’  In 
early childhood workforce profiles across Europe. 33 country 
reports with key contextual data. 

(225) OECD PISA 2018, Expectation to work as science and 

engineering professionals among top performers in science 
or mathematics, by gender. 

(226) Brussels-Capital Region: 9.8%, Flanders: 5.8%, Wallonia: 

(222) BEfr: 28.3%, BEnl: 22.4%, BEde: 22.9%, EU: 29.55%. 

8.1% 

89 

 
 
 
 
 
 
is  so  high 

to  academic  selection  that  limits  the  potential  of 
young  people  and  hinders  social  mobility.  The 
impact  of  school  choice 
that 
disadvantaged  students  in  advantaged  schools 
outperform advantaged students in disadvantaged 
schools (227).  Therefore,  it  is  crucial  to  incentivise 
schools to diversify their student body and to help 
students  succeed  at  the  same  time.  Structural 
barriers include  early  tracking (in the Flemish and 
grade 
German-speaking 
retention  policies  (in  the  French  Community), 
coupled  with  a  gradual 
lower 
performing  students  to  vocational  tracks,  which 
exacerbates  inequalities  between  academic  and 
vocational tracks (228).  

Communities) 

transfer  of 

and 

The  share  of  students  that  report  repeating 
at least one grade in their educational career 
is the highest in the EU: 26.5% of Belgian pupils 
in  all  schools (229)and  52% 
in  disadvantaged 
in  the  French  and  German-speaking 
schools 
Communities.  The  rate  is  especially  high  in  the 
French  Community,  where  the  share  of  students 
who  have  repeated  at  least  one  year  of  their 
studies is as high as 50% by the last two years of 
secondary  education (230).  Research  shows  that 
grade  repetition  is  costly,  ineffective  and  may 
increase  the  risk  of  early  school  leaving (231). 
Recently  adopted  measures  with  the  support  of 
the  Recovery  and  Resilience  Facility  (RRF)  include 
personalised pupil guidance and a closer follow-up 
of  school  absenteeism,  which  allow  for  better 
prevention and monitoring. However, more efforts 
could be needed to address the underlying causes, 
including  grade  retention  policies,  which  are 
gradually  revised  with  the  introduction  of  the 
common core curriculum, and teacher assessment 
practices. 

for 
Improving  digital  skills 
Belgium’s  competitiveness,  particularly  in 
light of the digital transition. Belgium has set 
a target of 500 000 ICT specialists in employment 

is  crucial 

(227) OECD, 2022, OECD Economic Surveys Belgium. 

(228) Ibid. 

(229) BEfr: 33.2%, BEnl: 21.5%, BEde: 23.1%. 

(230) Fédération Wallonie-Bruxelles, Les indicateurs de 

l’enseignement 2023. 

(231) Galand, B., Lafontaine, D., Baye, A., Dachet, D., & Monseur, C. 
(2019). Le redoublement est inefficace, socialement injuste, 
et favorise le décrochage scolaire. Cahiers des Sciences de 
l'Education, (38). 

by  2030,  which  would  require  an  increase  of  at 
least 220 000 from current levels. The shortage of 
ICT specialists is still among the highest in the EU, 
with  a  job  vacancy  rate  of  5.4%  in  2024  (EU: 
2.9%).  In  2023,  42%  of  SMEs  reported  that  skills 
shortages  hindered  their  ability  to  adopt  or  use 
digital  technologies  (EU:  45%) (232).  To  improve 
digital  literacy  more  broadly,  Belgium  aims  for 
over  70.4%  of  adults  (16-74)  to  possess  at  least 
basic  digital  skills  by  2030.  Between  2021  and 
2023, this share grew by more than 5 percentage 
points  (pps)  from  54.2%  to  59.4%.  However,  the 
share  of  16–19-year-olds  with  at  least  basic 
digital  skills  declined  by  9.2 pps  over  the  same 
period 
(EU:  66.5%), 
threatening the pool of young people ready to take 
on  ICT  jobs  in  the  future.  Despite  Flemish  eighth 
graders being among the top performers in the EU 
in 
International  Computer  and 
Information  Literacy  Study  (ICILS)  study,  36% 
failed  to  reach  the  baseline  proficiency  level  (EU: 
43%). Girls outperform boys in digital literacy, and 
significant  differences  are  observed  between 
students  based  on  parental  education (233). 
Qualified  teachers  are  essential  for  digital  skills 
development.  A  comprehensive  study  of  digital 
education  in  Flanders (234)  shows  progress  in  the 
ICT  use  and  ICT  competences  of  pupils  and 
teachers,  but  also  points  to  the  need  for  the 
further professionalisation of teachers. 

from  66% 

the  2023 

to  56.8% 

The shortage of teachers may impact student 
success,  including  in  STEM  and  technical 
fields.  Evidence  shows  a correlation  between  the 
number  of  unfilled  substitute  positions  in  schools 
and  student  performance (235).  However,  across 
Belgium,  finding  qualified  substitutes  for  absent 
teachers  during  the  school  year  is  a  challenge.  In 
Flanders,  vacancies  published  by  the  Employment 
Agency reached a record high in 2024. Secondary 
school  teachers  of  French,  mathematics  and 

(232) Eurobarometer 529. 

(233) European  Commission:  Directorate-General  for  Education, 
Youth,  Sport  and  Culture, International  Computer  and 
Information  Literacy  Study  (ICILS)  in  Europe,  2023  –  Main 
findings  and  educational  policy  implications,  Publications 
Office of the European Union, 2024. 

(234) (2024). MICTIVO-4. Monitor voor ICT-integratie in het 

Vlaamse onderwijs 2023. Eindrapport van 
overheidsopdracht: Meting ICT-integratie in het Vlaamse 
onderwijs (MICTIVO). Profacts. 

(235) Gambi, L. & De Witte, K. (2023). The uphill battle: The 

amplifying effects of negative trends in test scores, COVID-
19 school closures and teacher shortages. 

90 

 
 
 
technical  subjects  remain  classified  as  bottleneck 
occupations (236).  In  the  French  Community,  the 
share  of  non-qualified  teachers  decreased  in 
philosophy  and  citizenship,  mathematics,  science 
and  languages  between  2022  and  2023,  but  it is 
in 
still  difficult  to  recruit  qualified  teachers 
technical  subjects (237).  The  reform  of 
initial 
teacher training has yet to have an effect. 

(EU:  52.4% 

Vocational  education  and  training  (VET)  is 
well  developed,  and  recent  graduates  are 
easily employed although with a high level of 
socio-economic  segregation.  80%  of  people 
aged  20  to  34  with  a  vocational  medium-level 
education  were  employed  in  2024,  compared  to 
72.8%  for  those  with  a  general  medium-level 
indicating  that  choosing  vocational 
education, 
education  can  pay  off.  Work  exposure  during  VET 
is  nevertheless  less  prevalent  than  in  the  EU  on 
average  (48.8%  vs  65.3%  in  2024),  even  though 
such  exposure  helps ensure  students’  adaptability 
to  future  employment.  57.3%  of  students  in 
medium-level  education  are  enrolled  in  a  VET 
programme 
in  2024).  However, 
students  from  socio-economically  disadvantaged 
backgrounds are three times more likely than their 
more  advantaged  peers 
those 
programmes,  which  is  significantly  higher  than 
other EU countries (PISA 2022). In 2023, 27.7% of 
medium-level VET students were enrolled in STEM 
subjects,  below  the  36.3%  EU  average.  Both  the 
are 
Flemish 
implementing  VET  plans.  Flanders  has  invested  in 
better connecting educational institutions with the 
needs  of  the  labour  market.  This  includes  an 
increased  use  of  extended  reality  techniques,  and 
promotion of work-based learning, with premiums 
for 
for  a 
jobseekers  who 
bottleneck occupation. The French Community has 
opportunities, 
strengthened 
particularly  through  grant-associated  bonuses. 
Despite  dedicated  efforts,  the  evaluation  of  the 
Flemish  STEM  agenda  showed  little  progress  in 
increasing participation in STEM subjects in VET.  

Communities 

long-term 

to  enrol 

learning 

French 

train 

dual 

and 

in 

Higher  education  reforms  target  better 
student  guidance.  The  share  of  young  people 

(236) Commissie van Wijzen, 2024. PRIORITY FOR 

PROFESSIONALISM Contemporary personnel policy with 
competent teachers, powerful schools and strong school 
boards. 

(237) Fédération Wallonie-Bruxelles, Les indicateurs de 

l’enseignement 2023. 

91 

between  25  and  34  holding  a  tertiary  degree  is 
consistently  high  (50.7%  in  2024  vs  EU  44.2%), 
but  study  completion  rates  lag  behind  other  EU 
countries (238).  Measures,  such  as  the  Landscape 
Decree  in  the  French  Community  and  the  Higher 
in  the  Flemish 
Education  Advancement  Fund 
Community,  aim  to  increase  study  success  rates 
and  provide  better  orientation  for  students. 
However,  their  effectiveness  needs  to  be  further 
evaluated  to  reduce  drop-out  rates  and  study 
delays. 

