COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Belgium Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Belgium
Date: 2026-06-03
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, 3.6.2026  SWD(2026) 201 final  COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Belgium Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Belgium {COM(2026) 201 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Moderate economic growth 

Public finances remain a challenge 

largely  due 

slowed  down, 

Economic growth in Belgium slowed down 
in  2025  and  is  expected  to  further 
decelerate  in  2026 (1).  In  2025,  economic 
to 
activity 
heightened  global  uncertainty  and  a  fall  in 
exports. 
is 
expected  to  decelerate  driven  by  weaker 
private  consumption.  Imports  and  exports  are 
expected  to  rebound  in  2026,  although  they 
remain subject to external shocks. Overall, GDP 
growth is projected to stand at 0.7% in 2026. 

In  2026,  domestic  demand 

Inflation 
is  rising,  following  spiking 
energy  prices.  Recent  events  in  the  Middle 
East  have  led  to  increased  energy  prices. 
Depending  on  the  length  of  recent  energy 
markets’  disruption,  inflationary  pressures  are 
set  to  negatively  impact  private  consumption 
and investments, bringing inflation up to 3.4% 
in 2026. Wage growth is set to moderate. 

Strong  regional  disparities  continue  to 
mark the labour market. While major labour 
market  reforms  were  adopted  recently,  the 
employment  rate  remains  below  the  EU 
average, especially for low-skilled, people with 
a migrant background, persons with disabilities 
and  older  workers  (see  Section  4).  Moreover, 
disparities in employment rates across regions 
in 
the  highest 
are  among 
the  EU. 
(11.8%)  and 
in  Brussels 
Unemployment 
Wallonia  (7.4%)  is  above  the  EU  average 
(5.9%),  while  labour  shortages  are  significant 
in  Flanders.  Low  employment  rates  are  a 
challenge to growth and increase poverty risks. 

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

27 country reports was 30 April 2026. 

Public  debt  keeps  rising  because  of 
consistently  high  deficits.  The  general 
government’s deficit jumped to 5.2% of GDP in 
2025  and  is  projected  to  stabilise  at  5.2%  of 
GDP  in  2026  before  rising  again  in  2027. 
Public debt is forecast to continue to increase 
from  107.9%  of  GDP  in  2025  to  112.8%  in 
2027. 

to 

Additional 
consolidation  efforts  are 
needed  to  reduce  the  deficit  and  bring 
public  debt  on  a  downward  path.  In  its 
medium-term  fiscal  structural  plan  for  2025-
limiting  net 
2029,  Belgium  commits 
expenditure  growth,  aiming  to  reduce 
its 
deficit  below  3%  of  GDP  in  line  with  its 
Excessive Deficit Procedure and place debt on 
a  downward  path  (see  Annex  2).  According  to 
the plan, this would imply an improvement of 
the  structural  primary  balance  of  2.4  pps  of 
GDP  between  2025  and  2029.  Policy  actions 
are projected to slowdown expenditure growth 
in  2026,  especially  ageing-related  costs  and 
subsidies. However, low revenue growth, rising 
interest  payments  and  defence  expenditure 
continue to weigh on the government balance. 
Further  consolidation  efforts  are  needed  to 
reduce  the  structurally  high  deficit  and  bring 
the  debt-to-GDP  ratio  on  a  downward  path. 
The  swift  implementation  of  the  reforms  and 
fiscal 
investments 
structural  plan  could  support  this  effort  (see 
Annex 2). 

the  medium-term 

in 

Defence  spending  has  risen  sharply  in 
recent years to reach the NATO 2% norm 
in  2025.  The  government  has  stepped  up 
efforts  to  increase  defence  expenditure  to 
meet  the  NATO  commitment.  Total  defence 
expenditure  rose  from  0.9%  in  2021  to  1.4% 
in  2025  and  is  projected  to  reach  1.8%  in 

2 

 
 
 
2027 (2). To boost public defence spending, the 
Council  has  activated  the  national  escape 
clause upon request  of Belgium (3). As part of 
the ReArm Europe Plan, Belgium has requested 
EUR 8.3 bn  in  EU  loans  under  Security  Action 
for Europe (SAFE) for defence procurement. 

Graph 1.1: Expenditure items with the highest 
gap with main neighbouring countries, ppt of 
GDP, 2023 

Source: Eurostat 

Belgium’s  fiscal  strategy  focuses  on 
reducing  expenditure,  while  safeguarding 
public  investment.  The  country’s  share  of 
public expenditure is among the highest in the 
EU,  at  54.2%  of  GDP  in  2025.  To  contain 
public  spending, 
the  federal  government 
limited  unemployment  benefits,  incentivises 
labour  market  participation  and  reforms  the 
pension  system.  The  government  also  plans 
revenue-increasing  measures  such  as  a  new 
capital  gains  tax,  VAT-reforms  and  increased 
excise  duties  on  fossil  fuels.  Additional  fiscal 
consolidation  could  be  achieved  by  reducing 
fossil  fuel  subsidies  and  tax  expenditure. 
Despite 
finance 
situation,  public  investment  has  shown  an 
upward trend in recent years. It is expected to 
rise  from  2.6%  in  2019  to  3.3%  of  GDP  in 
2027 (see Annex 2). 

challenging  public 

the 

High  public  expenditure  stands  in  stark 
contrast  to  the  poor  cost  efficiency  of 

(2)  A difference in scope and time of reporting explains the 
difference between the NATO and the national account 
defence expenditure as percentage of GDP. 

(3)  The  activation  of  the  national  escape  clause  provides 
Member  States  with  budgetary  flexibility  to  increase 
defence  expenditure,  without  an  immediate  need  to 
finance  such  increase  with  spending  cuts  or  revenue-
raising measures. 

3 

in 
public  services.  Public  expenditure 
Belgium was about 4.6 pps of GDP higher than 
the  average  of 
its  main  neighbouring 
countries.  This  was  mainly  due  to  higher 
expenditure  on  general  affairs  and  education 
compared  with  other  EU  countries  (see  Graph 
1.1)  -  without  necessarily  higher  quality  of 
public  services  provided.  As  part  of  the 
medium-term  fiscal  structural  plan,  all  levels 
of government are anchoring spending reviews 
to  their  budgetary  process  to  improve  the 
composition  and  efficiency  of  their  public 
expenditure.  However,  further  efforts  are 
needed  to  increase  the  cost  efficiency  of 
public  administration  at  all  government  levels 
(municipalities, 
and 
provinces, 
communities,  federal  level).  Seeking  out  and 
implementing  possible  economies  of  scale 
could  be  eased  by  streamlining  government 
structures. 

regions 

Improving inter-federal budgetary 
coordination 

The  budgetary  process  suffers  from 
structural  weaknesses,  but  reforms  are 
ongoing.  Belgium  was  so  far  the  only  EU 
country without multiannual  fiscal planning at 
national  level  and  without  budgetary  targets 
federated  entities (4).  Moreover, 
for 
the 
budgetary calendar does not provide sufficient 
time  for  evidence-based  policy  evaluations 
legal  review.  Starting  the  budgetary 
and 
process  earlier  would  make  the  budget  less 
dependent  on  ad-hoc  fiscal  measures  and 
avoid late submission of the budgetary plan. 

In  March  2026,  federal  and  federated 
entities  have  reached  an  agreement  on 
enhanced budgetary coordination, to which 
Belgium  had  committed  in  its  medium-term 
fiscal structural plan. Belgium plans to do this 
by  setting  multiannual  budgetary  targets  for 
all entities to comply with the requirements of 
the  EU  economic  governance  framework.  To 
facilitate a swift and effective implementation 

(4)  Some fiscal rules exist at local  authority level and to a 
certain  extent  for  some  regions  and  communities  (e.g. 
Flanders). 

0,00,51,01,52,02,53,0General economic,commercial and labouraffairsPre-primary andprimary educationSecondary educationBENLFRDE 
   
 
 
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). 

of  this  agreement,  its  design  should  aim  for 
transparency  and  simplicity.  Belgium  also 
made plans to redefine the tasks and enhance 
the  financial  and  staff  capacity  of  the  High 
Council  of  Finance  so  that  it  can  effectively 
perform  its  task  as  an  independent  fiscal 
institution.  This  reform  aims  to 
improve 
Belgium’s  budgetary  planning  and  verification 
of 
the  EU  economic 
the 
governance 
independence  of  the  High  Council  of  Finance 
and  its  secretariat  should  be  assured  when 
implementing the reform. 

framework.  Safeguarding 

compliance  with 

While  public  investment  needs  are  high, 
the delivery of investment suffers from a 
lack  of  inter-federal  coordination.  Public 
investment  will  be  crucial  to  finance  the  twin 
transition  and  achieve  the  UN  Sustainable 
Development  Goals  (see  Box  1).  While  public 
it  remains 
increased  recently, 
investment 
lower  than 
in  other  EU  countries.  Public 
investment is largely delegated to regions and 
communities,  and  a  lack  of  effective  inter-
federal coordination may lead to inefficiencies 
in public investment management. Introducing 
multi-year investment plans at all government 
levels  could  improve  the  cost  efficiency  of 
public investment. Effective coordination could 
also  help  offset  the  fragmentation  of  policy 
action  across  government  levels.  Streamlining 
government structures, clarifying competences 
levels  and  avoiding 
between  government 
duplication could increase policy effectiveness 
and coherence. 

funding 

instruments 

provide 
EU 
considerable  resources  to  Belgium.  They 
support investments and structural reforms to 
environmental 
increase 
sustainability,  skills,  social 
fairness  and 
security,  while  helping  to  address  challenges 

competitiveness, 

the 

(CSRs).  Key 

country-specific 
identified 
in 
instruments 
recommendations 
include  the  Recovery  and  Resilience  Facility 
(see Box 2) and Cohesion policy funds (see Box 
3). In addition, the Common Agricultural Policy 
(CAP) provides Belgium with an EU contribution 
of EUR 3.3 billion under the CAP strategic plan 
for 2023-2027 (5). A further EUR 299.5 million 
are available under the Asylum, Migration and 
Integration  Fund  (AMIF),  together  with  the 
Border  Management  and  Visa 
Instrument 
(BMVI)  and  the  Internal  Security  Fund  (ISF). 
Other 
support 
instance 
competitiveness 
through  open  calls  under  Horizon  Europe  and 
the Connecting Europe Facility. 

also 
in  Belgium,  for 

programmes 

EU 

Rising ageing costs put public 
finances under pressure 

is  expected 

Ageing 
to  significantly 
increase  public  expenditure  by  2070,  but 
the  new  pension  reform  should  ease  the 
strain.  According  to  the  2024  Ageing  Report, 
pensions  and  long-term  care  expenditure  are 
the  main  drivers  of  a  projected  increase  in 
ageing-related  expenditure  of  4.7 pps  of  GDP 
by  2070,  substantially  higher  than  the  EU 
average  of  1.3 pps  (see  Annex  2).  Pension 
expenditure is projected to increase by 3.1 pps 
of  GDP  by  2070,  to  reach  16.2%  in  2070.  In 
March 2026, a draft law to reform the pension 
system  has  been  tabled  to  the  parliament (6), 
which (i) introduces a ‘bonus-malus’ system to 

(5)  An overview of Belgium’s formally approved strategy to 
the  EU’s  common  agricultural  policy 

implement 
nationally can be found at: Flanders and Wallonia. 

(6)  Pension reform draft law of 10 March 2026. 

4 

 
 
 
Box 2: 

Key achievements of the recovery and resilience plan 

Belgium’s recovery and resilience plan (RRP) represents a total budget of  EUR 5 264 million, 
corresponding  to  0.88%  of  GDP.  The  aim  of  the  RRP  is  to  support  reforms  and  investments 
contributing  to  the  green  and  digital  transitions,  strengthen  economic  resilience,  and  address 
long-standing structural challenges identified in the European Semester. 

As of 4 May 2026, EUR 3.07 billion (around 58.3 % of the total allocation) have been disbursed 
to  Belgium  following  the  satisfactory  fulfilment  of  100  milestones  and  targets,  of  which  EUR 
103.36  million  in  loans.  Implementation  has  progressed  steadily,  with  a  growing  number  of 
reforms and investments already fulfilled and delivering real results on the ground. 

Belgium also  benefits  significantly  from the  RRPs of  other Member States (Italy, Spain,  France 
and  Poland)  through  spillover  effects,  which  are  estimated  at  EUR  4.6  billion.  The  full  positive 
impact of the Recovery and Resilience Facility (RRF) on Belgium’s GDP is estimated at EUR 10.3 
billion between 2020 and 2030. 

Highlights and impact of the plan 

•  Fibre networks and 5G. Reform of regulatory frameworks to accelerate the roll out of fibre 

networks and 5G at all government levels. 

•  Greening of road transport. Investments in the deployment of charging infrastructure for 

electric vehicles. 

•  Modal shift. Investments in railway upgrades and in cycling infrastructure. 
•  Water management. Investments in ‘Blue Deal’ projects to increase water availability and 

resilience to climate change. 

•  Pension system. Reform of the pension system, improving its social and fiscal sustainability. 
•  Spending reviews. Integration of spending reviews into the budgetary process by all levels 

of government. 

replace the bonus system introduced in 2024. 
(ii)  increases  the  relevance  of  the  period 
effectively  worked  compared  with  periods  of 
assimilated  work;  (iii)  further  harmonises  the 
civil servants’ pension system with the general 
system;  and  (iv)  gradually  phases-out  the 
favourable  conditions  under  some  special 
pension regimes in the public sector. The draft 
law 
is  expected  to  reduce  the  projected 
increase  in  pension  expenditure  by  1.3 pps 
between 2024 and 2070 (7). 

The  projected  increase  in  long-term  care 
costs  puts  pressure  on  the  long-term 
financial sustainability of public finances. 
Belgium  received  a  CSR  in  2025  to  make  the 
long-term  care  system  more  cost-effective 
and  has  made  some  progress  in  addressing 
the  challenge.  In  2025,  expenditure  on  long-
term  care  stood  at  2.3%  of  GDP  (vs  1.7%  in 
the  EU),  one  of  the  highest  in  the  EU.  Until 

(7)  Federal  Planning  Bureau,  2026,  Budgetary  and  social 
assessment  of  the  federal  government’s  pension 
reform, Rapport 13299. 

high 

ranks 

Belgium 

2070, long-term care spending is projected to 
increase  by  1.7  pps  of  GDP  (EU  average  0.8 
pps), one of the highest in the EU, weighing on 
fiscal  sustainability  (as  confirmed  by  S2 
indicator (8)). 
for 
residential  care  and  rather  low  for  home 
care (9),  with  risks to affordability  due to high 
out-of-pocket  costs  of  residential  care.  Data 
show  that  there  is  still  excessive  or  early 
placement 
little 
improvement since 2021. This is most acute in 
Brussels  and  Wallonia,  suggesting  room  to 
improve  the  cost  efficiency  of  care,  including 
by  strengthening  measures  to  discourage 
overuse  of  residential  care  and  improving 
is 
community-based 
expanding the use of the BelRAI tool, which is 
a  tool  to  help  tailor  care  to  the  individual’s 

in  residential  care,  with 

Flanders 

services. 

(8)  The  S2  indicator  measures  the  adjustment  needed  to 
stabilise  public  debt  over  the  long  term.  See  European 
Commission Debt Sustainability Monitor 2025. 

(9)  KCE, 2024, Performance of the Belgian health system – 
KCE report 376C, p. 112. Based on OECD data, providing 
that  long-term  care  for  older  people  differs  across 
countries. 

5 

 
 
 
 
level of dependency. Brussels has taken steps 
to promote home care and Wallonia has taken 
steps on prevention. Belgium spends less than 
many  other  EU  countries  on  preventive  care 
which  could  also  help  reduce  long-term  care 
costs (Annex 15). 

incentivise  work,  the  federal  government  will 
phase  out  the  marital  quotient  for  second 
earners, increase the work bonus for low-wage 
earners,  reduce  the  special  social  security 
contribution  and  gradually  increase  the  tax-
free allowance by 2030. 

be 

and 

could 

offering 

pension 

Public 
further 
supplemented  with  occupational  pension 
(see  Annexes  2  and  6).  While  60%  of 
Belgian  workers  have  employer  pension 
schemes, participation and savings levels vary 
by  sector  and  employer  size.  Expanding 
occupational pensions to all private and public 
sectors,  increasing  the  level  of  the  average 
contributions 
occupational 
pensions  as  monthly  payments  instead  of  a 
lump  sum  would  ensure  a  complementary 
source  of  regular  income  for  people  in  their 
retirement.  Easing 
including 
relaxing  the  mandatory  return  guarantee  for 
occupational 
encourage 
could 
to  choose  defined-contribution 
employers 
return  group 
products, 
insurance  contracts.  The  federal  government 
has  asked  social  partners to  find  ways  for  all 
employees  to  have  an  occupational  pension 
with  an  employer  contribution  of  at  least  3% 
by 2035. 

regulations, 

pensions 

rather 

than 

low 

Reforming the tax system 

revenue 

High  personal  income  taxes  deter  labour 
market participation. Labour taxation (social 
contributions  and  income  taxes)  is  one  of  the 
highest  in  the  EU  at  almost  all  income  levels 
from 
(see  Annex  3).  However, 
consumption  taxes  is  below  the  EU  average 
(9.5  vs  10.6%  of  GDP).  Personal  income  tax 
brackets  in  Belgium  are  narrow  and  even 
average income earners are therefore liable to 
the highest income tax  rates (45% and 50%). 
This  results  in  significant  low-wage  traps 
where  additional  earnings  are  quickly  taxed 
away  through  higher  taxes  and  reduced 
benefits.  This  comes  on  top  of  non-cash 
benefits  which  are  not  means-tested  and 
linked  to  the  status  of  beneficiaries (10).  To 

(10)  OECD, 2024, Economic Surveys: Belgium 2024. 

leading 

The high tax burden on labour is offset by 
to 
subsidies, 
many  wage 
distortions.  Company  cars,  meal  vouchers 
and  other  alternative  wage  forms,  tend  to 
create  economic inefficiencies  and  distortions. 
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  (2%  of 
GDP)  and  generally  not  well-targeted,  the 
federal government plans to extend ‘flexi-jobs’ 
and  student  jobs.  While  those  measures  are 
meant  to  increase  flexibility  and  address 
labour  shortages,  they  risk  crowding-out  jobs 
low-skilled  workers  and  exacerbating 
for 
in  certain  sectors (11). 
labour  shortages 
Moreover, wage subsidies for employing older 
people  and  for  the  first  hire  (while  reformed) 
do  not  appear  to  be  effective,  as  they  come 
with limited or no net job creation (12). 

Capital taxation is distortive across asset 
types  and  does  not  encourage  equity 
investments.  Most  capital  income  is  subject 
to a final withholding tax and is not included in 
the  personal 
income  tax  base.  However, 
specific  tax  rules  apply  to  several  types  of 
investment,  distorting  resource  allocation  and 
creating tax-induced overinvestment in certain 
types  of  assets  (see  Annex  6).  For  instance, 
immovable property investments are favoured 
because 
to 
calculate  property  tax)  is  often  undervalued, 
and  there  is  no  tax  on  capital  gains  or  rental 
income.  Likewise,  tax  relief  for  some  highly 
regulated  pension  products,  such  as  group 
insurances  and  pension  savings  products, 
hinder  investment  diversification  and  cost 
efficiency.  Moreover,  favourable  taxation  of 
interest  from  regulated  saving  accounts,  the 

the  cadastral 

income 

(used 

(11)  National Bank of Belgium, Annual report 2025. 

(12)  Godefroid, H. et al., 2025, Are government subsidies and 
investment  grants  to  enterprises  higher  in  Belgium? 
NBB Economic Review. 

6 

 
 
 
Box 3: 

Contribution of cohesion policy funds 

EU  cohesion  policy  funding  is  supporting  Belgium’s  efforts  to  boost  competitiveness, 
environmental  sustainability,  skills  and  social  fairness.  In  the  2021-2027  programming 
period,  EU  cohesion  policy  funds  (ERDF,  ESF+,  CF  and  JTF)  are  providing  EUR 2.5 billion 
(amounting  to  EUR 5.6 billion  paired  with  national  co-financing),  to  Belgium.  The  value  of 
selected  projects  corresponded  to  78.2%  of  the  total  allocation  as  of  March  2026,  with 
additional calls for projects in the pipeline. 

• 

Innovation,  business  environment  and  productivity.  More  than  EUR 1 billion  are 
allocated  for  research  and  innovation,  SMEs  competitiveness  and  for  the  regions  most 
affected  by  the  transition  away  from  carbon-intensive  activities.  Around  7 000  firms  have 
already seen their projects approved.  

•  Decarbonisation,  energy  affordability  and  sustainability.  EUR 886  million  are 
earmarked  for  green  infrastructure,  energy  efficiency  and  renewable  interventions.  These 
funds  will  contribute  to  additional  waste  recycling  capacity  of  53 699  tonnes  per  year. 
Another  EUR 456  million  supports  the  territories  most  affected  by  the  transition  towards 
climate neutrality. 

•  Skills, quality jobs and social fairness. EUR 302.6 million are earmarked for increasing 
employment, including youth employment,  EUR 432.7 million for improving social inclusion, 
and EUR 490.1 million for strengthening lifelong learning as well as education and training 
systems. The ESF+ has earmarked EUR 50.6 million for addressing material deprivation, with 
over 460 000 people having received food support, including over 148 000 children.  

The  mid-term  review (*)  boosted  the  cohesion  policy’s  contribution  to  emerging  strategic 
priorities, reallocating nearly EUR 164 million. Approximately 75% of the allocation is expected to 
boost  competitiveness,  notably  through  support  for  critical  technologies  under  the  Strategic 
Technologies  for  Europe  (STEP),  while  less  than  20%  will  be  directed  towards  research  and 
innovation in the defence sector. The mid-term review will also contribute to water resilience and 
construction of high environmental performance public housing. 

(*) The mid-term review is carried out halfway through the 2021-2027 programming period. It is a formal 
process  required  under  Article  18  of  the  Common  Provisions  Regulation  that  aims  to  assess  the 
implementation of programmes and, where necessary, propose adjustments  to improve their performance, 
ensure their relevance in light of new and emerging needs and keep them aligned with other EU policies. 

tax  on  securities  accounts  and  the  recent 
capital  gains  tax  further  discourage  equity 
investments. 

7 

 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

The  CSRs  in  2025  recommended  that 
Belgium  simplify  regulation,  improve  the 
business  environment  and  business 
dynamics, and boost innovation diffusion. 
Since  then,  Belgium  has  announced  some 
measures  to  simplify  regulation  and  reduce 
administrative  burden.  However,  substantial 
measures  are  missing  and  further  efforts  are 
needed  to  address  the  recommendation  in  a 
meaningful way (see Annex 1). 

Improving the business 
environment 

taken. 

having 
in 

been 
the  2025  CSRs, 

Complexity of legislation persists despite 
measures 
As 
reducing 
highlighted 
regulatory  burden  and  complexity  remains  a 
challenge.  Businesses  are  mostly  concerned 
about  employment  regulation,  social  security 
and operational costs (13). This can be linked to 
the  fragmentation  of  services  across  regions 
and 
the 
levels  of  government,  making 
business  environment  complex  in  Belgium. 
Simplification  initiatives  are  being  taken  at 
regional 
federal 
but 
and 
implementation 
timelines  are  sometimes 
missing,  and  inter-federal  coordination  seems 
lacking.  To  avoid  new  regulatory 
to  be 
requirements, mechanisms for cutting red tape 
and 
be 
strengthened  at  all  levels  of  government,  in 
particular  by  strengthening  data  governance 
and  establishing  single  points  of  contact  (see 
Annex 7). 

simplifying 

regulation 

level (14), 

could 

(13)  Flash Eurobarometer 567/568, 2026. 

(14)  Administrative  Simplification  Plan  2025–2029  and 
SMEs  Plan  2025-2026  at  federal  level.  Vlaamse 
Regering,  2025,  Regelrecht  Rapport;  Gouvernement 
:  état 
Wallon,  2025,  Simplification  administrative 
d'avancement 
simplification 
administrative. 

Choc 

and 

de 

Fragmented permitting processes make it 
difficult  to  obtain  business  permits  and 
may  lead  to  housing  shortages.  While 
Belgium  is  getting  close  to  all  public  services 
for business being available online, there is no 
online  one-stop  shop  for  obtaining  business 
permits (15).  Permits  are  handled  by  federal, 
regional, and local authorities. This makes the 
time-
process  complex,  fragmented,  and 
consuming. 
documentation 
requirements and overlapping rules mean that 
professional  support  is  usually  needed  to 
navigate the system efficiently. Administrative 
complexity and long permitting periods lead to 
a  decline  in  issued  building  permits  since 
2022. This indicates that low construction will 
persist  and  that  -  coupled  with  increasing 
rental prices - affordability issues for low and 
middle-income  households  will  rise. Moreover, 
waiting lists for social housing (around 6% of 
the total housing stock) are long in all regions. 

Burdensome 

The  inefficiency  of  the  justice  system 
continues  to  challenge  the  business 
sector.  Although  efforts  are  being  made  to 
address 
length  of 
proceedings  remains  problematic  (see  Annex 
7)  and  shortcomings  in  structural  resources 
continue to cause delays for businesses. 

judicial  backlogs, 

the 

Removing EU single market 
barriers 

Restrictions 
in  regulated  professions 
remain  high.  Belgium  is  well  integrated  into 
the EU single market and its intra-EU  imports 
and  exports  accounted  for  52%  of  GDP  in 
2024.  While  some  regulations  for  architects 
and  accountants  were  adjusted 
in  2024, 
services  trade  restrictiveness  indices  remain 

(15)  Apply for permits | Business Belgium. 

8 

 
 
 
 
transport,  architecture  and 
high  for  air 
accounting  services (16),  which  could  hinder 
cross-border  business  activity  or  create  entry 
barriers for firms. Regulation helps uphold the 
safety  and  reliability  of  professional  services, 
but  transformative  technologies  create  new 
challenges that may outdate existing practices 
and  require  a  more  dynamic  regulatory 
federal  government  has 
approach.  The 
planned  measures  to  increase  competition  in 
business  services,  including  liberalising  tariffs 
for notaries, but progress is limited. 

Strict  regulation  applies  in  the  services 
sector,  which  may 
limit  competition. 
Belgium  received  a  CSR  to  remove  barriers  in 
the services sector but made  limited progress 
in  this  area.  While  it  took  measures  to  relax 
regulation  in  the  retail  sector  by  reforming 
shop  opening  hours, 
the  Belgian  Price 
Observatory  found  that  consumers  pay  more 
for  branded  daily  consumer  goods  in  Belgium 
than  in  neighbouring  countries,  which  may 
point  to  territorial  supply  constraints  reducing 
competition (17). Regarding telecoms, prices are 
among  the  highest  in  the  EU,  with  three 
operators dominating the market (18). A fourth 
operator  recently  entered  the  market  but  its 
impact  on  prices  remains  constrained  by 
limited  network  deployment  and  fibre  rollout 
challenges.  Moreover,  the  retail  market  for 
electricity  is  concentrated  and  shaped  by  a 
fragmented  regulatory  framework.  Removing 
distortions and barriers to competition, such as 
complex 
in  Wallonia, 
that  new  companies  and 
would  ensure 
innovative  services  can  enter  the  market. 
Moreover,  easing  administrative  requirements 
in  the  implementation  of  posting  of  workers 
rules  could  reduce  regulatory  fragmentation 
within  the  EU  single  market,  facilitate  cross-
border  mobility  and  boost  competitiveness, 
without undermining workers’ protections. 

licensing  procedures 

Improving business dynamics by 
encouraging scale-ups 

companies.  Micro-firms 

Size-dependent  tax  relief  prevents  firms 
to scale-up and become major employers. 
While a dynamic economy needs fast-growing 
firms, labour and capital seem to be trapped in 
low-growth  firms  and  do  not  reach  the  most 
productive 
(0-9 
people) make up 95.9% of businesses but they 
struggle  to  grow.  This  is  reflected  in  the  very 
low  business  dynamism  (see  Graph  2.1)  for 
which  Belgium  received  a  CSR.  The  share  of 
high-growth  businesses  is  well  below  the  EU 
average  (0.25%  vs  0.79%).  A  recent  study 
identified several barriers that prevent Belgian 
start-ups  from  scaling  up (19).  These  include 
high  labour  costs  and  tax  incentives  to  stay 
small.  Among  those,  the  first-hire  subsidy  – 
exempting  employers  from  social  security 
contributions  for  their  first  hire  –  was  found 
not  to  be  effective  to  boost  sustainable  job 
creation (20).  Along  with  high  personal  income 
taxes (see Section 1), tax relief for SMEs (e.g. a 
reduced  corporate 
income  tax  rate)  also 
encourages  entrepreneurs  to  incorporate  and 
convert  labour  income  into  capital  income, 
explaining  the  high  number  of  ‘management 
companies’  (sole  business  owners  without 
employment and the ambition to grow). 

Difficult  access  to  finance  may  also 
prevent businesses from scaling up. While 
early-stage  funding  is  relatively  easy  to  get, 
access to finance becomes difficult during the 
scale-up phase when larger funds are needed 
to  grow.  This  is  particularly  the  case  as 
markets for venture and growth capital are not 
broadly  developed  (see  Annex  6).  Moreover, 
late  payments  by 
to 
businesses  can  be  significant  leading  to  the 
in 
disruption  of  businesses  cash  flows, 
particular for SMEs (see Annex 5).  

local  governments 

(16)  Intra-European 

Economic 

Area 

Services 

Trade 

Restrictiveness Index (Intra-EEA STRI). 

(17)  FPS Economy (2023). Comparaison du niveau des prix à 

la consommation des produits en Belgique, en 
Allemagne, en France et aux Pays-Bas. 

(19)  Bijnens,  G. 

(2025)  Reigniting  growth:  trends  and 
challenges  for  business  dynamism  in  Belgium.  NBB 
Economic Review. 

(20)  Cockx,  B.  et  al  (2025)  La  mesure  «zéro  coti»  déçoit, 

(18)  OECD 2023 PMR country note Belgium. 

Regards économiques. 

9 

 
 
 
Graph 2.1: Growth rate of companies created 
five years ago, 2023 

Source: NBB (2025) 

Boosting innovation diffusion 

the  strongest 

Belgium’s strong performance in research 
and  innovation  is  not  translated  into 
sustained  productivity  gains  because  the 
spreading  of  innovation  is  low.  Belgium 
remains  among 
innovation 
leaders  in  the  EU (21)  and  its  research  and 
development (R&D) intensity rose to 3.36% of 
GDP  in  2024,  among  the  highest  in  the  EU. 
This  is  driven  by  robust  R&D  policies,  world-
class research institutions and the presence of 
multinational  companies.  However,  business 
R&D remains concentrated in a few industries 
where  Belgium  has  been  historically  strong, 
such  as  the  pharmaceutical  sector.  Moreover, 
in  Wallonia  the impact  of  R&D  investment  on 
employment and the economy remains limited 
due  to  fragmented  business  support  and 
insufficient  economic  diversification 
(see 
Annex  18),  although  some  ongoing  reforms 
may  reverse  the  trend.  Furthermore,  low  job 
mobility in Belgium, which may be due to high 
seniority  pay  and  low  pay  transparency (22), 
further  limits  the  expansion  of  innovation 
activities.  Overall  limited  progress  has  been 
made to increase innovation diffusion. 

Tax  relief  for  business  R&D  is  sizeable 
but  benefits  mostly 
large  companies 
rather  than  companies  with  the  highest 

growth potential. Public support for business 
R&D  (0.36%  of  GDP)  is  among  the  highest  in 
the EU, largely driven by tax incentives (0.23% 
of  GDP  covering  corporate  tax  relief  and 
labour  withholding  tax  exemption).  However, 
these  strong  tax  incentives  disproportionally 
benefit  large  firms,  since  SMEs  received  only 
8%  of  the  total  R&D  support,  although 
accounting  for  almost  half  of  the  number  of 
beneficiaries (23). 
tax 
incentives  for  R&D  are  not  effective 
in 
stimulating  additional  R&D  activities (24).  To 
reach  companies  with  high  growth  potential, 
the OECD (25) suggested basing support on the 
increase  of  R&D  spending  –  rather  than  its 
level – to avoid the bulk of R&D support being 
large 
allocated 
companies. Limited progress has been made in 
addressing this issue. 

to  a  small  number  of 

Corporate 

income 

Monitoring competitiveness 

curbs 

Strict  application  of  the  wage-setting 
framework 
automatic  wage 
indexation  but  overlooks  productivity 
differences  among  industries  and  firms. 
The  wage  norm  defines  a  ceiling  for  wage 
growth (based on the expected wage evolution 
in  the  main  neighbouring  countries)  to  curb 
automatic  wage  indexation  and  avoid  wage 
cost  differentials  with  neighbouring  countries 
(see  Annex  5).  This  has  resulted  in  real  wage 
increases  which  were  close  to  zero  in  2025. 
However,  the  wage  norm  does  not  cater  for 
differentiated 
developments 
productivity 
across  sectors  where  wage  increases  in  low 
productivity growth sectors risk being too high, 
while they risk being too low in sectors where 
productivity 
federal 
government  decided  to  cap  wage  indexation 
and  asked  social  partners  to  propose  a 
modernised  wage  norm  by  the  end  of  2026, 
signalling  its  intention  to  reform  the  wage 
norm if no agreement is reached. 

faster. 

rises 

The 

(21)  2025 European Innovation Scoreboard. 

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

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

they effective? NBB Economic Review. 

(25)  OECD (2024), OECD Economic Surveys: Belgium 2024. 