Graph A12.1: Share of students enrolled in STEM 
programmes as a share of total tertiary students 
(ISCED 5-8), by sex, 2022 (%) 

Source: Eurostat: educ_uoe_enrt03. 

Despite  targeted  policies,  the  low  share  of 
STEM  graduates  hampers  efforts  to  tackle 
labour shortages in these fields. Increasing the 
share  of  high-skilled  STEM  specialists  in  the 
workforce  would  lead  to  a  significant  productivity 
gain of about 20% for a typical firm, far outpacing 
the  benefits  of  hiring  more  low-skilled  STEM 
workers  or  high-skilled  non-STEM  workers (239).  In 
2022,  the  share  of  students  enrolled  in  STEM 
programmes  compared  to  the  total  number  of 
students  enrolled  at  tertiary  level  was  the  third 
lowest  in  the  EU  (18.3%  vs  27.1%).  The  share  of 
students  enrolled  in  ICT  was  also  below  the  EU 
average  (4.1%  vs  5.2%).  Critically,  the  share  of 
women among all ICT students is the lowest in the 
EU, at 13.2% (EU: 20.2%). Given the generally high 
rate  and  above-average 
tertiary  attainment 

(238) Education and Training Monitor, 2024. 

(239) Bijnens, G., and Dhyne, E., ‘The return on human (STEM) 

capital in Belgium’, OECD Productivity Working Papers, 2021- 
26, OECD Publishing, Paris. 

0%10%20%30%40%BEEUMale STEM enrolments as a share of total ISCED 5-8 enrolmentsFemale STEM enrolments as a share of total ISCED 5-8 enrolments 
 
  
 
proportion of top performers in mathematics (PISA 
2022),  the  underlying  reasons  could  be  linked  to 
student  motivation  and  career  orientation.  In 
Wallonia,  the  reasons  why  young  people  are 
deterred  from  choosing  STEM  study  programmes 
and careers are linked to: (i) low self-confidence in 
scientific subjects; (ii) a preference for professions 
not  requiring  high  study  investment;  and  (iii)  the 
perception  of  the  working  conditions  in  these 
professions (240).  The  STEM  agenda  in  Flanders 
sets targets to increase the number of students in 
STEM  subjects  in  secondary  education  and  STEM 
in  higher  education.  STEM 
study  efficiency 
academies  (providing  after-school  extracurricular 
activities)  show  some  positive  impact  so  far  on 
girls’  intentions  to  pursue  further  studies  and 
careers  in  STEM (241).  Policy  responses  have  been 
slower  in  the  French  Community:  only  plans  of  a 
strategy have been announced. 

Graph A12.2: Adult participation in learning over 
the last 12 months 

Source: AES 2022 (excluding guided-on-the-job training) 

low-skilled  people, 

Strengthening  lifelong  learning,  especially 
to 
among 
maintaining  Belgium’s  competitiveness.  High 
ICT  and  STEM  shortages  hinder  economic 
performance  as  the  educational  system  alone 
does not fully address labour market needs. Skills 
mismatches  (242)  are  also  still  among  the  highest 

is  key 

(240) Bouchat, Pierre, et al., 2020, Les déterminants de l’attrait 
pour les études et les métiers scientifiques et techniques 
chez les 12-25 ans, Rapport de recherche, UCLouvain. 

in the EU in 2024, at 25.6% vs 19.2% at EU level. 
Belgium  has  set  a  target  of  60.9%  of  adult 
participation  in  training  by  2030.  However,  that 
rate  fell  from  39.4%  in  2016  to  34.9%  in  2022, 
below  the  EU  average  of  39.5% (243).  Men  and 
most adult age groups but especially  older adults 
(55-64-year-olds) participate less in adult learning 
then  the  EU  average  (see  Graph  2).  Even  more 
worryingly, the participation rate for those with the 
lowest level of school education is just 12.5% (vs 
EU  18.4%).  Targeted  upskilling  and  reskilling  of 
adults  is  essential  for  improving  labour  market 
competitiveness. 
supporting 
outcomes 
Initiatives taken at federal and federated levels to 
create  portable  individual  learning  rights  would 
need  to  be  strengthened  to  ensure  that  workers 
and  non-workers  can  participate  in  upskilling  and 
reskilling aligned with labour market needs. 

and 

in 

reported 

in  2024 

The  green  transition  calls  for  significant 
upskilling and reskilling efforts. High levels of 
shortages  were 
the 
construction  sector  and  in  the  electricity,  gas, 
steam and air conditioning supply sector, both key 
for  the  green  transition,  as  well  as  in  specific 
occupations  such  as  civil  engineering  technicians, 
environmental  and  occupational  health  inspectors 
and  garden  and  horticultural  workers (244). 
Opportunities  in  the  green  transition  sector  are 
significant,  but  the  environmental  goods  and 
services  sector  only  made  up  1.8%  of  total 
employment  in  2022,  well  below  the  EU  average 
of  3.3%.  By  contrast,  3.0%  of  the  labour  force  is 
working  in  energy-intensive  industries  in  2023, 
which are more likely to be impacted by the green 
transition.  At  the  same  time,  40%  of  Belgian 
employees  believe  they  do  not  have  the  skills 
required  to  participate  in  this  transition  (EU: 
38%) (245). Without adequate investment in critical 
targeted  reskilling  programmes  – 
skills  and 
particularly  for  those  most  affected  –  Belgium 
risks  slowing  the  pace  of  its  green  transition.  The 
recovery and resilience plan (RRP) prioritises green 
including  upskilling  and 
transition  policies, 
reskilling  initiatives,  and  regional  governments 
have launched strategies to support this shift. The 
Flemish  green  skills  strategy  aims  to  position  the 
region  as  an  EU  leader  in  green  innovation,  while 

(241) Blondeel, A. and Coussement, S., 2022. STEM academies 

exploratory impact study research report. 

(243) Excluding guided-on-the-job training, in line with the 

methodology agreed to monitor the 2030 target, age 25-64. 

(242) The macroeconomic skills mismatch indicator measures the 
dispersion of employment rates across skill groups (proxied 
by qualification levels, with ISCED 0-2 low; 3-4 medium and 
5-7 high). 

(244) European Labour Authority, 2025, EURES Report on labour 

shortages and surpluses 2024. 

(245) Eurobarometer SP527, 2022. 

92 

0102030405060Total (25-64 years old)MenWomen55-64 years old25-34 years old35-44 years oldLower educationBEEU27 
  
 
 
the  Wallonian  2025-2035  Skills  for  Life  plan 
identifies  the  green  transition  as  a  strategic 
priority. 

93 

 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for Belgium 

(1) Update of 5 May 2025. 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 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

94 

34.97.059.49.98.03.4572.35.72.0106.118.220.252.733.56.852.21.4Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Better than averageBest performersEqual 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, 2024)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, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024) 
 
 
 
 
 
  
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

to 

boosting 

fairness,  while 

Belgium’s  health  system  faces  challenges 
that need to be addressed if the country is to 
improve  the  health  of  its  population  and 
social 
the 
competitiveness of its economy. Belgium has a 
fragmented  approach 
care  organization 
between  primary  and  secondary  care.  There  are 
significant  disparities 
in  healthcare  access 
between income groups - among the highest in the 
EU.  In  2022,  the  share  of  out-of-pocket  spending 
increased  and  accounted  for  over  20%  of  total 
healthcare  spending  in  Belgium.  The  growing 
shortage  of  health  professionals,  particularly 
doctors, raises concerns about service accessibility 
amid rising demand. 

in  Belgium 
Life  expectancy  at  birth 
rebounded  above  its  pre-COVID-19  level and 
stood slightly above the EU average in 2023. 
There  are  gender  gaps  in  health  outcomes.  While 
women  can  expect  to  live  4.1  years  longer  than 
men,  they  would  expect  to  live  less  time  in  good 
health  -  about  nine  months  less  than  men. 
Treatable  mortality,  which  has  continuously 
improved in the last decade, is one of the lowest in 
the  EU,  suggesting  that  the  health  system  is 
effective  (see  Table  A11.2).  Diseases  of  the 
circulatory  system  (cardiovascular  diseases)  and 
cancer  are  the  leading  cause  of  death.  Belgium 
participates  in  several  joint  actions  funded  by 
EU4Health,  which  aim  to  reduce  the  burden  of 
cardiovascular  diseases,  cancer,  diabetes  and 
respiratory diseases. The national suicide rate was 
above  the  EU  average  in  2021  but  has  been 
decreasing steadily since 2012.  

Graph A14.1: Life expectancy at birth, years 

Source: Eurostat (demo_mlexpec) 

Healthcare  delivery 
in  Belgium  remains 
considerably  hospital-centred  despite  recent 
efforts to strengthen primary and integrated care, 
including  the  Memorandum  of  Understanding  on 
the  Inter  federal  plan  for  integrated  care  and 

95 

programmes  for  pregnant  women,  vulnerable 
groups  and  childhood  obesity.  In  2022,  health 
spending  per  person  in  Belgium  (adjusted  for 
differences in purchasing power) exceeded the EU 
average.  Notably,  spending  on  inpatient  care  was 
higher  than  the  EU  average,  while  expenditure  on 
outpatient  services,  retail  pharmaceuticals  and 
medical  devices  was  lower.  The  public  share  of 
health  expenditure  in  Belgium  is  below  the  EU 
average and saw a slight decline in 2022 (72.12% 
of  current  expenditure  vs  an  EU  average  of 
81.30%).  Additionally,  out-of-pocket  healthcare 
payments  in  Belgium  increased  to  20.1%  of  total 
healthcare  spending  in  2022,  surpassing  the  EU 
average of 14.3%. 

Graph A14.2: Treatable mortality 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

regards  public  health,  support  for 
As 
prevention is comparatively modest. While the 
rate  of  preventable  mortality  in  Belgium  is  lower 
than  the  EU  average,  the  share  of  spending 
directed  at  prevention  stood  at  2.5%  of  total 
public spending on health in 2022 - less than half 
of  the  EU  average  of  5.5%.  Vaccination  coverage 
with  recommended  doses  for  measles  was  below 
the  EU  average  in  2023  and  measles  outbreaks 
were reported in Belgium in both 2023 and 2024 
(246).  Belgium's  population  has  a  comparatively 
high  level  of  fruit  and  vegetable  consumption, 
alcohol  intake  has  gone  down,  and  the  smoking 
rate  is  below  the  EU  average  (247).  However,  the 
regular use of vaping products, also among young 
adults (15-24), is above the EU average. In 2024, 
Belgium  introduced  measures  to  reduce  tobacco 
use,  including  extending  smoking  bans  to  outdoor 
public  places  by  December  2024  and  prohibiting 

(246) OECD/European Commission (2024), Health at a Glance: 

Europe 2024 - State of Health in the EU Cycle, pp 160-161. 

(247) Health at a Glance: Europe 2024, Chapter 4. 

82.180.881.981.882.581.380.480.180.681.420192020202120222023BelgiumEU69.965.262.761.662.391.389.291.793.389.720182019202020212022per 100 000 populationBelgiumEU 
 
      
      
 
 
 
Table A14.1:Key health indicators 

*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 based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source:  Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

the  display  of  tobacco  products  at  points  of  sale 
from April 2025.  

Belgium  faces  challenges  with  unequal 
access  to  services.  While  the  overall  proportion 
of  the  population  reporting  unmet  medical  needs 
in  2023  was  below  the  EU  average,  specifically 
among people who declared having medical needs, 
the  gap  between  people  below  and  above  the 
poverty  threshold  reporting  unmet  needs  (defined 
as  60%  of  the  median  equivalised  income)  is 
higher  in  Belgium  than  the  EU  average.  However, 
Belgium has invested around EUR 30 million from 
the  European  Social  Fund  Plus  to  improve  the 
accessibility,  quality  and  resilience  of  the  health 
system. 

long  waiting 

Shortages  of  health  staff  undermine  the 
In 
accessibility  of  healthcare  services. 
Belgium, general practitioners (GPs) do not act  as 
gatekeepers, meaning that individuals can directly 
access  specialised  care  without  a  referral.  In 
addition,  due  to  growing  demand  and  limited 
resources,  GPs  are  increasingly  refusing  new 
patients,  exacerbating 
times  -
sometimes lasting months - and making it difficult 
to  deliver  timely  services,  such  as  mental  health 
care  for  example.  The  number  of  practising 
doctors  (3.5)  per  1  000  population  in  Belgium  in 
2022  was  below  the  EU  average  (4.1).  Improving 
the attractiveness of the health professions was a 
key  area  of  focus  in  2024,  with  the  creation  of 
new roles and profiles to support nurses and GPs. 
A  royal  decree  of  September  2023,  amended  in 
April  2024,  set  out  the  nursing  services  that  can 
be provided by a nursing assistant, as well as their 
conditions  of  practice.  In  April  2024,  two  royal 
decrees  also  set  out  the  clinical  activities  and 

recognised 

medical procedures that advanced practice nurses 
may  carry  out,  as  well  as  the  criteria  to  obtain 
recognition  as  an  advanced  practice  nurse.  To 
support GPs, the title of practice assistant has also 
been 
since  May  2024.  These 
paramedical  professionals  assist  GPs  with 
administrative  tasks  as  well  as  some  technical 
support  tasks  (such  as  taking  samples  for  the 
laboratory  or  recording  a  patient’s  weight),  under 
the supervision of the physician. 

The  Belgian  health  system  has  the  potential 
to  drive  innovation  and  foster  industrial 
development 
in  the  EU  medical  sector. 
Belgium reports an increase in public spending on 
health research and development, reflected in 163 
European  patents  granted 
the 
combined 
pharmaceuticals, 
of 
biotechnologies  and  medical  technologies  (248)  
(see Annex 3). Belgium is among the EU countries 
with a relatively high number of clinical trials (249). 
The  Belgian  recovery  and  resilience  plan  includes 
through 
investments 
research  and  development  in  the  health  sector, 
including nuclear medicine for cancer treatment.  

supporting 

innovation 

in  2023 

areas 

in 

and 

health 

overall 

Belgium  already  has  a  good  uptake  of  e-
health 
system 
digitalisation. Both the share of people accessing 
their  personal  health  records  online  and/or  using 
online health services (excluding phone) instead of 
in-person 
in  2022 
compared  to  2020.  Significant  investment  under 

consultations 

increased 

(248) European Patent Office, Data to download | epo.org. 
(249) EMA (2024), Monitoring the European clinical trials 

environment, p. 9. 

96 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population229.3223.2220.1218.2n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 229.0 217.9 217.0 221.6n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 8273 8724 1814 339n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 75.2 78.1 76.6 75.1n.a.81.3 (2022)Spending on prevention, % of current health expenditure 1.62.13.12.5n.a.5.5 (2022)Available hospital beds per 100 000 population** 416 412 408 404n.a.444 (2022)Doctors per 1 000 population*3.43.53.53.6n.a.4.2 (2022)*Nurses per 1 000 population*n.a.n.a. 11.6n.a.n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality14.312.914.213.413.214.3 (2023)Number of patents (pharma / biotech / medical technology)22819416313016329 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****21.416.717.420.420.620.0 (2023) 
 
 
      
 
 
the  digital 

transformation  of 

the recovery and resilience plan is aimed at further 
the 
boosting 
healthcare  sector  in  Belgium.  The  investment  in 
digital  health  and  health  data  aims  to  develop 
standardised  care  sets  for  patient  data  collection 
and  storage,  extending  the  e-prescription  system, 
creating  an 
for 
medicine  use,  rolling  out  teleconsultations,  and 
providing  digital  tools  for  integrated  care  teams 
things.  Belgium  has  adopted 
among  other 
legislation to set up a Health Data Authority, in line 
with  the  European  Commission’s  proposal  for  a 
European Health Data Space.  

tracking  system 

integrated 

97 

 
 
 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

social 

fairness 

This  Annex  assesses  Belgium’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
and 
sustainability, 
macroeconomic stability. 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 
inequalities  and  tackle  climate 
poverty,  fight 
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 
the EU. 

Belgium  performs  well  and  is  improving  on 
all SDGs on competitiveness (SDGs 4, 8, 9). It 
performs strongly in particular on innovation, with 
R&D intensity of 3.3% of GDP in 2023 well above 

Graph A15.1: Progress towards the SDGs in Belgium 

the  EU  average  (2.2%).  The  share  of  households 
with  a  high-speed  internet  connection  in  2023 
(96.0%%)  is  now  above  the  EU  average  (78.8%). 
Belgium is performing well on education indicators 
overall, although there are still concerns over high 
inequalities  in  educational  outcomes  linked  to the 
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%). 
However,  the  country  still  faces  a  significant 
challenge  to  improve  digital  skills.  The  recovery 
large 
and 
investments  to  improve  digital  infrastructure  and 
equipment in schools. 

resilience  plan 

includes 

(RRP) 

While Belgium is improving on nearly all the 
SDGs  related  to  sustainability,  it  is  losing 
ground  on  SDG  14  (Life  below  water)  and 
needs  to  catch  up  with  the  EU  average  on 
SDG 7 (Affordable and clean energy), 15 (Life 
on  land),  13  (Climate  action)  and  SDG 11 
(Sustainable cities and communities). Belgium 

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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

98 

 
 
 
 