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

10 

050100150BEFRDENL 
   
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

2025 

country-specific 
Belgium’s 
recommendations  (CSR)  invited  Belgium 
to  reduce  its  overall  reliance  on  fossil 
fuels, including in the buildings and transport 
sectors, to incentivise industry  to decarbonise, 
accelerate  the  roll-out  of  renewable  energies 
and  upgrade  grid  infrastructure,  phase-out 
fossil fuel subsidies and take further action on 
sustainable  agriculture.  While  measures  have 
been  taken  to  boost  low-carbon  electricity 
supply  and  raise  excise  duties  on  fossil  fuels, 
there  is  still  room  for  improvement  –  both  in 
these  areas  and  across  the  remaining  policy 
areas (see Annex 1). 

Securing energy supply and 
decarbonising industry 

electricity 

low-carbon 

While 
supply 
continues  to  increase,  Belgium  remains 
highly  dependent  on  fossil  fuel  imports 
and received a CSR to reduce this dependence. 
To  do  so,  Belgium  has  extended  so  far  the 
operational  life  of  two  nuclear  power  plants, 
providing  33.4%  of  its  electricity.  Fossil  fuels, 
however,  continue  to  provide  one  third  of 
Belgium’s  electricity  and  retain  their  role  as 
marginal  price-setting 
technologies,  since 
thermal  plants  are  used  to  cover  supply-
demand  gaps.  Moreover,  fossil  fuels  still 
accounted  for  67.1%  of  the  country’s  energy 
mix, making Belgium highly reliant on imports. 

The manufacturing sector is improving its 
energy  efficiency,  but  high  electricity 
costs  hold  back  decarbonisation.  Energy-
intensive industries have a strong presence in 
Belgium  and  the  manufacturing’s  energy-
related  emissions  have  declined  since  2019 
(see  Annex  8).  This  decline  is  mainly  due  to 
energy efficiency gains rather than to a switch 
to  electricity,  given  the  high  electricity-to-gas 

11 

price ratio (3.9 in 2025), one of the highest in 
the EU. Decarbonising industry and shifting to 
low-carbon  energy  sources  therefore  need  to 
be  incentivised,  as  underlined  in  Belgium’s 
2025 CSR. To this end, the federal government 
plans  to  lower  excise  duties  on  electricity  to 
the  EU  minimum  for  firms  and  the  regional 
governments  plan  to  apply  CISAF (26)  to 
address  electricity  costs  of  energy-intensive 
industries  while  decarbonising.  In  addition, 
Flanders  plans  to  provide  additional  subsidies 
from  2028  to  support  greening  and  derisking 
electrification projects - using carbon contracts 
for  difference.  Such  contracts  are  more  cost-
efficient  in  supporting  the  decarbonisation  of 
industries than indirect cost compensation, for 
which  Flanders  largely  overuses  its  EU  ETS 
proceeds (see Annex 8). A recent study (27) also 
advocates 
public 
procurement  to  help  de-risk  decarbonisation 
investments.  Moreover,  promoting  circular 
economy  practices  and  sustainable  supply 
chains  could  help  reduce  industrial  energy 
demand and dependency on imports of critical 
raw  materials  (75.6%  of  material  inputs  in 
Belgium vs 22% in the EU). 

green 

use 

the 

of 

Enable renewables by upgrading 
the electricity grid 

The  main  challenge  in  Belgium’s  energy 
transition  is  upgrading  the  electricity 
grid.  While  several  infrastructure  projects  are 
planned  to  boost  the  electricity  grid  and  the 
country’s  interconnectivity,  progress  is  slow. 
Belgium’s  artificial  energy  island,  which  is 
designed to host new offshore wind farms and 

(26)  Framework for State Aid measures to support the Clean 

Industrial Deal. 

(27)  Wyns,  T.  et  al.  (2025)  DEEPIN  —  Deep  Industrial 

greenhouse gas reductions in Belgium. 

 
 
 
to facilitate offshore interconnectors, is facing 
significant  cost 
increases.  Moreover,  grid 
upgrade projects face permitting issues. While 
the  permit  for  the  Ventilus  project  was 
awarded,  the  Boucle  du  Hainaut  project  is 
pending 
the  Walloon 
government. Therefore, further streamlining of 
permitting  procedures  is  needed  to  prevent 
additional delays. 

approval 

from 

Insufficient  grid  capacity  holds  back  the 
roll-out  of  renewables,  which  Belgium  was 
recommended  to  accelerate.  With  a  share  of 
renewable energy in final energy consumption 
of 14.3% in 2024, which is now the lowest in 
the  EU.  While  Belgium  has  raised  its  target 
from  17.5%  to  20.4%  in  its  final  updated 
national  energy  and  climate  plan,  it  remains 
below its expected national contribution to the 
EU  2030  target.  To  bridge  the  gap,  Belgium 
has  pledged  to introduce  legal  frameworks  to 
boost 
renewable  energy 
in 
installations,  particularly  in  electricity  storage 
and flexible solutions to manage grid stability. 
Furthermore, facilitating energy sharing at the 
regional  level  remains  underdeveloped.  Smart 
meter  deployment,  which  enables  consumers 
take  advantage  of  dynamic  pricing 
to 
electricity  contracts,  is  slow  in  Brussels  and 
Wallonia,  limiting  the  flexibility  of  electricity 
consumption and energy efficiency gains. 

investment 

Energy efficiency and fossil fuel 
subsidies 

Belgium’s  final  energy  consumption  rose 
in  2024,  reversing  the  downward  trend 
observed  since  2019.  While  Belgium 
received  a  CSR  to  step  up  energy  efficiency 
improvements,  no  progress  was  made  in  this 
area.  In  2024,  final  energy  consumption  rose 
by  2.45%  compared  with  2023,  setting 
Belgium’s  consumption  trajectory  off  course 
from  the  linear  path  needed  to  meet  its 
expected contribution by 2030. While industry 
and  services  maintain 
longer-term 
downward  trend,  transport  is  on  an  upward 
trend, with a 2.76% rise relative to 2019. 

their 

Increasing  energy 
consumption  and 
emissions  in  transport  are  mainly  driven 

fuel 

related 

transport 

activities, 

consumption 

by  international  aviation,  maritime  and 
freight  sectors.  Greenhouse  gas  emissions 
from  the  aviation  and  maritime  sectors, 
to 
including 
are 
international 
particularly  high  compared  with  other  EU 
countries (28),  mainly  explained  by  Antwerp’s 
port activities. Investments in sustainable fuel 
production  and  distribution  infrastructure  for 
maritime  and  aviation  transport  are  still 
lacking.  Moreover,  insufficient  coordination  of 
transport planning along key interregional axes 
weighs  on  mobility  efficiency  in  Belgium  (see 
Annex  18).  Rail 
remains 
insufficiently  attractive  for  both  passengers 
and freight, and the number of passenger cars 
has  steadily  increased  over  the  last  decade, 
contributing  to  congestion  costs  estimated  at 
in  2024 (29).  The  share  of 
EUR 5.3 billion 
electric  cars  of  total  car  sales  has  recently 
plateaued, possibly due to the lack of charging 
it  was 
infrastructure 
recommended 
low-emission 
transport, Belgium only made limited progress. 
Policy options include additional road charging 
beyond the current one on heavy duty vehicles, 
and  charging  differentiation  by  time,  CO2 
performance of the vehicle and distance. 

in  Wallonia.  While 
incentivise 
to 

transport  also 

Map 3.1:  Electricity-gas price ratio for 
households, 2025 

Source: Eurostat 

Renovation  made 
residential  energy 
consumption fall, but not enough to meet 
long-term  renovation  targets.  In  2025, 

(28)  56.1% of the share of greenhouse gas emissions of the 
entire transport sector versus the EU average of 26% in 
2022;  EU  transport  in  figures:  Statistical  pocketbook 
2024. 

(29)  FEB and Febiac, Belgian Mobility Dashboard. 

12 

 
 
 
 
 
so 

taken 

network 

far.  While 

Belgium  received  a  CSR  to  reduce  fossil  fuel 
use in buildings, but only a few measures have 
been 
Flanders 
implemented  a  ban  on  new  natural  gas 
connections  for  residential  buildings  in  2025 
and  Brussels  ended  preferential  rates  for  gas 
connections,  more 
distribution 
ambitious  policy  action 
to 
is  needed 
decarbonise the building stock, which accounts 
for 33% of national energy consumption. After 
taxes  and  levies,  the  cost  of  electricity  for 
households  was  3.9  times  higher  than  gas  in 
2025  (Map  3.1),  hindering  the  switch  to 
greener  heating  systems.  To  encourage  the 
use of heat pumps, the electricity price should 
not be  more than 2.1 and 2.5 times the price 
respectively (30). 
of  gas  and  heating  oil 
Therefore,  the  federal  government  plans  to 
gradually increase excise duties on natural gas 
and  heating  oil.  In  addition,  Flanders  plans  to 
costs  while 
gradually 
increasing levies on fossil fuels for heating. It 
is uncertain if these shifts will be sufficient to 
change  the  relative  prices  of  electricity  and 
gas.  Further  reforming  the  tax  system  by 
taxing  rental  income  and  making  renovation 
costs  tax  deductible  could  encourage  energy 
renovation  and  improve  the  energy  efficiency 
of rental housing stock. 

lower  electricity 

Fossil  fuel  subsidies  hold  back  energy 
efficiency  gains.  Belgium  records  sizeable 
fossil  fuel  subsidies  with  no  planned  phase-
out before 2030 (see Annex 9). A recent report 
by  the  Belgian  authorities  estimates  that 
federal  direct  fossil  fuel  subsidies  in  Belgium 
amounted  to  2.4%  of  GDP (31) 
in  2022. 
Phasing  out  these  subsidies  would  contribute 
to  Belgium’s  climate  commitments  and  could 
fuel 
reduce 
subsidies  tackle  energy  poverty  in  a  targeted 
way or are vital for industrial competitiveness, 
they  could  be  prioritised  for  phase-out  (e.g. 
reduced  excise  duties  on  professional  diesel 
and  on  fuel  oil,  company  fuel  cards,  reduced 
VAT  on  gas).  While  the  federal  government 
plans to increase excise duties on fossil fuels, 

expenditure.  Unless 

fossil 

(30)  FPS  Health  and  Finance  (2024).  The  landscape  of 
carbon and energy pricing and taxation in Belgium. 

(31)  FPS  Finance  (2025),  Inventory  of  federal  fossil  fuel 

subsidies. 

13 

more  efforts  will  be  needed  to  phase-out 
fossil fuel subsidies. 

Improve water quality by boosting 
sustainable agriculture 

Water  quality  is  a  challenge,  and  the 
state  of  the  natural  environment 
is 
declining.  Most  water  bodies  in  Belgium  are 
polluted,  as  only  51%  of  groundwater  and 
27.4%  of 
surface  water  had  healthy 
ecosystems  in  2021.  None  of  the  surface 
water  bodies  achieved  good  chemical  status, 
due to harmful pollutants like persistent PFAS 
substances. Belgium, therefore, received a CSR 
in 2025 to improve water quality. Biodiversity 
is declining and less than 5% of habitats were 
reported as having a good conservation status, 
among  the  lowest  in  the  EU.  This  creates 
significant  economic  risks,  since  some  sectors 
are  very  dependent  on  ecosystem  services. 
Nature-based  solutions  are  key  to  building 
climate 
the 
to  shielding 
economy from extreme weather events.  

resilience  and 

Reducing  excessive  nitrogen  deposition 
from agriculture and industry would help 
improve  water  quality.  Intensive  animal 
farming  (primarily  located  in  Flanders)  is 
among  the  highest  in  the  EU  and  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  mainly  come  from  mineral 
fertilisers  and  manure.  Moreover,  pesticides 
were  detected  in  52%  of  surface  water  at 
levels  exceeding  the  maximum  thresholds. 
Belgium,  therefore,  received  a  CSR  to  take 
further  action  on  sustainable  agriculture  by 
reducing  nutrients  losses,  but  progress  is 
revised  7th  Nitrates  Action 
limited.  The 
Programme 
Flemish 
adopted 
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 increasing the 
reviews  of  permits  for  water 
periodical 
abstraction  and  discharges  in  Wallonia  and 
Flanders could help prevent water scarcity and 
pollution. 

the 

by 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Belgium  received  a  CSR  in  2025  to  further 
integrate disadvantaged groups into the labour 
market,  to  tackle  labour  shortages  and  skills 
mismatches, to improve education and training 
systems,  and 
teaching 
strengthen 
profession.  Since  then,  Belgium  has  made 
some progress on activation, including through 
major  labour  market  reforms.  Yet,  significant 
reforms  are  still  needed  in  several  areas (see 
Annex 1). 

the 

faces  a  higher  risk  of  underachievement  in 
education,  stronger  policy  actions  covering 
education  and  training  and  labour  market 
access, along with better support services such 
as  childcare,  could  help  to  speed  up  their 
integration into the workforce. 

Graph 4.1: Employment rate (20-64) total and 
non-EU nationals 

Addressing low employment, skills 
shortages and integration of 
disadvantaged groups 

(15-24) 

Belgium  has  a  low  employment  rate 
which  varies  greatly  between its  regions. 
Although the employment rate (72.8%, 20-64) 
has risen slightly recently, it falls short of both 
the EU average (76.1%) and the national 2030 
target  of  80%.  At  the  same  time,  labour 
shortages  persist  despite  some  easing.  Youth 
unemployment 
is  above  the  EU 
average and early school leaving is on the rise. 
Strong  regional  labour  market  differences 
continue,  with  employment  rates  of  77.3%  in 
Flanders,  67.9%  in  Wallonia  and  63.9%  in 
Brussels  (see  Annex  18).  Regional  labour 
market  differences  offer  scope  to  further 
increase interregional labour mobility, building 
on  recently  improved  cooperation  between 
Flemish  and  Walloon  public  employment 
services. 

Labour  market  participation  of  people 
with a migrant background is low. Belgium 
records the lowest employment rate in the EU 
for  non-EU  citizens  (51.6%;  EU:  65.2%)  (see 
Graph  4.1),  with  lower  rates  for  women.  In 
addition,  non-EU  country  nationals  are  more 
often employed in lower quality jobs, including 
in  temporary  employment,  and  with  a  higher 
risk  of  in-work-poverty.  Since  this  group  also 

14 

Source: Eurostat [lfsi_emp_a, lfsa_ergan] 

People  with  disabilities,  a  low  education 
level  and  older  people  also 
face 
significant  barriers  to  work. 
In  2025, 
Belgium  received  a  CSR  to  further  integrate 
disadvantaged  groups  into  the  labour  market. 
The  disability  employment  gap  is  high  (34.7 
pps;  EU:  24.2  pps)  and  contributes  to  higher 
poverty  rates  among  people  with  disabilities. 
Belgium  also  performs  below  EU  average  in 
employment  of 
low-educated  and  older 
people. However, the employment rate of older 
workers (55-64) has improved considerably in 
recent  years.  Belgium  is  also  implementing  a 
pension  reform  to  incentivise  longer  working 
careers  (see  Section  1),  with  the  gender 
pension gap to be monitored. 

Belgium  has  adopted  major 
labour 
market  reforms,  but  their  impact  will 
of 
depend 
accompanying  measures.  Belgium  has 
made  some  progress  in  strengthening  the 

effectiveness 

the 

on 

35404550556065707580201420152016201720182019202020212022202320242025BE - TotalEU - TotalBE - Non-EU nationalsEU - Non-EU nationals 
 
  
increasing 

effectiveness  and  targeting  of  active  labour 
market  policies  in  line  with  its  2025  CSR.  In 
2025,  Belgium  substantially  reformed 
its 
unemployment  benefits  system,  restricting 
benefit  duration  to  two  years  and  increasing 
degressivity.  Belgium  expects  the  reform  will 
lead one third of the long-term unemployed to 
work  and  one  third  to  social  assistance.  To 
reduce the number of people on long-term sick 
leave,  Belgium  has  improved  its  Return-to-
Work  policy 
the 
including  by 
responsibility  of  actors  involved.  Improved 
reintegration,  cross-institutional  cooperation 
and enhanced prevention efforts that promote 
quality  jobs  will  be  essential.  Belgium  also 
reinforced  activation 
incentives  for  social 
the 
assistance 
employment  and  budgetary  impact  of  these 
reforms  will  depend  on  the  adequacy  and 
effectiveness  of  accompanying  measures 
ill 
helping  unemployed  and 
individuals back to work. Such measures could 
include  (language)  training,  childcare,  better 
job-matching  as  well  as  easing  the  transition 
back to work after long-term sick leave. 

long-term 

agencies. 

However, 

sectors, 

including 

Labour  and  skills  shortages  remain  high 
while  adult  learning  is  low  and  uneven 
across  population  groups.  Although  labour 
shortages have eased  somewhat, job  vacancy 
rates  remain  firmly  above  the  EU  average  in 
all Belgian regions. Labour and skills shortages 
remain particularly high in the services sector, 
as  well  as  in  professional,  scientific  and 
technical 
healthcare, 
construction  and  ICT,  which  are  important  for 
the  green  and  digital  transition.  While  the 
fiscally  attractive 
‘flexi-jobs’  aim  to  ease 
labour  shortages,  there  are  concerns  they 
could actually worsen them in key sectors such 
as care and education. Upskilling and reskilling 
could  reduce  skills  mismatches,  but  adult 
participation  in  education  or  training  is  low 
(34.9%  in  2022;  EU:  39.5%)  and  well  below 
Belgium’s 2030 target of 60.9%. Participation 
is  noticeably  lower  for  people  with  a  lower 
skills  level,  people  outside  the  labour  force, 
and  older  people.  More  focused  and  targeted 
efforts  to  reach  underrepresented  groups 
would  support  progress  towards  the  2030 
target and help alleviate skills mismatches. 

Declining basic skills, persisting 
educational inequalities and 
limited STEM and ICT skills 

Pupils  are  falling  behind  in  their  basic 
skills.  The  2025  CSRs  called  on  Belgium  to 
improve  the  performance  and  equity  of  the 
education  and  training  systems.  Despite  this, 
children’s  educational  performance  in  basic 
skills (literacy, mathematics and science) in all 
three  Communities  has  worsened.  The  2023 
Trends  in  Mathematics  and  Science  Study 
(TIMSS)  showed  a  substantial  number  of 
in 
underachievers  among  fourth  graders 
maths  (27%  in  BE-nl,  42%  in  BE-fr)  and 
science  (41%  in  BE-nl,  46%  in  BE-fr).  In 
addition,  the  share  of  top  performers  in 
(PISA, 
international 
TIMSS, PIRLS) has sharply dropped. 

student  assessments 

related 

large-scale 

implementing 

Educational  gaps 
to  socio-
economic  and  migration  status  persist 
despite targeted interventions. Only 16.6% 
of  students  from  a 
low  socio-economic 
background performed well in the 2022 OECD 
PISA  study,  compared  with  over  60%  of 
advantaged  students.  While  the  Communities 
are 
curricular 
reforms  focusing  on  basic  skills,  education 
systems  lead  pupils  from  an  early  age  into 
different educational tracks (early tracking) by 
ability,  reinforcing  inequalities.  Improving  the 
pathways  between  academic  and  vocational 
education,  along  with  better  personalised 
guidance and early intervention systems, could 
help  tackle  structural  challenges.  Increasing 
work-based  learning  could  improve  labour 
market  relevance  of  medium-level  vocational 
(VET),  and  VET 
education  and 
training 
attractiveness  could  be  further 
improved. 
Efforts are needed in Brussels and other large 
cities,  where  absenteeism  and  early  school 
leaving  are  significantly  above  the  regional 
average,  and  existing  initiatives  have  proven 
lacking in countering the negative trend. 

Increasing the attractiveness of teaching 
careers  could  help  address  teacher 
shortages.  The  Communities  have  extended 
teacher 
temporary  measures 
reforms  are 
shortages.  However,  further 

to  address 

15 

 
needed  to  make  teaching  careers  attractive. 
Data  from  OECD  TALIS  show  that  teachers  in 
Belgium  face  barriers  to  engage  in  impactful 
professional  learning and feel  undervalued by 
society,  especially  in  the  French  Community. 
Progressing  with  the  respective  government 
proposals  to  review  careers  in  teaching  and 
training  would  help  to  attract  and  retain 
qualified young graduates. 

Enrolment in STEM and ICT studies  is too 
low  to  meet  labour  market  demand. 
Belgium  has  one  of  the  lowest  rates  of 
students enrolled in STEM fields at the tertiary 
level,  despite  a  generally  high 
tertiary 
attainment rate. The share of STEM enrolment 
in medium-level VET is also below EU average, 
and  efforts  to  increase  women  and  girls’ 
participation  in  STEM  could  be  expanded. 
Although women’s participation in ICT fields is 
increasing,  their  relative  share  in  the  field 
remains low and the share of tertiary students 
in  ICT  is  also  below  average.  In  the  French 
Community, more coordinated efforts between 
Community  and  regional 
initiatives  would 
increase  the  effectiveness  of  interventions.  In 
Flanders, 
the  STEM  Agenda  2030  gives 
strategic focus, but a deeper understanding of 
the  drivers  of  student motivations  would  help 
further progress. 

Increasing  spending  efficiency  could 
improve educational outcomes. Investment 
in  education  is  one  of  the  highest  in  the  EU, 
representing 4.4% of the GDP for pre-primary, 
primary and secondary education. Even though 
the  actual  wages  of  teachers  in  Belgium  are 
below  the  EU  average,  81%  of  education 
spending  is  on  wages,  well  above  the  EU 
average  of  62% (32).  This  is  due  to  lower 
student-to-teacher  ratios  and  a  relatively 
shorter  statutory  teaching  time  (704  hours  in 
BE-nl and 708 hours in BE-fr vs 773 hours per 
in  EU-25). 
year 
Moreover,  various  educational  networks  in 
each  Community  lead,  in  some  locations,  to 
the  duplication  of  small-size  schools (33). 
Reducing  the  fragmentation  of  the  education 

for  primary  education 

(32)  European Commission, Investing in education 2025. 

(33)  Hallaert,  J.  (2025).  Public  Education  in  Belgium  – 

Improving Outcome While Reducing Cost. 

system  and  increasing  teaching  time  may 
increase spending efficiency. 

Addressing varying social 
outcomes, including for very low 
work intensity households 

its  overall  2030  poverty 

While  poverty  and  social  exclusion  have 
fallen overall, certain regions and groups 
perform  below  EU  average.  The  risk  of 
poverty  or  social  exclusion  dropped  to  16.5% 
in 2025 (EU: 20.9%), and Belgium has already 
met 
reduction 
targets (34).  Belgium  has  also  made  good 
progress  towards  achieving  the  sub-target  on 
child  poverty.  Despite  overall  improvements, 
regional gaps persist. Brussels, and to a lesser 
extent  Wallonia,  present  significantly  higher 
poverty  risks  and  face  long  social  housing 
waiting lists (see Section 2). Because of worse 
labour  market  outcomes,  poverty  risks  are 
above  EU  average  for  people  with  a  migrant 
background  and  people  with  disabilities. 
Nevertheless,  social  protection  is  effective  in 
Belgium, reducing poverty by more than half. 

Belgium  has  one  of  the  highest  rates  of 
people  living  in  very  low  work  intensity 
households  in  the  EU  (11.0%  vs  EU:  7.9%), 
with wide regional differences, reaching 22.1% 
in  Brussels.  More  than  half  of  this  group 
reports  a  disability,  and  many  are 
low-
qualified  and  live in  households  with  children. 
Notably,  68.3%  of 
these 
households  are  at  risk  of  poverty,  raising 
concerns  about  the  cycle  of  deprivation  being 
passed down through generations. While social 
protection  is  effective,  disadvantaged  groups 
in  these  households  need  targeted  support 
focused  on  employment,  which  offers  the 
most sustainable way out of poverty. Reducing 
the  number  of  low  work  intensity  households 
would  help  promote  social  and  regional 
convergence over the medium to long term. 

children 

in 

(34)  The national 2030 poverty reduction target for Belgium 
was  279 000  persons  at-risk-of-poverty-or-social-
exclusion  compared  to  2019  levels,  including  93 000 
children. Belgium has achieved a reduction of 344 000 
persons, including 86 000 children, since 2019. 

16 

 
 
 
KEY FINDINGS 

In areas covered by existing CSRs, Belgium 
would benefit from: 

•  making long-term care more cost-
effective by better matching the type 
of care to the level of dependency; 

• 

• 

improving  efficiency  and  quality 
including  by 
of  public  spending, 
streamlining government structures; 

implementing 
coordination 
redefining 
the 
independent fiscal institutions; 

the 
agreement 
tasks 

budgetary 
and 
the 

of 

•  ensuring 

policy 

across  government 
strengthening 
cooperation; 

coordination 
levels 
by 
inter-federal 

•  shifting the tax burden away from 
labour  and  reviewing  the  design  of 
social benefits; 

•  making  the  tax  system  more 
less  distortive  by 
neutral  and 
and 
reviewing 
harmonising  capital  taxation  across 
asset types; 

expenditure 

tax 

•  simplifying 

business 
the 
environment 
streamlining 
by 
permitting  procedures,  including  for 
construction, 
the 
regulatory burden; 

reducing 

and 

• 

• 

EU 

single  market 
removing 
in 
barriers  by  easing  restrictions 
regulated professions and the services 
sector; 

improving  business  dynamics  by 
removing  size-dependent  subsidies 
and easing financing for scale-ups; 

• 

increasing  innovation  diffusion  by 
reforming R&D tax incentives to target 
companies with high growth potential; 

•  decarbonising  industry  by  derisking 
investment  through  carbon  contracts 
for  difference  and  green  public 
procurement,  by  recycling  critical  raw 
materials  and  ensuring  economic 
security; 

•  stepping  up  decarbonisation  and 
energy  efficiency  of  the  transport 
sector  by  supporting  electrification, 
sustainable  fuels,  modal  shift,  active 
mobility  and  public  transport,  and 
by 
tackling 
differentiated  road  charging  for  all 
types of vehicles; 

congestion 

road 

•  accelerating  the  upgrade  of  the 
electricity  grid  and  the  roll  out of 
renewable  energy,  by  promoting 
demand-side  flexibility  and  storage, 
and 
sharing 
facilitating 
addressing regional disparities; 

energy 

•  boosting  energy  efficiency  of 
housing  by  phasing  out  fossil  fuel 
subsidies,  further  shifting  charges  to 
fossil  fuels  and  stepping  up  housing 
renovation, including social housing; 

reducing 
nitrogen 
excessive 
deposition  and  improving  water 
supporting 
quality 
sustainable  agriculture  and  making 
ecosystems more robust; 

further 

by 

labour  shortages  and 
tackling 
increasing 
skills  mismatches,  by 
targeting 
of 
and 
activation  policies,  further  integrating 
disadvantaged  groups  and  very  low 
into  the 
work-intensive  households 

effectiveness 

• 

• 

17 

 
 
labour market and addressing regional 
gaps; 

•  developing  human 

capital  by 
improving  the  performance  and 
equity  of 
the  education  and 
training  systems  by  improving  their 
labour  market  relevance,  increasing 
enrolment  in  ICT  and  STEM  fields 
including 
and 
reforming teacher careers and training. 

among  women, 

18 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

A1.  CSR implementation 

Fiscal 

A2.  Fiscal developments and debt sustainability 

A3.  Taxation 

Productivity 

A4. 

Innovation to business 

A5.  Single market and industry 

A6.  Savings, investment and access to finance 

A7.  Effective institutional framework 

Sustainability 

A8. 

Industry decarbonisation, circularity and climate mitigation 

A9.  Affordable energy transition 

A10.  Climate adaptation, preparedness and environment 

Fairness 

A11.  Labour market 

A12.  Social policies 

A13.  Education and skills 

A14.  Social scoreboard 

A15.  Health and health systems 

A16.  Housing 

Horizontal 

A17.  Sustainable development goals 

A18.  Competitive regions 

A19.  Transport 

LIST OF TABLES 

A1.1. 
A2.1. 
A2.2. 
A2.3. 
A2.4. 
A3.1. 

2025 CSR implementation and Commission assessment 
Supplementary pension scheme - scope for expansion 
Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 
Fiscal governance database indicators and public accounting maturity 
Reforms and investments underpinning the extension of the adjustment period for Belgium 
Taxation Indicators 

21 

24 

29 

29 

34 

38 

38 

43 

52 

59 

63 

63 

74 

79 

90 

90 

94 

98 

103 

104 

108 

114 

114 

116 

122 

23 
29 
30 
31 
32 
34 

 
 
 
Key innovation indicators 
Single Market and Industry 
Savings and Investments Union summary diagnostic 
Statistical Annex 
Belgium. Selected indicators on better regulation practices for primary legislation 
Digital Decade key performance indicators: availability of digital public services 
Key clean industry and climate mitigation indicators: Belgium 

A4.1. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A7.2. 
A8.1. 
A10.1.  Key Adaptation Indicators 
A14.1.  Social Scoreboard for Belgium 
A15.1.  Key health indicators 
A18.1.  Main development trends, challenges and the concentration of resources 
A18.2.  Key regional indicators for Belgium (NUTS 1 and NUTS 2 level) 
A19.1.  ERTMS deployment in Belgium. 

LIST OF GRAPHS 

Composition of NFCs’ funding 
Capital markets and financial intermediaries 
Composition of HHs’ financial assets 
Trust in justice, regional / local authorities and in government 

Contributions to the change in general government balance (% of GDP) 
Public investment evolution and composition (% of GDP) 
Primary spending evolution and composition 
Tax revenue by economic function in 2024, BE (outer ring) and EU-27 (inner ring) 
Tax wedge for single and second earners as a % of total labour costs, 2025 
Employment share of high-growth businesses measured in employment (%) 
Graduates in ICT per thousand population aged 25-34 

A2.1. 
A2.2. 
A2.3. 
A3.1. 
A3.2. 
A4.1. 
A4.2. 
A5.1.  Manufacturing industry production: total and selected sector, index (2021=100), 2015-2024 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2.  Most time-consuming aspects of service delivery 
A8.1. 
A9.1. 
A9.2. 
A11.1.  Key labour market indicators (BE) 
A11.2.  Employment rate by citizenship 
A12.1.  At-risk-of-poverty or social exclusion rate and its components (AROP, SMSD, LWI) 
A13.1.  Share of advantaged vs disadvantaged students that perform well in at least one PISA domain. EU vs Be(Fl) vs Be(Fr) 
A13.2.  Adult participation in learning 
A15.1.  Treatable mortality 
A15.2.  Out-of-pocket payments: share in healthcare spending and categories, 2023 
A16.1.  House prices, rents and price-to-income evolution in BE and EU27 since 2005 
A16.2.  House supply indicators in BE since 2005 
A16.3.  Borrowing costs and housing loans, in BE and EA since 2018 
A16.4.  Housing affordability selected indicators 
A17.1.  Progress towards the SDGs in Belgium 
A18.1.  Labour productivity growth (2014 - 2024) and labour productivity (2024), Belgium (NUTS 2 regions) 

Greenhouse gas emissions in the effort sharing sectors, 2005, 2023, and 2024 
Electricity and gas prices for household and non-household consumers, first half of 2025 
Low-carbon electricity generation vs. electricity wholesale prices, 2025 

LIST OF MAPS 

A18.1.  GDP per head compared with the EU average 
A18.2.  Average number of hours per year lost by a commuter due to congestion during rush hour across Belgian metropolitan 

areas 

A19.1.  TEN-T Cross-Border & National Priority Sections in Belgium. 

22 

40 
50 
51 
57 
59 
60 
72 
88 
102 
105 
116 
117 
122 

28 
28 
29 
33 
33 
39 
40 
48 
51 
52 
53 
58 
59 
66 
73 
74 
89 
91 
93 
97 
99 
103 
104 
107 
108 
108 
112 
113 
115 

116 

120 
123 

 
 
 
 
 
23 

 
 
ANNEX 1: CSR IMPLEMENTATION  

Table A1.1:  2025 CSR implementation and Commission assessment 

(Continued on the next page) 

24 

Belgium faces challenges in a wide range of policy areas, as identified in the country-specific recommendations (CSRs). Belgium was recommended, among other things, to make the long-term care system more cost-effective, simplify regulation, improve the business environment and innovation diffusion, reduce the overall reliance on fossil fuels, incentivise industry to decarbonise, accelerate the roll-out of renewable energies and upgrade grid infrastructure, enhance labour market performance through integrating disadvantaged groups and tackling labour shortages and skills mismatches, improve education and training systems, and strengthen the teaching profession. The Commission has assessed the degree of implementation of the 2025 CSRs considering the policy action taken by Belgium to date*. To do so, the Commission has taken into account the information provided by Belgium in its [Annual Progress Report – not received yet] as well as other information sources. This annex provides summary information on the policy actions taken or planned by Belgium for each CSR. More detailed information on these actions is included in the relevant chapters and other annexes of the report. *CSR 2 is not assessed in CeSaR. 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, 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. Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress 1.1 Reinforce overall defence and security spending and readiness while ensuring debt sustainability in line with the European Council conclusions of 6 March 2025. Total general government defence expenditure in 2026 is projected at 1.6% of GDP, corresponding to an increase of 0.4 ppt. compared to 2024.  Total general government defence expenditure in 2027 is projected at 1.8% of GDP, corresponding to an increase of 0.6 ppt. compared to 2024.   Substantial progress 1.2 Adhere to the maximum growth rates of net expenditure recommended by the Council on 20 June 2025, with a view to bringing an end to the situation of an excessive deficit while making use of the allowance under the national escape clause for higher defence expenditure.  - Cumulated deviation in 2025 amounted to 0.1% of GDP but is fully explained by the NEC flexibility (0.5 pps. of GDP). - Cumulated deviation in 2026 projected at –0.2% of GDP. - The EDP is held in abeyance  Full implementation 1.3 Implement the set of reforms and investments underpinning the extended adjustment period as recommended by the Council on 20 June 2025. See table A.2.4 in Annex 2 of the Country Report Substantial progress 1.4 Make the long-term care system more cost-effective while keeping access to care and services affordable. - Flanders promotes the use of BelRAI as tool to assess the level of dependency and to decide the optimal care setting;  - Wallonia adopted a strategy, including a stronger role for preventive care; - Brussels introduced a close statistical monitoring of the number of people with long-term care needs. Flanders is developing “CareForecast”, a tool which should allow more accurate budgetary care need estimations and help draft indicative multi-year estimates for residential care. Some progress  
 
 
 
     
 
Table (continued) 

(Continued on the next page) 

25 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress 3.1 Simplify regulation, improve regulatory tools, reduce administrative burden - Federal level implements the 2025-2029 administrative simplification plan and 2025/2026 SMEs plan (89 measures) to reduce regulatory and administrative burdens; - Flanders implements the Regelrecht project for efficient business procedures, granting of permits, and strengthening the central digital access point to Flemish public services.  - Wallonia and French Community: approved the Administrative Simplification Shock strategy. In its MTFSP, Belgium committed -to simplify procedures to improve access by SME’s to public procurement procedure; -to implement an SME plan with a focus on start-ups to reduce the cost of doing business. Some progress 3.2 and remove barriers to trade and competition, The government has allowed the entrance on the fixed and mobile telecom market of a 4th provider and the BIPT adopted further related decisions in 2025. The federal government launched the strategic platform MAKE2025-2030, with the objective: to strengthen the competitiveness of the Belgian industry through closer cooperation between the federal government, the Regions, and economic partners. Limited progress 3.3 in particular in the services sector No specific measures identified. Federal reform of shop opening hours. Limited progress 3.4 and regulated professions, No specific measures identified. Federal level announced a reform of notary tariffs. Limited progress 3.5 to improve the business environment and business dynamics. No specific measures identified. Federal level announced authorising of night work, easing part-time working restrictions, reintroducing the probationary period, extending the scope of flexi-jobs to all private and public sectors.  Limited progress 3.6 Increase innovation diffusion by targeting R&D public support to companies with the highest growth potential. Federal measures to incentivize entrepreneurship and encourage new investments, with potential indirect impact on innovation diffusion, such as a reform of the investment deduction and of the special tax regime for inbound taxpayers and researchers, aimed to attract foreign talents to Belgium. Federal level intends to: - Harmonize the tax reductions for start-ups and scale-ups. - Abolish restrictions for certain equity investments by pension funds and insurance companies; - Accelerate public access to unexploited patents; - Accelerate depreciation for investments in R&D, including re-introduction of degressive/ amortisation options for SMEs; - Abolish the requirement of a regional certificate for R&D investments. Limited progress 3.7 Also in this context, foster the job mobility of workers. Federal measure introducing a one-time entitlement to unemployment benefits after own-initiative resignations. The collaboration agreement between the VDAB and Actiris/Forem has been strengthened. Federal level intends to reintroduce a probationary period for new contracts on both employer and employee side, but the impact on job mobility is unclear. Limited progress 4.1 Reduce overall reliance on fossil fuels, Extension of the operational life of nuclear power plants, but still high reliance on imported fossil fuels. Agreement to increase excise duties on natural gas and reduce them on electricity Limited progress  
 
 
     
 
Table (continued) 

(Continued on the next page) 

26 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress 4.2 including by stepping up energy efficiency improvements Better targeting of renovation subsidies in Flanders Wallonia signed a new agreement with the European Investment Bank to support projects related to renewable energy and energy efficiency  Limited progress 4.3 and reducing fossil fuel use in buildings, - VAT rate reduction from 21% to 6% for the purchase of heat pumps. - Flanders: 2025 ban on new natural gas connections for residential buildings;  - Brussels: elimination of gas distribution preferential rates.   Limited progress 4.4 and by further incentivising industry to decarbonise.  Federal government announced support measure for energy-intensive industry (‘energy norm’). Some progress 4.5 Provide incentives and remove barriers to increase the use and supply of public transport, low-emission transport and active mobility. - Federal level strengthened the energy efficiency and climate resilience of few railway buildings. - Brussels accelerated the deployment of public accessible charging stations. - Flanders invested in the greening of the bus fleet and in expanding cycling infrastructure. It also stimulates a modal shift in passenger transport by deploying hubs where different modes of transport come together. - Wallonia accelerates the deployment of charging stations across the region: on municipal land, at carpooling areas, rest areas, on regional roads, etc.  Some progress 4.6 Accelerate the roll-out of renewable energies and upgrade grid infrastructure by further streamlining permitting procedures, by adopting legal frameworks to boost investment in renewable energy installations and by facilitating energy sharing. - Federal level took measures to accelerate appeals, but federal aviation constraints continue to hinder onshore wind deployment. - Flanders allowed plug-in solar systems and introduced a PV-obligation for large consumers in Flanders. It also introduced a digital one-stop shop to make administrative procedures swifter, but new distance rules in Flanders continue to hinder onshore wind deployment. Flanders also optimises the permit-granting process for wind turbines and agreed on a tax shift for a favourable price ratio of electricity and gas in favour of heat pumps.  Limited progress 4.7 Take specific steps to phase out fossil fuel subsidies, in particular in the transport and heating sector,  At federal level, a spending review of fossil fuel subsidies is due to be completed by mid-2026 and its findings are said to provide a basis for policy action. Limited progress 4.8 including by shifting excise duties from electricity to fossil fuels.  Federal government announced an excise duty reform gradually shifting the burden from electricity to natural gas and heating oil by 2029, but excise duties would remain Some progress  
 
 
     
 
Table (continued) 

(Continued on the next page) 

27 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress considerably lower than in neighbouring countries. 4.9 Take further action on sustainable agriculture by improving water quality and by reducing nutrient losses. Rollout of specific actions under the 7th Manure Action Plan  Flanders plans to reduce the number of livestock (pigs) by 30% by 2030 compared to 2015. Limited progress 5.1 Address labour shortages and skills mismatches, including for the green and digital transition. - Federal: adoption of an unemployment benefit reform to increase labour market participation and of a pension reform to keep older workers on the labour market. - Flanders reformed the Individual vocational training (IBO) programme to improve its attractiveness and adopted a plan to address workforce shortages in the childcare sector. - French Community reformed the offer of adult learning and training to better tailor it to skills needs; - Wallonia introduced a labour needs survey to better tailor the shortage occupations list to business needs. Enhanced cooperation between Flemish and Walloon public employment services to improve interregional labour mobility.  Some progress 5.2 Strengthen the effectiveness and targeting of active labour market policies to further integrate disadvantaged groups into the labour market, in particular people with a low level of education, older workers, people with a migrant background and persons with disabilities. - Federal level strengthened activation incentives for the CPAS/OCMWs (into force from 2028) and expanded its ‘Return-to-Work’ policy for long-term ill. - Wallonia implemented a reform of its public employment service in October 2025. - Flanders: from 2026, local authorities receive funding for locally tailored social economy policy to benefit vulnerable groups.  Some progress 5.3 Improve the performance and equity of the education and training systems and enhance their labour market relevance, in particular in ICT and STEM fields. - Flemish Community provided additional funding for language support and agreed on new minimum attainment targets in primary education; it also further supports teachers in evidence-based teaching - French Community progressively rolls out a curriculum reform between 2021-2029 and starts the implementation of the action plan against early school leaving and absenteeism in primary schools in 2026 and in secondary schools in - Flemish Community launched in 2025 a new policy framework for inclusive education until 2040, aiming to better integrate students with special learning needs in mainstream education. Limited progress  
 
 
     
 
Table (continued) 

Source: Belgium's reporting and Commission assessment. 

28 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress 2027. 5.4 Continue reforms to strengthen the teaching profession by developing more flexible and attractive career paths and training for teachers. - Flemish Community extended temporary measures to combat teacher shortages and created special teaching positions to offer career diversification incentives, but take up by schools is low. - French Community extended temporary measures to combat teacher shortages and introduced a new framework for teacher evaluation.  - Flemish Community: in 2024, commitment to reform initial teacher education and to develop a new career framework for teachers, but concrete measures are still under development. - French Community: in 2024, commitment to reform the status of teachers, to improve career stability, but still under development (planned for 2027-2028). Limited progress   
 
 
   
 
 
FISCAL 
ANNEX 2: FISCAL DEVELOPMENTS AND DEBT SUSTAINABILITY 

in 

in 

strategy 

line  with 

developments 

This annex discusses selected topics in public 
finance  and 
fiscal-
structural  country-specific  recommendations 
(CSRs)  addressed  to  Belgium  in  July  2025. 
These 
include  a  call  to  strengthen  defence 
spending  and  readiness  while  implementing  a 
the  Council 
fiscal 
Recommendation  of  20 June 2025.  On  that  date, 
the  Council  of  the  European  Union  adopted  both 
the 
Belgium’s 
medium-term  fiscal-structural  plan (35)  and  a 
revised  recommendation  under  Article  126(7) 
TFEU with a view to bringing an end to Belgium’s 
excessive  deficit (36).  On  8 July 2025,  the  Council 
also  activated  the  national  escape  clause  for 
Belgium to facilitate its transition to higher levels 
of defence spending (37) (38). 

recommendation 

endorsing 

Graph A2.1: Contributions to the change in general 
government balance (% of GDP) 

Source: European Commission Spring Forecast  

(35)  OJ C, C/2025/3975. 

(36)  Council  Recommendation  with  a  view  to  bringing  an  end  to 
the  situation  of  an  excessive  deficit  in  Belgium  as  adopted 
on  20 June 2025.  The  corrective  net  expenditure  path 
recommended  by  the  Council  under  the  excessive  deficit 
procedure  is  consistent  with  the  maximum  growth  rates  of 
net expenditure set out in the plan. 

(37)  Council Recommendation of 8 July 2025 allowing Belgium to 
deviate from the maximum growth rates of net expenditure 
as  set  by  the  Council  under  Regulation  (EU)  2024/1263 
(Activation  of 
(OJ  C, 
C/2025/3960). 

the  national  escape  clause) 

(38)  Compliance  by  Belgium  with  the  maximum  growth  rates  of 
net expenditure recommended by the Council is assessed in 
COM(2026)200. 

Developments in government deficits, 
debt and public expenditure (39) 

Belgium’s  government  deficit  was  5.2%  of 
GDP  and  the  country’s  debt-to-GDP  ratio 
amounted  to  107.9%  of  GDP  at  the  end  of 
2025.  The  Commission  Spring  2026  Forecast 
projects  that  the  deficit  will  stabilise  at  5.2%  of 
GDP  in  2026  and  reach  5.4%  of  GDP  in  2027. 
Public  debt  is  expected  to  increase  to  110.5%  at 
the end of 2026 and to 112.8% end 2027, mostly 
driven  by  the  high  general  government  deficits. 
The  projected  increase  in  the  deficit  in  2027  is 
driven by higher defence expenditure and interest 
payments, while lower RRF revenues are offset by 
lower RRF expenditure as well (see Graph A2.1). 

Public  investment  is  rising,  but  it  remains 
lower  than  in  other  EU  countries.  Public 
investment  is  expected  to  reach  3.3%  of  GDP  in 
2026, up from 2.6% in 2019 (see Graph A2.2). It is 
set  to  increase  further  in  2027  despite  the  lower 
support  from  the  Recovery  and  Resilience  Facility 
(RRF) thanks to greater investment financed by the 
national budget, mainly on defence. 

Graph A2.2: Public investment evolution and 
composition (% of GDP) 

Source: Spring Forecast  

Growth-friendly  expenditure  had  remained 
broadly  stable  over  three  decades  but  has 
slightly  increased  since  2019.  This  may  be 

(39)  Figures  underpinning  fiscal  surveillance  (net  expenditure 
growth)  are  provided 
in  the  Fiscal  Statistical  Tables 
(SWD(2026)200) providing background data relevant for the 
assessment of the budgetary policies of the Member States. 

29 

-2-1012342021202220232024202520262027RevenueExpenditureChange in budget balance% of GDP0,00,51,01,52,02,53,03,5201920202021202220232024202520262027% of GDPOther nationally-financedRRF grants and other EU fundsDefence 
 
 
  
 
  
 
 
 
Table A2.1:  Supplementary pension scheme - scope for expansion 

Source: European Commission 

labour  market  participation 
Annex 3). 

in  Belgium 

(see 

Graph A2.3: Primary spending evolution and 
composition 

services, 

affairs (40) 

communication).  Zooming 

related  to  the  impact  of  the  RRF,  which  possibly 
facilitated  expenditure  with  a  greater  growth 
impact (including education, R&D, health, transport 
and 
the 
in  on 
social  protection 
spending, 
composition  of 
accounts for the largest share of total expenditure 
in 2024 (around 40%), followed by health, general 
public 
and 
economic 
education, each of which constitutes at least 10% 
of  total  expenditure.  While  Belgium  is  one  of  the 
EU  countries  spending  most  (as  %  of  GDP)  on 
education,  it  has  experienced  a  deterioration  in 
education  outcomes,  as  reflected  in  CSRs  calling 
for  improved  performance  and  equity  in  this  area 
(see  Annex  13),  questioning  the  efficiency  of 
public 
education 
expenditure  on  social  protection  and  defence  has 
increased  by  more  than  expenditure  on  other 
functions,  as  a  share  of  total  expenditure  (See 
Graph  A2.3),  with  the  rise  in  defence  spending 
reflecting  recent  security  developments.  Among 
growth-friendly  spending  categories,  health  and 
R&D expenditure have increased since 2019, while 
communication  and  transport  expenditure  have 
declined.  

spending. 

2019, 

Since 

Belgium has relatively high tax revenues as a 
share  of  GDP  and  relies  heavily  on  labour 
taxes. In 2025, Belgium’s total tax revenues as a 
percentage  of  GDP  (including  compulsory  social 
contributions) amounted to 42.0%, compared with 
an  EU  average  of  40.1%.  Total  tax  revenues  are 
projected  to  increase  to  42.2%  of  GDP  in  2026 
and  2027  according  to  the  Commission’s  Spring 
2026  Forecast.  The  tax  mix  in  Belgium  relies 
heavily on labour taxation which is reflected in low 

(40)  Economic  affairs  refers  to  the  set  of  government  activities, 
policies,  and  expenditures  aimed  at  regulating,  supporting, 
and  developing  economic  activity  across  major  sectors, 
including  general  economic  and  labour  policies,  agriculture 
and  natural  resources,  energy,  industry,  construction,  and 
other economic functions not elsewhere classified. Although 
transport  and  communication,  as  well  as  research  and 
development  activities,  are  normally  considered  part  of  this 
function, they are treated separately in the graph presented. 

Source: Eurostat  
Note: Based on economic literature, the categories considered 
to have a greater growth impact include education, R&D, 
health, transport and communication (See Barbiero and 
Cournede (2013), Gemmel et al. (2016), Lupu et al. (2018), 
Cepparulo and Mourre (2020) and OECD (2025)).   

Rising ageing costs 

Total ageing-related expenditure is projected 
to rise by about 1.6 pps of GDP between now 
and  2040,  to  around  29%  of  GDP,  with  a 
further  3 pps  increase  between  2040  and 
2070  (see  Table  A2.2).  The  overall  increase  in 
this area is mainly the result of a projected rise in 
pension  and  long-term  care  expenditure,  with  a 
smaller  contribution  from  healthcare  spending. 
Public  healthcare  expenditure  is  projected  to  be 
6.2%  of  GDP  in  2025  (below  the  EU  average  of 

30 

10152025304045505560200720082009201020112012201320142015201620172018201920202021202220232024Primary expenditureSpending with higher impact on GDP (rhs)-0.6-0.20.20.61.0Other economicCultureEnvironmentTransportGeneralservicesCommunicationPublicorderEducationHousingInterestspendingHealthR&DSocialprotectionDefenceb) Compositional change (% total spending) since 2019 Assets in 2024 (% GDP)Participation in 2024 (% working-age population)BE30,31,959,4BEEU32,4-2,855,9EUGross replacement rate at retirement: (pps change 2025-2040)  
 
   
 
     
 
Table A2.2:  Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 

Source: 2024 Ageing Report (EC/EPC). 

6.6%)  and  is  expected  to  increase  by  0.6 pps  of 
GDP  between  now  and  2070.  However,  Belgium 
has  one  of  the  highest  levels  of  ageing-related 
spending in the EU. This will remain the case in the 
future, according to the projections from the 2024 
Ageing  Report.  However,  these  projections  do  not 
account  for  the  ongoing  reform  of  the  pension 
system. 

Pension  expenditure  is  projected  to  increase 
by  about  1.3 pps  of  GDP  by  2040  and 
continue  to  rise,  but  the  ongoing  pension 
reform  should  ease  the  strain.  Overall, 
between  now  and  2070,  public  pension 
expenditure  is  forecast  to  rise  by  around  3.1 pps 
of GDP, although these figures do not incorporate 
the federal government’s planned pension reform. 
In  March  2026,  following  its  approval  by  the 
Council  of  Ministers,  a  draft  law  for  a  reform  of 
the  pension  system  was  submitted 
the 
Parliament (41).  The  draft  law  contains  measures 
that:  (i)  introduce  a  bonus-malus  system  (to 
replace the bonus system introduced in 2024); (ii) 
increase  the  relevance  of  the  period  effectively 
worked  compared  to  periods  of  assimilated  work; 
(iii) further harmonise the pension system for civil 
(iv) 
servants  with  the  general  system;  and 
gradually  phase  out  the  favourable  conditions  in 
some special pension systems in the public sector. 
The  draft  law  is expected to  reduce  the  projected 
in  pension  expenditure  by  1.3 pps 
increase 
between 2024 and 2070 (42).  

to 

Supplementary  pension  schemes  can  make 
the  pension  system  more  resilient  by 
diversifying  retirement  income  sources.  In 

(41)  Pension reform draft law of 10 March 2026. 

of 

uptake 

however, 

Belgium, 
these 
the 
supplementary  schemes  remains  modest.  At  the 
end of 2024, private pension assets amounted to 
in 
around  30%  of  GDP  while  participation 
supplementary schemes covered only around 60% 
of  the  working-age  population (43).  This  coincides 
with  both:  (i)  rising  medium-term  pressures  on 
public  pension  spending;  and  (ii)  a  projected 
increase  in  the  replacement  rate  by  1.9 pps 
between 2025 and 2040 (Table A2.1) (44). 

risk. 

fiscal 

Public  expenditure  on  long-term  care  is 
projected to be 2.3% of GDP in 2025 (above 
the  EU  average  of  1.7%)  and  is  expected  to 
increase by 0.7 pps of GDP between now and 
2040  and  by  a  further  1.0 pps  of  GDP 
between 2040 and 2070. This increase in long-
term  care  expenditure  contributes  significantly  to 
the  Commission 
In  2025, 
the 
recommended  that  Belgium  makes  its  long-term 
care  system  more  cost-effective.  Data  show  that 
there  is  still  excessive  or  early  placement  in 
residential  care,  with  little  improvement  since 
2021. This is most acute in Brussels and Wallonia, 
suggesting room to improve the cost efficiency of 
care,  including  by  strengthening  measures  to 
residential  care  and 
discourage  overuse  of 
improving  community-based  services.  Flanders  is 
expanding  the  use  of  the  BelRAI  tool,  which  is  a 
tool  to  help  tailor  care  to  the  individual’s  level  of 
dependency.  Brussels  has taken  steps  to  promote 
home  care  and  Wallonia  has  taken  steps  on 
preventive care. 

(43)  OECD  Pension  Market 

in  Focus  2025.  The  highest 
participation rate in at least one supplementary pension plan 
is reported. 

(42)  Federal  Planning  Bureau,  2026,  Budgetary  and  social 
assessment  of  the  federal  government’s  pension  reform, 
Rapport 13299. 

(44)  The  (gross)  replacement  rate  refers,  depending  on  data 
availability,  to  both  public  and  private  pensions.  It  is  based 
on projections from the 2024 Ageing Report.  

31 

BE27,11,30,30,7-0,61,628,7BEEU24,30,50,30,4-0,30,925,2EUBE27,13,10,61,7-0,74,731,9BEEU24,30,20,60,8-0,31,325,6EUageing-related expenditure change in 2025-2040 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotalageing-related expenditure change in 2025-2070 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotal 
 
 
 
  
 
National fiscal framework 

Although spending reviews are used, there is 
room  to  further  improve  the  efficiency  of 
public  spending.  As  part  of  Belgium’s  Recovery 
and Resilience Plan (RRP), all levels of government 
(federal,  regions  and  communities)  are  anchoring 
spending  reviews  to  their  budgetary  process. 
However,  noteworthy  results  in  this  area  can  be 
seen  only  in  Flanders  which  has  run  spending 
reviews  since  2019  and  integrates  the  results  of 
the  spending  reviews  into  its  annual  budget.  At 
federal 
regions  and 
communities, spending reviews did not lead yet to 
notable spending adjustments. 

level  and 

in  other 

The  lack  of  coordination  across  government 
levels  is  hampering  the  efficiency  of  public 
investment.  In  most  areas,  public  investment  is 
almost entirely delegated to Belgium’s regions and 
communities.  Multi-year 
investment  plans  are 
missing at both federal and federated-entity level, 
although  Flanders  and  Wallonia  have  more 
recently begun to take action in this area. There is 
also  room  to  better  prepare  public  investment 
projects:  Belgium  has  no  standard  procedures  for 
appraising  or  selecting  public  investment  projects 
at federal level, and the same is true in Wallonia, 
Flanders and the Brussels Region. Flanders has put 
in  place  a  process  to  expedite  the  delivery  of 
complex projects, but its use is not mandatory. 

The  budgetary  process  and  coordination 
suffer  from  structural  weaknesses,  but 
reforms  are  ongoing.  Belgium  was  so  far  the 
fiscal 
only  EU  country  without  multiannual 

planning  at  national  level.  The  annual  budgetary 
process  starts  after  the  summer,  which  leaves 
little  time  before  the  15  October  deadline  for 
submission  of  the  draft  budgetary  plan  to  the 
Commission.  The  federal  government  plans  to 
start  the  annual  budgetary  process  earlier  in  the 
year  to  have  more  time  to  prepare  the  draft 
budgetary  plan  and  to  submit  it  in  line  with  the 
deadline.  In  March  2026,  federal  and  federated 
entities  have  reached  an  agreement  on  enhanced 
budgetary  coordination,  to  which  Belgium  had 
committed  in  its  medium-term  fiscal  structural 
plan.  Belgium  plans  to  do  this  by  setting 
multiannual  budgetary  targets  for  all  entities  to 
comply with the requirements of the EU economic 
governance  framework.  This  reform  will  facilitate 
compliance  with  the  net  expenditure  growth 
recommendation  from  the  Council  at  the  national 
level.  To 
facilitate  a  swift  and  effective 
implementation  of  this  agreement,  its  design 
should  aim  for  transparency  and  simplicity.  An 
overly 
to 
inter-federal 
distribute  the  net  expenditure  growth  between 
entities  may  hamper  its  effective  implementation 
and may jeopardise the verification of compliance 
at entity level. 

framework 

complex 

the  macroeconomic 

The  institutional  set-up  of  Belgium’s  two 
independent  fiscal  institutions  (IFIs)  is  being 
reformed.  Belgium’s  Federal  Planning  Bureau 
(FPB)  produces 
forecast 
underlying  the  government’s  budgetary  plans  and 
conducts  budget 
long-term 
sustainability analysis. The High Council of Finance 
-  Public  Sector  Borrowing  requirements  (HCF-
PSBR),  monitors  inter  alia  Belgium’s  compliance 
with  fiscal 
rules.  The  HCF-PSBR  has  been 
hampered  in  its  work  by  (i)  the  lack  of  binding 

forecasting  and 

Table A2.3:  Fiscal governance database indicators and public accounting maturity 

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. 
The score for public accounting reflects the degree of maturity in relation to the International Public Sector Accounting Standards 
(IPSAS). Countries with an accounting maturity of 70% or more in relation to IPSAS are deemed to apply accrual accounting. For 
more information, see the report on public accounting in the EU (COM(2025)746 and Staff Working Document SWD(2025)396). 
Source: Fiscal Governance Database, European Commission. 

32 

2024BelgiumEU AverageCountry Fiscal Rule Strength Index (C-FRSI)13,0114,81Medium-Term Budgetary Framework Index (MTBFI)0,680,722025 Public accounting maturity of general government74%65% 
 
  
 
agreements  on  budgetary  objectives  between  the 
different levels of government; and by (ii) a lack of 
financial  and  human  resources.  These  difficulties 
faced  by  the  HCF-PSBR  also  partly  explain  why  it 
has not performed any ex post assessment of the 
authority’s  budgetary  forecasts.  The  fact  that  the 
governor of Belgium’s central bank chairs the HCF-
PSBR  could  also  negatively  affect  its  independent 
functioning.  Following  an  external  review  of  the 
FPB  by  the  OECD  in  2023,  the  organisation  of 
these  two  IFIs  are  being  improved.  The  recent 
reform  proposal  ensures  that  the  administrative 
and analytical support needs of the HCF-PSBR will 
be fulfilled by the FPB to address the HCF-PSBR’s 
staffing issue. However, the independence of both 
IFI’s  needs  to  be  safeguarded  in  this  institutional 
set-up. 

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

investments  underpinning 

Belgium’s  CSRs  call  for  implementing  the  set  of 
reforms  and 
the 
extension  of  the  adjustment  period.  This  set  of 
reforms is composed of: (i) commitments from the 
(ii)  commitments  extending  previously 
RRP; 
existing  RRP  measures;  and 
(iii)  additional 
commitments  to  reforms  and  investments.  Based 
the  information  provided  in  the  Annual  Progress 
Report,  Table  A2.4  shows  the  implementation 
status of the set of reforms and investments due 
in 2025 and the first half of 2026. 

Table A2.4:  Reforms and investments underpinning the extension of the adjustment period for Belgium 

Note: The progress of each backward-looking key step (i.e., those scheduled for completion by 30 April 2026) is classified as 
either ‘completed’ or factual information is provided. The status of forward-looking key steps in 2026 not yet completed remains 
blank and those due after December 2026 do not appear in the table, as these will be assessed by the Commission in future 
Country Reports. 
** These key steps correspond to milestones C44-R-407-M157 and C44-R-407-M158 of Belgium’s RRP, whose assessment is still 
pending in the context of a payment request under the RRF and the table does not prejudge its assessment. 
Source: Commission’s assessment and Belgium’s Annual Progress Report 

33 

MeasuresKey stepsRecommended implementation dateCOM assessment 2026Pension reformDelivery of milestones C44-R-407-M157 and C44-R-407-M158 of Belgium's RRP, notably by permanently reducing the projected increase in public pension spending by at least 0.3% of GDP by 2029 and by at least 1.0% of GDP by 2040, compared to the 2024 Ageing Report projections, while ensuring that the overall impact of the pension reform between 2029 and 2070 will not result in debt cumulation.Q4 2025Completion expected in 2026**Complete spending reviews in the areas of: a) fossil fuel subsidies; and 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 2026Labour market reformEntry into force of legislation which permanently decreases general government expenditure on unemployment benefits and long-term sickness leave by at least 0.3% of GDP per year from 2027 by: (i) limiting unemployment benefits to a maximum of two years; and (ii) reducing long-term sickness by requiring employers to contribute to the payment of incapacity benefits and by increasing accountability for employees and doctors.Q4 2025CompletedEntry into force of legislation which reduces the tax burden for those active on the labour market, totalling a cumulative 0.5% of GDP in 2029, including by: (i) increasing the personal tax-free allowance for earned income; and (ii) reforming the special social security contribution.Q1 2026Completion expected in 2026Entry into force of legislation which finances the labour tax reduction of 0.5% of GDP in 2029 by: (i) removing tax expenditure (including abolishing the tax reduction for unemployment benefits and limiting the 'marital quotient'); (ii) increasing capital-related taxes, including (introducing a 10% capital gains tax on realised capital gains and abolishing the tax deductibility of mortgage interest for secondary residences); and (iii) limiting the welfare envelope.Q1 2026Completion expected in 2026. These measures have been adopted or are included in draft legislation submitted to the Parliament. The welfare envelope was set to zero until 2029.Entry into force of legislation to: (i) ensure effective budgetary coordination between the federal and federated entities; and (ii) redefine the tasks - and increase the financial and staff capacity - of the High Council of Finance (HCF).Q4 2025Budegtary coordination agreed, adoption by all Parliaments expected by Q4 2026. Royal Decree on HCF agreed, pending adoption in 2026.Entry 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) reducing the administrative burden for companies; (ii) simplifying procedures to improve access by SMEs to public procurement; and (iii) drawing up an SME plan with a specific focus on start-ups to reduce the cost of doing business.Q4 2025CompletedSpending reviewsTax reformBudgetary coordination 
 
 
   
 
ANNEX 3: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Belgium’s  tax  system.  It  includes 
information  on  the  tax  mix,  on  competitiveness 
and fairness aspects of the tax system, and on tax 
collection and compliance. In the area of taxation, 
the 2025 CSRs for Belgium highlighted challenges 
in  taking  specific  steps  to  phase  out  fossil  fuel 
subsidies,  including  shifting  excise  duties  from 
electricity to fossil fuels. In its medium-term fiscal 
and  structural  plan,  Belgium  committed  to  reduce 
the  tax  burden  on  labour,  totalling  a  cumulative 
0.5% of GDP in 2029. The reform also requires the 
labour  tax  reduction  to  be  financed  by  removing 
tax  expenditure,  by 
increasing  capital-related 
taxes, and by limiting the welfare envelope. 

Graph A3.1: Tax revenue by economic function in 
2024, BE (outer ring) and EU-27 (inner ring) 

Source: Taxation Trends Data, DG TAXUD 

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 2024 (42.8% vs 
39.4%) (45).  The  largest  source  of  tax  revenues 
were  labour  taxes  (51.8%  of  tax  revenues  vs  EU 
average  of  51.5%),  followed  by  capital  taxes 
(25.7% of total revenues vs EU average of 21.6%) 
and consumption taxes (22.1% of tax revenues vs 
EU  average  of  26.8%).  The  high  tax  burden  on 
labour  risks  reducing  labour-market  participation, 
which  runs  counter  to  the  Belgian  government’s 
objective  of  increasing  the  employment  rate  to 
80%  by  2030  (in  2024:  72.3%).  In  contrast, 
revenues  from  consumption 
recurrent 
immovable  property  taxes  and  environmental 
taxes,  which  are  among 
least 
detrimental  to  growth,  are  close  to  or  below  the 
EU average. 

taxes, 

taxes 

the 

(45)  Preliminary  Eurostat  data  point  to  a  tax-to-GDP  ratio  of 

42.3% in 2025. 

34 

Graph A3.2: Tax wedge for single and second 
earners as a % of total labour costs, 2025 

Note: The second earner tax wedge shows a household’s tax 
wedge resulting from the wage that a second earner taking 
up a job at 67% of the average wage receives. It does not 
show the total tax wedge of the household. The household is 
assumed to have a first earner at 100% of the average wage 
and no children. For the methodology of the tax wedge for 
second earners, see OECD (2024), Taxing Wages 2024. 
Source: European Commission 

The tax wedge on labour is well above the EU 
average  at  almost  all  income  levels,  except 
for  very-low-income  earners.  The  tax  wedge 
for  a  single  worker  with  average  earnings  was 
50.8  %  in  2024,  well  above  the  EU  average  of 
40%  (see  Graph A3.2) (46).  High  labour  taxation 
can  constrain  work  incentives  and  contribute  to 
low employment rates, with financial incentives to 
work  also  depending  on  individual  characteristics 
(see  Annex 11).  Personal  income  tax  (PIT)  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%). High marginal tax rates for lower-
middle to middle incomes result in significant low-
wage  traps  where  additional  earnings  are  taxed 
away  quickly  through  higher  taxes  and  reduced 
benefits.  This  effect  dampens  the  financial  gains 
from 
in  hours  worked  or  wage 
progression  at  common  earnings  levels.  At  the 
same time, the increased ceiling of hours allowed 

increases 

(46)  The  tax  wedge  is  an  indicator  of  the  tax  burden  on  labour 
that  can  be  assessed  at  various  levels  of  earnings.  It  is 
defined  as  the  sum  of  PIT,  employee  and  employer  social-
security  contributions  and  other  mandatory  contributions, 
expressed  as  a  percentage of  total  labour  costs  (composed 
of  the  net  wage,  PIT,  social  contributions,  and  other 
mandatory  contributions).  Tax  wedge  data  in  the  2026 
country  reports  are  calculated  by  the  Joint  Research  Centre 
of  the  European  Commission  and  based  on  the  EUROMOD 
model,  while  past  country  reports  were  based  on  the  OECD 
tax and benefit model. While the underlying methodology is 
very  similar,  differences  in  the  assumptions  can  lead  to 
different results between both models. 

51.526.821.651.822.125.7Taxes on labourTaxes on consumptionTaxes on capital21.537.950.857.450.020253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - BESingle earner - EU averageSecond earner -  BESecond earner -  EU average 
 
      
 
     
 
 
 
Table A3.1:  Taxation Indicators 

(1) (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 2024. EU-27 refers to the median value. For more data on tax revenues as well as the methodology 
applied, see the Data on Taxation Trends webpage. 
Source: European Commission, OECD, ISORA. 

under the fiscally attractive student status and the 
planned  expansion  of  ‘flexi-jobs’  to  all  sectors 
could narrow the labour taxation base. 