 
 
low 

remains 

in  particular 

a low activity rate (see Annex 14). Labour market 
for 
participation 
vulnerable  groups,  such  as  adults  with  a  lower 
level  of  education,  people  with  a  migrant 
background  and  people  with  disabilities.  Belgium 
needs  to  catch  up  with  the  EU  average  on 
affordable and clean energy (SDG 7), including on 
the  share  of  renewable  energy  in  gross  final 
energy  consumption,  which  was  14.7%  in  2023  - 
well below the EU average of 24.6%. However, the 
proportion  of  the  population  unable  to  keep  their 
home  adequately  warm  is  lower  than  the  EU 
average (6% in 2023; EU average: 10.6%). 

stability, 

For  macroeconomic 
Belgium 
performs  well  and  is  improving  on    SDG  8 
related to decent work and economic growth 
while  it  is  moving  away  from  achieving  SDG 
16  (peace,  justice  and  strong  institutions) 
and  SDG  17  (Partnerships  for  the  goals).  It 
performs  relatively  well  on  the  quality  of  its 
institutions (SDG 16), and on access to justice, but 
worse  than  average  on  peace  and  personal 
security. The perceived independence of the justice 
system by the population decreased from 64% in 
2018 to 61% in 2024 but was substantially above 
the EU average of 52% in 2024. Belgium performs 
better  than  the  EU  average  on  most  indicators 
related  to  SDG 8  (Decent  work  and  economic 
growth)  except  for  the  employment  rate,  which 
was  72.3%  in  2024,  below  the  EU  average  of 
75.8%,  and  the  long-term  unemployment  rate, 
which  at  2.0%  was  slightly  higher  than  the  EU 
average of 1.9% in 2024. 

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

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  14.7%  in  2023. 
However,  Belgium’s  performance  remains  below 
the EU average (24.6% in 2023). The final energy 
consumption  in  household  per  capita  (SDG 7) 
decreased from 704 kilos in 2018 to 591 kilos in 
2023  of  oil  equivalent  but  is  still  above  the  EU 
average  of  511  kilos  in  2023.  Belgium’s  RRP 
includes measures to support the shift from fossil 
fuels,  in  particular  for  the  energy  renovation  of 
buildings, decarbonisation of industrial production, 
and 
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 6).  On 
SDG 12,  the  circular  material  use  rate  declined 
from  20.6% 
in  2023, 
nevertheless remaining well above the EU average 
(11.8%).  

transport.  Emissions 

sustainable 

to  19.7% 

in  2018 

Belgium performs well or is improving on all 
SDGs related to social 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  2023  to  18.6%,  below  the 
EU average of 21.3%. Belgium has made progress 
on  various  employment  indicators.  These  include 
indicators  like  the  long-term  unemployment  rate 
(2.6%  in  2018  against  2.0%  in  2024)  and  the 
number  of  young  people  not  in  employment, 
education  or  training  (11.4%  in  2018,  9.9%  in 
2024). Several measures in the RRP aim to further 
tackle  unemployment,  in  particular  by  improving 
training  and  life-long  learning.  However,  despite 
these measures the employment rate remains well 
below the 2030 national target, being held back by 

99 

 
 
 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

Project  selection  under  the  2021-2027  cohesion 
is 
policy  programmes  has  accelerated  and 
advanced. 

The  Belgian  RRP  contains  119  investments 
and  40  reforms  to  stimulate  sustainable 
growth,  accelerate  the  transition  towards  a 
more  low-carbon  economy,  maximise  the 
benefits  of  the  digital  transformation  and 
ensure social cohesion. A year before the end of 
the  RRF  timespan,  the  implementation  is  delayed 
with  46.5  %  of  the  funds  disbursed.  At  present, 
Belgium has fulfilled 28.3 % of the milestones and 
targets  in  its  RRP  (254).  Significant  efforts  are 
needed to ensure completion of all RRP measures 
by  31 August  2026.  Enhancing  administrative 
capacity  and  improving  the  timely  detection  and 
resolution  of  potential  delays  would  support  the 
effective implementation of the plan. 

Belgium  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed 
in  Table  A16.1.  Most  notably,  the  common 
agricultural  policy  (CAP)  provides  Belgium  with  an 
EU  contribution  of  EUR 3.3  billion  under  the  CAP 
strategic  plan  for  2023-2027(255).  A  further 
EUR 290.1 million are available under the Asylum, 
Migration  and  Integration  Fund  (AMIF),  together 
with the Border Management and Visa Instrument 
(BMVI)  and  internal  security  funds.  Operations 
amounting  to  EUR  537.8  million  (256)  have  been 
signed  under  the  InvestEU  instrument  backed  by 
the  EU  guarantee,  improving  access  to  financing 
for riskier operations in Belgium. 

recommendations 

Belgium faces structural challenges in a wide 
range  of  policy  areas,  as  identified  in  the 
country-specific 
(CSRs) 
addressed  to  the  country  as  part  of  the 
European  Semester.  They  refer,  among  other 
things,  to  taxation  policy,  the  pension  system, 
long-term care, policies to help people find work or 
stay  in  work,  skills  and  education,  restrictions  on 
competition, the business environment, energy and 
transport. 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
Belgium  to  date  and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP).  At  this 
stage, Belgium has made at least ‘some progress’ 
on 75% of the CSRs (250), and ‘limited progress’ on 
22% (Table A16.2). 

by 

to  Belgium 

competitiveness, 

EU funding instruments provide considerable 
resources 
supporting 
investments  and  structural  reforms  to 
increase 
environmental 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 5.3  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (251) 
are  providing  EUR 2.5  billion 
to  Belgium 
(amounting  to  EUR 5.7  billion  with  national  co-
financing)  for  2021-2027  (252)  to  boost  regional 
competitiveness  and  growth.  Support  from  these 
instruments combined represents around 1.3 % of 
these 
2024  GDP 
instruments  to  different  policy  objectives 
is 
in  Graphs  A16.1  and  A16.2.  This 
outlined 
substantial  support  comes  on  top  of  financing 
provided 
the  2014-2020 
multiannual  financial  framework,  which  financed 
projects  until  2023  and  has  had  significant 
benefits  for  the  economy  and  Belgian  society. 

(253).  The  contribution  of 

to  Belgium  under 

(250) 7% of the 2019-2024 CSRs have been fully implemented, 

5% substantially implemented and some progress has been 
made on 63%. 

(251) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025.  

(252) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

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

(254) As of mid-May 2025, Belgium has submitted 3 payment 

requests, the last one being under assessment. 

(255) An overview of Belgium’s formally approved strategy to 

implement the EU’s common agricultural policy nationally 
can be found at https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/belgium-flanders_en and 
https://agriculture.ec.europa.eu/cap-my-country/cap-
strategic-plans/belgium-wallonia_en  

applicable. GDP figures are based on Eurostat data for 2024. 

(256) Data reflect the situation on 31.12.2024. 

100 

 
 
 
 
 
 
Graph A16.1: Distribution of RRF funding in 
Belgium by policy field 

(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 circle 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. 
Source: European Commission 

Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in Belgium 

Source: European Commission 

includes 

technologies to 

Cohesion  policy  funds  aim  to  increase  the 
productivity  and  competitiveness  of  Belgian 
firms and improve the business environment. 
The  European  Regional  Development  Fund  (ERDF) 
and  the  Just  Transition  Fund  (JTF)  are  used  to 
boost  investments  in  research,  innovation  and 
the transfer  of 
digitalisation.  This 
the 
increase 
advanced 
competitiveness  of  small  and  medium-sized 
businesses 
in 
the digitalisation  of  SMEs.  Support  will  extend  to 
nearly  14 000  SMEs,  more  than  half  of  them  in 
Wallonia,  and  enable  the  development  of  digital 
services,  products  and  processes  in  over  200 
public institutions. Wallonia has allocated EUR 120 
innovation 
million 
investment  in  the  region’s  less  developed  and 
transition  areas,  in  addition  to  EUR 147 million  to 
improve  the  competitiveness  of  the  SMEs  and 

research  and 

investments 

to  support 

(SMEs) 

and 

address 

interventions 

boost job creation. The European Social Fund Plus 
(ESF+) provides EUR 836 million to support overall 
access  to  the  labour  market,  especially  for  long-
term  unemployed  people,  older  people, 
low-
educated,  disabled  and  inactive  individuals.  More 
youth 
specifically, 
unemployment  and  precarious  work  for  young 
people,  promote  self-employment  and  foster  the 
social  economy.  ESF+  also  contributes  EUR 35 
million  to  the  modernisation  of  labour  market 
institutions  and  the  educational  system  benefits 
from  support  worth  EUR 124 million.  EUR 400 
is  used  to  reduce  skills 
million  from  ESF+ 
mismatches 
through  skilling,  upskilling  and 
reskilling, emphasising digital and green skills, with 
the aim of boosting Belgium’s competitiveness. 