On  the  positive  side,  there  is  less  income 
inequality  in  Belgium  than  in  the  EU  on 
average  due  to  the  combined  inequality-
reducing  effect  of  taxes  and  benefits.  The 
tax-and-benefit system reduced income inequality 
in  2024  by  12.6 pps  as  measured  by  the  Gini 
compared  with  an  EU-average 
coefficient, 
reduction of about 7.8 pps (47). 

In  2026,  the  government  introduced  some 
measures  to  make  work  more  financially 
rewarding,  making  progress  towards 
its 
commitment  in  the  mid-term  fiscal  and 
structural  plan  to  reduce  the  tax  burden  on 
increase 
labour.  The  tax-free  allowance  will 
gradually  from  EUR 10 910  to  EUR 15 600  by 
2030 
in  2026).  The 
first  step 
corresponding  tax  reduction  for  pensions  and 
replacement incomes will be reduced to offset the 

(with  a 

(47)  The  Gini  coefficient  measures  the  extent  to  which  the 
distribution  of  income  within  a  country  deviates  from  a 
perfectly  equal  distribution.  A  coefficient  of  0  expresses 
perfect equality where everyone has the same income, while 
a coefficient of 100 expresses full inequality where only one 
person has all the income. 

fiscal  cost associated with this increase. A cap  on 
the social security contributions to be  paid by the 
employer  will  also  be 
introduced,  effectively 
lowering  the  financial  burden  of  high-earning 
contracts  to  the  employer.  To  support  low-wage 
workers,  the  work  bonus  will  be  increased  from 
2026  with  a  view  to  equalising  net  to  gross  pay 
for minimum-wage earners by 2029. Furthermore, 
the  progressive  tax  rates  for  working  pensioners 
will  be  replaced  by  33%  flat  rate  on  earned 
income.  

the 

linked 

Belgium  has also  taken  several  measures to 
reduce 
to 
tax  advantages 
replacement  income  or  inactivity.  The  tax 
reduction  for  unemployment  benefits  will  be 
reduced from 2026 and abolished by 2029. From 
2026  onwards  the  minimum  income  will  become 
taxable. The marital quotient will be phased down 
from 2026. It will be halved for active earners by 
2029  and  more  gradually  abolished 
for 
pensioners.  

Belgium  introduced  a  10%  capital  gains  tax 
on  realised  capital  gains  on  shares  and 
cryptocurrency  effective  from  1 January 
2026.  Capital  gains  realised  in  the  context  of  a 
‘substantial interest’ (i.e. when the transferor holds 
at  least  20%  of  the  rights  in  the  capital  of  the 
company  whose  shares  are  being  transferred) 

35 

2019202220232024202520192022202320242025Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)43.342.542.142.842.339.939.739.039.4Taxes on labour (% of GDP)22.022.021.922.120.620.119.920.3of which, social security contributions (SSC, % of GDP)13.312.712.813.113.012.712.713.0Taxes on consumption (% of GDP)10.69.99.69.511.210.910.510.6of which, value added taxes (VAT, % of GDP)6.76.56.36.27.17.47.17.1Taxes on capital (% of GDP)10.510.410.511.08.18.78.58.5Personal income taxes (PIT, % of GDP)11.311.811.611.99.69.49.39.6Corporate income taxes (CIT, % of GDP)3.73.93.94.42.63.23.23.1Total property taxes (% of GDP)3.53.33.13.22.22.11.91.8Recurrent taxes on immovable property (% of GDP)1.31.21.31.21.21.00.90.9Environmental taxes (% of GDP)2.62.22.32.22.62.12.12.1Effective carbon rate in EUR per tonne of CO2 equivalentsnana74.0nanana84.8naTax wedge at 50% of average wage (single person) (*)21.623.623.321.521.532.431.631.531.531.6Tax wedge at 100% of average wage (single person) (*)50.251.050.850.750.840.139.739.939.940.0Corporate income tax - effective average tax rates (1) (*)27.923.823.822.520.019.219.019.3Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)12.912.612.612.67.88.07.97.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)15.512.613.9na31.832.630.7naVAT gap (% of VAT total tax liability, VTTL) (**)13.211.712.313.910.57.38.2naEU-27BelgiumProgressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
     
 
benefit from an exemption of EUR 10 000 and will 
be  subject  to  a  progressive  rate  from  1.25%  to 
10%.  Internal  capital  gains  on  shares  and  profit 
certificates  realised  upon  transfer  to  a  company 
which  is  controlled  directly  or  indirectly  by  the 
transferors  themselves,  or  together  with  their 
family will be fully subject to tax at a rate of 33%. 
The law allows capital gains to be partially offset 
against  capital  losses,  but  the  final  result  cannot 
be  negative.  Some  investment  funds  will  be 
exempted  from  the  tax.  To  protect  small  and 
medium-size  savers,  an  annual  exemption  of 
EUR 10 000 per individual is granted. This exempt 
amount  will  be  indexed  annually  and  can  be 
increased to EUR 15 000 for individuals who have 
not  withdrawn  any  capital  gains  in  the  five 
preceding years. The tax will not apply  to pension 
savings and group insurances. 

The 
federal  government  announced  a 
progressive  increase  of  excise  duties  on 
natural  gas  and  heating  oil  to  encourage 
transition  from  fossil  fuel  to  electricity  (see 
Annex 9).  Excise  duties  on  natural  gas  will  be 
gradually  increased  as  of  2026,  generating  an 
additional  EUR 365 million  by  2029.  Excise  duties 
on  heating  oil  will  also  increase  from  EUR 17  to 
EUR 23 per 1 000 litres from 2026, then increased 
by  EUR 1  every  year  until  2029.  Excise  duties  on 
electricity  will  be  reduced  by  EUR 170 million  by 
2029. Gaps with the main neighbouring countries, 
however,  will  remain  substantial.  At  federal  level, 
an  ongoing  spending  review  on  fossil  fuel 
subsidies is due to be completed by mid-2026, but 
no structural fossil fuel subsidy reform is currently 
planned. 

forward-looking 

The top statutory corporate income tax (CIT) 
rate  in  Belgium  is  25%  in  2025  and  the 
effective 
model-based 
average  tax  rate  based  on  2022  data  is 
22.5%.  The  application  of  the  top-up  tax  will  be 
assessed on case-by-case basis depending on the 
actual  effective  tax  rate  of  the  given  group  in 
Belgium,  nevertheless  it  is  likely  that  the  top-up 
tax  will  not  significantly  affect  Belgium’s  tax 
revenues.  

Belgium  provides  strong  tax  incentives  to 
support  R&D,  but  do  not  seem  to  reach 
companies with the highest growth potential 
(see  Annex  4).  Overall  R&D  intensity  reached 
3.36% of GDP in 2024 (vs 2.43% in 2015), thanks 
to a very substantial increase over the last decade 
in  business  R&D  intensity  (2.43%  in  2024),  now 

the  second  highest  in  the  EU.  Public  support  for 
business  R&D  (0.36%  of  GDP  vs  EU  average  of 
0.2%)  is  amongst  the  highest  in  the  EU,  largely 
driven  by  tax  incentives  (0.23%  of  GDP  of 
foregone  revenues  vs  EU  average  of  0.1%). 
Studies show that corporate income tax incentives 
for R&D are not effective in stimulating additional 
tend 
R&D  activities,  since 
to 
disproportionally  benefit 
them.  Direct 
subsidies  and  labour  tax  incentives  could  boost 
R&D spending in small start-ups. 

firms 

large 

from 

It  has  also 

Tax  expenditures  are  estimated  to  foregone 
revenues  of  EUR 31 billion, 
representing 
6.06% of GDP or 18.4% of total tax revenues 
(2021) (48).  Belgium  publishes  a  comprehensive 
report  on  tax  expenditures  (TEs)  in  the  ‘Federal 
Inventory  of  Tax  Expenditures’  annexed  to  the 
budget  every  year. 
recently 
implemented  a  spending  review  framework  that 
covers  TEs,  primary  expenditure  and  the  social 
security  sector.  The  largest  part  result  from  VAT 
with  EUR 11.2 billion or 2.2% of GDP in foregone 
revenues  (32.1%  of  VAT  revenue);  reduced  VAT 
rates  cause  97%  of  foregone  VAT  revenues,  the 
from  exemptions.  Tax 
remaining  3%  stem 
expenditures 
represented 
to 
related 
EUR 10.7 billion  or  2.06%  of  GDP  (22%  of  PIT 
to  CIT 
revenue).  Tax  expenditures 
amounted  to  about  EUR 2.2 billion  or  0.43  %  of 
GDP (12.3% of CIT revenue). 

related 

PIT 

The  VAT  compliance  gap  has  increased  in 
2023  to  12.3%  up  from  11.7%  in  2022  and 
remains  among  the  highest  in  the  EU.  This 
the  6th  highest  VAT 
means  Belgium  has 
compliance  gap  in  the  EU,  which  is  expected  to 
increase further in 2024. Belgium does not have a 
reliable method for calculating what proportion of 
the  VAT  compliance  gap  comes  from  undeclared 
turnover,  reduced  rates  abuse,  missing  trader 
intra-community fraud and VAT carrousel fraud.  

Nevertheless, recent reforms have supported 
the  stabilisation  of  the  VAT  compliance  gap. 
An update to the existing mandatory cash register 
system  for  the  HORECA  sector  will  transmit  data 
to  the  cloud  to  facilitate  control  by  the  tax 
administration. The mandatory use of this system 
will  be  extended  to  other  (as  yet  unspecified) 
sectors.  E-invoicing  has  been  mandatory  for  B2B 
since  1 January 2026.  Real  time  reporting  will  be 

(48)  Federal Inventory of Tax Expenditures 2024. 

36 

 
 
targeted 

put  in  place  from  1  January  2028.  The  Belgian 
administration  is  also  invested  in  the  Eurofisc 
network  allowing  swift, 
information 
exchange and coordinated risk analysis to combat 
cross-border  VAT  fraud.  It  is  also  continuing  to 
develop and refine existing national tools for data 
mining  and  risk  analysis  to  counter  national  non-
declaring of VAT. It is gradually reforming the VAT 
chain  to  modernise  how  VAT  flows  through  the 
system and how the administration can react more 
efficiently and effectively to non-compliance. This 
reform 
is  expected  to  have  a  positive  but 
unquantifiable impact on VAT receipts. 

Belgium is not among the EU Member States 
that  officially  estimates  or  publishes 
national  tax  gaps (49).  It  does  not  produce  and 
report  tax  gap  estimation  figures,  apart  from  its 
involvement 
in  the  EU  VAT  gap  estimation 
exercise.  Estimating  CIT  and  PIT  compliance  gaps 
could  help  policy  makers  understand  the  nature 
and magnitude of the problems related to PIT tax 
collection.  In  addition,  measuring  and  monitoring 
tax 
tax 
administration  in  assessing  the  effectiveness  of 
their tax policy actions. 

compliance 

support 

gaps 

can 

platform, 

significant 

the  MyMinfin 

strides 
and 

Belgium  made 
in 
risk 
efficiency 
digitalisation, 
management within VAT collection (50). One of 
the most notable improvements is the automation 
and  simplification  of  VAT  refund  and  registration 
processes.  The  communication  of  bank  account 
details  for  refunds  can  now  be  done  digitally 
through 
reducing 
administrative  burden  and  accelerating  refunds. 
Another  major  reform  introduced  in  2025  is  the 
VAT  provision  account,  which  allows  taxpayers  to 
access  validated  but  unpaid  VAT  credits  digitally, 
reallocating  them  to  debts  or  refund  requests 
through  MyMinfin.  In  addition,  Belgium  shortened 
the  statutory  settlement  period  for  monthly  filers 
as  of  January  2025,  further  speeding  up  refund 
turnaround times. These reforms represent a clear 
improvement,  particularly  considering  that  refund 
delays  were  previously  identified  as  a  systemic 
weakness across Member States. 

Despite the clear progress, certain processes, 
such  as  debt  management  and  arrears 

may 

limit 

efficiency 

tracking,  still  rely  on  legacy  infrastructure, 
and 
which 
interoperability.  While  Belgium’s  VAT  processes 
are  increasingly  digitalised,  the  full  integration  of 
IT  systems,  notably  the  migration  from  the  older 
Stiron  application 
the  FIRST  monitoring 
platform, is still underway and not expected to be 
complete until 2026. 

to 

The Belgian tax administration has adopted a 
tax  recovery  strategy  to  steer  its  recovery 
activities.  Belgium  does  not  regularly  publish  a 
dedicated  tax  recovery  activity  report.  However, 
the general report from the Federal Public Service 
Finance  includes  some  statistics  about  recovery 
activity  and  the  tax  administration  publishes 
further statistics on tax recovery on its website. 

The  closing  stock  of  arrears  at  year  end  as 
percentage  of  total  revenue  collected  in 
Belgium  is  below  the  EU  average  and  has 
decreased slightly in recent years. The level of 
outstanding  tax  arrears  at  year  end  for  Belgium 
decreased from 15.5% of total revenue in 2021 to 
12.6% in 2022 (51). These figures suggest that the 
tax  administration  is  capable  of  collecting  the 
taxes  owed.  In  2022,  Belgium  reported  slightly 
over  10%  of  the  closing  stock  of  arrears  as 
collectible,  representing  a  decrease  compared  to 
2021. The time limit for tax recovery in Belgium is 
five  years (52),  starting  from  the  date  of  the 
executability of the tax receipt. The  time limit can 
be suspended in some cases. 

the  administrator  of 

Currently,  Belgium  does  not  have  specific 
legislation  on  cooperation  between  the 
administrator  of  insolvency  proceedings  and 
tax  recovery  authorities.  Belgium  does  not 
allow  the  tax  recovery  authorities  to  exchange 
the 
information  with 
insolvency proceedings concerning the assets that 
could  be  used  for  the  recovery  of  the  unpaid 
claims  in  the  insolvency  proceedings.  Professional 
secrecy  does  not  prevent  the  communication  of 
information  regarding  the  tax  situation  of  a 
bankrupt taxpayer to the insolvency administrator, 
since  the  latter  holds  a  judicial  mandate  and 
represents  both  the  bankrupt  individual  and  the 
body  of  creditors.  However,  due  to  the  rule  of 

(49)  European Commission, Mind the gap - 2025 report. 

(50)  Commission’s Ninth Report on VAT Administration, EUR-Lex - 
52022DC0137 - EN - EUR-Lex / 2025 VAT Collection Survey. 

(51)  OECD Tax Administration 2024 Figure 7.2. 

(52)  Art. 443bis, §1, al. 1 of Income Tax Code. 

37 

 
 
 
professional  secrecy,  the  administration  is  not 
allowed to disclose information about third parties. 

38 

 
PRODUCTIVITY 
ANNEX 4: INNOVATION TO BUSINESS  

Belgium  continues  to  be  a  strong  performer 
in research and innovation but its capacity to 
translate  this  performance  into  productivity 
gains  is  weak.  In  the  2025  European  Innovation 
Scoreboard,  Belgium  remains  a  strong  innovator, 
with  a  performance  much  higher  than  the  EU 
average, and also above the average of the other 
strong  innovators  (122.6%  vs  114.1%  of  the  EU 
average  in  2025) (53).  Its  overall  R&D  intensity 
reached  3.36%  of  GDP  in  2024  (vs  2.43%  in 
2015),  thanks  to  a  very  substantial  increase  over 
the  last decade  in  business  R&D  intensity  (2.43% 
in  2024) (54),  now  the  second  highest  in  the  EU. 
Factors  such  as  the  internationally  oriented  and 
highly  attractive  public  research  system  and  the 
high  level  of  R&D  investments  in  the  business 
sector  equips  Belgium  with  a  solid  innovation 
ecosystem.  Belgium  also  performs  strongly in  the 
digitalisation of businesses and plays an important 
role  in  the  development  of  advanced  digital 
technologies. However, business  R&D  investments 
are  highly  concentrated  in  sectors  where  Belgium 
the 
has  been  historically  strong,  such  as 
pharmaceutical  sector  (see  Annex  15).  Difficulties 
experienced  by  new  firms  in  scaling  up  and 
structural  rigidities  in  the  Belgian  labour  market 
the  diffusion  of 
renewal, 
hamper  economic 
innovation, and the translation of R&I performance 
into  productivity  growth  and  competitiveness. 
Therefore, 
country-specific 
recommendations  (CSRs)  stressed  the  need  to 
spread innovation by focusing public R&D support 
on high-growth firms and by fostering workers’ job 
mobility. 

2025 

the 

Excellent science  

Belgium  benefits  from  a  highly  attractive 
and internationally oriented research system, 
but  its  performance  is  eroding  slightly.  The 
public 
is  characterised  by 
universities  that  are  competitive  on  the  global 
stage (55) and internationally engaged, with strong 

research  sector 

(53)  2025 European Innovation Scoreboard. 

(54)  Eurostat data on GERD by sector of performance (released in 

December 2025). 

(55)  KU  Leuven,  Ghent  University,  UCLouvain,  ULB,  VUB  and 
University  of  Antwerp,  are  all  well  positioned  in  global 

39 

participation  in  cross-border  collaborations (56),  as 
well  as  by  the  high  number  of  researchers 
employed (57).  The  proportion  of  publications 
among  the  top  10%  most  cited  remains  well 
above EU average (11.48 in 2022 vs EU: 9.44) but 
has been on a downward trend for a decade. Even 
if this trend, linked to the emergence of China as a 
major  scientific  powerhouse (58),  is  observed  in 
several  innovation  leaders,  Belgium  is  among  the 
countries  with  the  most  pronounced  decrease. 
Public R&D intensity (0.91% vs EU: 0.72% in 2024) 
has slightly increased over the last three years. It 
remains  to  be  seen  if  this  will  allow  Belgium  to 
halt its decline in scientific performance.  

Differences  persist  across  regions  in  terms 
of innovation performance. The 2025 Regional 
Innovation  Scoreboard (59)  confirmed  the  ranking 
‘innovation 
of  Brussels  and  Flanders  among 
leader’  regions,  while  Wallonia,  with  a  much 
weaker  public  R&D  intensity  than  the  two  other 
regions (0.52% vs 0.94% in Flanders and 0.76% in 
Brussels),  remains  ‘strong  innovator’.  However, 
Wallonia’s  performance  significantly 
improved 
over the 2018-2025 period. 

Business innovation 

The  Belgian  innovation  ecosystem  benefits 
from  a  high 
level  of  business  R&D 
investments.  Business  R&D  intensity  is  one  of 
the  highest  in  the  EU  (2.46%  in  2023  vs  EU: 
1.49%),  with  significant  growth  over  the  last  15 
years.  This  excellent  performance  also  extends  to 
the expenditure (as % of GDP) of SMEs in R&D and 
the  number  of  researchers  employed  by  the 

rankings  (The  top  10  best  universities  in  Belgium:  2025 
rankings | Study.eu). 

(56)  71.4% of the total number of publications are international. 

(57)  6.0  per  thousand  active  population,  compared  to  EU-27 

average of 4.3. 

(58)  2025 European Innovation Scoreboard.  

(59)  European 

Commission 

(2025), 

Regional 

Innovation 

Scoreboard 2025 – Country profile Belgium. 

 
 
 
 
 
 
 
 
business  sector  per  thousand  working  population, 
both above the EU average (60). 

Strong  science-business  linkages  are  a  key 
asset  for  the  Belgian  innovation  ecosystem. 
The  proportion  of  public-private  co-publications 
among the total publications of the country stood 
at  11.46%  in  2024  (vs  EU:  7.62%).  The  public 
expenditure  in  R&D  financed  by  the  business 
sector  also  firmly  remains  higher  than  the  EU 
average (61). 
In  addition,  Belgian  universities 
maintain  well-functioning 
transfer 
offices and regularly generate spin-offs (62). 

technology 

the 

added 

Belgium  performs  very  well  in  high-tech 
manufacturing  but  its  capacity  to  translate 
its R&I performance into productivity gains is 
weak.  Thanks  to  a  very  strong  pharmaceutical 
sector, 
high-tech 
manufacturing  as  a  percentage  of  total  value 
added is higher than the EU average (63). The R&D 
intensity  of  high-tech  manufacturing  is  also  very 
high (64). However, there has been a negative trend 
over  the  last  decade  in  patent  applications  per 
billion  GDP,  which  in  2022  stood  below  the  EU 
average (65).  

value 

in 

Productivity  growth  has  slowed  significantly 
in  other 
since  the  1990s,  more  than 
advanced economies. This tendence is shown by 
total  factor  productivity  (TFP)  growth,  which  is 
lower than in other advanced European economies 
to  a  very  high 
and 
related 
few 
concentration  of  business  R&D 
in  a 
manufacturing  sectors (66),  and  to  a 
lack  of 
investments  able  to  deliver  productivity  growth in 

it  might  be 

sectors such as ICT and services (67). Furthermore, 
the proportion of ICT patent applications has seen 
a negative decline in the last decade (68). This also 
suggests stalling technological diffusion and room 
to  improve  the  transmission  of  innovation  to 
productivity gains (69). 

continues 

to  make 

The uptake of digital technologies by Belgian 
robust 
businesses 
progress.  In  2025,  84.35%  of  SMEs  reached  at 
least  a  basic  level  of  digital  intensity,  remaining 
well above the EU average (71.39%). Belgium also 
strengthened its leading position in the adoption of 
artificial  intelligence,  with  34.54%  of  businesses 
using  AI  (vs  EU:  19.95%),  reflecting  a  sharp 
increase  over  the  previous  year.  The  adoption  of 
cloud  computing  and  data  analytics  has  also 
accelerated  significantly.  In  2025,  58.51%  of 
businesses used cloud services and 52.09% relied 
on data analytics, both clearly above EU averages 
(46.69% and 39.85% respectively). 

AI 

fostering 

To  support  business  digitalisation,  Belgium 
continues  to  implement  a  range  of  policy 
measures  at  federal  and  regional  levels. 
These  include  support  schemes  for  SME  digital 
transformation,  innovation  vouchers  and  targeted 
programmes 
and 
experimentation  by  businesses.  Several  measures 
are supported through the recovery and resilience 
plan, notably in areas such as digital innovation, AI 
the 
experimentation 
strengthening  of  digital  innovation  ecosystems. 
Belgium also remains actively involved in EU-level 
initiatives  to  strengthen  digital  industrial  capacity 
and  participates  in  several  Important  Projects  of 
Common European Interest (IPCEIs). 

environments 

adoption 

and 

(60)  SMEs spending on R&D as % of GDP is 0.89 (EU average at 
0.43), while researchers employed by business per thousand 
population is 9.3 in 2024, vs the EU-27 average of 5.90. 

(61)  Public expenditure on R&D financed by business (national) as 

% of GDP: 0.09 compared to EU-27 of 0.06 in 2023. 

(62)  University  spin-offs  create  economic  value  from  cutting-

edge research | The Bulletin. 

(63)  2.83% in 2023, against an EU average of 2.14%. 

(64)  31.2 in 2021, the highest in the EU, with an average of 17.9. 

(65)  Patent  applications  filed  under  PCT  per  billion  GDP  (in  PPS 
EUR): 
in  2022  Belgium’s  performance  is  2.4  (with  a 
compound growth between 2012 and 2022 of -2.4) and the 
EU average is 2.8. 

Public support to business R&D is significant 
but mostly benefits large firms. Public support 
for business R&D (0.356% of GDP vs EU: 0.2%) is 
among the highest in the EU, largely driven by tax 
incentives  (0.232%  of  GDP  foregone  revenues  vs 
EU: 0.1%). However, studies show that large firms 
tend  to  disproportionally  benefit  from  it (70).  In 

(67)  The ANBERD database clearly shows that BERD in Belgium is 
highly  concentrated  in  manufacturing  (EUR 5.6  billion)  more 
than doubling the ICT sector (EUR 1.8 billion). 

(68)  OECD data (2024): from 18.6% in 2013 to 8.8% in 2020. 

(69)  International Monetary Fund (2025), country report: Belgium, 

IMF country report No. 25/69. 

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

(66)  OECD (2024), OECD Economic Surveys: Belgium 2024. 

development in Belgium: fourth evaluation. 

40 

 
 
 
particular,  the  proportion  of  R&D  tax  support 
accounted for by SMEs is low by OECD  standards 
and well below their contribution to business R&D 
spending  (around  20%) (71).  Therefore,  the  2025 
CSR  called  on  targeting  R&D  public  support  at 
companies  with  the  highest  growth  potential.  The 
OECD suggested several reforms in this vein, such 
as making the R&D tax credit annually refundable 
or redeemable against payroll taxes, capping total 
public support or tying tax relief to the increase in 
R&D spending rather than its absolute level (72). 

Entrepreneurial dynamism 

Weak  entrepreneurial  dynamism  is  a  key 
factor  behind  the  slowdown  in  productivity 
growth.  This  is  notably  reflected  in  the  fact  that 
relatively few firms enter and exit the market, and 
low  growth  among  entrants.  As  few  high-growth 
businesses  emerge  from  Belgium’s  SME  sector, 
Belgian  high-growth  firms  have  a  much  smaller 
footprint  in  the  economy  than  their  European 
counterparts (73).  This  tendency  to  remain  small 
poses  challenges  for  growth,  productivity  and 
overall economic competitiveness (74). 

lists  934 

Belgium’s  startup  and  tech  ecosystems  are 
still  early  in  their  maturation  journey.  The 
StartupBlink  ecosystem  report 
’top 
startups’  in  Belgium (75)  (i.e.  firms  that  meet 
certain  criteria  such  as  investment,  employee 
count,  web  traffic),  with  a  growing  deep-tech 
cohort and five widely recognised unicorns (Odoo, 
Collibra, Deliverect, team.blue and Lighthouse) (76). 
Looking  at  the  tech  sector  the  Belgian  tech 
ecosystem has benefited from a healthy influx and 
financing  of  seed  to  early-stage  startups:  in  the 
first half of 2025, there was a near 50% increase 
in  recorded  seed  rounds  compared  to  the  same 
period  in  2024.  However,  the  lack  of  later  stage 

(71)  OECD (2024), OECD Economic Surveys: Belgium 2024. 

(72)  OECD (2024). OECD Economic Surveys: Belgium. 

(73)  Employment  share  of  high-growth  businesses  measured  in 
employment (%) in Belgium was 0.27 in 2023, while the EU-
27 average was 0.87.  

(74)  Bijnens  G.  (2025)  “Reigniting  growth:  trends  and  challenges 
for business dynamism in Belgium”. NBB Economic Review. 

(75)  Startup Ecosystem Index (2025), StartupBlink. 

(76)  Belgium  Startup  Ecosystem  -  Rankings,  Startups  and 

Insights. 

41 

funding  rounds  proves  that  the  Belgian  tech 
ecosystem  is  plainly  still  early  in  its  maturation 
journey,  remaining  small  compared  to  its  EU 
peers (77).  The  National  Bank  of  Belgium  has 
recently  advocated  for  fostering  an  environment 
where  more  new  firms  can  sustain  high  growth 
beyond the startup phase (78). 

The  regional  and  federal  governments  have 
acknowledged  the  above  challenges  and  are 
looking  at  ways  to  encourage  investment  in 
high-growth  companies.  The  recent  reform  of 
the  investment  deduction  system (79)  as  well  as 
the  upcoming  measures  accelerating  depreciation 
for  investments  in  R&D (80)  might  help  to  support 
investment,  notably  in  SMEs  and  firms  with  high-
growth potential. 

Graph A4.1: Employment share of high-growth 
businesses measured in employment (%) 

Source: DG R&I, Eurostat, 2021-2023 

administrative 
and 

There is still room to improve the regulatory 
The 
and 
the 
complexity 
administrative 
to 
regulatory  powers,  procedures  and  support 
systems  being  split  across  federal,  regional  and 
local levels) raises compliance costs and hampers 

frameworks. 
of 
due 

fragmentation 

frameworks 

(partly 

(77)  State of Belgian Tech Report (2025). 

(78)  Bijnens  G.  (2025)  “Reigniting  growth:  trends  and  challenges 
for business dynamism in Belgium”. NBB Economic Review.  

(79)  The  investment  deduction  system  has  been  substantially 
reformed  with  new  rules  applying  to  qualifying  investments 
made  from  1 January 2025,  including  simplified  categories, 
rates  and  enhanced  carry-forward  of  unused 
fixed 
investment deduction. 

(80)  The  proposed  measures 

(including 

re-introduction  of 
degressive/  amortisation  options  for  SMEs  and  accelerated 
write-offs  for  larger  companies)  are  included  in  the  2025-
2029  government  coalition  pact,  but 
implementing 
legislation  remain  in  preparation  and  are  not  yet  fully 
enacted. 

00.10.20.30.40.50.60.70.80.91202120222023BEEU-27 
 
   
 
scaling and cross-border single market growth (81) 
(see  Annex  19).  A  number  of  positive  initiatives 
have been developed by various public authorities 
and  have  the  potential  to  be  replicated  in  other 
authorities,  regions  or  sectors,  such  as  NIDO (82) 
(the  public  sector  innovation  laboratory  of  the 
federal  public  service  for  policy  and  support),  the 
Flanders’ 
innovation 
procurement (83),  or  regulatory  sandboxes  with 
that 
legislative  experimentation  environments 
allow emerging technologies and business models 
to be scaled up, leveraging on sectoral experiences 
such as the FinTech contact point (84). 

programme 

for 

Graph A4.2: Graduates in ICT per thousand 
population aged 25-34 

Source: DG R&I, Eurostat, 2016-2023 

Shortages  of  highly  skilled  workers  hinder 
Belgium’s  economic  competitiveness  and 
business  innovation.  With  labour  shortages  in 
Belgium  among  the  highest  in  the  EU  (see  Annex 
11), Belgium’s innovation ecosystem is also under 
strain.  Although  historically  one  of  the  highest 
performing  across  the  continent,  it  is  challenged 
by  low  participation  in  STEM  (science,  technology, 
engineering  and  maths)  and  ICT  education  (see 
Annex  13)  and  difficulties  in  upskilling  the  labour 
force.  As  a  consequence,  Belgium  continues  to 
face  difficulties  in  addressing  labour  shortages  in 
key fields such as ICT and clean tech (85). In 2023, 

(81)  Business  associations  from  Belgium,  answering  to  the 
stakeholder  consultation  on  the  EU  Startup  and  Scaleup 
Strategy,  referred  to  the  difficulty  to  access  the  EU  Single 
Market  and,  thus,  to  the  need  to  set  up  a  dedicated  28th 
system and a one-stop shop for startups. 

(82)  NIDO  Lab  (2023),  Innovation  Network  at  the  NIDO  Lab, 

https://www.nidolab.be/nido/fr/network. 

(83)  VLAIO  helps  entrepreneurs  grow  |  Flanders  innovation  & 

entrepreneurship. 

(84)  FinTech Contact Point | FSMA. 

the  number  of  new  graduates  in  STEM  subjects 
was  lower  than  the  EU  average,  and  this  is  also 
the case for ICT, with one of the lowest  averages 
in the EU (2.5 per thousand population vs EU: 3.84) 
(see  Annex  13).  Employers  indicate  engineering 
and  IT/Data  as  the  most  difficult  skills  to  find  in 
Belgium (86). This is also confirmed by tech startup 
founders,  who  consider  talent  acquisition  and 
retention as their biggest challenge (87), as well as 
by  the  ICT  job  vacancy  rate,  higher  than  the 
national average (88). 

rigidities 

job-to-job  mobility 

in  science  and 
Low 
technology further hinders innovation-driven 
activities. In the European Innovation Scoreboard 
2025 (89),  Belgium  has  experienced  a  marked 
deterioration  in  labour  mobility  among  workers  in 
science  and  technology  in  recent  years.  This 
negative  trend  reflects broader  and  long-standing 
structural 
labour 
in 
market (90)  (see  Annex  11).  According  to  the 
National  Bank  of  Belgium,  almost  half  of 
employees  remain  with  the  same  employer  for 
more  than  ten  years,  limiting  reallocation  to 
expanding and innovation-driven activities (91). The 
implementation  of  the  2025  recommendation  on 
fostering  the  mobility  of  workers  is  supported  for 
researchers  by  the  recent  reinforcement  of  the 
EURAXESS Belgium network (92). 

the  Belgian 

Belgium  promotes  entrepreneurship  through 
Community, 
In 
education. 
entrepreneurship 
in 
education.  The  STEM  agenda  2030 (93)  promotes 

the 
is  a  strategic  priority 

Flemish 

(86)  2025 Talent Shortage Report. 

(87)  According to the 2025 State of Belgian Tech report, a survey 
of 135+ Belgian Tech founders indicated that the acquisition 
and retention of the right kind of talent remained the biggest 
pain point today (at 20%). 

(88)  It  was  4.4%  in  September  of  2025,  according  to  Statbel, 

while the national average is 3.84%. 

(89)  European  Commission 

(2025a),  European 

Innovation 

Scoreboard 2025 – Country Profile: Belgium. 

(90)  Bijnens  G.  (2025)  “Reigniting  growth:  trends  and  challenges 
for business dynamism in Belgium”. NBB Economic Review. 

(91)  National  Bank  of  Belgium  (2024),  Economic  Report:  Labour 
Market  Developments,  Towards  a  competitive  economy  to 
support well-being today and tomorrow. 

(92)  EURAXESS  is  the  largest  pan-European  initiative  to  foster 
researchers’  mobility  and  career  development.  The  national 
relocation  and  career 
networks 
transitions both nationally and internationally. 

researcher 

facilitate 

(85)  European  Commission 

(2025). 

European 

Innovation 

Scoreboard, Country profile: Belgium. 

(93)  STEM-agenda  2030. 

STEM-competenties 

voor 

een 

toekomst- en missiegericht beleid | Vlaanderen.be. 

42 

00.511.522.533.544.520162017201820192020202120222023BEEU-27 
   
 
 
Table A4.1:  Key innovation indicators 

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

developing  entrepreneurship  skills  within  STEM 
education. 
for 
dedicated 
A 
entrepreneurship 
provides 
methodological  support  and  stimulates  exchange 
teachers  at  primary  and  secondary 
among 
level (94) (95) (96). 
German-speaking 

education 

platform 

the 

In 

the  Wirtschaft  macht  Schule" 
Community, 
programme  offers  pupils  the  opportunity  to 
discover  their  entrepreneurial  spirit  and  develop 
their interest in self-employment (97). At the same 
time,  evidence  on  how  these  initiatives  affect 
student skills and attitudes remains limited. 

(94)  Entrepreneurial Education | VLAIO. 

(95)  European  Commission  (EACEA),  Baïdak,  N.,  Kocanova,  D., 
Pierantoni,  L.  and  Riiheläinen,  J.  M., Entrepreneurship 
education  at  school  in  Europe  –  2025  –  Eurydice  report, 
Publications Office of the European Union, 2025. 

(96)  Formation 010402324/49339 | IFPC. 

(97)  Ostbelgien Bildung - Wirtschaft macht Schule. 

43 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.062.433.373.213.243.36:2.243.44Public expenditure on R&D as % of GDP0.650.710.860.860.890.91:0.720.64Scientific publications of the country within the top 10% most-cited publications worldwide as % of total publications of the country 13.3213.4512.2111.48:::9.4412.31Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population4.204.905.405.705.906.00:4.3:International co-publications as % of total number of publications56.1564.1569.6970.4570.3371.44:57.24:Business enterprise expenditure on R&D (BERD) as % of GDP1.381.72.492.322.342.43:1.492.69Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.490.69::0.89::0.470.30Researchers employed by business per thousand active population4.105.806.908.709.109.30:5.9:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)3.572.953.032.41:::2.812.20Employment share of high-growth enterprises measured in employment (%):::0.260.27::0.87:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::74.46:84.3571.39:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%)::::44.47:52.0939.85:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%)::::47.69:58.5146.69:Artificial intelligence adoption % enterprises (EU Digital Decade target by 2030: 75%)::::13.8124.7134.5419.95:Public-private scientific co-publications as % of total number of publications9.8110.8910.93211.4411.7011.46:7.62:Public expenditure on R&D financed by business enterprises (national) as % of GDP0.060.070.080.080.09::0.060.02Total public-sector support for BERD as % of GDP0.230.25:::::0.21:R&D tax incentives: foregone revenues as % of GDP0.110.140.230.23:::0.100.16BERD financed by the public sector (national and abroad) as % of GDP 0.120.11::0.09::0.11:Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.030.030.080.080.070.07:0.06:Seed stage funding share (% of GDP)0.000.000.010.000.000.00:0.01:Start-up stage funding share (% of GDP)0.020.010.050.040.030.03:0.03:Later stage funding share (as % of GDP)0.010.010.030.030.030.03:0.03:New graduates in science & engineering per thousand population aged 25-3410.5112.1413.0712.9113.55::16.82:Graduates in the field of computing per thousand population aged 25-341.330.851.832.432.50::3.84:Innovative talentR&D investment & researchers employed in businessesInnovation outputsDigitalisation of businessesAcademia-business collaboration Public support for business innovationFinancing innovationScience and innovative ecosystemsBelgium2010201520202022202320242025EU average (1)USHeadline indicator 
 
 
 
   
 
ANNEX 5: SINGLE MARKET AND INDUSTRY 

Belgium  faces  several  challenges  to  its 
competitiveness,  such  as  high  labour  and 
energy  costs,  declining  industrial  production 
over the past three years, and decreasing EU 
trade integration. In response, the country made 
a  series  of  reforms  and  investments,  including 
those outlined in the Recovery and Resilience Plan 
(RRP).  Important  reforms  planned  include  for 
the  unemployment 
instance 
benefits,  a  reform  of  the  long-term  sickness 
system,  and  measures  to  simplify  and  streamline 
the  business  environment.  These  initiatives  are 
expected  to  significantly  reshape  the  economic 
landscape.  The  reforms  not  only  aim  to  address 
the  2025 
recommendations 
(CSRs) but also align with the country’s budgetary 
concerns. 

country-specific 

reform  of 

the 

Business dynamics 

The  investment  climate  in  Belgium  remains 
generally positive. Business investment in recent 
years  has  been  consistently  higher  than  the  EU 
average. In 2024, it was 16% of GDP compared to 
12.6%  for  the  EU  (A5.1).  Overall,  the  share  of 
firms reporting long-term barriers to investment is 
lower than average for EU firms (98). 

foreign 

attracting 

Belgium  is  still  among  the  top  ten  EU 
direct 
countries 
investment. In 2024, despite a decrease, Belgium 
remains  8th  in  the  EU,  with  the  United  States, 
France  and  the  Netherlands  being  the  main 
investors (99).  Regional  differences  are  significant, 
with the province of Antwerp being in the top 10% 
EU  NUTS-2  regions  in  greenfield  FDI  amounts, 
while Namur ranks among the bottom 10% (100). 

Public  investment  in  2024  increased  but 
remains below the EU average. At 3.1% of GDP 
its  public 
in  2024,  Belgium  has 
investment compared to the last two years (2.7% 
in  2022  and  2.9%  in  2023)  but  it  remains  low 
compared  to  the  EU  average  of  3.7%  (A5.1)  The 
RRP partly explains this increase in recent years, as 

increased 

(98)  European Investment Bank, 2025, EIB Investment Survey. 

(99)  Ernst & Young Belgium Attractiveness survey 2025. 

(100) OECD (2026), Connecting FDI and SMEs for Productivity and 
Publishing, 
Europe, 

Innovation 
Paris, https://doi.org/10.1787/9848e952-en., page18.  

OECD 

in 

Belgium has historically had a low share of public 
investment. 

Belgium's  economic  structure  has  evolved 
over  the  years  towards  a  highly  knowledge-
based  economy.  In  the  last  20  years,  Belgium 
has  transformed  into  a  high-knowledge  intensive 
economy,  marked  by  a  significant  increase  in  the 
share  of  firms  within  the  "Professional,  scientific 
and  technical  activities"  sector  and  a  decrease  in 
the share of low-tech manufacturing industries, as 
well as mining and quarrying (101). 

This  transformation  has  been  facilitated,  in 
part,  by  a  favourable  R&D  environment  As  a 
consequence,  Belgium  scores  high  on  many 
indicators  related  to  innovation  and  technology, 
linkage  between 
such  as  firm 
investments, 
innovative  SMEs,  employment 
innovative 
enterprises,  although  public  funding  for  R&I  by 
SMEs could be  enhanced, as recommended  in the 
2025 CSR (see Annex 4). 

in 

Belgium's  economic  structure  is  dominated 
by  SMEs  and  has  a  lower  share  of  young, 
high-growth firms than the EU average. SMEs 
constitute  99.9%  of  the  firms.  In  2024,  among 
SMEs,  micro-firms  (0-9  persons)  remain  largely 
predominant,  comprising  95.9%  of  firms,  above 
the EU average of 93.6%. The share of small firms 
is  only  3%  (EU  average  5.4%).  The  share  of  high 
growth  companies  (gazelles)  in  Belgium  in  2022 
was  0.25%,  much  lower  than  EU  average  of 
0.79%. Overall, it  appears that Belgian firms face 
challenges  in  scaling  up,  including  strict  labour 
labour  costs  and 
market 
insufficient growth capital (102). 

regulations,  high 

The government has announced measures to 
simplify  access  to  financing  and  favouring 
scaling  up.  In  its  SME  plan (103)  the  government 
aims to encourage more households to invest their 
savings  in  shares  of  Belgian  small  and  mid-cap 
increased 
companies, 
communication  on  the  offerings  of  the  European 
Investment  Fund.  Moreover,  the  Federal  Holding 
and Investment Company (SFPIM), will increase its 

in  particular 

through 

(101) Gross  value  added  and  income  by  detailed  industry  (NACE 

Rev.2 )[nama_10_a64__custom_13043442]. 

(102) Gert  Bijnens 

(2025) 
challenges  for  business  dynamism 
Economic Review. 

“Reigniting  growth: 

trends  and 
in  Belgium”;  NBB 

(103) 2026-01-05-PLAN-PME. 

44 

 
 
 
 
 
 
investment 

indirect 
in  scale-ups.  Finally,  a 
simplification of the Tax Shelter scheme has been 
announced in the SME action plan to promote this 
alternative  form  of  financing  to  citizens  and 
businesses, in order to better support growth. 

Business environment 

environment 

The  Belgian  business 
is 
regarded as flexible, but barriers remain, the 
recent  government’s  reforms  are  moving 
towards  more  flexibility.  The  percentage  of 
firms  reporting  business  regulation  as  a  major 
obstacle  in  Belgium is  smaller (26%)  than  the  EU 
average (34%) (104). The quality of infrastructure is 
considered  one  of  the  most  important  factors 
when choosing to invest in Belgium (105), including 
transport  infrastructure (106) (107).  The  share  of 
private investment is high.  

Access  to  finance  remains  easier  than  in 
other EU countries. Belgium has an EIF access to 
finance index for loans among the best of the EU 
(rank  6). 
Investing  firms  use  more  external 
finances  than  EU  average  (42%)  and  Belgium 
firms  using  external  finance  show  a  significantly 
lower level of dissatisfaction with borrowing costs, 
with  only  2%  (vs  15%  EU)  dissatisfied (108). 
However,  while  early-stage  funding  is  relatively 
accessible,  access  to  finance  becomes  a  major 
issue  during  the  scale-up  phase  when  larger 
funding 
further 
growth (109). 

rounds  are 

required 

for 

payments (110) 

Late 
be 
significant  in  certain  areas,  from  public 
entities.  (Table  A5.1).  Belgian  public  authorities 

however 

can 

(104) 2025 EIBIS Belgium. 

(105) Ernst & Young European Investment Monitor 2025. 

(106) Logistics Performance Index by Country 2025. 

(107) even if interconnections between regions remain a 

weakness. 

(108) EIB IS. 

(109) Gert Bijnens “Reigniting growth: trends and challenges for 
business dynamism in Belgium”; NBB Economic Review 
2025, Nr10. 

(110) Part of the barriers highlighted in the Single market strategy 
(“Terrible 10”) and the 2026 Annual Single Market and 
Competitiveness Report. 

45 

are  the  third latest payers  in  Europe  according  to 
suppliers (111).  Lack  of  available  data  slows 
progress. Efforts have been made at federal level 
to improve payment performance. A new IT system 
for  the  registration  and  payment  of  invoices  has 
been  introduced  at  federal  level,  the  average 
payment  periods  are  published  online (112).  New 
Belgian public procurement law has been modified 
to establish stricter payment terms (30 days) and 
has  entered  into  force  on  1  January  2025 (113). 
Nevertheless,  data  collection  and  monitoring  of 
payment  performance  at  local  level  (communes) 
remains  unsatisfactory.  Data  on  the  payment 
performance  of  municipalities  is  collected  by  the 
regional governments through a survey. Such data 
is  then  sent  to  the  Commission.  The  participation 
rate  by  the  municipalities  is  not  exhaustive. 
Belgian  authorities  do  not  have  a  central  system 
for  the  registration,  monitoring  and  payment  of 
invoices  that  are  received  by  all  municipal 
authorities. The absence of a standardised system 
for  the  registration  of  invoices  increases  the 
likelihood of flawed results.  

Belgium is among the high performers in the 
EU  in  terms  of  very  high-capacity  network 
(VHCN)  coverage  and  has  made  particularly 
rapid progress in 5G deployment. It is reaching 
over  93%  of  households  in  2024,  up  from  over 
91% in 2023. This reflects sustained investment in 
gigabit-capable  infrastructure  and  places  Belgium 
on  a  favourable  trajectory  towards  the  2030 
connectivity 
coverage 
increased  sharply  and 
is  now  close  to  full 
coverage.  However,  Belgium  still  lags  behind  the 
EU  average  in  5G  coverage  for  households  in 
sparsely  populated  areas  and  in  the  3.4-3.8  GHz 
band (114).  Progress has  also  been  recorded in  the 
assignment  and  use  of  harmonised  spectrum, 
supporting  the  development  of  advanced  digital 
services and industrial applications. 

targets.  Overall  5G 

Fibre-to-the-premises  (FTTP)  coverage,  while 
improving,  remains  well  below  the  EU 
average.  Deployment  is  accelerating,  supported 

(111) 2025 late payments observatory report. 

(112) See for example BOSA: 

https://bosa.belgium.be/fr/news/delais-moyens-de-paiement-
dans-ladministration-federale-trois-premiers-trimestres-
2025.  

(113) Marchés publics: règles de paiement à partir de janvier 2025 

| BOSA. 

(114) Belgium Digital Decade 2025 country report. 

 
 
 
by  both  private  investment  and  public  initiatives, 
regulatory  measures  and  projects 
including 
financed  through  the  RRP  and  cohesion  policy 
funding.  These  efforts  aim  to  extend  fibre 
networks,  including  in  less  densely  populated 
areas,  and  are  supported  by  regulatory  action 
linked  to  fibre  roll-out  joint  ventures.  While  fibre 
deployment continues to expand, Belgium remains 
the country with the lowest coverage in the EU. 

and  skills  mismatches/shortages.  Belgium 
exhibits one of the lowest employment rates in the 
EU,  despite  high  vacancy  rates,  hinting  at  some 
disincentives  to  work.  Poor  mobility  may  also  be 
influenced  by  the  extent  to  which  benefits  are 
linked to  geographical  location  (115), as individuals 
who  relocate  may 
lose  their  benefits.  Skills 
shortages  are  evident  across  Belgium,  across 
various sectors (see Annex 11). 

Conducting  business  in  Belgium  can  present 
certain  challenges.  These  primarily  concern  the 
high  labour  costs,  the  tightness  of  the  labour 
market  in  certain  regions,  the  regulatory  burden 
and the supply of energy and critical materials (for 
the  latter  see  section  on  industry  and  security).  A 
CSR  was  issued  in  2025  simplify  regulation, 
improve 
reduce 
regulatory 
administrative burden. 

tools 

and 

in  Belgium  was 

Labour  costs  in  Belgium  are  consistently 
among  the  highest  in  the  EU  driven  by  non-
wage  costs  and  automatic  indexation.  In 
2024,  the  average  hourly  labour  cost  for  LCI 
(compensation  of  employees  plus  taxes  minus 
subsidies) 
approximately 
EUR 48.10,  placing  it  third  highest  in  the  EU, 
behind  Luxembourg  and  Denmark.  A  major 
component  is  non-wage  costs  such  as  employer 
social 
sectoral 
contributions  and  insurances.  Belgium  is  also  one 
of the few euro area countries with an automatic 
wage indexation system. 

contributions, 

bonusses, 

to 

the 

long-term  sickness 

last  EU  countries 

Belgium  has  adopted  significant 
labour 
market  reforms.  A  reform  of  unemployment 
benefits that limits their duration to two years was 
included  in  the  latest  RRP  revision.  Belgium  was 
one  of 
retain 
unemployment  benefits  of  unlimited  duration.  In 
an  effort  to  reduce  the  high  and  growing  number 
of  people  on 
leave,  the 
government is also expanding its ‘Return-to-Work’ 
measures. The share of persons in the working age 
population  that  are  inactive  due  to  health  or 
disability  reasons  in  Belgium  is  the  highest  of  all 
EU  Member  States  and  is  almost  double  that  of 
Germany  and  France (116).  The  reform  involves 
stricter  controls,  particularly  after  the  one-year 
benchmark  (see  Annex  11).  Several  measures 
aimed  at making the  labour  market more  flexible 
have  been  tabled. Measures  include  annualisation 
of  working  time,  voluntary  overtime,  authorising 
night  work,  easing  part-time  working  restrictions, 
the  reintroduction  of  the  probationary  period,  the 
extension of flexi-jobs and student job, temporary-
agency-work  simplification  and  notice-period 
limitation. 

High productivity, reductions in contributions 
and the wage cap law bring some nuances to 
these  high  costs  but  add  to  the  rigidity  of 
labour law. While the hourly cost is high, Belgian 
labour  productivity  is  also  higher  than  the  euro 
area  average  (see  Table  A5.1),  which  helps 
mitigate  the  impact  of  the  high  cost.  To  remain 
competitive,  the  federal  and  regional  authorities 
offer  various 
reductions  on  social  security 
contributions, particularly for first hires or specific 
sectors  (R&D),  making  the  "effective"  labour  cost 
lower than the nominal one. The “wage cap” law of 
1996  introduced  a  legal  framework  to  limit  real 
wage  increases  on  top  of  automatic  inflation 
indexation,  however 
for 
differences  in  productivity  level  across  industries. 
Overall, these various texts  create a lot of rigidity 
in labour regulations. 

it  does  not  cater 

The tightness of the labour market is mainly 
due to a low employment rate, poor mobility, 

infrastructure, 

Permitting requirements have been identified 
as  significant  hindrances.  They  pose  obstacles 
not only for industry, economic activity, energy and 
climate 
logistics  and  circular 
economy  projects,  but  also  for  real  estate  and 
housing.  This 
the  strict 
interpretation  of  environmental,  climate,  and 
cultural heritage legal and regulatory frameworks. 
Since  1998,  a  strong  decline  in  new  housing 
permit applications can be observed in all  regions 
of  Belgium,  despite  an increase  in population  and 
a  historic  low  in  Flanders  for  permit  applications 
industrial  and  business  activities  since 
for 

issue  arises 

from 

(115) European Semester fact finding mission. 

(116) Incapacité de travail et réintégration des salariés sur le 
marché de l’emploi - Mars 2024 | Conseil supérieur de 
l'emploi – See  graph 1. 

46 

 
 
2018 (117).  At  the  level  of  the  Council  of  State, 
between  60-70%  of  contested  permit  decisions 
are  effectively  annulled.  The  2024  World  Bank 
Enterprise  survey  for  Belgium (118)  shows  that 
construction permits take 253 days in Belgium, (vs 
90  days  in  the  “Europe  &  Central  Asia”  region), 
operating 
(vs  41  days), 
electrical  connections  60 days  (vs  30.2  days)  and 
water  connections  50  days  in  contrast  to  26.9  in 
these countries (see Annex 7). 

licences  146  days 

at 

the 

enhancing 

The  MTFSP  contains  several  reforms directly 
business 
aimed 
environment.  It  includes  a  plan  for  SMEs,  a 
commitment  to  reduce  administrative  burden  for 
SMEs,  a  simplification  of  public  procurement 
procedures  and  further  digitalisation  of  public 
services.  The  federal  government  initiative  ‘MAKE 
2030’  has  been  announced  aiming  at  restoring 
competitiveness in the Belgian industry. 

is 

to  simplify 

The SME plan is ambitious with 89 measures 
announced;  however, 
its  budget  remains 
quite constrained. As part of the MTFSP (119), the 
SME  plan (120)  endeavours 
the 
obligations related to the register of final business 
owners  and  digitise  publications  in  the  Belgian 
Official Journal. Additionally, it includes a series of 
planned  automations  concerning  incapacity  for 
work.  A  significant  feature 
"radical" 
the 
implementation  of  the 
"only  once"  principle, 
ensuring that a document already submitted to an 
administration does not need to be resubmitted. In 
the  area  of  innovation,  the  government  aims  to 
speed  up  visa  procedures  for  founders  and 
innovative  sectors—
in 
experienced  workers 
particularly  AI—to  facilitate  recruitment  for  start-
ups  and  scale-ups.  Moreover,  it  intends  to  hasten 
public access to unexploited patents. The age limit 
of  25  for  student-entrepreneur  status  will  be 
abolished.  A  new  policy  will  ensure  bankruptcy 
does  not  permanently  block  future  loans,  while  a 
"right to be forgotten" will apply to non-fraudulent 
bankruptcies,  applicable  both  in  official  registers 
and  online  search  engines.  Parental  leave  for  the 
self-employed will phased in, accounting alone for 
30%  of  the  plan’s  budget.  The  overall  budget  for 

(117) Permis de bâtir par mois, région, province arrondissement et 

commune | Statbel. 

this  plan  is  currently  restricted  to  EUR 15 million 
per year until 2029.  

Single Market 

of 

businesses. 

is  hindered 

Regulatory and administrative barriers to the 
Single  Market  persist  in  Belgium,  affecting 
services  trade  as  well  as  the  freedom  of 
Business 
establishment 
establishment 
by  asymmetric 
establishment  rules  across  regions.  Firms  face 
three  sets  of  building  norms,  environmental 
permitting  regimes,  commercial  establishment 
and 
licenses, 
administrations. This increases time, cost and legal 
uncertainty  and  duplicates  compliance  work  for 
multi‑regional 
roll‑outs. 
Heterogeneous 
commercial  establishment  permit  thresholds  and 
procedures, technical specifications tied to regional 
practices, can delay the expansion of EU retailers. 
restrictions  on 
In  addition, 
legal  form  and 
in  professional  companies  may 
shareholding 
complicate the establishment of businesses.  

establishment 

professional 

Belgium  is  well  integrated  into  the  Single 
Market  for  goods  trade.  In  2025,  intra-EU 
imports  and  exports  accounted  for  51.3%  of 
Belgium’s GDP. This is one of the highest shares in 
the  EU  and  higher  than  the  2025  EU  average  of 
40.7% (Table A5.1). In 2025, Belgium was among 
the top seven Member States for the share of GDP 
generated  from  intra-EU  goods  trade.  It  was  also 
one  of  the  top  seven  Member  States  for  trade  in 
services.  

into  national 

law.  Belgium’s 

in  transposing 
Belgium  performs  poorly 
transposition 
Single  Market 
deficit  (which  measures  the  percentage  of  all 
directives  not  transposed 
law) 
worsened  in  2025,  from  1%  to  1.7%  (the  target 
set  by the EU Council  is 1%), ranking 23rd out  of 
27  Member  States (121).  This  number  is  partly 
driven  by  the  Belgian  structural  and  institutional 
levels  of 
framework,  which 
extensive 
and 
governance 
coordination. Regarding the conformity deficit, with 
1.1%  of  directives  being  wrongly  transposed, 

involves  multiple 
necessitates 

(118) World Bank Economy | Belgium | Enterprisesurveys. 

(119) Medium-Term Fiscal Structural Plan | BOSA. 

(120) 2026-01-05-PLAN-PME. 

(121) Part of the barriers highlighted in the 2025 Single Market 

Strategy (“Terrible 10”), Single Market strategy. See also the 
Annual Single Market and Competitiveness Report 2026 
(forthcoming). 

47 

 
 
 
infringement 

Belgium  is  at  the  EU  average.  The  number  of 
remains 
pending 
significantly above the EU average (33 vs. 25) (122). 
The  SOLVIT  centre  increased  its  resolution  rate 
from  59%  of  cases  in  2024  to  85.1%  of  cases, 
above the EU average of 84.6% in 2025.  

proceedings 

of 

and 

increase 

Belgium’s 

The  rapid  changes  undertaken  by  European 
and global markets, driven by the rise of new 
technologies  such  as  AI  or  quantum,  call  for 
an 
National 
Standardisation  Bodies  (NSBs)  capacity  and 
resources. This investment is essential  to attract 
and  retain  specialised  experts,  ensure  a  timely 
development  of  standards,  and  support  Belgium’s 
competitiveness.  Without  adequate  support,  the 
risk  of  falling  behind  in  critical  technological 
domains  could  undermine  both  the  Single  Market 
EU’s 
integrity 
autonomy.  
Furthermore,  the 
limited  digitalisation  of  the 
standardisation  process,  still  document-centric 
rather  than  machine-readable  format,  creates 
delays in  developing  and updating  standards,  and 
hampers  the  involvement  of  certain  stakeholders, 
create barriers that slow down innovation, increase 
costs, and hinder cross-border trade, especially for 
SMEs  and  start-ups.  To  address  these  challenges, 
Belgium must provide stronger support to its NSBs. 
This will enable faster, more inclusive, and market-
responsive 
that 
businesses can fully benefit from the opportunities 
of the Single Market. 

standardisation, 

strategic 

ensuring 

Compliance  of  products  circulating  in  the 
Single Market (123) is key to ensuring a level-
playing  field  for  law-abiding  companies  and 
the  safety  of  consumers.  In  Belgium,  the 
number  of  market  surveillance  investigations  has 
increased  compared  with  2019.  In  2025,  national 
authorities  reported  in  the  EU  system  for  market 
surveillance (ICSMS) a total of 62.1 investigations 
per one million inhabitants, which is lower than the 
EU  median  of  136.2.  The  number  of  notifications 
remains limited in absolute terms, which may also 
be 
IT  national 
the 
interoperability 
ICSMS  system.  The 
upcoming  revision  of  the  Market  Surveillance 

insufficient 

result  of 

the 

to 

(122) The 2026 Annual Single Market and Competitiveness Report 
- Internal Market, Industry, Entrepreneurship and SMEs. 

(123) Part of the barriers highlighted in the Single Market 

strategy (‘Terrible Ten’) and the 2026 Annual Single Market 
and Competitiveness Report. 

Regulation  will  upgrade 
interoperable EU digital platform. 

ICSMS 

to  a 

fully 

(EEA) 

indices 

(STRI) (124)  within 

Belgium  still  shows  restrictions 
in  the 
services  sector  and  regulated  professions. 
Belgium still has one of the highest services trade 
restrictiveness 
the 
European  Economic  Area 
including  for 
architects,  accountants  and  air  transport,  despite 
some  measures  having  been  adopted 
for 
architects  and  real  estate  agents 
in  2024. 
Unjustified  restrictions  related  to  shareholding  of 
veterinary  companies  remain,  due  to  a  lengthy 
process  of  amendment.  The  federal  government 
agreement  included  several  provisions  aiming  at 
increasing  competition 
in  business  services, 
including  notaries.  Tariffs  and  advertising  were 
expected  to  be  liberalised (125).  So  far,  however, 
progress  in  addressing  barriers  in  the  field  of 
business  services  remains  limited.  In  answer  to  a 
survey  carried  out  by  the  Commission  between 
December  2025  and  February  2026,  Belgium 
reported  it  fully  implemented  3  and  partially 
implemented  1  of  the  10  Commission  2021 
recommendations (126). 
is 
currently  assessing  Belgium’s  answer.  The  rise  of 
transformative  technologies 
including  artificial 
intelligence and blockchain and related innovations 
is calling into question the principles underpinning 
the  regulation  of  many  professions,  such  as  the 
need  to  protect 
information 
asymmetry and the requirement for trusted third-
party certification of authenticity. 

individuals  from 

Commission 

The 

is 

the 

still 

telecommunications 

In 
sector, 
competition is gradually improving; however, 
significant  progress 
required, 
particularly in the fixed telecom network. The 
OECD  Product  Market  Regulation  (PMR)  report  for 
Belgium (127) indicates enhanced competition in the 
mobile 
reveals  more 
restrictions  than  the  OECD  average  within  the 
fixed telecom network. Belgium continues to have 
one  of  the  highest  telecom  prices  in  the  EU  (128), 

telecom  network  yet 

(124) Services Trade Restrictiveness Index Simulator. 

(125) Accord_gouvernemental-Bart_De_Wever_fr.pdf. 

(126) European Commission, 2021, Communication on updating 
the reform recommendations for regulation in professional 
services, COM(2021)385. 9/7/2021, Eur-lex.europa.eu.  

(127) Belgium_2023_PMR country note.pdf. 

(128) Mobile and fixed broadband price in Europe in 2024: Insights 
into the European Broadband Market | Shaping Europe’s 
digital future. 

48 

 
 
 
with  three  operators  dominating  the  market 
alongside  their  second-tier  brands.  A  fourth 
operator 
the  market,  still 
developing its own network (129). 

recently  entered 

is  among  the  most 
In  retail,  Belgium 
restrictive  EU  Member  States,  but  some 
reforms  are  underway.  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 
establishment  (130)(131).  End  of  2025  the  Belgian 
government  initiated  a  reform  of  shop  opening 
hours,  aiming  at  allowing  shops  to  open  from 
5 a.m. to 9 p.m. every day of the week. This reform 
was  approved  by  the  Council  of  Ministers  on  24 
April 2026 (second reading) and will afterwards be 
submitted  to  the  Parliament.  Belgian  consumers 
pay more for branded daily  consumer goods than 
their  neighbours  in  France,  Germany  and  the 
Netherlands. This could be due to territorial supply 
constraints  affecting  Belgian 
retailers  and 
preventing  them  from  sourcing  products  from 
other Member States (132). 

and 

steps 

taken 

to 
its 

simplify 

further 
Belgium  has 
public 
modernise 
procurement  system.  Public  procurement 
is 
estimated  to  account  for  about  15.2%  of  Belgian 
GDP,  slightly  above  the  OECD  average  of  14.8%, 
and  around  27.3%  of 
total  government 
expenditure,  slightly  below  the  OECD  average  of 
28.7%  (133).  Belgium  performs  well  in  public 
procurement as single bid contracts (24% in 2025, 
vs  27%),  direct  awards  (3%  in  2025,  vs  6%)  are 
below  EU  medians  (Table  A5.1).  A  measure  to 
improve  e-procurement  at  the  federal  level  has 
been  put  in  place  with  the  RRP  funds  (134).  The 
MTFSP  includes  measures  to  facilitate  access  for 
businesses and SMEs to public procurement 

tenders. The share of firms perceiving the level of 
independence  of  the  public  procurement  review 
body  (Council  of  State)  as  ‘very  good’  or  ‘fairly 
good’ is of 67% (135). Additionally, in Belgium, 50% 
of companies (EU average: 53%) consider conflicts 
of  interest  in  the  evaluation  of  bids  in  public 
procurement  procedures,  and  49%  (EU  average: 
58%)  tailor-made  specifications  for  particular 
companies,  'very'  or  'fairly  widespread'  practice. 
Among  companies  that  have  experience  in  and 
participated  in  a  public  procurement  procedure, 
27%  think  that  corruption  has  prevented  them 
tender  or  a  public 
from  winning  a  public 
procurement  contract  in  practice  (EU  average: 
25%) (136).  Stakeholders  continue  to  signal  low 
transparency in government contracts (137). 

the  need 

issues  highlight 

cross-border  procurement 

Belgium’s  eProcurement  landscape  and  data 
quality 
for 
interoperable  systems,  common  standards, 
and  stronger  data  governance.  Belgium’s 
centralised eProcurement service allows economic 
operators  to  use  a  single  system  to  access  all 
national  public  procurement  procedures.  However, 
issues 
concerning 
remain,  creating  complexity  and  barriers 
to 
participation  for  firms  of  other  Member  States. 
partially 
The  once-only 
implemented  at  national  level  (see  Annex  7),  and 
buyers  across  the  EU  still  lack  digital  access  to 
relevant  evidence.  Belgium  does  not  have  a 
dedicated  entity  in  charge  of  monitoring  and 
accessing  the  uptake  of  public  procurement 
nationally.  Therefore,  the  Belgian  system  would 
benefit from a dedicated public procurement data 
the 
collection  and  analysis  service  within 
government,  to  support  data-driven  oversight  of 
the procurement lifecycle (138). 

is  only 

principle 

Firms  have  a  favourable  view  of  the  public 
procurement  review  body;  however,  they 
have  a  less  positive  view  of  integrity  in 

(129) Note de priorités2026. 

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

(131) Belgium country report 2025. 

(132) Comparaison du niveau des prix à la consommation des 

produits en Belgique, en Allemagne, en France et aux Pays-
Bas | SPF Economie. 

(133) Public procurement | OECD. 

(134) E-Procurement | BOSA. 

(135) Figure 59, 2025 EU Justice Scoreboard. 

(136) Flash Eurobarometer 557 on Businesses’ attitudes towards 
corruption in the EU (2025). This is 1 percentage points 
above the EU average. 

(137) Stichting Overheidsopdrachten (2024). 

(138) European Court of Auditors, Special Report 28/2023: Public 
Procurement in the EU. Less competition for contracts 
awarded for works, goods and services in the 10 years up to 
2021, 2023, Special report 28/2023: Public procurement in 
the EU. 

49 

 
 
 
Industry and economic security 

Graph A5.1: Manufacturing industry production: 
total and selected sector, index (2021=100), 
2015-2024 

industry  to  decarbonise 

Belgium 
received  a  Country  Specific 
Recommendation  (CSR)  in  2025  to  further 
incentivise 
(see 
Annex  8).  The  federal  coalition  agreement 
included  several  reform  proposals,  such  as  a  new 
eco-tax  policy  concerning  energy  taxes  and  fossil 
fuel 
resulting  package  of 
interventions  from  these  negotiations  presents 
some noteworthy measures. 

subsidies.  The 

Some measures proposed claim to target the 
decarbonisation  of industry.  The  air  passenger 
tax  has  been  increased,  representing  progress, 
albeit  modest  compared  to  many  neighbouring 
countries. The VAT for pesticides, previously set at 
12%,  has  been  increased  to  the  standard  rate  of 
21%. Excise duties on natural  gas and heating oil 
are  planned  to  be  increased,  while  those  on 
electricity will be decreased. This shift is expected 
to  reduce  the  electricity  price  by  approximately 
EUR 35 per year, while the cost of natural gas will 
rise  by  an  average  of  EUR  75  per  year.  Excise 
duties on petrol and diesel are increasing (139). 