are 

funds 

contributing 

transport  and 

Other 
to 
competitiveness  in  Belgium,  for  instance 
through  open  calls.  The  Connecting  Europe 
Facility  has  financed  strategic  investments,  for 
instance in inland waterways, including the Seine-
Scheldt  project,  maritime 
rail 
infrastructure,  as  well  as  the  deployment  of 
alternative  fuel  infrastructure  and  of  5G  in  smart 
communities.  Horizon  Europe  has  supported 
from 
research 
scientific 
innovation, 
breakthroughs  to  scaling  up 
innovation,  with 
digital,  industry  and  space,  and  climate,  energy 
and  mobility  as  top  priorities  in  Belgium.  The 
Technical  Support  Instrument  focused  in  2024, 
among  others,  on  empowering  educators  in  the 
digital  transition;  implementing  the  national  EU 
Emission  Trading  System  and  developing  the 
Social  Climate  Plan;  and  the  digitalisation  of  the 
justice system as regards storage and consultation 
of evidence. 

and 

to 

the 

Belgium’s  RRP  also  contains  ambitious 
business 
improve 
measures 
environment  and  competitiveness.  As  part  of 
the  measures  covered  by  payment  requests 
assessed  over  the  past  year,  reforms  have  been 
implemented  to  develop  an  individual  entitlement 
to  training  for  employees  and  to  create  tax 
incentives  for  companies  to  provide  training. 
Auctions  to  assign  5G  spectrum  were  completed 
and radiation standards were adapted to allow for 
the 
the 
recommendations  of  relevant  committees  on 
health  and  environmental  aspects.  New  digital 
platforms  have  started  operating  in  the  Brussels 
Region 
individuals  and  businesses 
complete their procedures on permitting, including 
environmental  permit  procedures,  urban  archives 

in  accordance  with 

rollout  of  5G 

to  help 

101 

Green transitionDigital transformationSmart, sustainable and inclusivegrowthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
        
 
        
 
and  urban  information  procedures.  A  reform  to 
facilitate  the  conducting  of  tendering  procedures 
entered  into  force.  A  project  management  office 
has  been  set  up  for  digitalisation  of  the  justice 
system and a portal for accessing justice services 
and  information  was  put  online.  Several  pilot 
spending 
reviews  have  been  completed  at 
different government levels to improve the quality 
and efficiency of public spending and the practice 
is being integrated into budgetary processes. 

energy 

reduction, 

in  Belgium,  of  which  36 050 tonnes 

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
green  transition 
in  Belgium  during  the 
current  seven-year  EU  budget  (multiannual 
financial  framework).  Almost  EUR 400  million 
from the ERDF is being invested in greenhouse gas 
emission 
efficiency  and 
renewable  energy.  Of  this  amount  over  EUR 86 
million  is  being  used  for  renovation  and  energy 
efficiency in public infrastructure in less developed 
and  transition  regions  in  Wallonia.  Investments 
also cover sustainable mobility and the expansion 
of  waste  recycling  capacity  by  46 751  tonnes  a 
in 
year 
Wallonia. In addition, EUR 183 million from the JTF 
is  being  invested  in  developing  a  low-carbon, 
circular  and  energy-efficient  economy,  to  support 
economic  diversification  and  a  fair  climate 
transition  in  Wallonia.  Wallonia’s  CAP  strategic 
plan  allocates  EUR 110  million  (56%  of  rural 
to  environmental  and 
development 
climate  objectives  and  EUR 345  million  (26%  of 
direct  payments)  to  eco-schemes,  supporting 
biodiversity,  organic  farming  and  sustainable 
practices,  including  EUR 140  million  to  support 
organic  farming  covering  132 000  hectares  over 
the five-year period. Around 68.5% of agricultural 
land  will  be  covered  by  incentives  to  reduce 
emissions,  to  maintain  and  enhance  carbon 
storage, such as developing permanent grasslands 
or increasing the biodiversity in agricultural areas. 
Flanders’  CAP  strategic  plan  allocates  EUR 185 
million  (54%  of  rural  development  funding)  to 
environmental and climate objectives and EUR 261 
million (25% of direct payments) to eco-schemes, 
supporting  biodiversity,  organic 
farming  and 
sustainable  practices.  These  measures  are  aimed 
at  reducing  greenhouse  gas  emissions,  increasing 
soil  and  water  quality  and 
strengthening 
biodiversity amongst other things. 

funding) 

Belgium’s  RRP, 
including  the  REPowerEU 
chapter, has a comprehensive set of reforms 
and  investments  for  the  green  transition. 

incentives  to 

Sustainable 
transport  measures  covered  by 
payment  requests  assessed  over  the  past  year 
include: a federal tax incentive for the installation 
of  private  and  semi-public  charging  points  for 
electric cars; a law to reform the company car tax 
scheme aimed at phasing-out the existing scheme 
for  conventional  cars; 
increase 
demand  for  sustainable  alternatives  to  company 
cars for commuting between home and work; and 
a  (legislative)  framework  for  the  installation  of 
charging  stations  in  the  different  regions.  To 
establish  a  supportive  framework  for  the  energy 
legal 
transition,  Belgium  has  approved 
framework  for  energy  grant  schemes  in  Flanders, 
Brussels  and  the  German-speaking  community, 
and adopted the electricity ordinance to introduce 
a  one-stop  shop  for  renovation.  It  also  improved 
the energy subsidy scheme of the Flemish Region. 
To facilitate the transition to a circular economy a 
roadmap  has  been  developed  for  the  governance 
of  the  central  platform in  Flanders that  promotes 
the transition to a circular economy. 

the 

in  poverty. 

including  children 

Promoting  fairness,  social  cohesion  and 
improving  access  to  basic  services  are 
among  the  key  priorities  for  EU  funding  in 
Belgium.  While  the  ERDF  supports  investment  in 
educational  systems,  EUR 423  million  from  the 
ESF+  allocation  (31%)  is  dedicated  to  increasing 
social  inclusion  and  active  participation  especially 
among  disadvantaged  groups  and  vulnerable 
In  this 
people, 
respect,  ESF+  programmes  aim  to  align  with  the 
European Child Guarantee which ensures access to 
the  most  fundamental  rights  such  as  healthcare 
and  education  for  children  at  risk  of  poverty  or 
social  exclusion.  In  addition,  Belgium  focuses  on 
helping people into work and increasing their self-
reliance.  ESF+  programmes  aim  to  identify  and 
eliminate  structural  barriers  to  participation  in 
society  and  integration  into  the  labour  market.  In 
addition,  the  AMIF  supports  the  digitalisation  of 
asylum  procedures  and 
the  optimisation  of 
reception  capacities;  as  well  as  early  integration 
with  a  focus  on integration  on  the labour market; 
and the development of an integrated approach to 
return  procedures,  focusing  on  cooperation  with 
local  and  international  authorities,  and  adapting 
strategies for vulnerable groups. 

Belgium’s  RRP  contains  several  reforms  and 
investments  related  to  fairness  and  social 
policies. One of the measures within the payment 
request  assessed  over 
is  a 
deinstitutionalisation strategy for older people and 

last  year 

the 

102 

 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments made to the 
Member State before 2021.  Hence the figures do not comprise the totality of payments corresponding to the 2014-
2020 allocation. The cut-off date for data on disbursements under EMFAF and EMFF is 29 April 2025.  The cut-off 
date for data on disbursements under cohesion policy funds, AMIF, BMVI and ISF is 5 May 2025.   
(4) AMIF - Asylum, Migration and Integration Fund; BMVI- Border Management and Visa Instrument; ISF - Internal 
Security Fund.  
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF disbursements is 
based on the Member State declarations until March 2025.  Disbursements for the Direct Payments (EAGF) started 
in 2024. 
Source: European Commission 

people  with  a  disability,  as  part  of  the  Walloon 
health policy. A framework decree was adopted to 
support  pupils  with  psychosocial  and  educational 
issues  relating  to  COVID-19  to  prevent  early 
school  leaving  in  the  French  Community;  and 
1 358  ICT  devices  and  WiFi  points  were  provided 
for  schools  in  Brussels  with  a  high  level  of 
vulnerable  pupils.  To  enhance  education  and 
employment  opportunities,  Belgium  has  deployed 
a  reinforced  support  mechanism  for  students  in 
need  and  developed  an  action  plan  based  on 
output of the employment conference. To promote 
activation,  upskilling  and  reskilling,  Belgium  has 
improved  the  support  for  training  leaves  and  the 
online training offer, and envisages better support 
for the temporarily unemployed. 