However, the energy needs of SMEs seem to 
have  been  overlooked.  The  adjustments  in 
excise  duties  for  natural  gas,  heating  oil,  and 
electricity  primarily  affect  households.  The 
previously  announced  support  for  zero-emission 
delivery vans  has  been  cancelled,  and  there is  no 
update  regarding  the  phasing  out  of  commercial 
diesel subsidies. The energy needs of SMEs appear 
to  have  been  overlooked,  as  neither  the  excise 
duty adjustments nor energy support measures for 
large  consumers  seem 
to  benefit  smaller 
businesses. 

Source: Eurostat 

Faced  with  rising  energy  costs,  Belgium 
supports  its  energy-intensive  industries  (see 
Annex  9).  The  energy  costs  for  non-households  in 
Belgium  are  not  as  high  compared  to  other  EU 
countries;  however,  they  have  more  than  doubled 
since  2020  and  remain  higher  than  those  in 
various  non-EU  countries  globally,  resulting  in  a 
competitive  disadvantage  (140).  Electricity  costs  in 
2025  for  businesses  in  Belgium  were  above  EU 
average  (141).  The  production  volumes  in  energy 
intensive  industries  never  reached  2015  volumes 
again  (Graph  A5.1).  Stakeholders  mention  high 
energy  costs  as  one  of  the  main  reasons  for  the 
decrease  in  activity.  In  2023,  energy-intensive 
industries 
represented  30%  of 
manufacturing,  compared  to  36%  in  2000.  The 
in 
decrease 
manufacturing 
particularly 
since  2000 
significant  for  paper  (-60%),  basic  metals  (-
57.2%),  and  chemicals  (-42%)  (142).  Electricity 
large 
subsidies  have  been 
implemented  for 
industries,  alongside 
the  existing  budgetary 
commitment  of  EUR  100-150  million  per  year. 

the  share  of  added  value 

in  Belgium 

in 

is 

(140) Example: Electricity prices for non-household consumers - bi-

annual data (from 2007 onwards) 
[nrg_pc_205__custom_19841462]. 

(141) 2026 Annual Single Market and Competitiveness Report 

SWD(2026)30 final. 

(139) https://www.linkedin.com/pulse/adieu-sisyphus-analyse-van-

het-federale-yelter-bollen-ygwoe. 

(142) Gross value added and income by detailed industry (NACE 

Rev.2 )[nama_10_a64__custom_13043442]. 

50 

7075808590951001051101151202015201620172018201920202021202220232024ManufacturingManufacture of wood and of products of wood and cork, except furniture;manufacture of articles of straw and plaiting materialsManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of rubber and plastic productsManufacture of other non-metallic mineral productsManufacture of basic metals 
 
  
 
decarbonisation,  circular  economy  and  hydrogen 
projects (144). 

Belgium also shows some sector-specific extra-EU 
dependencies  in  the  mining  and  quarrying  sector, 
coke  and  refined  petroleum,  basic  metals,  and 
textiles (143). 

in  clean 
is  an  active  player 
Belgium 
technology.  Belgium's  strength  lies  in  several 
clean  technologies,  including  its  production  of 
electrolysers (3rd EU producer), solar photovoltaics 
(7th), heat pumps and the recycling economy (see 
Annex  8).  Belgium  hosts  companies  involved  in 
manufacturing  components  and  parts  for  wind 
turbines.  Although  battery  production  is  modest, 
Belgium is well-known for supplying materials for 
the  battery  value  chain  from 
recycling  or 
processing.  The  country  participates  in  Important 
Projects  of  Common  European  Interest  (IPCEIs) 
focusing on batteries and hydrogen (Hy2Tech and 
Hy2Use).  Additionally,  Belgium  engages  in  EU 
programmes on carbon capture storage, holding a 
investment  (ranked 
3.9%  share  of  total  EU 
seventh). The clean technology sector constitutes a 
significant  component  of  the  Belgian 
labour 
market,  employing  around  65 000  workers  in 
2023, representing 0.28% of the total workforce. 

is 

all 

handle 

delays 

non-nuclear 

cooperation. 

in 
Belgium 
experiencing 
implementing  the  Net-Zero 
Industry  Act 
(NZIA).  Belgium's  energy and  climate  policies  are 
predominantly  managed  at  the  regional  level 
requires 
(Flanders,  Wallonia,  Brussels),  which 
federal 
For 
coordination  and 
competencies, Belgium has designated the Federal 
Public  Service  of  Economy,  Directorate  of  Energy, 
to 
energy-related 
permitting covered by the NZIA. Federal authorities 
are still coordinating to designate a single point of 
contact  (SPOC)  for  nuclear-related  permitting. 
Concerning  the  Belgian  regional  authorities,  they 
have  yet  to  designate  the  required  SPOCs.  As  of 
now,  Belgium  has  not  confirmed  any  Net-Zero 
Strategic  Projects  but  has  established  a  national 
contact point to administer applications. Regarding 
"acceleration  valleys,"  the  regions  have  expressed 
support for various aspects of the green transition, 
such  as  Carbon  Capture,  Usage,  and  Storage 
(CCUS)  in  Flanders,  but  this  does  not  constitute  a 
formal  declaration  of  an  "acceleration  valley." 
Meanwhile,  Belgium 
the  main 
beneficiaries  of  the  Innovation  Fund  with  notable 
industrial  heat 
successes 

in  carbon  capture, 

is  one  of 

(143) Paolo Pasimeni, 2025 December 18, Who’s is buying 

(144) Innovation Fund projects - Climate Action - European 

European? 

Commission. 

51 

 
 
 
Table A5.1:  Single Market and Industry 

Source: (1) Eurostat, (2) EIB Investment Survey, (3) EIF SME Access to Finance Index, (4) Intrum Payment Report, (5) SAFE survey, 
(6) OECD, (7) data up to 2024: Single Market and Competitiveness Scoreboard, 2025: Commission calculation based on TED data, 
accessible at the Public Procurement Data Space (PPDS) (*) the value represented here under EU average is the median, (8) Single 
Market and Competitiveness Scoreboard, (9) European Commission calculations.  

52 

POLICY AREA20212022202320242025EU-27 average132,2132,1133,8133,9131,5100,015,215,515,816,0-12,62,82,72,93,1-3,9Business environment and simplification19,421,97,35,126,034,00,670,590,440,60-0,430,190,130,150,16-0,1911,511,715,316,517,517,412,216,017,716,913,813,6from private entities in the previous or current quarter---45,459,647,1from public entities in the previous or current quarter---13,915,315,958,560,553,652,451,340,70,0630,0630,0630,0630,0630,0502324272224272223362,82,31,611,711,21,11,21,31,11,191,2188,2815985,184,63233313433250,09890,16590,15130,11270,12690,146230,031,331,1--32,713,013,814,714,3-25,273,074,975,675,8-22,421,317,821,822,7-12,2BelgiumINDICATOR NAMEBusiness environment and investmentProductivity and investmentLabour productivity (GDP per hour worked in PPP terms), % of EU271Business investment (share of GDP)1Public investment (share of GDP)1Impact of regulation on long-term investment, % of firms reporting business regulation as a major obstacle2SME liquidityEIF Access to Finance for SMEs index - loans3EIF Access to Finance for SMEs index - equity3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment4Payment gap - public sector, difference in days between offered and actual payment4Share of SMEs experiencing late payments, %5Industry and economic securitySingle Market IntegrationEU trade integration, average(intra-EU imports + intra EU exports)/GDP, %1EEA Services Trade Restrictiveness index6Public procurementSingle bids, % of total contractors7*Direct awards, % of negotiated procedures7*ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, resolution rate per country, %8Number of pending infringement proceedings8Energy-intensive industriesElectricity prices for non-household consumers1Electrification (electricity as a share of total energy consumption in industry)1Share of energy from renewable sources (renewable energy generation as a share of overall energy consumption)1Critical raw materialsMaterial import dependency, %1Circular material use rate1Operational cleantech manufacturing capacity in 20259 - Solar PV (c: cell, w: wafer, M:module), GW0.17 (m) - Electrolyzer, GW1,050 - Heat pump assembly 0,2 - Battery, GW- 
 
  
 
ANNEX 6: SAVINGS, INVESTMENT AND ACCESS TO FINANCE 

Table A6.1:  Savings and Investments Union summary diagnostic 

Source: OECD (pensions), Eurostat (households' financial wealth), FISMA CMU dashboard (VC and PE), national sources (capital 
taxation). End-2024. 

little 

in  financial  assets, 

Belgium  is  an  average  Member  State  on  the 
key  progress  indicators  for  the  Savings  and 
Investment  Union  (see  Table  A6.1).  The 
financial  sector 
in  Belgium  continues  to  be 
dominated  by  banks,  and  the  country’s  capital 
markets  are  comparatively  small.  As  in  most 
Member  States,  households  in  Belgium  invest 
relatively 
including 
equities.  Belgium’s  tax  system  discourages  equity 
investment, and the recently adopted capital gains 
tax on securities, together with the increase in the 
tax  on  securities  accounts,  will  exacerbate  this 
bias.  Unlike  many  other  Member  States,  Belgium 
does  not  have  a  savings  and  investment  account 
(SIA)  to  encourage  household  equity  investment. 
The  banking  sector  appears  sound  and  profitable, 
and  is  therefore  not  constrained  in  its  role  of 
financing  the  economy.  The  insurance  sector  also 
appears  broadly  sound,  but  the  legal  framework 
for  insuring  against  natural  hazards  has  some 
shortcomings  and  leaves  the  sector  exposed  to 
unexpected  losses in  the event  of  adverse  events 
such  as  the  2021  floods.  Asset-backed  funded 
pensions  are  relatively  small  and  generate  only 
modest real returns. Encouraging the development 
of  universal  funded  pension  schemes  alongside 
the  prevailing  pay-as-you-go  system  would  help 
channel  investment  into  equities  and,  in  turn, 
support growth and innovation. 

Business landscape and company 
funding 

The  Belgian  economy,  in  terms  of  structure 
and size, relies less on large companies than 
the  EU  average.  Micro,  small  and  medium 
companies  play  a  greater  role  in  the  structure  of 
the  Belgian  economy  than  large  companies  (see 
Annex 5 for more details). This has implications for 
the corporate sector’s demand for funding. 

Graph A6.1: Composition of NFCs’ funding 

Source: Eurostat. End-2024. 

Compared  with  the  EU  average,  firms  in 
Belgium  rely  more  on  funding  from  banks 
and less on both internal funding and funding 
from  capital  markets.  Belgian  businesses 
depend  less  on  internal  financing  than  their 
European  peers.  According  to  the  2025  EIB 

53 

050100150200250300BEEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equityMain featuresRelative EU positioningAssets at 30.3% of GDP (32.3% in the EU)10-year real return of 0.8% (1.4% in the EU)Belgium has moderate pension fund assets that yield a modest return. Belgium has no mandatory or auto-enrolment pension schemes, but the participation rate in voluntary occupational pension funds is rather high. Belgium has a low gross replacement rate.EUR 138 200 per capita (EUR 85 100 in the EU)o/w 8.6% in listed shares and bonds (7.6% in the EU)o/w 18.9% in investment funds (11.1% in the EU)o/w 9.7%  in life insurance (13.4% in the EU)o/w 7.6% in pension claims (13.6% in the EU)A relatively high share of households' high financial assets is invested in investment funds, but a relatively small share is invested in life insurance and pension funds. Belgium has no savings and investment account.VC at 0.068% of GDP (0.064% in the EU)PE at 0.414% of GDP (0.487% in the EU)Belgium has modest levels of PE and VC but better than most Member States.Capital gains tax of 10%, tax on securities accounts of 0.3%, corporate income tax of 25% with interest deductibility, withholding tax of 30%, tax on stock exchange transactions.Equity is more taxed than bonds, bank deposits and owner-occupied dwellings.1-34-1011-1718-2425-27Colours indicate the country's relative ranking based on five groups, ranging from the three best to the three worst performers. The relative ranking as regards an SIU diagnostic topic derives from a consistent cross-country comparison, the starting point of which is the average of the underlying main features.TopicAsset-backed pension schemesHouseholds' financial assetsVenture capital (VC)Private equity (PE)Capital taxation 
 
 
   
 
 
 
  
 
Investment  Survey,  56%  of  Belgian 
firms’ 
investment needs are covered by internal funding, 
compared with an EU average of 66%. In terms of 
external funding, at the end of 2024 bank finance 
through loans constituted 35% (vs 27% in the EU) 
of  all  funding  sources  for  Belgian  non-financial 
corporations (NFCs), while listed shares and bonds 
accounted for only 17% (vs 24% in the EU) of all 
funding.  When  expressed  in  terms  of  GDP,  the 
overall level of NFC funding was higher in Belgium 
(241% of GDP) than it was in the EU (226%) (see 
Graph A6.1). 

Size and structure of the financial 
sector 

Graph A6.2: Capital markets and financial 
intermediaries 

Source: ECB, EIOPA, AMECO. End-2024. 

Even  though  the  financial  sector  in  Belgium 
remains  dominated  by  banks,  insurers  and 
investment  funds  are  also  sizeable.  Bank 
assets  in  Belgium  were  equivalent  to  228%  of 
GDP in Q4-2024 (vs 251% in the EU). The banking 
industry in Belgium is quite concentrated, since the 
five  leading  banks  accounted  for  74%  of  the 
sector’s total assets in 2024 (vs 51% in the EU on 
average).  Domestic  banks  accounted  for  about 
46% of the banking sector’s assets in 2024 (down 
from  53%  in  2023).  Most  Belgian  banks  are 
privately  owned,  with  the  notable  exception  of 
Belfius,  which  has  been  100%  state-owned  since 
2012.  However,  the  current  government  plans  to 
sell  20%  of  its  stake  in  Belfius  in  the  autumn  of 
2026.  The  Belgian  insurance  sector,  with  total 
assets equivalent to 55% of GDP in Q4-2024 (see 
Graph  A6.2),  dominates  non-bank  intermediation, 

54 

and  this  is  in  line  with  the  EU  average  (insurers’ 
assets  are  also  equivalent  to  55%  of  GDP  in  the 
EU  on  average).  Because  insurers  are  the  main 
provider of pension benefits, the assets of pension 
funds in Belgium are much smaller: these are only 
equivalent to 8% (145) of GDP in Belgium (vs 23% 
in the EU). Investment funds  are more significant, 
with assets equivalent to 43% of GDP. 

in 

The  Belgian  capital  markets  are  relatively 
small.  The  main  stock  exchange  in  Belgium  is 
Euronext  Brussels.  The  Belgian  equity  market  is 
terms  of  capitalisation 
relatively  modest 
(equivalent  to  51%  of  GDP  vs  an  EU  average  of 
67% as of end-2024). The market breadth (146) 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  (147)  on  Belgian  equity 
markets  is  lower  than  the  EU  average  (1.3%  vs 
1.6%).  In  2025,  three  initial  public  offerings  took 
place  on  Euronext  Brussels,  after  none  in  2024. 
Euroclear Bank, which operates in Belgium, is one 
of two international central securities depositories 
in the EU; the other is Clearstream Banking, based 
in  Luxembourg.  Hosting  such  a  strategic, 
systemically  important  piece  of  financial-market 
infrastructure exposes Belgium to significant legal 
and political risks in times of crisis.  

Belgium’s  capital  markets  are  skewed 
towards  the  financial  sector  on  the  equity 
side  and  dominated  by  public  debt  on  the 
bond  side.  At  end-2024,  financial  corporations 
accounted for 32% of the market capitalisation of 
Belgian  listed  equities,  reflecting  the  extent  to 
which  Belgium’s  stock  market  is  geared  towards 
funding 
real 
the  financial  segment  of 
economy.  The  outstanding  volume  of  listed  debt 
securities  of  Belgian  issuers  stood  at  139%  of 
GDP  at  end-2024;  government  bonds  made  up 
63%  of  the  total,  underlining  the  large  weight  of 
public debt in the bond market. 

the 

(145) The figure on pension fund assets (in % of GDP) provided in 
Graph A6.2 is based on ECB data on pension funds. It is 
therefore different from the figure provided in the first table 
on the assets of asset-backed pension schemes, which is 
based on OECD data and includes all pension providers (not 
only pension funds) and public pension reserve funds.  

(146) The ratio of the value of bonds outstanding to GDP. 

(147) Median of bid-ask spread as a percentage of the mid-price. 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250   Listed equity               Bonds                        Assets by sector% of GDP 
      
 
Households’ participation in capital 
markets 

Like  in  most  Member  States,  households  in 
Belgium  invest  relatively  little  in  financial 
assets,  including  equities.  Belgian  households’ 
financial  assets  were  equivalent  to  263%  of  GDP 
in  2024,  more  than  the  EU  average  (212%),  but 
much less than the US (446%). Assets invested in 
equity  (whether  directly  or 
indirectly  through 
intermediaries  like  insurers  and  pension  funds) 
were estimated to be equivalent to 148% of GDP, 
above  the  EU  average  (91%)  but  well  below  the 
US  average  (291%).  Belgian  households’  financial 
asset  allocation  is  broadly  similar  to  that  of  the 
average  EU  household  (see  Graph  A6.3),  except 
that  Belgian  households  invest  less  in  insurance 
and pension funds, and more in investment funds. 

Graph A6.3: Composition of HHs’ financial assets 

(vi)  capital  gains  tax.  The  overall  tax  burden  on 
equity  investments  is  also  higher  than  that  on 
owner-occupied  dwellings.  The  recently  adopted 
capital  gains  tax  of  10%  on  securities  will 
aggravate  the  distortions  and  may  reduce  retail 
participation in capital markets, in particular retail 
investment in equity. In the area of pensions, some 
tax  incentives  in  Belgium favour  specific  products 
such as pillar 2 group insurance or pillar 3 pension 
to 
savings  products.  This  creates  obstacles 
investment  diversification  and  cost  efficiency. 
Currently,  the  pan-European  personal  pension 
product does not benefit from the most beneficial 
tax  treatment  available  in  Belgium.  Finally,  the 
increase  in  the  rate  of  tax  on  securities  accounts 
with assets greater than EUR 1 million from 0.15% 
to  0.30%  will  aggravate  the  existing  bias  against 
investment  in  securities,  which  is  already  subject 
to various stock-exchange transaction taxes. There 
is  therefore  room  to  simplify  the  Belgian  tax 
system  and  make  it  less  distortive  across  asset 
classes. 

(SIA). 

account 

Belgium has not established any savings and 
On 
investment 
30 September 2025  the  Commission  published  a 
Recommendation (148) on increasing the availability 
of  SIAs  with  simplified  and  advantageous  tax 
treatment.  SIAs  are  provided  by  authorised 
financial  service  providers  and  enable  individuals 
to  invest  in  financial  instruments  such  as  shares, 
bonds,  and  units  of  collective 
investment 
undertakings.  They  often  come  with  tax  benefits. 
Certain  countries,  including  some  EU  Member 
States like Sweden and France, have implemented 
SIAs  to  address  low  retail  participation  in  capital 
markets. Evidence from successful SIA frameworks 
shows  that,  when  designed  properly,  they  can 
make  capital  markets  more  attractive  and  easier 
to  access  for  retail  investors  and  help  them  build 
their wealth more effectively. To date, Belgium has 
not  established  any  savings  and 
investment 
account and has not expressed any intention to do 
so. 

(148) See https://eur-lex.europa.eu/eli/reco/2025/2029/oj/eng.  

55 

Source: Eurostat. End-2024. 

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.  These  distortions 
arise  from  various  features  of  the  tax  system, 
such  as:  (i)  the  tax  deductibility  of  interest  for 
corporate  income  tax  purposes  (the  ‘debt–equity 
bias’);  (ii)  the  higher  exemption  ceiling  applicable 
to  regulated  savings  accounts;  (iii)  the  lower 
withholding  tax  (15%)  applicable  to  interest  from 
regulated  savings  accounts 
compared  with 
dividends  (30%);  (iv)  taxes  on  stock-exchange 
transactions; (v) levies on securities accounts; and 

050100150200250300020406080100120140160BEEUBEEUper capita (000 EUR) (lhs)% of GDP (rhs)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
   
 
The banking sector: resilience and 
financing of the economy 

sector 

the  economy.  Bank  solvency 

appears 
banking 
The  Belgian 
relatively  sound  and  profitable,  and 
is 
therefore  not  constrained  in  its  role  of 
is 
funding 
satisfactory,  with  a  stable  average  capital-
adequacy  ratio  of  20.2%  in  Q3-2025  (vs  an 
average  of  20.2% 
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 Q2-
2025, up from 32.5% of TREA in December 2024 
(149). Against an average MREL binding target at EU 
level  (including  combined  buffer  requirements)  of 
29.3%  of  TREA  in  Q2-2025,  no  bank  reported  a 
MREL  shortfall.  In  July  2024,  Belgium  published 
information on its national bail-in mechanic in line 
with  EBA  guidelines  (150).  In  addition  to  their 
capitalisation, the credit quality of banks is strong, 
especially  in  the  household  sector,  even  though 
the  non-performing-loan  ratio  slightly  increased 
from a record low of 1.4% in Q2-2022 to 1.7% in 
Q3-2025 (vs 1.9% in the EU). However, the banks’ 
asset quality outlook is increasingly uncertain due 
to  the  current  conflict  in  the  Middle  East  and  its 
impact  on  energy  prices  and  economic  growth. 
With  return  on  equity  of  9.0%  in  the  first  three 
quarters of 2025, Belgian banks were slightly less 
profitable  than  their  EU  peers  (where  average 
return on equity in the period was 9.6%). Funding 
from depositors remains comfortable, with a loan-
to-deposit ratio of 91.6% in Q2-2025 (vs 93.5% in 
the EU). In its opinion (151) of 31 October 2023, the 
Belgian  Competition  Authority  observed  that  a 
comparison  of  the  remuneration  systems  for 
savings  accounts  put  in  place  in  other  Member 
States  reveals  the  uniqueness  of  the  Belgian 
system,  and  said  that  this  had  a  negative  impact 
on  competition  among  banks  in  Belgium.  The 
Belgian  Competition  Authority  said  that  this 
competition  was  especially  affected  by  the  dual-
rate mechanism (a base rate and a loyalty bonus) 
and  the  complexity  of  the  method  used  to 
calculate interest. 

(149) See the MREL Dashboard published by the SRB. 

(150) EBA, Guidelines to resolution authorities on the publication of 

their approach to implementing the bail-in tool. 

(151) Avis de l’Autorité belge de la Concurrence relatif aux services 

Credit  growth  in  Belgium  has  picked  up  due 
to  more  attractive  lending  conditions  and 
remains stronger than in the rest of the euro 
area.  Due  to  the  moderate  decline  in  interest 
rates that took place until April 2025, year-on-year 
household credit growth in Belgium has  increased 
from a low of 2.0% (vs  0.2% in the euro area) in 
March 2024 to 3.9% in September 2025 (vs 2.6% 
in  the  euro  area).  Lending  to  NFCs  was  stronger 
than  lending  to  households,  and  its  year-on-year 
growth reached 6.3% in September 2025 (vs 2.5% 
in  the  euro  area),  up  from  a  low  of  3.4%  in 
November 2024.  

Interest  rates  on  new  loans  to  the  private 
sector  have  receded  from  the  peak  reached 
in  late  2023.  In  September  2025,  interest  rates 
on  new  loans  to  Belgian  households  for  house 
purchases  at  floating  rates  reached  3.36%  (vs 
3.32%  in  the  euro  area),  down  from  a  high  of 
3.81%  in  November  2023.  Interest  rates  on  new 
loans  to  NFCs  followed  a  similar  pattern,  albeit 
with  steeper  falls in interest  rates.  These  reached 
3.47%  (vs  3.38%  in  the  euro  area)  in  September 
2025,  down  sharply  from  the  peak  of  5.27% 
observed in April 2024. Overall, even if they have 
somewhat declined from their peak, interest rates 
remain  relatively  high  compared  with  those 
observed over the last decade. 

Belgian  banks  reported  no  change  in  their 
credit  standards  for  NFC  loans,  and  a  slight 
loosening  in  credit  standards  for  housing 
loans  in  Q4-2025.  In  the  January  2026  Bank 
Lending  Survey  (152),  Belgian  banks  indicated  that 
their credit standards for NFC loans had remained 
unchanged  in  Q4-2025  compared  with  Q3-2025, 
while  the  euro  area  reported  a  tightening  on 
average. Belgian banks reported a slight loosening 
in  credit  standards  for  housing  loans  in  Q4-2025 
compared  with  the  previous  quarter  period  in  the 
previous  year,  in  line  with  the  small  easing 
reported  in  the  euro  area,  but  they  expect  some 
minor  tightening  in  Q1-2026.  Firms’  net  demand 
for  corporate  loans  remained  stable  in  Q4-2025 
(vs a slight increase in the euro area). Demand for 
housing loans fell in Q4-2025 compared with Q3-
2025  (vs  a  moderate  increase  in  the  euro  area), 
mostly  because  of  the  general  level  of  interest 
rates. Demands for both home loans and loans for 

bancaires de détail, 31 October 2023. 

(152) ECB Bank lending survey. 

56 

 
 
 
NFCs  are  expected  to  slightly  decline  in  Q1-2026 
compared with Q4-2025. 

Role of non-bank financial 
intermediaries 

insurance  sector  currently 
The  Belgian 
appears  sound  overall.  Insurers’  solvency  ratio 
decreased from 215% in Q4-2023 to 200% in Q4-
2024.  This  ratio  remains  twice  the  regulatory 
requirement,  but  below  the  EEA  average  (244%). 
In  2024,  non-life  insurers’  profitability  slightly 
improved,  as  their  combined  ratio  (153)  decreased 
from  96%  to  95%  (vs  96%  in  the  EEA).  Insurers 
(and  especially  life  companies)  have  benefited 
from rising risk-free rates, which have reduced the 
present value of their liabilities. By contrast, rising 
inflation  has  hurt  insurers,  especially  non-life 
firms, by pushing up the cost of claims. Therefore, 
the fact that most of the surge in inflation seems 
to  be  over  is  a  positive  development  for  non-life 
insurers. 

The  investment  portfolio  of  Belgian  insurers 
is  mostly  composed  of  bond  holdings.  The 
Belgian  insurance  sector,  which  is  moderately 
large  by  EU  standards  (with  assets  equivalent  to 
55%  of  GDP  vs  an  EU  average  of  53%  in  Q2-
2025) invested 49% of its assets in bonds in Q4-
2024 (on average, insurers in the EEA invest 37% 
of  their  assets  in  bonds)  (154).  This  relatively  high 
bond  exposure  is  mainly  due  to  the  significant 
share of guaranteed products offered by insurers. 
Government  bonds 
(with  domestic  Belgian 
government  bonds  accounting  for  39%  of  their 
government  bond  holdings)  represented  33%  of 
the  total  asset  portfolio  of  the  Belgian  insurance 
sector (vs 19% for insurers in the EEA on average). 
The  rest  of  the  asset  portfolio  comprised:  (i) 
corporate bonds at 16% (vs 18.0% for insurers in 
the  EEA);  (ii)  equity  at  8%  (half  the  16%  held  by 
insurers in the EEA); (iii) investment funds at  25% 
(vs  36%  for  insurers  in  the  EEA);  (iv)  cash  and 
deposits at 2% (vs 4% for insurers in the EEA); and 
(v)  mortgages  and  loans  at  12%  (vs  4%  for 
insurers in the EEA).  

the 

floods, 

Following 

The  financial  risks  resulting  from  both 
physical  climate  change  and  the  climate 
transition more broadly  are  considerable for 
Belgian  insurers.  The  insurance  sector  had  to 
cope  with  the  impact  of  the  floods  that  hit 
Belgium  in  July  2021.  The  damages  from  these 
floods  of  EUR 2.4 billion  largely  exceeded  the 
EUR 0.4 billion  contractual  ceiling  on  insurance 
insurers 
coverage. 
exceptionally agreed to bear a greater share of the 
burden, and paid EUR 2 billion of claims, of which 
EUR 1.03 billion  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 urged 
to  intervene  beyond  it.  On  20 July 2023,  the 
Ministry of Economy announced that the statutory 
limit  for  such  risks  would  be  quadrupled  from 
EUR 0.4 billion 
in 
to  EUR 1.6 billion. 
Belgium will now have to cover 100% of claims up 
to  that  ceiling.  The  new  framework  does  not 
provide for any public or private intervention if the 
damages exceed the ceiling, like they did in 2021. 
The federal  level  refused to intervene any further 
in  this  new  framework,  and  the  regions  failed  to 
reach an agreement to bear (in part or in full) the 
cost 
this 
damages 
EUR 1.6 billion ceiling. According to a study by the 
NBB(155),  this  increase  of  the  ceiling  will  cause 
premiums  to  rise  by  1.3%,  but  insurers  expect  a 
larger increase. 

exceeding 

Insurers 

future 

of 

The  domestic  pension  fund  industry  is  small 
compared with the rest of the EU, but it 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  8%  of 
Belgian  GDP  in  Q2-2025  (vs  23%  in  the  euro 
area).  At  the  end  of  2024,  investment  funds 
accounted  for  80%  of  the  IORPs’  assets  (156)  (vs 
38%  in  the  EEA),  of  which  27%  were  debt  funds 
and 28% equity funds. In terms of direct exposure, 
government bonds accounted for 6% of the IORPs’ 
assets  (vs  23%  in  the  EEA),  corporate  bonds  5% 
(vs  12%  in  the  EEA),  equity  6%  (vs  20%  in  the 
EEA) and cash and deposits 2% (vs 3% in the EEA). 
In  terms  of  both  direct  and  indirect  exposure, 
equity  accounted  for  about  37%  of  the  assets  of 

(153) The combined ratio is equal to the sum of the incurred losses 
and expenses divided by the earned premiums. It is inversely 
related to profitability. 

(154) Source: EIOPA Insurance Statistics. 

(155) Rapport de première lecture, 24 November 2023.  

(156) IORPs are Institutions for Occupational Retirement Provision. 

57 

 
 
 
Belgian  IORPs  (vs  33%  in  the  EU)  and  bonds 
accounted for 49% of assets (vs 43% in the EU). 

(funded) 

pensions 

Asset-backed 
are 
relatively small. Belgium’s pension system relies 
mainly on pay-as-you-go arrangements, making it 
vulnerable to demographic shifts and poorly suited 
to  equity  investment  and  the  development  of 
(157)  were 
capital  markets.  Pension  assets 
equivalent  to  only  30.3%  of  GDP  in  2024  (vs 
32.3%  in  the  EU  and  162.0%  in  the  US).  Belgium 
has  no  public pension  reserve  fund:  it  established 
the  Silver  Fund  in  2001  to  front-load  the  future 
costs  of 
its  pay-as-you-go  pension  system. 
However,  the  Silver  Fund  –  which  had  invested 
exclusively  in  domestic  government  bonds  –  was 
to 
2016. 
discontinued 
occupational pension schemes are not mandatory, 
and  there  is  no  auto-enrolment.  Occupational 
pensions  exclude  large  categories  of  workers  in 
some  sectors  like  the  public  sector,  and  the 
average contribution per member is relatively low. 
Belgium’s pension-tracking system  covers pension 
entitlements in pillars 1 and 2, but not yet pillar 3. 

Contributions 

in 

at 

2.5% 

guarantee 

Certain  regulatory  constraints  materially 
limit returns on pension assets.  Over the past 
10  years,  the  average  real  return  generated  by 
Belgian  pension  assets  has  been  mediocre  (0.8% 
vs 1.4% in the EU), partly because of their modest 
equity  exposure  (48%  vs  36%  in  the  EU)  and 
substantial bond holdings (45% vs 36% in the EU). 
This  outcome  is  partly  driven  by  the  statutory 
return 
from 
(set 
1 January 2025)  applied  to  pillar  2  occupational 
plans. This guarantee incentivises many employers 
to opt for group insurance contracts that provide a 
guaranteed  rate  rather  than  pure  pension-fund 
defined-contribution  vehicles,  which  typically  do 
not offer an employer-backed nominal  guarantee. 
Consequently,  in  2025  about  70%  of  pillar  2 
reserves 
low-return, 
guaranteed-interest  insurance  products.  Personal 
pension products (pillar 3) receive a substantial tax 
advantage,  but  the  ceiling  on  the  eligible  annual 
amount  is  too  low  (EUR 1 050)  to  really  make  a 
difference.  More  importantly,  those  products  are 
constrained  by  strict  rules  on  asset  allocation, 

(158)  were 

invested 

in 

limiting  both  the  options  available  to  customers 
and  competitive  pressure,  with  a  potential 
detrimental  impact  on  cost  and  performance.  In 
general,  encouraging  the  build-up  of  universal, 
funded  pension  schemes  alongside  the  prevailing 
pay-as-you-go  system  would  help:  (i)  channel 
investment  into  equities;  (ii)  support  growth  and 
innovation; and (iii) diversify retirement income. 

Venture capital ecosystem 

The  domestic  markets  for  venture  and 
growth  capital  in  Belgium  are  moderately 
developed. The value of private equity relative to 
nominal  GDP  hovered  at  around  0.47%  of  GDP 
between 2017 and 2023, and decreased to 0.35% 
in  2024  (vs  0.46%  in  the  EU).  And  the  value  of 
venture capital relative to nominal GDP fluctuated 
at around 0.07% of GDP between 2017 and 2024, 
and reached 0.08% in 2024 (vs 0.06% in the EU). 

The  contribution  of  domestic  institutional 
investors to the funding of 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  that  falls 
substantially short of the 19% in the Baltic states 
or +20% shares for Nordic Member States (159). 

funding. 

start-up 

There  are  some  policies  in  place  in  Belgium 
Support 
to  promote 
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  Flemish  Agency  for 
Entrepreneurship,  Wallonia 
Innovation 
Innovation 
and 
Growth, 
finance&invest.brussels.  The  Belgian  start-up 
ecosystem is supported by Start it X, the country’s 
largest  accelerator  helping  start-ups  to  develop, 
accelerate  and  expand  (see  Annex  4  for  more 
entrepreneurial 
start-ups  and 
analysis 
dynamism). 

and 

and 

on 

(157) Pension assets consist of pension providers’ assets and 
public pension fund reserve assets. See OECD, Pension 
Markets in Focus 2025 for details. 

(158) https://www.fsma.be/sites/default/files/media/files/2025-

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

12/apercusectoriel_2025.pdf. 

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

58 

 
 
 
Table A6.2:  Statistical Annex 

(1) Annualised data. 
For ECB data on credit growth and pension fund assets, EU data refer to the EA average. 
Private equity and venture capital, % of GDP is calculated as a three-year moving average. 
Source: ECB, ESTAT, OECD, CMU Dashboard, AMECO. 

59 

20182019202020212022202320242025-Q3EUTotal assets of MFIs, % of GDP218,0214,8240,2229,5227,4216,8225,8227,7246,1Common equity Tier 1 ratio15,615,517,117,617,316,815,916,016,8Total capital adequacy ratio18,818,720,320,420,119,520,020,220,2Overall NPL ratio, % of all loans2,32,12,11,61,51,61,81,71,9NPL ratio, loans to NFCs3,73,64,03,22,82,93,33,33,5NPL ratio, loans to HHs2,32,02,01,41,11,31,41,42,1Return on equity ratio18,28,65,99,99,911,410,49,09,6Loans to NFCs, % of GDP30,530,532,431,530,129,029,329,329,3Loans to HHs, % of GDP49,650,253,551,749,246,546,045,643,6NFC credit growth rate, %6,94,11,83,86,34,04,56,32,5HH credit growth rate, %5,76,84,56,46,42,32,33,92,6Stock market capitalisation, % of GDP63,875,869,370,856,053,049,955,869,9Initial public offerings, % of GDP0,010,020,301,330,000,000,00-0,06Market funding ratio63,762,662,361,058,957,858,2-49,7Private equity, % of GDP0,4050,4280,3820,5220,5600,5920,414-0,487Venture capital, % of GDP0,0510,0680,0830,0870,0790,0670,068-0,064Financial literacy, composite index-----45,5--45,5Bonds, % of HHs' financial assets3,22,82,31,81,93,93,3-2,8Listed shares, % of HHs' financial assets4,55,05,15,95,35,45,3-4,8Investment funds, % of HHs' financial assets15,115,616,018,016,917,518,9-11,0Insurance/pension funds, % of HHs' financial assets22,823,022,721,418,318,318,2-27,8Total assets of insurers, % of GDP70,275,281,374,858,056,556,255,653,9Pension assets, bn EUR---201,9-183,1187,7-5813,8Pension assets, % of GDP---39,9-30,430,3-32,310y real return average of pension assets, %-----1,30,8-1,4Pension funds assets, ECB (% of GDP)-8,49,29,27,17,57,87,723,01-34-1011-1718-2425-27Colours indicate performance ranking among the 27 EU Member States.Banking sectorNon-banking sector 
 
      
 
ANNEX 7: EFFECTIVE INSTITUTIONAL FRAMEWORK 

institutional  framework 

An  effective 
is 
essential  for  competitiveness.  This  requires 
public  trust  built  on  integrity,  quality  legislation, 
regulatory  simplification  and  efficient  services  for 
people  and  businesses.  For  Belgium,  the  2025 
related  country-specific  recommendations  (CSRs) 
highlighted  challenges  in  simplifying  regulation, 
improving 
reducing 
administrative burden (see also Annex 5). 

regulatory 

tools 

and 

Public trust 

Public  trust  in  government  in  Belgium  has 
fallen  to  the  EU  average.  Trust  in  regional  or 
local authorities have fallen below the EU average, 
while  trust 
legal  system 
remained stable but below the EU average. 

justice  and 

in  the 

Graph A7.1: Trust in justice, regional / local 
authorities and in government 

(1) EU-27 since 2019; EU-28 before 
Source: Standard Eurobarometer surveys 

Quality of lawmaking and 
implementation 

lawmaking  rules  are  partially 
Belgium’s 
aligned 
reducing 
to  best  practice  for 
regulatory  burdens  and  ensuring  effective 
implementation  (Table  A7.1).  Regulatory  impact 
assessments  are  not  systematically  required,  or 
publicly  available,  for  all  primary  and  secondary 
legislation,  and  monitoring  and  enforcement  are 
not 
in 
policymaking.  Ex  post  evaluations  also  do  not 
systematically  assess  administrative  burdens  or 

systematically 

embedded 

early 

compliance  costs (160).  The  oversight  and  quality 
control  system  for  public  consultations  and 
evaluation  of  legislation  is  underdeveloped,  and 
there  is  no  external  review  body.  Under  the 
recovery and resilience plan, Belgium is improving 
policy  evaluation  through  regular  federal  and 
regional  spending  reviews  integrated  into  the 
budget  process.  Although  Belgium  scores  above 
the  EU  average  on  consultations  for  adopting 
improving  methodology,  oversight, 
legislation, 
quality control and transparency is needed. 

Evidence-informed  policymaking  at  Belgian 
federal  level  displays  both  strengths  and 
challenges. The strengths include solid analytical 
capacity;  strong  links  between  policymakers  and 
academia; agile research funding and collaborative 
mechanisms.  However,  systematically  generating 
and 
remains 
challenging, due to uneven analytical  skills across 
administrations;  poor  coordination;  complex  data 
access;  low  data  literacy; limited  political  support; 
and weak regulatory management (161). 

effectively 

evidence 

using 

is 

to 

steps 

taking 

reduce 
Belgium 
administrative  burdens,  although  procedural 
complexity  remains  high.  At  federal  level,  the 
2025-2029  administrative  simplification  plan  and 
2025/2026 SMEs plan (89 measures) are reducing 
regulatory  and  administrative  burdens (see  Annex 
5),  but  key  gaps  remain:  there  are  no  firm 
implementation timelines or monitoring framework 
and  uncertain  alignment  with  the  ’Make  2025–
2030’ 
level, 
Flanders has 106 new simplification proposals and 
72%  of  the  previous  47  measures  have  been 
completed or are underway (162). Wallonia has over 
100  measures (163).  Although  the  administrative 
burden  was  reduced  between  2022  and  2024, 
saving  people  and  businesses  over  EUR 116 
million (164), 
legislation  still 
presents  a  challenge  for  companies  (65%  vs  EU: 

industrial  strategy.  At 

rapidly  changing 

regional 

(160) OECD, 2025, Better Regulation Practices across the EU 2025. 

(161) OECD, 2025, Building capacity for evidence-informed 

policymaking in Belgium. 

(162) Vlaamse Regering, 2025, Regelrecht Rapport. 

(163) Gouvernement Wallon, 2025, Simplification administrative : 
état d'avancement and Choc de simplification administrative 
: des premières avancées concrètes. 

(164) BOSA, 2025, Report administrative simplification. 

60 

00,10,20,30,40,50,60,70,80,9AutumnSpringAutumnSpringAutumnSpringWinterSummerWinterSpringWinterSummerAutumnSpringAutumnSpringAutumnSpring202520242023202220212020201920182017Justice,  legal system EU-27Justice,  legal system BERegional or local public authorities EU-27Regional or local public authorities BEGovernment  EU-27Government  BE 
 
  
 
 
 
Table A7.1:  Belgium. Selected indicators on better regulation practices for primary legislation 

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

streamline  company,  VAT  and  social  security 
registration, and using a unique enterprise number 
via  the  Crossroads  Bank  for  Enterprises  enables 
coordinated  data  exchange.  On  the  other  hand, 
there is no online one-stop shop to obtain business 
permits (167),  although  some  regions  have  their 
own digital platforms (168). As a result, the process 
is often complex, fragmented and time-consuming. 
Permits are handled by federal, regional and local 
commercial, 
authorities, 
environmental and construction activities. Although 
online tools are available in some regions, onerous 
documentation requirements and overlapping rules 
mean  professional  support  is  usually  needed  to 
navigate the system efficiently. 

industrial, 

covering 

Graph A7.2: Most time-consuming aspects of 
service delivery 

64%)  and  a  slight  rise  in  perceived  corruption 
(30% vs EU: 35%) (165). 

Public service delivery and 
digitalisation 

Although  people’s  satisfaction  with  service 
delivery  is  high  (64%),  there  is  scope  to 
simplify  services.  Identifying  the  correct  service 
is  a  challenge  for  both  people  (38%  vs  EU:  29%) 
and  companies  (36%  vs  EU:  18%) (166).  People 
pinpoint introducing a single point of contact (53% 
vs  EU:  38%)  as  one  clearly  needed  improvement. 
These 
the 
can  be 
fragmentation  of  services  across  regions  and 
levels  of  government.  Other  challenges  include 
processing time (43% vs EU: 39%) and simplifying 
the  documentation  needed  to  apply  for  services 
(Graph  A7.2).  56%  of  businesses  report  facing 
challenges  when 
public 
administration,  leading  to  increased  operational 
costs (40%), above the EU average (30%). 

interacting  with 

responses 

linked 

to 

Belgium  made  mixed  progress  in  offering 
public  digital  services  to  businesses  (Table 
A7.2). Nearly all public services for businesses are 
available  online.  Enterprise  one-stop  shops 

Source: European Commission. Flash Eurobarometer 567 / 
568 on satisfaction with administrative services (2026) 

(165) European Commission, 2025, Flash Eurobarometer 557 on 

Businesses attitudes towards corruption in the EU. 

(167) Apply for permits | Business Belgium. 

(166) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(168) Digitisation of permits takes a big step forward with 

MyPermit | Brussels-Capital Region. 

61 

0%10%20%30%40%50%Time forresponsesServiceidentificationDocumentspreparationApplicationformsServiceidentificationDocumentspreparationPeopleBusinessesEUTools for smart legislation: Share of possible impacts assessed for all primary laws when developing legislation 1Regulators are required to identify and quantify the benefits of a new primary law0Regulators are required to identify and assess the impacts of alternative non-regulatory options0Tools for effective implementation: when developing laws, regulators are required to:Assess the level of compliance1Identify and assess potential enforcement mechanisms1Specify the methodology of measuring progress in achieving the law's goals0Oversight of better regulation: There is an external  body responsible for reviewing the quality of RIAs and of ex post evacuations 1There are publicly available assessments of the effectiveness of RIA in modifying regulatory proposals 1There are reports on the level of compliance by government department with the requirements of RIA1There are indicators on the percentage of ex post evaluations that comply with guidelines0The effectiveness of ex post evaluations in improving the regulatory stock has been assessed in the last five years0 
 
  
 
 
  
 
Table A7.2:  Digital Decade key performance indicators: availability of digital public services 

Digital Decade target by 2030: 100. (2) Publishing year, data were collected in the previous year 
Source: European Commission. State of the Digital Decade report 2025 

Progress in offering online public services to 
people  is  also  mixed.  Belgium  has  enabled  full 
access  to  electronic  health  records,  and  100%  of 
Belgians  currently  have  access  to  a  form  of  eID, 
which  was  issued  based  on  extensive  once-only 
data  reuse  (99%  pre-filled  fields)  and  integration 
between  municipal  systems, 
the  Population 
Register  and  Belgian  eID  card (169).  At  the  same 
time, Belgium is lagging behind in providing digital 
public  services  to  people.  Both  people  (60  vs  EU 
67) and businesses (66 vs EU 73) are less positive 
about  the  extent  to  which  digital  public  services 
save time. Aspects that could make digital services 
more  attractive  to  people  are  notification  about 
the  progress  of  requested  services  (72%)  and 
user-friendly design (71%). 

and 

across 

regions 

to  service  design  and  delivery (172).  However, 
is  still  evolving  and  remains 
interoperability 
unaligned 
levels. 
Documentation  exists  but  is  not  consolidated  and 
responsibilities  for  maintaining  and  updating 
standards are not always clearly defined. Belgium 
has begun establishing a distributed yet functional 
governance  model  that  brings  together  the  four 
national  competent  authorities (173).  Belgium’s 
largest  digital  investment  under  its  recovery  and 
resilience  plan  (EUR 391.2 million  out  of  EUR 970 
million  for  digital  public  services)  is  dedicated  to 
developing 
secure  online  platforms,  digital 
interoperable 
administrative  procedures  and 
government  systems  to  increase  the  use  of  e-
government  services,  with  different  projects 
expected to become fully operational by Q2 2026. 

of 

data 

exchange 

Belgium  is  technically  ready  to  enable  the 
cross-border 
and 
documents  between  authorities  through  the 
EU  once-only  technical  system (170).  When 
services  become  accessible (171),  people  and 
businesses  will  no  longer have to  search  for  their 
data,  download  and  upload  documents  manually 
across  e-government  portals  in  different  Member 
States. Belgium still needs to identify the types of 
document  and data it  needs  to  exchange  through 
the  system  and  explore  ways  to  shift  from  the 
exchange  of  unstructured  to  structured  data 
formats. 

has 

Belgium 
a  whole-of-government 
approach  to  the  standard  of  services  and  is 
planning to implement a life events approach 

(169) European Commission, forthcoming, Simplification of key life 

events. 

(170) European Commission, Once-Only Technical System 

Acceleratormeter, Ec.europa.eu. 

Civil service 

public  administration 

The  Belgian 
is 
relatively  well  educated  and  younger  than 
the EU average. The ratio of young (aged 25-49) 
vs old (aged 50-64) civil servants is improving and 
remains above the EU average (1.77 vs 1.45). The 
proportion  of  civil  servants  with  post-secondary 
education is in line with the EU average (174). Civil 
servants’  participation  rate  in  adult  learning  is 
below  the  EU  average  (17.9%  vs  19.2%)  but 
increasing (175). Gender parity in senior civil servant 
positions  is  increasing  year-on-year,  but  remains 

(172) OECD,2025, Government at a Glance 2025. 

(173) Interoperability  assessment  success  story 

|  Belgium 

| 

Interoperable Europe Portal. 

(174) European  Union  Labour  Force  Survey,  Employees  by 
educational  attainment  level  and  NACE  Rev.  2  activity 
(2008-2026). 

(171) Procedure types under Annex II of the SDGR (2018/1724/EU) 
and directives 2005/36/EC, 2006/123/EC, 2014/24/EU and 
2014/25/EU. 

(175) European  Union  Labour  Force  Survey,  Participation  rate  of 
employees in education and training (last 4 weeks) by NACE 
Rev. 2 activity (2008-2026). 

62 

EU-272023202420252025Digital public services for citizens (0 to 100)81828182Digital public services for businesses (0 to 100)88929586Access to electronic health records (0 to 100)8510010083Belgium 
 
 
 
  
 
considerably below the EU average, with only 41% 
of women in senior positions (vs EU 48%). 

The  federal  government  is  implementing  the 
2024  competency  framework  to  help  the 
administration  attract  and  retain  talent (176). 
Since  2025,  all  federal  selection  procedures  use 
the  new  competency  profiles.  The  framework  is 
learning  and  development 
also  connected  to 
through the Federal Public Service on Strategy and 
Support  (FPS  BOSA)  learning  catalogue,  allowing 
employees  to  find  training  courses  linked  to 
competencies.  A  new  digital  tool  (Crescendo  2) 
was  launched  in  November  2024  to  manage 
evaluations, 
job  descriptions  and  competency 
profiles  more  effectively.  The  administration  has 
also  invested  in  mobility  and  talent  development 
programmes (such as the Talent Exchange internal 
mobility  programme, 
career  guidance,  and 
expanding  linguistic  tests),  which  are  designed  to 
retain  and  develop  internal  talent.  In  2024,  the 
number  of  candidates  per  vacancy  increased 
(median:  from  10  to  13),  indicating  growing 
interest in public sector jobs (177). 

asset  and  interest  declarations.  Reform  of 
lobbying  legislation  has  not  been  completed,  as 
the  federal  government  has  not  yet  taken  a 
decision  on 
for 
government  members  presented  by  the  previous 
government. 

the  draft 

lobbying 

rules 

Good cooperation between the Central Office 
for  the  Repression  of  Corruption  and  the 
prosecution  service  continues,  although 
concerns remain on handling prominent high-
level  corruption  cases. The  federal  government 
intends  to  create  a  new  financial  investigation 
service  and  a  new  specialised  prosecution  service 
focused  on  financial  crime  and  corruption,  to  be 
established within current prosecutorial structures. 
Investigation  and  prosecution  of  foreign  bribery 
cases  continue  to  be  limited.  An  OECD  report 
criticises  the  low  number  of  investigations  and 
prosecution  of  foreign  bribery  cases, 
limited 
awareness  within  companies  on  the  risks  of 
foreign  bribery,  and the  absence  of  investigations 
and low sanctions targeting legal persons. 

Integrity 

Justice 

Perceptions  of  corruption  when  doing 
business in Belgium are slightly below the EU 
average.  54%  of  companies  consider  corruption 
widespread (EU: 63%), 65% cite overly close links 
between  business  and  politics  as  a  driver  (EU: 
76%), and 30% see corruption as a problem when 
doing business (EU: 35%) (178). Public procurement 
remains  an  area  of  risk  for  high  corruption, 
marked  by  low  contract  transparency.  In  addition, 
there is still limited local awareness of conflicts of 
interest  (Annex  5).  However,  no  companies  report 
being  asked  or  expected  to  offer  a  gift,  favour  or 
extra  money  for  permits,  services  or  procurement 
(EU:  10%)  and  40%  believe  bribery  of  senior 
officials is appropriately punished (EU: 33%). 

Shortcomings  persist  in  the  monitoring  and 
enforcement  of  existing  integrity  policies, 
and  in  the  verification  and  transparency  of 

(176) Competencies | BOSA. 

justice  system  continues 

to  face 
The 
challenges  as  regards 
its  efficiency.  An 
overview of the efficiency of justice is unavailable 
due  to  a  lack  of  data  on  court  proceedings,  while 
efforts  are  ongoing  to  map  judicial  backlogs.  The 
time  taken  to  reach  a  decision  in  civil  and 
instance  courts 
commercial  cases  at 
remained stable at 246 days in 2024 (the same as 
in  2023).  The  estimated 
resolve 
administrative  cases  at  first  instance  courts  rose 
(from 360 days in 2023 to 370 in 2024). 

time 

first 

to 

The  quality  of  the  justice  system  faces 
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 (179). 
Belgium  is  making  progress  in  digitalising  its 
justice  system.  Improvements  could  be  made  to 
extend  secure  electronic  communication  to  all 
courts  and  prosecution  services  in  all  cases. 

(177) Travailler dans la fonction publique 2024 | BOSA. 

(178) European  Commission,  2025,  Flash  Eurobarometer  survey 
557 on Businesses' attitudes towards corruption in the EU. 

(179) For  a  more  detailed  analysis  of  the  performance  of  the 
justice  system  in  Belgium,  see  the  upcoming  2026  EU 
Justice Scoreboard and the 2025 Rule of Law Report. 

63 

 
 
 
lags  behind 

Belgium  significantly 
in  digital 
solutions  to  initiate  and  follow  proceedings  in 
civil/commercial  and  administrative  cases,  and 
lags behind in the general public’s online access to 
published  judgments.  This  could  be  improved  by 
ensuring  that  all  judgments  are  published  in 
machine-readable 
associated 
metadata,  to  allow  for  greater  reuse  by  private 
companies. 

format  with 

64 

 
SUSTAINABILITY 
ANNEX 8: INDUSTRY DECARBONISATION, CIRCULARITY AND CLIMATE MITIGATION 

pollution.  Decarbonising 

Belgium  faces  challenges  in  decarbonising 
industry  and  road  transport,  on  waste 
generation  and  management, and on  air and 
Belgium’s 
water 
industrial  sector  will  require  investment  in  critical 
enablers  such  as  CO₂  transport  infrastructure, 
greater  clean  power  capacity,  carbon  contracts-
for-difference,  and  better  coordination  between 
federal  and  regional  governments.  The  electricity-
gas price gap remains a major barrier to industrial 
electrification,  though  tax  reforms  initiated  in 
2025-2026  aim  to  progressively  address  this 
imbalance.  In  transport,  road  emissions  remain 
stubbornly  high,  despite  notable  progress  in  EV 
adoption  (with  significant  regional  disparities), 
while public transport is under strain from budget 
cuts  and  fare  increases  at  a  time  when  a  modal 
shift  away  from  cars  is  urgently  needed  to  meet 
climate  targets.  Despite  performing  well  on  the 
circular  economy  and  on  recycling  rates,  waste 
generation  in  Belgium  continues  to  rise,  regional 
disparities  in  waste  management  persist,  and  the 
market  for  recycled  products  remains  limited.  Air 
quality breaches in certain areas have triggered EU 
infringement  procedures,  while  industrial  water 
pollution,  particularly  from  PFAS,  imposes  direct 
and indirect costs of EUR 30 million a year. 

Industry decarbonisation 

Greenhouse gas emissions from industry 

industry 

Belgium’s  manufacturing 
is 
becoming more energy efficient, but the high 
costs  of  electricity (180)  and  the  need  for 
more  CO2-free  power  remain  significant 
barriers  to  the  shift  to  cleaner  energy  (181). 

(180) Belgium maintains a competitive edge over its neighbouring 
countries  with  its  relatively  low  natural  gas  prices.  The 
situation  is  more  mixed  regarding  electricity  prices  that 
depend  on  the  different  profiles  and  electro-intensity.  See 
FORBEG  (2025):  “A  European  comparison  of  electricity  and 
natural  gas  prices  for  residential,  small  professional  and 
large industrial consumers”, F20250514EN.pdf. 

(181) This  Annex  discusses 

the 

industry,  specifically 

transition  of  Belgium's 
manufacturing 
its  energy-intensive 
industries, to low-carbon and net-zero modes of production, 
which  is  key  to  preserving  competitiveness  on  the  path 
towards  climate  neutrality  as  mandated  by  the  European 
Climate  Law.  A  broader  perspective  on 
the  current 
competitiveness  challenges  facing  Belgium’s  manufacturing 

(GHG)  emissions 

The  2025  country-specific  recommendations  for 
Belgium emphasised the need for “reducing overall 
reliance  on  fossil  fuels  (…),  including  by  further 
incentivising  industry  to  decarbonise”.  Between 
2019  and  2024,  the  energy-related  greenhouse 
gas 
intensity  of  Belgium’s 
manufacturing industry declined by 11%. Over the 
the  share  of  electricity  and 
same  period, 
renewables 
in 
final  energy  consumption 
in 
manufacturing  was  broadly  unchanged  at  around 
38%.  Data  from  last  year’s  2025  Country  Report 
for  Belgium  suggest  that  the  reduction  in  the 
energy-related 
of 
emission 
manufacturing observed between 2017 and 2023 
energy-efficiency 
was  mainly 
improvements, or product improvements reflected 
in  the  value  added,  rather  than  a  shift  to  green 
energy. 

intensity 

due 

to 

are 

expected 

assessed 

Policy (182) 

contributions 

A  new  study  funded  by  the  Federal  Belgian 
Science 
different 
pathways  to  decarbonise  Belgian  industry. 
The  study  concludes  that  it  is  possible  to  reduce 
industrial  emissions  by  90%  from  2005  levels  by 
2040–2050 under critical enabling conditions. The 
main 
from 
infrastructure,  where  it  will  be  essential  to  put  in 
place  a  CO₂  transport  and  storage  backbone  (by 
around  2035)  and  a  step-change  in  clean  power 
capacity  and  grid  reinforcements.  Government 
action  to  derisk  investments  is  also  required  by 
making  greater  use  of  carbon  contracts  for 
difference,  green  public  procurements  and 
reforming  energy 
the 
taxation 
electricity-gas  price  difference.  To  stimulate 
innovation,  the  focus  would  have to  be  on  pulling 
products  from  late-stage  innovation  to  market 
readiness and pushing game-changing early-stage 
innovation.  In  addition,  Belgium’s  federal  system 
of  shared  competences  would  require  more 
coordinated  planning  across  federal  and  regional 
levels,  including  coordination  on  energy  taxation, 
investments  and  planning  and 
infrastructure 
Cooperation  with 
regulatory 

streamlining. 

to  narrow 

industry  is  provided  in  Annex  5.  For  a  more  detailed 
description  of  greenhouse  gas  emissions  from  industry,  see 
European  Commission  (2025),  2025  Country  Report  - 
Belgium,  Commission  staff  working  document,  SWD  (2025) 
205  final,  Brussels,  4.6.2025,  Annex  A7.  Clean  industry  and 
climate mitigation. 

(182) Brussels  School  of  Governance  (VUB  2025):  “DEEPIN:  Deep 

Industrial greenhouse gas reductions in Belgium”. 

65 

 
 
 
 
 
 
 
 
neighbouring countries on infrastructure (including 
North  Sea  projects)  would  be  critical  to  reduce 
overall costs.  

Energy-intensive  industries  have  a  strong 
presence  in  Belgium,  but  they  have  faced 
challenges  lately.  Manufacturing  in  Belgium  is 
fairly  emission  intensive.  Industry  generates  25% 
of  the  country's  GHG  emissions (183).  The  steel, 
refining and (petro)chemical sectors account for a 
significant  share  of  industrial  production  and 
investments  but  face  higher  pressure 
than 
competitors  in  the  United  States  and  China. 
Energy-intensive 
industries  produce  24.8%  of 
Belgium’s  total  manufacturing  gross  value  added 
(GVA) (2023), the second highest value in the EU. 
These  industries  include  manufacturing  of  non-
metallic  mineral  products  and  manufacturing  of 
basic  metals,  which  produced  4%  to  4.5%  of 
Belgium’s  manufacturing  GVA  each.  They  emitted 
2.5  kg  and  2.4  kg  CO2eq  per  euro  of  GVA 
respectively, against the EU average of 2.4 kg and 
3.1 kg  in  2023 (184).  Current  infrastructure  is  not 
yet  ready  to  handle  the  expected  increase  in 
demand  for  (green)  electricity  and  other  clean 
energy  carriers  such  as  green  hydrogen  (via 
imports),  as well as infrastructure for liquefaction 
transport  of  CO2 (185).  Energy-intensive 
and 
industries  account  for  a  moderate  share  of  total 
employment at 3.5% (see Annex 11). 

Policies to promote industry decarbonisation 

Since  manufacturing  produces  a  high  share 
of total GHG emissions, there is a strong link 
between  Belgium's  climate  goals  and  its 
industrial policy. The approach taken is based on 
targeted  strategies,  support  measures  and  close 
cooperation  with 
innovation 
industry 
ecosystems,  all  framed  within  EU  climate  and 
competitiveness  objectives.  Measures  put  forward 
include  promoting  the  electrification  of processes, 
energy  efficiency,  deployment  of  low-carbon  heat 
solutions  (green  hydrogen,  biomass),  support  for 
the  development  of  CO2  infrastructure,  energy 

and 

(183) Without  NACE  division  C19  –  manufacture  of  coke  and 
refined petroleum products. That sector adds a further 6 per 
cent; data from 2024.  

(184) See  table  A8.1  at  the  end  of  this  annex,  also  for  other 

indicators regarding industry decarbonisation.  

(185) VLAIO  (2025): 

'Programmanota  Klimaatsprong  voor  de 
industrie:  transitieprogramma  voor  een  koolstofarme  en 
competitieve energie-intensieve industrie tegen 2050'.  

policy  agreements  with industry,  requirements  for 
solar  installations  for  large  electricity  consumers 
(though  these  were  weakened  in  2025),  and 
support for innovation and circularity.  

Belgium  is  tackling  the  structural  problems 
that  have  prevented  more 
industrial 
decarbonisation  but  their  combined  impact 
remains  uncertain.  A  persistent  problem  has 
been  that  electricity  for  industrial  use  is  priced 
substantially  higher  in  Belgium  than  gas.  In  the 
first  semester  of  2025,  electricity  for  large  non-
times  more 
household  consumers  was  3.9 
expensive  than  gas,  in  part  due  to  differences  in 
taxes and levies (see also Annex 9). This difference 
undermines  the  business  case  for  electrification 
and clean technology adoption in energy-intensive 
sectors.  

In  2025,  in  line  with  the  country-specific 
recommendations  to  Belgium,  the  federal 
government agreed to progressively shift (as 
of  March  2026)  part  of  the  tax  base  away 
from  electricity  towards  fossil  fuels.  For 
firms, excise duties on electricity will be lowered to 
the EU minimum, and transmission network tariffs 
will  be  reduced  for  energy-intensive  industries  to 
the same level as neighbouring countries. Flanders 
is  also  preparing  a  gradual  tax  shift  to  lower 
electricity costs while at the same time increasing 
levies  on  fossil  fuels  for  heating.  Concretely,  this 
means shifting the costs of the combined heat and 
power  certificates,  the  public  service  obligations 
regarding rational energy use and the Energy Fund 
contribution  from  the  electricity  bill  towards  gas 
and  heating  oil  consumers.  Whether  these  shifts 
will  result in  a  sufficient  relative  change in  prices 
of  electricity  and  gas  depends  on  several  factors, 
including  whether 
industry  qualifies  for 
electro-intensity  reductions  and  in  which  Belgian 
region  they're  located,  as  prices  vary.  In  addition, 
in January 2025, a reform of the tax deduction on 
investments  entered  into  force,  providing  a  30% 
tax deduction for large companies and up to 40% 
for  SMEs  for  environmental  investments  and 
investments 
renewable 
in  energy  efficiency, 
energy  and  zero-emission  transport  and  related 
digital investments (186). 

the 

(186) Ministry  of  Health,  Safety  and  Environment  (December 
2025),  'The  landscape  of  carbon  and  energy  pricing  and 
taxation  In  Belgium',  see:  *2025-landscape-of-carbon-and-
energy-taxation.pdf. 

66 

 
 
 
Although  hands-on  industrial  and  energy 
policy  sits  at  regional  level,  Belgium's  2021 
federal  hydrogen  strategy  remains  a  central 
pillar  for 
industrial  decarbonisation.  This 
strategy  aims  to  use  hydrogen  and  renewable 
molecules to make industrial applications climate-
neutral  where  electrification  is  not  economically 
viable  or  technically  feasible.  It  positions  Belgium 
as  an  import  and  transit  hub  for  renewable 
molecules, creates a hydrogen market (with up to 
EUR 395  million 
in  public  funding),  aims  to 
strengthen  technology  leadership  and  promotes 
in  cross-border  cooperation.  The 
investment 
Energy Transition Fund also remains a key federal 
instrument  to  support  R&D  in  areas  such  as 
hydrogen production, nuclear energy and storage.  

and 

energy, 

reliable 

In  Flanders,  decarbonisation  is  one  of  the 
industrial  policy  priorities,  along  with 
innovation  and  productivity,  access 
to 
and 
affordable 
strengthening the strategic value chains. The 
2025 
Industry  Plan  provides  the  overarching 
strategic  policy  direction, and  a  major  operational 
instrument  is  the  'Klimaatsprong'  (Climate  Leap). 
The  2025  update  provides  long-term  financial 
support  to  large  industrial  emitters  (i.e.  basic 
industries  under  the  EU  emissions  trading  system 
such  as  steel,  chemical  and  refinery  sectors)  for 
high-impact 
investments, 
decarbonisation 
including  using  carbon  contracts  for  difference. 
The programme recognises the need for significant 
investments by 2030 in carbon capture, utilisation 
and  storage  (CCUS),  in  the  electrification  of  heat 
and  in  the  development  of  a  circular  value  chain 
for plastics. Also in 2025, the government funded 
multiple  industrial  transition  projects  focused  on 
electrification,  heat  pumps,  waste  heat  recovery 
and  process  optimisation. 
the 
supports 
'Moonshot 
breakthrough 
including 
advanced  manufacturing, 
low-carbon  process 
technologies,  hydrogen  applications  and  CCUS. 
Sectoral  clusters  translate  these  ambitions  into 
specific  technology  roadmaps  aligned  with  public 
funding priorities. 

programme 
innovation, 

In  parallel, 

industrial 

Flanders' 

support 

additional 

Disbursement  will  happen  through  competitive 
bidding using contracts for difference. The aim of 
this 
safeguard 
decarbonisation  investments  in  the  pipeline  – 
notably  in  the  chemical,  steel  and  refineries 
sectors  –  but  that  await  a  final  investment 
decision  (e.g.  Kairos@C,  ZESTA,  H2backbone,  etc.) 
meaning that the projects are uncertain.  

to 

is 

Flanders  continues  to  use  a  high  proportion 
of  EU  ETS  revenues  for 
indirect  cost 
compensation of energy-intensive industries, 
though this is conditional on climate commitments. 
The amounts transferred this way exceed the 25% 
auction  revenues  indicatively  set  in  the  EU  ETS. 
Flanders  committed  to  an  evaluation  of  the  main 
expenditure of the Flemish Climate Fund (187) with 
a view to more effective spending, but the results 
remain unknown.  

In  Wallonia,  industry  generates  nearly  30% 
of the Region’s GHG emissions and is a focus 
for achieving the region's climate objectives. 
Wallonia  has  developed  a  structured  strategy  on 
industrial  decarbonisation,  based  on  regional 
roadmaps such as the study 'Facilitating the Low-
Carbon  Transition  of  Walloon  Industry'(188).  These 
documents  identify  challenges,  key  technologies, 
policy  levers  and  specific  measures  to  reduce 
industrial  emissions.  Central  to  the  Walloon 
approach  is  the  integration  of  decarbonisation 
objectives  into  sectoral  policies  and  business 
support  mechanisms,  in  close  coordination  with 
industrial clusters and public stakeholders such as 
SPW, AWAC and Wallonia-Entreprendre.  