103 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)2 372.5RRF loans 83.2Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)2 339,02 503,11 458,4European Regional Development Fund (ERDF) 1 077,6 992,8696,7European Social Fund (ESF, ESF+) and the Youth Employment Initiative (YEI)1 261,41 327,6 705,1Just Transition Fund (JTF) 182,6 56,6European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 41,7 40,322,2Migration, border management and internal security - AMIF, BMVI and ISF (4) 238,5 290,1140,1The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan  995,6European Agricultural Guarantee Fund (EAGF) 944,8European Fund for Agricultural Development (EAFRD) 50,8Migration and home affairs Allocation 2021-2026 5 033.9244.2FisheriesAllocation 2023-20273 301,12 763,3537,8 
 
 
 
        
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

104 

BelgiumAssessment in May 2025Relevant 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. No longer relevantSDGs 8, 16Use windfall gains to accelerate the reduction of the general government debt ratio. No longer relevantSDGs 8, 16Continue reforms to ensure the fiscal sustainability of the long-term careSome progressSDG 3and pension systems, including by limiting early exit possibilities from the labour market. Limited progressSDG 8Improvethecompositionandefficiencyofpublicspending,inparticularthroughspendingreviews, Some progressSDGs 8, 16andthecoordinationoffiscalpoliciesbyalllevelsofgovernmenttocreateroomforpublicinvestment.Limited progressSDGs 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 progressSDGs 8, 10Improve the performance and inclusiveness of the education and training systems Some progressSDGs 4, 8, 10and address skills mismatches.Some progressSDG 42019 CSR 3Some progressFocus investment-related economic policy on sustainable transport, including upgrading rail infrastructure, Some progressSDGs 10, 11the low carbon and energy transition Some progressSDGs 7, 9, 10, 11, 13and research and innovation, in particular in digitalisation, taking into account regional disparities. Some progressSDGs 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 progressSDG 112019 CSR 4Some progressReduce the regulatory and administrative burden to incentivise entrepreneurship Some progressSDGs 8, 9andremovebarrierstocompetitioninservices,particularlytelecommunication,retailandprofessional services.Some progressSDG 92020 CSR 1Substantial progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability,whileenhancing investment. No longer relevantSDGs 8, 16Reinforcetheoverallresilienceofthehealthsystemandensurethesupplyofcriticalmedicalproducts.Substantial progressSDG 32020 CSR 2Some progressMitigate the employment and social impact of the COVID-19 crisis, notably by promoting effective active labour market measures Substantial progressSDGs 1, 2, 8, 10and fostering skills development.Some progressSDG 42020 CSR 3Some progressEnsure effective implementation of the measures to provide liquidity to assist SMEs and the self-employed Full ImplementationSDGs 8, 9and improve the business environment.Some progressSDGs 8, 9 Front-load mature public investment projects Some progressSDGs 8, 16and promote private investment to foster the economic recovery. Some progressSDGs 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularoninfrastructureforsustainable transport, Some progressSDG 11clean and efficient production and use of energy, Some progressSDGs 7, 9, 13the circular economy, Some progressSDGs 6, 12, 15digital infrastructure, such as 5G and Gigabit Networks, Some progressSDG 9and research and innovation.Some progressSDG 9 
 
 
  
 
Table (continued) 

(Continued on the next page) 

105 

2021 CSR 1No longer relevantIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudentfiscalpolicy.Preservenationallyfinancedinvestment. No longer relevantSDGs 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-term fiscal positions and ensuring fiscal sustainability in the medium term. No longer relevantSDGs 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupporting the green and digital transition. No longer relevantSDGs 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthandsocialprotection systems for all.No longer relevantSDGs 8, 162022 CSR 1Limited progressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspendingtothe evolving situation.No longer relevantSDGs 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilience Facility and other Union funds.No longer relevantSDGs 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthe medium term through gradual consolidation, investment and reforms.No longer relevantSDGs 8, 16Prioritisereformstoimprovethefiscalsustainabilityoflong-termcare,includingbypromotinga cost efficient use of the different care settings.Some progressSDG 3Reformthetaxationandbenefitsystemstoreducedisincentivestoworkbyshiftingthetaxburdenawayfromlabourandbysimplifyingthetaxandbenefitsystem.Reducetaxexpenditures and make the tax system more investment-neutral.Limited progressSDGs 8, 10, 122022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestones and targets included in the Council Implementing Decision of 13 July 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiations with the Commission and subsequently starting their implementation.2022 CSR 3Some progressAddresslabourshortagesandskillsmismatches,notablybyimprovingtheperformanceandinclusivenessoftheeducationandtrainingsystem,enhancingthequalityandlabourmarketrelevanceofthevocationaleducationandtraininganddevelopingmoreflexibleandattractive career paths and training for teachers.Some progressSDG 42022 CSR 4Some progressReduce overall reliance on fossil fuelsLimited progressSDGs 7, 9, 13bysteppingupenergyefficiencyimprovementsandthereductionoffossilfueluseinbuildings,Some progressSDG 7promoting the use and supply of public transport as well as soft mobilitySome progressSDG 11andacceleratingthedeploymentofrenewableenergiesandrelatedgridinfrastructurebyfurtherstreamliningthepermittingproceduresincludingbyreducingthelengthofappealproceduresandadoptingframeworkconditionstoboostinvestmentsinsolarenergyinstallationsSome progressSDGs 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) 

Source: European Commission 

106 

2023 CSR 1Limited progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,andpreserveincentives for energy savings.Substantial progressSDGs 8, 17Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinanced net primary expenditure in 2024 to not more than 2%.No progressSDGs 8, 17PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrants and other EU funds, in particular to foster the green and digital transitions.Full ImplementationSDGs 8, 17Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainable growth, to achieve a prudent medium-term fiscal position.No progressSDGs 8, 17Strengthen efforts to improve the efficiency of long-term care.Some progressSDG 3Pursuethereformofthetaxationandbenefitssystemtoreducedisincentivestoworkbyshifting the tax burden away from labour and by simplifying the tax and benefits system.Limited progressSDGs 8, 10, 12Review tax expenditures to reduce their economic, social and environmental harmful impact.Limited progressSDGs 8, 10, 122023 CSR 2Ensureaneffectivegovernancetoallowforaswiftandsteadyimplementationofitsrecoveryandresilienceplan.SwiftlyfinalisetheREPowerEUchapterwithaviewtorapidlystartingitsimplementation.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclose complementarity and synergy with the recovery and resilience plan.2023 CSR 3Some progressAddresslabourshortagesandskillsmismatches,inparticularbystrengtheningactivationpolicies (including guidance) to integrate disadvantaged groups into the labour market.Some progressSDGs 8, 10Improvetheperformanceandequityoftheeducationandtrainingsystemsandcontinuereforms to strengthen the teaching profession.Some progressSDG 42023 CSR 4Some progressReduce overall reliance on fossil fuelsLimited progressSDGs 7, 9, 13bysteppingupenergyefficiencyimprovementsandthereductionoffossilfueluseinbuildings,Some progressSDG 7 by further stimulating the decarbonisation of industry andSome progressSDG 7 by promoting the use and supply of public transport as well as soft mobility.Some progressSDG 11Acceleratethedeploymentofrenewableenergiesandrelatedgridinfrastructurebyfurtherstreamliningthepermittingprocedures,includingbyreducingthelengthofappealprocedures,andbyadoptinglegalframeworkstofurtherboostinvestmentsinrenewableenergy installations and facilitate energy sharing.Some progressSDGs 7, 8, 9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetencesneeded for the green transition.Some progressSDG 42024 CSR 1Limited progressSubmit the medium-term fiscal-structural plan in a timely manner.Full ImplementationSDGs 8, 16InlinewiththerequirementsofthereformedStabilityandGrowthPact,limitthegrowthinnetexpenditurein2025toarateconsistentwith,interalia,puttingthegeneralgovernmentdebtonaplausiblydownwardtrajectoryoverthemediumtermandreducingthegeneralgovernment deficit towards the 3% of GDP Treaty reference value.Full ImplementationSDGs 8, 16Address the expected increase in age-related expenditure,Limited progressSDGs 8, 16including by making the long-term care system more cost-effective. Some progressSDG 3Reformthetaxandbenefitssystemtostrengthenincentivestoworkbyshiftingthetaxburden away from labour and by reviewing the design of benefits.Limited progressSDGs 8, 10, 12Finance the labour tax reduction,Limited progressSDGs 8, 10, 12including by reducing tax expenditure.Limited progressSDGs 8, 10, 12Inparticular,takestepstophaseoutfossilfuelsubsidies,includingbyshiftingexcisedutiesfrom electricity to fossil fuels.Limited progressSDGs 6, 7, 9, 12, 13, 152024 CSR 2Significantlyacceleratetheimplementationoftherecoveryandresilienceplan,includingtheREPowerEUchapter,ensuringcompletionofreformsandinvestmentsbyAugust2026,byensuringeffectivegovernance.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreview,continuefocusingontheagreedpriorities,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologiesforEurope Platform initiative to improve competitiveness.2024 CSR 3Some progressAddresslabourshortagesandskillsmismatches,includingforthegreentransition,andstrengthenactivationpoliciestofurtherintegratedisadvantagedgroupsintothelabourmarket.Some progressSDGs 4, 8, 10Improvetheperformanceandequityoftheeducationandtrainingsystemsandcontinuereforms to strengthen the teaching profession.Some progressSDG 42024 CSR 4Some progressImprovethebusinessenvironmentandbusinessdynamicsbyreducingregulatoryburdenand complexity,Some progressSDGs 8, 9and by easing the restrictions in the service sector.Some progressSDG 9RRP 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.RRP 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. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

The  regions  of  Belgium  showcase  higher 
competitiveness  levels  than  the  EU  average. 
Nonetheless,  disparities  persist  at  regional 
level,  and  regions  and  provinces  have 
different  challenges  and  opportunities  for 
growth. While the transition towards a green and 
sustainable  economy 
is  progressing,  regional 
challenges  remain  as  regards  the  transformation 
of  historically  energy-intensive  economic  areas 
and sectors. 

Belgium’s 
prosperous 
economy,  while 
compared  to  the  EU  average,  overall,  shows 
significant  regional  disparities  in  terms  of 
GDP  per  head  and  growth  rates.  The  Flemish 
Region  and  the  province  of  Brabant  Wallon  have 
displayed  strong  long-term  growth,  in  contrast  to 
other  Walloon  provinces.  While  the  Brussels-
Capital  Region  maintains  a  high  GDP  per  capita 
compared  to  the  national  average,  its  long-term 
growth has also lagged, as population growth has 
been outpacing economic output. The provinces of 
Hainaut  and  Luxembourg  – 
less 
economically  developed  –  have  a  GDP  per  capita 
below 75% of the EU average (257). 

that  are 

Graph A17.1: Average annual real GDP per head 
growth vs GDP per head in 2013 

Competitiveness 

real 

labour  productivity 

In  2022,  Belgium’s  labour  productivity  was 
35%  higher  than  the  EU  average,  with 
significant and widening regional disparities. 
Belgium’s 
in  2022, 
measured  as  GDP  per  hour,  was  EUR 58.4,  1% 
percent  lower  than  the  previous  year.  While  the 
province  of  Brabant  Wallon  and  the  Brussels-
Capital  region  both  boast  the  highest  labour 
productivity  (EUR 73.9  and  EUR 73.7  per  hour, 
respectively),  their  trajectories  diverge  sharply. 
Brabant  Wallon  experienced  a  significant  6% 
increase  in  real  productivity  growth  in  2022 
bringing  it  almost  back  to  pre-pandemic  level, 
while  Brussels  saw  a  decline  of  3%.  Apart  from 
Vlaams-Brabant  which  enjoyed  a  substantial  4% 
growth  rate,  the  other  provinces  experienced 
productivity  losses.  The  productivity  gap  between 
Belgium’s  most  and  least  productive  provinces 
steadily  widened  over  the  past  two  decades  until 
2020,  and  despite  a  recent  narrowing,  it  exceeds 
EUR 30 per hour. 

Graph A17.2: Labour productivity per hour 

X axis: GDP per head, 2013 (PPS, index EU-27 = 100).  
Y axis: Annual average real growth of GDP per head, 2014-
2023 (EUR, 2015 prices, %). Bubble size: Population, 2023. 
Source: ARDECO (JRC) 

(257) NUTS 1 level corresponds to the 3 regions and NUTS 2 to the 
10 provinces plus the Brussels-Capital Region. Provinces 
exercise their powers autonomously while remaining under 
the supervision of their region. 

Unit: Real GDP per hour worked (EUR, 2015 prices) 
Source: ARDECO (JRC) 

All Belgian provinces surpass the EU average 
in  the  Regional  Competitiveness  Index  (RCI), 
which measures a region’s attractiveness for 
businesses  and  residents.  However,  Flemish 
provinces  consistently  outperform  most  Walloon 
provinces.  The  Brussels-Capital  Region,  Vlaams-
Brabant,  and  Brabant  Wallon  form  a  strong  and 
interlinked economic hub. 

Knowledge-intensive  and  high-tech  sectors 
are  significant  drivers  of  productivity  and 
in  many  Belgian 
provide  opportunities 

107 

Région de Bruxelles-Capitale/Brussels Hoofdstedelijk GewestProv. AntwerpenProv. Limburg (BE)Prov. Oost-VlaanderenProv. Vlaams-BrabantProv. West-VlaanderenProv. Brabant wallonProv. HainautProv. LiègeProv. Luxembourg (BE)Prov. Namur-0,50,00,51,01,52,02,53,06080100120140160180200220240GDP per head growth, 2014-2023 (%)GDP per head, 2013 (EU27=100)Capital regionOther NUTS2 regionsLinear (National average)Linear (EU27_2020)30405060708090201220132014201520162017201820192020202120222015 EUR per hour workedOther NUTS2 regionsCapital regionNational averageEU27 
 
       
 
       
 
 
Table A17.1:Selection of indicators at regional level in Belgium 

Source:  Eurostat and JRC 

leads  Belgium  in 
provinces.  Brabant  Wallon 
industries, 
knowledge-intensive  and  high-tech 
driving  significant  economic  growth.  In  2024,  half 
of  Belgian  employment  was  concentrated 
in 
knowledge-intensive services, with Brabant Wallon 
and  Namur  boasting  the  highest  share  (nearly 
60%) – well above the EU average of 41%. High-
tech  employment  is  also  concentrated  in  Brabant 
Wallon,  with  8.3%  of  the  workforce  employed  in 
this  sector,  compared  to  a  mere  3.4%  in  West-
Vlaanderen. 
in 
Walloon  Brabant  and  Flemish  Brabant,  as 
evidenced  by 
their  high  number  of  patent 
applications,  especially  in  biotechnology  and  ICT. 
These regions rank among the top in the EU, taking 
advantage  of  R&D  policies,  and  the  presence  of 
world-class  research  universities  like  KU  Leuven 
and UCLouvain and of multinational companies. As 
such,  98.8%  of  the  patent  applicants  are  non-
Belgian holders (258). 

thrives  particularly 

Innovation 

by 

several 

Belgium’s  regional  innovation  landscape  is 
characterised 
of 
excellence  across  different  areas  and 
sectors,  which  enable  opportunities  for 
economic development. Regional cluster policies 
are  well  implemented  and  specialised  in  fields 
such  as  biotechnologies  and  the  green  industry, 

centres 

(258) FPS Economy, 2024, Intellectual Property Office – Annual 

Report 2023, economie.fgov.be. 

with a strong focus on sustainable and competitive 
innovations.  Cluster-based  ecosystems  boost 
industrial  competitiveness,  R&D,  exports,  and 
foreign 
investment,  while  enabling  workforce 
reskilling to meet evolving industry needs (259). 

lagging  behind 

The southern provinces, Hainaut in particular, 
are 
in  terms  of  human 
capital (260).  In  Hainaut,  20.5%  of  the  population 
aged  0  to  64 live in  a  household  with  a  very  low 
work intensity. In addition, only 37% of 30 to 34-
year-olds  have  a  high  level  of  education.  This  is 
less than in the rest of Wallonia (43.6%) and much 
less  than  in  Flanders  (51.7%)  or  the  Brussels-
Capital  Region  (63.8%).  On  a  positive  note,  the 
number  of  early  school  leavers  in  Wallonia  fell 
from 10.9% in 2019 to 8.1% in 2024, a trend that 
can  also  be  observed  in  Hainaut.  The  province  of 
Luxembourg  faces  similar  challenges  in  terms  of 
human  capital.  A  significant  part  of its  workforce, 
while  residing  mainly  in  the  areas  around  Arlon, 
Bastogne  and  Virton,  actually  works  in  the  Grand 
Duchy  of  Luxembourg (261),  which 
improves 

(259) European Cluster Collaboration Platform, Country factsheet 

Belgium, clustercollaboration.eu. 

(260) Human capital encompasses knowledge, skills and 

competences, highlighting the importance of education, 
training and experience in building a workforce that drives 
economic growth, innovation and productivity. 

(261) Idelux, 2023, Tableau de bord socioéconomique, Idelux.be. 

108 

GDP per head (PPS)Real GDP per head growthProductivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)Human resources in science and technology (core)Employment in knowledge-intensive servicesRegional Competiti-veness IndexEmployment rate 20-64At-risk-of-poverty or social exclusionAccess to alternative fuel infrastructureGreenhouse gas emissionsGreen employment - in sustainable but competitive sectorsIndex EU-27 = 100Average annual % changeIndex EU-27 = 100Average annual % change% of total employment% of total employmentIndex EU-27 = 100% of population aged 20-64% of total populationNumber of electric vehicles charging points within 10 kmtCO2eq. per person% of total employment20232014-202320222013-202220242024202220242024202220232020European Union (27 MS)1001,61000,949,241,575,821,02877,115,1Belgium1181,11350,656,550,172,318,26339,019,3Région de Bruxelles-Capitale/ Brussels Hoofdstedelijk Gewest1910,01670,164,648,913664,137,227182,361,5VLAAMS GEWEST1211,51340,756,148,676,912,85568,4Prov. Antwerpen1381,41490,957,149,713475,815,88508,218,4Prov. Limburg (BE)951,01160,350,846,512675,711,62246,614,1Prov. Oost-Vlaanderen1101,51250,458,049,513578,913,148211,314,3Prov. Vlaams-Brabant1352,01541,363,354,213674,710,16246,525,5Prov. West-Vlaanderen1161,31160,549,141,712179,011,23658,314,6RÉGION WALLONNE861,21190,654,453,967,121,88712,4Prov. Brabant wallon1482,61722,172,659,213673,716,91166,521,0Prov. Hainaut720,71100,547,050,410864,326,87316,55,8Prov. Liège851,01160,155,853,511265,120,51269,99,2Prov. Luxembourg (BE)730,91010,252,054,710572,017,82812,54,2Prov. Namur811,21040,255,858,311170,317,84511,58,7 
 
 
 
   
 
household  income,  while  the  province’s  GDP  per 
capita remains low. 

Graph A17.3: Share of internet users interacting 
with public authorities: percentage of individuals 
who used the internet within the last year (%) 

significant 

led  with 

(75.8%),  with 
Flanders 

Labour  market  conditions  are  generally 
better  in  Flanders  than  in  the  Brussels-
Capital  Region  or  Wallonia.  Belgium’s  2024 
employment  rate  (72.3%)  was  lower  than  the  EU 
average 
regional 
a  76.9% 
differences. 
employment  rate,  while  Wallonia  (67.1%)  and 
Brussels  (64.1%)  lagged.  West-Vlaanderen  and 
Oost-Vlaanderen had the highest employment rate 
(79%),  and  Hainaut  and  Liège  the  lowest  (64-
65%).  Women’s  employment  rates  remain  lower 
than  men’s  nationwide.  Youth  unemployment  is  a 
concern, particularly the rates in Brussels (23.6%) 
and  Namur  and  Hainaut  (26.3  and  28.1%),  which 
significantly  exceed  the  EU  (14.9%)  and  national 
(17.4%)  averages.  At 
time,  skill 
mismatches and labour shortages pose significant 
challenges  to  small  to  medium-sized  enterprises 
(SMEs).  In  2023,  75%  of  Belgian  SMEs  declared 
that skill shortages negatively affect their general 
business  activities,  above  the  EU  average  of 
63% (262).  Innovation  and  competitiveness  can  be 
impeded  by  skill  mismatches/shortages.  This  is 
particularly 
the  ongoing 
industrial and green transitions. 

challenging  given 

the  same 

The  Regional  Quality  of  Government 
index (263)  varies  across  the  Belgian  regions 
with Flanders and Wallonia scoring above the 
EU  average  and  Brussels  slightly  below  it. 
Coordination and cooperation are a necessity  in a 
multi-level  institutional  system  with  extensive 
regional  and  at  times  shared  competencies  and 
can 
effort.  However, 
improvements  in  governance  and  in  providing 
services,  including  at  regional  and  local  level,  can 
be achieved even in complex institutional settings. 
This  is  illustrated,  for  example,  by  the  roll-out  of 
public  e-services  and  the  share  of  the  population 
using them which has accelerated substantially in 
recent  years,  including  in  the  less  developed 
provinces (Graph A17.3). 

considerable 

require 

(262) European Commission, 2019, Skills Mismatch and 

Productivity in the EU, Europa.eu. 

Source: Eurostat 

Social fairness  

The  highest  poverty  rates  in  Belgium  are  in 
Brussels,  where  37.2%  of  the  population  is 
at  risk  of  poverty  or  social  exclusion,  and 
13.6% experience severe material and social 
deprivation. These figures are significantly higher 
than 
the  national  averages  and  are  more 
pronounced  than  in  Wallonia  and  Flanders.  High 
poverty  rates  in  Brussels  are  in  part  exacerbated 
by relatively high housing costs, driven by multiple 
economic  factors.  These  include  higher  demand, 
and consequently higher prices for Brussels and its 
limited 
areas, 
surrounding 
expansion  opportunities,  general 
inflation  and 
rising  energy  prices (264).  The  cost  of  housing 
places a substantial burden on city residents, with 
11%  of  the  country’s  urban  population  facing 
housing  cost  overburden  in  2024,  meaning  that 
these  households  spend  more  than  40%  of 
disposable  income  on  housing  costs.  While  the 
cost  of  housing  is  a  national  issue,  it  is  less 
pronounced in towns and suburbs, and rural areas 
(5%). A focus on affordable housing management 
vulnerable 
consideration 
with 

higher  wages, 

special 

for 

(263) European Quality of Government Index 2024| University of 

(264) OECD, 2024, OECD Territorial Reviews: Brussels-Capital 

Gothenburg 

Region, Belgium, oecd.org. 

109 

455055606570758085201120132015201720192021Brabant WallonVlaams-BrabantRégion de Bruxelles-Capitale/BrusselsHoofdstedelijk GewestLimburg (BE)AntwerpenOost-VlaanderenLuxembourg (BE)West-VlaanderenNamurHainautLiège 
 
       
 
populations could improve overall living conditions 
in Brussels. 

Sustainability 

There  are  significant  regional  differences  in 
access  to  healthcare  and  primary  education 
in  Belgium’s  rural  areas  (Graph  A17.4).  The 
proportion  of  the  population  living  less  than  10 
minutes  by  car  from  the  nearest  health  centre 
ranges  from  25%  in  Luxembourg,  below  the  EU 
average  of  29%,  to  63% in  Oost-Vlaanderen (265). 
While the EU  average is 31%, in Vlaams-Brabant, 
24% of children in rural areas live less than a 15-
minute  walk  from  the  nearest  elementary  school, 
compared to 49% in Luxembourg. In urban areas, 
around  90%  of  the  population  has  close  physical 
access 
to  hospitals  and  primary  education 
facilities  except  for  the  provinces  of  Limburg  and 
Namur as regards access to elementary schools. 

Graph A17.4: Access to services in rural areas in 
2021 

Units: Access to healthcare: Percentage of population that can reach 
nearest hospital within 10 minutes by car (EU-27). 
Access to primary school: Percentage of children under 15 who can 
reach primary school within 15-minute walk (EU-24). 
Source: Eurostat 

reduced 

significantly 

Belgium 
annual 
greenhouse  gas  emissions  per  person  from 
14.5  to  9  tCO2eq  between  1990  and  2023. 
While  Brussels  is  the  lowest-emitting  region  with 
2.3  tCO2eq  per  person,  Hainaut’s  emissions  are 
seven  times  higher.  Carbon  intensive  industry 
accounts for 29.7% of CO2 emissions in Wallonia, 
due  to  the  activities  of  cement,  chemicals  and 
power  plants.  Three  districts  within  Hainaut  are 
included in the Wallonia’s Just Transition Plan, with 
the  aim  of  helping  them  transition  to  more 
sustainable  production  processes  and  diversify 
their economic base. 

is 

concentrated 

less  developed  regions 

Green  employment 
in 
Brussels, where 62% of jobs are classified as 
sustainable  and  competitive  (266).  This 
is 
significantly  higher  than  in  Hainaut,  where  the 
share is only 5.8%, even below the EU benchmark 
for 
(6.3%).  However, 
several structural Walloon plans (267) establish the 
framework  of  sustainable  development,  boosted 
by  measures  for  training  for  underqualified 
workers 
Proper 
implementation of the industrial/green transition in 
the  province  of  Hainaut  is  key  to  ensuring  local 
economic resilience and social cohesion. 

specialised 

sectors. 

for 

vehicle 

electric 

charging 
Belgium’s 
infrastructure (268) varies significantly across 
regions. Brussels boasts the highest density, with 
an  average  over  2 700  charging  points  within  a 
10 km radius of where people live. In contrast, the 
province of Luxembourg has only 28, compared to 
the Belgian average of 633 and the EU average of 
287. 

(265) The south-eastern area of the Brussels-Capital Region is 
covered by forest, which means that the parcels are 
classified as rural according to the degree of urbanisation. 
For this reason, a small part of the population living there 
has reduced access to hospitals or schools compared to 
other parts of the region. 

(266) JRC data: Jobs from 56 NACE activities which produce less 

greenhouse gas emissions per worker and are more 
productive per worker than the EU median value. 

(267) List of Walloon plans on Wallonie.be. 

(268) Indicators of access to alternative fuel infrastructure are 

based on calculations by DG REGIO and the JRC, using data 
from the European Alternative Fuels Observatory (EAFO), 
Eurostat, TomTom and Eco-Movement. 

110 

020406080100Prov. Vlaams-BrabantProv. AntwerpenProv. Limburg (BE)Prov. Brabant wallonProv. Oost-VlaanderenProv. LiègeProv. HainautProv. West-VlaanderenProv. NamurProv. Luxembourg (BE)Région de Bruxelles-…Belgique/BelgiëEuropean UnionAccess to healthcare (% of population)Access to primary school (% of children under 15)