Wallonia's  industrial  decarbonisation  policy 
places  strong  emphasis  on  energy  efficiency 
and  electrification,  and  on  the  use  of  low-
carbon  energy  carriers.  Wallonia  aims  to 
position  itself  as  a  hub  for  the  production  and 
distribution of low-carbon hydrogen, building on its 
industrial  ecosystem  and  logistical  infrastructure 
(e.g.  John Cockerill,  TWEED  cluster).  Together  with 
the 
renewable  electricity  generation, 
biomass,  biogas  and  other  renewable  energy 
in 
sources, 

this  should  replace  fossil  fuels 

rise 

in 

Several industrial decarbonisation projects in 
the  pipeline  in  Flanders  remain  uncertain. 
Flanders decided in early February 2026 to provide 
as  of  2028  and  for  the  next  10  years  EUR 200 
million in additional annual subsidies for industrial 
greening and electrification projects. These will be 
financed  with  revenue  from  EU  ETS  auctions  and 
the  Carbon  Border  Adjustment  Mechanism. 

(187) The Flemish Climate Fund, financed by revenue from EU ETS 
auctions, mainly serves to implement Flemish climate policy, 
pay  compensations 
indirect  emission  costs,  and 
contribute to international climate financing. 

for 

(188) ICEDD  (2024) :  'Faciliter  la  transition  Industrie  Bas  Carbone 

sur le territoire de la Wallonie'. 

67 

 
 
industrial  processes.  Wallonia  is  also  currently 
structuring  the  development  of  a  CO₂  transport 
network,  supported  by  regulatory  frameworks 
designed  to  organise  the  value  chain  (transport, 
storage  and  utilisation) (189).  In  parallel,  industrial 
consortia are developing innovative pilot projects – 
including  on-site  and  mobile  CO₂  capture  (CO2 
Disrupt  and  Columbus  projects)  –  with  regional 
support. In November 2025 Flanders and Wallonia 
signed  a  joint  declaration  that  they  pledge  to 
enable 
in  CO₂ 
infrastructure, with the aim of positioning Belgium 
as  a  key  hub  for  decarbonisation  in  north-west 
Europe. 

the  necessary 

investments 

and 

low-carbon 

Wallonia  combines  several  financial  and 
industrial 
policy  tools  to  facilitate  the 
transition,  but  major  challenges  remain  to 
decarbonise  industry.  Through  the  “Easy’Green” 
loans,  it  issues  calls  for  projects  and  subsidies  to 
energy-saving 
support 
investments  in  industry.  Wallonia  also  mobilises 
European  funding  instruments  such  as  the  ERDF 
and the Just Transition Fund. Regarding the latter, 
+Public-private partnerships, including cooperation 
with the European Investment Bank and Wallonia-
Entreprendre  help  deploy  dedicated  financing  for 
green  technologies  and  energy  infrastructure.  The 
'Wallonie-Entreprendre  Investment  Strategy'  sets 
out  a  roadmap  with  EUR 2.5  billion  in  investment 
(2025-2029)  including  funding  streams  for  the 
energy transition and decarbonisation projects in a 
range  of  industrial  companies.  The  main  residual 
challenges  include  upgrading  the  electricity  grids, 
attracting  sufficiently 
investments, 
rolling  out  hydrogen  and  CO₂  infrastructure  and 
further adapting regulatory frameworks to ensure 
that  the  transition  remains  competitive  and 
socially fair. 

large-scale 

The  Brussels  Region  focuses  its  action  on 
industrial  decarbonisation  on  cleantech 
innovation,  the  circular  economy  and  urban-
scale  energy  efficiency  rather  than  heavy 
industry schemes due to its comparatively smaller 
industrial  base.  Nonetheless,  Brussels  has  an 
industrial  decarbonisation  strategy  embedded  in 
its  broader  climate  and  economic  transition 

(189) Moniteur belge (Janvier 2024/ 83867): «Décret modifiant le 
Livre II du Code de l’Environnement constituant le Code de 
l’Eau en ce qui concerne la réalisation de certains travaux en 
lien avec les cours d’eau en vue d’atténuer les conséquences 
des cas de force majeure. – Erratum».  

68 

framework,  notably 
'Go4Brussels  2030' 
the 
strategy,  the  'Shifting  Economy'  strategy  and  the 
'Air-Climate-Energy  Plan'.  Together  they  form  the 
basis  for  the  Brussels  Region's  contribution  to 
Belgium's  energy  and  climate  plan.  This  plan 
focuses  in  particular  on  replacing  fossil  fuels  for 
industrial  heat  through  renewable-energy-based 
electrification of industrial processes.  

The  'Shifting  Economy'  is  the  strategy  for 
economic  transition  of  the  Brussels-Capital 
Region.  It  adjusts  a  series  of  existing  plans  to 
make  them  more  coherent,  such  as  the  Regional 
Programme  for  Circular  Economy  (GPCE),  the 
Productive  Brussels  plan,  the  Next  Tech  plan  and 
the  Small  Business  Act.  Policies  aim  to  align 
economic  development  with  decarbonisation  by 
steering  public  support  and  regional  incentives 
toward  firms  that  reduce emissions,  innovate  and 
adopt  clean  technologies,  while  also  phasing  out 
support  for  high-carbon  activities.  Regional  aid 
reforms  in  Brussels  prioritise  environmental  and 
social  engagement  by  companies  by  providing 
higher 
advance 
innovation  and 
decarbonisation  supported  by 
research policies. This is managed by Innoviris, the 
regional  innovation  body.  This  body  bolsters  low-
carbon 
industrial  innovation,  circular  economy 
approaches  and  cross-sector  collaboration  via 
innovation clusters and strategic planning.  

subsidies 

action 

for 

to 

Reduction of effort sharing emissions 

Compliance  with  effort  sharing  limits  with 
domestic measures 

Belgium’s  effort  sharing  emissions  are 
projected to exceed its target in 2030, but it 
could  close  the  gap  with  unused  emission 
allocations  from  earlier  years  (190).  In  2024, 

(190) The  national  GHG  emission  reduction  target  is  set  out  in 
Regulation (EU) 2018/842 (the Effort Sharing Regulation). It 
applies  jointly  to  buildings  (heating  and  cooling),  road 
transport,  agriculture,  waste  and  small  industry  (known  as 
the effort sharing sectors). The emissions from effort sharing 
sectors for 2024 are based on approximated inventory data. 
The  final  data  will  be  established 
in  2027  after  a 
comprehensive  review.  Projections  about  the  impact  of 
current  policies 
(‘with  existing  measures’,  WEM)  and 
additional  policies (‘with  additional  measures’,  WAM)  as  per 
Belgium’s 2025 reporting under Article 17 of Regulation (EU) 
2018/1999 (the Governance Regulation). Also see European 
Commission  (2025),  Climate  Action  Progress  Report 2025  – 

 
 
 
 
allocations 

greenhouse  gas  emissions  from  Belgium’s  effort 
sharing  sectors  are  expected  to  be  22.7%  below 
its 2005 emissions. By 2030, current and planned 
policies  and  measures  are  expected  to  lead  to  a 
42.6% reduction, leaving a gap  of 4.4 percentage 
points  to  the  2030  target  to  reduce  by  47%. 
Belgium could bridge this gap with unused annual 
emission 
years. 
Nevertheless,  swift  and  steady  implementation  of 
the additional measures will be crucial to progress 
towards  climate  neutrality.  An  opinion  issued  by 
the  Federal  Sustainable  Development  Council 
noted that numerous federal measures have been 
delayed or not implemented as originally planned, 
which could jeopardise the achievement of the set 
objectives.  This  would  apply 
in  particular  to 
mobility and transport, but also to buildings(191). 

earlier 

from 

Sustainable transport 

Graph A8.1: Greenhouse gas emissions in the 
effort sharing sectors, 2005, 2023, and 2024 

Source: European Environment Agency. 

GHG  emissions  from  road  transport  remain 
slow to abate. In 2024, road transport generated 
39%  of  Belgium’s  effort  sharing  emissions,  down 
by  only  8%  from  2005  levels (Graph  A8.1  and 
Table  A8.1).  The  2025  CSR  therefore  requested 
Belgium to 'provide incentives and remove barriers 
to increase the use and supply of public transport, 
low-emission  transport  and  active  mobility'  (see 
also  Annex  19).  Belgium's  final  updated  NECP  of 
2025 includes measures to decarbonise transport, 
promote public transport and shift to low-emission 
transport  with  the  aim  to  reduce  GHG  emissions 

includes  EUR 1.2bn 

from  the  sector  by  an  additional  6.6  MtCO2eq  by 
in 
2030.  Belgium's  RRP 
investments  in  sustainable  transport,  notably  to 
improve  railway 
infrastructure,  finance  green 
public  buses,  roll  out  electric  charging  stations, 
develop  urban  public  transport  and  create  or 
refurbish cycle paths. 

Belgium has indeed made noteworthy strides 
in  developing  cycling  infrastructure,  though 
regional disparities remain. In Flanders, cycling 
accounts  for  16%  of  trips,  and  it  is  increasing  in 
Brussels  to  reach  10%.  By  contrast,  cycling  only 
accounts for 1.5% of trips in Wallonia(192). As part 
of  the  investments  under  the  RRF,  Flanders  is 
implementing  an  extensive  network  of  cycle 
highways  with  the  long-term  objective  to  provide 
2 400  kilometres  of  high-quality 
routes  for 
commuters. 

of 

the 

rollout 

support 

Belgium is emerging as a European leader in 
electric  vehicle  adoption  and  charging 
infrastructure  deployment,  despite  regional 
disparities.  Charging  infrastructure  expanded  at 
an  unprecedented  pace,  partly  thanks  to  support 
from  the  RRF.  Flanders  provides  approximately 
77 000 charging points, Wallonia over 13 000, and 
Brussels  just  under  10 000.  In  Wallonia,  a  report 
by  the  Belgian  Court  of  Auditors  published  in 
August  2025  signalled  shortcomings  in  the  policy 
to 
charging 
infrastructure(193).  It signalled the lack of capacity 
to analyse needs to guide policy, including how the 
power  grid  will  be  able  to  support  the  shift  to 
electric  transport,  and  a  lack  of  clarity  in  the 
distribution  of  responsibilities  among  the  various 
public  bodies  involved.  Wallonia  has  since  taken 
measures  to  accelerate  the  instalment  of  EV 
charging  stations,  including  the  creation  of  an 
'Electromobility  Project  Committee' (194)  under  the 
'SPW  Mobilité  et  Infrastructures',  which  brings 
together the main public and private-sector bodies. 
A  first  report  is  due  to  be  presented  to  the 
government  in  spring  2026.  In  May  2025,  the 
Walloon  government  approved  the  update  of  the 
territorial 
framework  agreement  with 

the 

Technical  Information,  Commission  staff  working  document, 
Brussels, Chapter 9 (pp. 111ff.), and in particular Tables 25 
and 26. 

(192) Federal Mobility Survey 2025: FEM2025.pdf. 

(193) Cour  des  comptes  (2025)  Infrastructure  de  recharge  pour 

véhicules électriques en Wallonie_Rapport. 

(191) FRDO/CFDD  “02  |  Rapport  de  suivi  concernant  la  mise  en 

(194) Électromobilité: 

la  Wallonie  structure 

son  plan  de 

œuvre de la politique climatique fédérale 2025». 

déploiement des bornes de recharge - Cécile NEVEN. 

69 

0102030405060708090200520232024MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
     
 
 
development agencies (195) to relaunch the process 
of  rolling  out  electric vehicle  charging  stations  on 
communal public property. The objective is to have 
3 400 charging points by 2027. It has also further 
regulated  the  instalment  of  fast  charging  points 
on  motorways  and  smaller  road  rest  areas.  In 
Flanders,  further  legislative  initiatives  were  taken 
in  2025,  including  the  compulsory  installation  of 
charging  points  in  non-residential  buildings  with 
more  than  20  parking  spaces.  In  Brussels,  the 
“ChargyClick”  programme  was  set  up  to  ensure 
that  every  resident  has  a  charging  station  within 
150 metres of their home.  

Meanwhile,  EV  adoption  has  accelerated 
across  passenger  cars,  vans  and  trucks.  The 
federal government is taking further steps to 
reduce  car  dependency  and 
incentivise 
sustainable  modes  of  transport  by  altering 
corporate  travel  perks (196).  Despite  removing 
the  tax  benefits  for  EVs,  2025  saw  a  record 
145 170 electric vehicle sales, up from 127 759 in 
2024. This translated into a 35% market share of 
EVs  in  newly  registered  cars.  The  reform  of  the 
traditional  company  car system, a measure under 
the  Belgian  RRP,  is  underway.  In  addition  to  the 
shift  to  electric  vehicles,  from  2027  it  will  be 
mandatory for employers that offer company cars 
to  also  offer  an  alternative  'mobility  budget'  that 
to  spend  on  public 
employees  can  choose 
transport, 
transport, 
shared 
environmentally  friendly vehicles or even housing. 
Employers  have 
the 
mechanism  and  calculations  involved  are  too 
complex,  which  may  explain  why  only  3%  of 
employers  have  voluntarily  offered  mobility 
budgets.  Although  under 
the  new  system 
companies  can  only  get  100%  deductions  if  they 
are fully electric, self-employed workers without a 
company  can  still  claim  partial  deductions  for 
hybrid  cars  at  100%  in  2026  and  95%  in  2027 
while  fuel  costs  are  no  longer  deductible  (from 
50%  to  0%).  It  is  unclear  what  will  happen  after 
the  RRF  ends,  and  whether  Belgium  will  partially 
revert the RRF reform. The corporate focus of the 
reform  also  means  that  over  86%  of  new  EV 
registrations in 2024 came from corporate leasing, 
highlighting the need to close the gap in household 
consumer purchases. The share of electric cars of 

concerns 

cycling, 

raised 

that 

(195) Bornes  de  recharge  :  un  nouveau  cadre  pour  accélérer  le 
déploiement  1.724  bornes  seront  installées  sur  le  domaine 
public communal d’ici 2026 - François DESQUESNES. 

(196) European Alternative Fuels Observatory.  

70 

total car sales has recently plateaued, with longer 
leasing  contracts.  Possible  explanations  are  the 
legal uncertainty about a possible return of hybrid 
company  cars  and  the  lack  of  sufficient  charging 
infrastructure in Wallonia. 

Toll  incentives  have  been  brought  in  for 
electric  heavy-duty  vehicles,  but  not  in  all 
regions.  The  Region  of  Flanders  exempts  zero-
emission  trucks  from  the  infrastructure  charge, 
although  the  future  of  this  measure  remains 
uncertain as the exemption has not been extended 
until 30 June 2031, as allowed under EU law. The 
Region  of  Wallonia  does  not  yet  promote  the 
uptake of zero-emission trucks with toll incentives 
and  does  not  exonerate 
the 
infrastructure charge component of the toll nor by 
levying  an  external-cost  charge  on  conventional 
vehicles to internalise the cost of carbon.  

them 

from 

In  2025,  the  federal  and  regional  ministers 
of  mobility  stepped  up  cooperation  on 
focuses  on 
mobility  planning.  Cooperation 
improving 
transport 
intermodality  and  public 
integration  e.g.  coordinating  the  NMBS  rail  plan 
regional  operators  De  Lijn,  TEC  and 
with 
STIB/MIVB.  Regarding  the  TEC, 
in  2025  the 
Walloon  government’s  policies  combined  modest 
cost-efficiency 
additional 
demands  and 
increases.  This  caused 
environmental  groups  to  raise  concerns  that  the 
reform may reduce access for lower-income users 
and risks prioritising financial sustainability over a 
genuine modal shift.  

investment  with 

fare 

In  Wallonia,  the  FAST  2030  mobility  vision 
guides a long-term shift in mobility, including 
the  modal  shift  to  public  transport,  cycling  and 
walking. However, in 2024, EVs accounted for only 
1.6%  of  Wallonia's  car  fleet,  far  from  the  2030 
target of 25%. Almost all goods are transported by 
road (93.7% of t/km in 2024 vs 75% expected in 
2030).  The  Walloon  government  adapted  a  series 
of mobility regulations to accelerate this transition 
and  modernise  public transport  services, including 
support  for  zero-emissions  freight  transport.  The 
measures  adopted  will  produce  progress  in  the 
take-up  of  EVs  but  are  likely  to  fall  well  short  of 
the 2030 target of 25%. The modal shift in freight 
is  likely  to  remain  marginal  unless  there  is  more 
aggressive 
rail  capacity  and 
waterway  logistics,  together  with  higher  pricing 
signals from the Viapass system. 

investment 

in 

 
 
Brussels  is  making  progress  on  the  modal 
low-emission 
shift  to  soft  mobility  and 
transport but the aim in the regional mobility 
plan  to  reduce  greenhouse  gas  emissions 
from transport by 75% by 2030 remains out 
of  reach.  In  2025,  Brussels  received  EUR 475 
million in financing from the European Investment 
Bank  for  electric  buses,  new  metro/tram  sets  and 
track  upgrades  to  improve  service  quality  and 
capacity.  However,  the  decision  taken  by  the  new 
Brussels government to shelve the plans for Metro 
3 are a setback in ambition. In the third quarter of 
2024, 8% of cars driving in the Region were 100% 
electric.  Since  2018,  the  number  of  car  trips  has 
fallen  by  11%,  while  the  car  trips  to  and  from 
Brussels  has  fallen  by  3%.  Public  transport  use 
has also fallen by 13% since pre-pandemic levels 
in 2018, with the increase in teleworking and soft 
mobility  possibly  providing  some  explanation.  Car 
ownership  has  fallen  from  48.3%  of  households 
owning at least one car in 2017 to 43.6% in 2024. 

increases 

There  have been  significant  budget  cuts  and 
in  Belgian  public 
ticket  price 
transport  in  2025-2026.  For  example,  there 
was  a  budget  cut  of  EUR 50  million  in  2025  and 
EUR 100  million  in  2026  alongside  rail  and  ticket 
price rises of almost 3% and similar price rises in 
2025 at STIB in Brussels (5%) and TEC in Wallonia 
(3.74%). The combination of reduced budgets and 
price  increases  comes  at  a  time  when  Belgium 
needs to encourage a modal shift away from cars 
to  meet  its  climate  goals,  creating  a  policy 
contradiction.  While  price  increases  make  public 
transport  less  attractive,  potentially  slowing  or 
reversing the modal shift, the challenge will be for 
public  transport  providers  to  find  efficiencies 
without 
or 
cleanliness. Pending the formal  submission of the 
Belgian  Social  Climate  Plan  and  positive 
assessment by the Commission, the Social Climate 
Fund  will  support  Belgium's  ongoing  initiative  to 
tackle  transport  and  energy  poverty  among  the 
most  vulnerable  households  and  transport  users 
(see Annex 12). 

frequency 

reliability, 

affecting 

Sustainable industry 

Circular economy industry 

Belgium  is  one  of  the  EU’s  best  performers 
on the circular economy in terms of resource 

71 

productivity, use of secondary materials and 
waste  management.  Belgium  is  one  of  the 
countries  not  considered  at  risk  of  missing  the 
municipal  and  packaging  waste  targets.  However, 
the market for recycled products is still limited and 
needs  to  grow  in  order  to  open  up  economic 
opportunities  for  products  that  are  collected 
separately and recycled. Further progress could be 
made  by  bringing  in  new  economic  measures  to 
prevent  waste  by  avoiding  the  incineration  of 
reusable  or  recyclable  waste –  especially  in  the 
Brussels  Region –  and  by  making  the  reuse  and 
recycling of waste more economically attractive. 

Belgium’s  federal  circular  economy  action 
plan  for  2021-2024 (197)  aims  to  stimulate 
in  Belgium  related  to  the 
opportunities 
circular  economy  in  terms  of  innovation,  job 
creation  and  competitiveness.  The  plan  also 
aims  to  combat  climate  change,  biodiversity  loss 
and  environmental  degradation.  Regional  plans 
(for  the  Brussels-Capital  Region,  Wallonia  and 
Flanders)  are  the  driving  force  behind  the  policy 
changes needed  for Belgium’s transition. The rate 
of  circular  use  of  materials  was  22.7%  in  2024 
(above  the  EU  average  of  12.2%),  the  third  best 
performer  in  the  EU.  With  EUR 4.4  generated  per 
kg  of  material  consumed  in  2024  (an  8.5% 
increase  in  one  year),  resource  productivity  in 
Belgium is well above the EU average of EUR 3 per 
kg  and  one  of  the  highest  in  the  EU  having 
increased  by  39%  since  2019.  Raw  material 
consumption, at 8.6 tonnes per capita in 2024, has 
fallen by 34% over the past five years, the second 
lowest  material  footprint  in  the  EU  (13.7  tonnes 
per  capita).  However,  a  report  on  the  circular 
economy  in  Belgium  published  by  the  European 
Environment Agency (EEA)(198) shows that in 2023, 
import  material  dependency 
in  Belgium  was 
75.6%, well above the EU average (22%). This has 
increased  continually  since  2011,  underlining  the 
need  for  continued  action  to  implement  circular 
solutions.  Belgium's  three  regions  have  all  taken 
launch  circular  economy  plans  and 
steps  to 
targets,  aligned  with  regional  smart  specialisation 
(innovation) strategies. 

(197) Plan  d’action  fédéral  pour  une  économie  circulaire  (2021-

2024). 

(198) ETC-CE 

Report  2024,  Belgium_2024 

Country 
profile_Final.pdf  –  Eionet  Portal  and  European  Innovation 
Scoreboard 2025, Belgium, page 7. 

CE 

 
 
Waste generation in Belgium has been on an 
upward  trend  since  2012.  In  2024,  at  699 kg 
per capita, it was the highest in the EU, well above 
the  EU  average  of  517 kg  per  capita.  However, 
Belgium  is  one  of  the  EU's  top  performers  on 
recycling  rates,  with  56.2%  of  municipal  waste 
recycled 
(EU  average:  48.1%)  and  99%  of 
construction  and  demolition  waste  recovered (199) 
(EU  average:  89%).  Belgium  is  the  EU's  top 
performer  in  the  recycling  of  plastic  packaging 
(59.5%  in  2023;  EU  average:  42%).  Belgium  also 
stands out as a good performer on patents related 
to recycling and secondary raw materials. In 2019, 
it filed 20.3 patents (1.77 per million inhabitants); 
this dropped to 11.96 in 2021 (or 1.03 per million 
inhabitants),  but  still  far  above  the  EU  average 
(0.73  per  million  inhabitants).  In  2024,  eco-
innovation related patents accounted for 74.4% of 
EU patents, down by 7.1% points since 2014.  

is 

improving  on  most 
While  Belgium 
indicators  of  sustainability,  action  is  still 
warranted  on  biodiversity,  water,  affordable 
and  clean  energy  and  sustainable  cities  and 
communities  where  more  investment  in  eco-
innovation  could  help  provide  solutions (200). 
Over  the  past  10  years,  the  circular  economy 
sector  has  consistently  accounted  for  only  1.2% 
(around  61 000  full-time  positions)  of  total 
employment  in  2023  (vs  1.3%  in  2014),  trailing 
the  EU  average  of  2% (201).  Although  per  capita 
material consumption has fallen by 40% over the 
past  10  years  and  resource  productivity  has 
increased  by  39% (202),  waste  generation  is  still 
high (203). The use of secondary materials has also 
grown  only  marginally,  from  18%  to  22.7%,  over 
the  past  10  years,  underscoring  a  persistent 
reliance on primary resources. 

(199) Joint  Research  Centre 

(2024)  Techno-economic  and 

environmental assessment of CDW management. 

(200) European Innovation Scoreboard 2025, Belgium, pp. 7-8. 

(201) Eurostat,  Persons  employed  in  circular  economy  sectors. 
https://ec.europa.eu/eurostat/databrowser/view/cei_cie011/d
efault/table?lang=en,  update  21.03.2025,  access  on 
16.01.2026. 

(202) Belgium  ranks  third  in  terms  of municipal  waste  generation 
per  capita  (Eurostat).  and  second  in  terms  of  construction 
and  demolition  waste  per  capita  (Joint  Research  Centre 
(2024)  Report  on  sustainable  management  of  construction 
and demolition waste). 

(203) Of  this,  municipal  waste  incineration  remains  unchanged  at 
3.5 million  annually,  reflecting  a  reliance  on  consumption-
driven materials. 

Extended  producer  responsibility  schemes 
are well developed in Belgium. There are three 
schemes in place for critical raw materials (waste 
electrical  and  electronic  equipment 
(WEEE), 
batteries  and  end-of-life  vehicles),  for  packaging 
and  for  used  mattresses (204).  In  terms  of  WEEE 
separate collection, Belgium is above the EU 2019 
target of 65% with 82.8% in 2023, up from 73.2% 
in  2022.  Circular  Wallonia (205)  aims  to  reduce 
electrical  and  electronic  equipment  waste  by  2 kg 
per  person  by  2025,  i.e.  from  22.5 kg  to  20.5 kg 
per  person,  thanks  to  repair  services  and  the 
economy  of  functionality.  Circular  Flanders  is 
developing 
circular 
manufacturing  (for  example  covering  electronic 
waste, textiles and batteries) (206). 

strategic 

agendas 

on 

Belgium shows mixed performance on waste, 
with  very  high  waste  generation  levels  but 
strong  results  in  recycling  and  recovery, 
ranking  among  the  EU’s  top  performers  in 
waste  management  and  circular  economy 
innovation. The landfill rate fell from 2% in 2010 
to  0.1%  in  2024.  The  incineration  rate  has 
gradually increased from 42.8% in 2017 to 43.7% 
in 2024, which is the third highest in EU. Belgium 
will  need to take further action to meet the more 
ambitious  recycling  targets  for  2035 (207), 
in 
particular  the  related  target  to  reduce  the 
incineration  of  municipal  waste.  All  three  Belgian 
regions  already  have  a  system 
taxes 
incinerated  waste,  and  they  all  encourage  heat 
recovery  from  waste  incineration.  The  2025  EIR 
listed  four  priority  actions  to  shift  reusable  and 
recyclable waste away from incineration, including 
through  economic  measures.  In  all  three  regions, 
an  incineration  tax  has  been  levied  for  several 
years on all waste entering incineration plants and 
on  waste  exported  for  incineration  outside  the 
region.  The  Brussels-Capital  Region  (BCR)  decided 
to  increase  the  incineration  tax  to  EUR 15/t  from 
2022. Both Flanders and Wallonia also have plans 
to increase their incineration tax  but are currently 

that 

(204) Valumat  is  the  management  organisation  for  extended 
producer  responsibility  for  used  mattresses.  Created  and 
financed  by  the  sector,  its  mission  is  to  collect  all  used 
mattresses  efficiently  (and  profitably)  and  process  them 
sustainably. 

(205) Stratégie Circular Wallonia.pdf (wallonie.be) (in French). 

(206) https://www.eionet.europa.eu/etcs/etc-ce/belgium_2024-ce-

country-profile_final.pdf. 

(207) Directive  (EU)  2018/851,  Directive  (EU)  2018/852,  Directive 

(EU) 2018/850 and Directive (EU) 2018/849. 

72 

 
 
 
studying  the  most  effective  way  to  do  this  in 
combination  with  other  policy  measures  to  help 
shift waste from incineration to separate collection 
(and recycling). 

There  are  still  wide  regional  differences  in 
waste  management  performance.  The  rate  of 
separate  waste  collection  differs  between  the 
regions (from 40% in the Brussels Region in 2021 
to 70% in Flanders and 75% in Wallonia in 2022). 
Flanders has developed good practice examples on 
single-use material for events catering, prohibiting 
the insertion of reusable material into the residual 
waste  bins to have little loss (208).  Support for the 
prevention,  reuse  and  recycling  of  waste 
is 
included  in  the  Walloon  Recovery  Plan  (Circular 
Wallonia), e.g. to promote reuse and repair, and to 
extend  sorting  and  selective  collection  to  new 
waste fractions (209). The total volume of products 
reused  by  households  –  not  recycling  them  but 
reusing them in  their entirety through  formal  and 
informal  channels  –  increased  to  35.5 kg  per 
inhabitant 
In  2023,  biowaste 
collection  became  mandatory  in  the  Brussels 
Region  with  the  aim  of  improving  the  recycling 
rate.  Since  2024,  biowaste  collection  is  required 
for all households and companies in Flanders and 
Wallonia, unless composted at source. 

in  2022 (210). 

for 

opportunities 

The  market  for  recycled  products  remains 
limited  and  would  need  to  grow  to  unlock 
separately 
business 
collected  and  recycled  products.  In  addition, 
recycled  products  and 
recycled 
materials  must  compete  with  non-recycled  and 
primary  raw  materials.  A  recent  trend  has  been 
that  more  complex  products  are  being  placed  on 
the  market,  making  it  more  challenging  to  repair, 
dismantle  or recycle them. There is also a lack of 
transparency  about  the  contents  of  products, 
which also makes recycling more difficult. 

secondary 

Bioeconomy industry 

In  Belgium,  the bioeconomy  value  added  has 
grown  faster  than  domestic  GDP  in  recent 
years,  driven  notably  by  the  food  and  beverages 

(208) https://ovam.vlaanderen.be/praktijkvoorbeelden-wetgeving-

cateringmateriaal (in Dutch). 

(209) Belgium_2024  CE  Country  profile_Final.pdf  –  Eionet  Portal, 

page 33. 

(210) Circular  Economy  Monitor:  Total  Reuse  Indicator  (kg/inhab) 

sector,  which  are  increasingly  generating  value 
from  agricultural  side  streams  to  produce  high-
value  ingredients  (and  generating  on  average 
6.9% in value added between 2018 and 2023 (211). 
The  bio-based  textiles  sectors  are  also  growing, 
where Belgium leverages its historical expertise to 
develop  sustainable  bio-fibers.  The  wood  and 
furniture  sector  in  Belgium  focuses  on  long-term 
carbon  storage  through  engineered  wood  and 
biocomposites (212) (213).  This  integrated  approach 
is  supported  by  the  Bio  Base  Europe  Pilot  Plant 
and 
Joint 
the  Circular  Bio-based  Europe 
Undertaking  (CBE  JU),  facilitating  the  scale-up  of 
these sustainable materials. Labour productivity in 
the  bioeconomy  –  measured  as  value  added  per 
person  employed  –  was  128%  of  the  national 
average, up from 116.8% in 2018 (214). 

Zero-pollution industry 

Air quality in Belgium is generally good, with 
some  exceptions.  The  latest  annual  estimates 
for 2023 attribute 2 940 deaths (or 30 396 years 
of  life  lost  (YLL))  to  fine  particulate  matter 
(PM2.5),  614  deaths  (or  6 355  YLL)  for  NO2,  and 
1 173  deaths  (or  12 166  YLL)  to  ozone.  All 
indicators  show  a  reduction  since  2022  for  each 
parameter (215).  In  2023,  two  air  quality  zones  in 
Belgium registered exceedances of NO2  above the 
limits  set  by  the  Ambient  Air  Quality  Directive 
(AAQD) (216) (217).  The  target  value  for  arsenic 
concentration  was  not  met  in  one  air  quality 
zone (218).  The  European  Commission  is  following 
up persistent breaches of air quality requirements, 
which have severe negative effects on health and 
the environment, through infringement procedures 
covering  all  Member  States  in  breach  of  the 

(211) Joint  Research  Centre,  Developments  of  Economic  Growth 
and Employment in Bioeconomy Sectors across the EU. 

(212) Bioeconomy  subsectors:  food  and  beverages;  bio-based 
textiles;  wood  products  and  furniture;  bio-based  chemicals 
and plastics. 

(213) Belgium:  Flanders  Materials  Programme  |  Ellen  MacArthur 

Foundation. 

(214) Joint  Research  Centre,  Developments  of  Economic  Growth 
and Employment in Bioeconomy Sectors across the EU. 

(215) EEA  (2025)  Harm  to  human  health  from  air  pollution  in 

Europe: burden of disease status. 

(216) Directive 2008/50/EU of the European Parliament and of the 
Council of 21 May 2008 on ambient air quality and cleaner 
air for Europe (OJ L 152, 11.6.2008, p. 1). 

(217) Antwerp and Ghent. 

and breakdowns; ideal for the per-capita pathway. 

(218) EEA, Eionet Central Data Repository. 

73 

 
 
 
requirements,  including  Belgium  for  excess  NO2 
values  (INFR(2016)2005).  The  aim  is  to  ensure 
that  appropriate  measures  are  put  in  place  to 
bring all air quality zones into compliance with the 
target values. In terms of the impact of improved 
air quality, labour productivity is estimated to have 
increased  by  2.32%  between  2000-2022  due  to 
the 4.26% reduction in PM2.5 (219). 

In 2022, Belgium recorded damages from air 
pollution  estimated  at  EUR 13.5 million  per 
year (220).  This  underscores  the  potential  benefit 
of  further  action,  particularly  in  industrial  regions 
and  urban  transport  corridors.  To  improve  air 
pollution,  a  combination  of  sustainable  transport, 
energy and agricultural policies can be adopted to 
reduce emissions of air pollutants, pursue targeted 
urban  and  land-use  planning  policies  and  take 
specific  fiscal  measures  (for  example  to  remove 
environmentally  harmful  subsidies  and  increase 
targeted environmental taxation). 

Water pollution from industry also remains a 
critical  challenge.  In  2022,  Belgium  had  a  high 
into  water  with 
level  of  pollutant  releases 
0.95 kg/EUR 1  billion  GVA,  weighed  by  human 
toxicity  factors  (EU  average:  0.86 
in  2022). 
Nevertheless,  between  2010  and  2023,  it  has 
achieved  a  62%  reduction  in  industrial  heavy 
metal releases (Cd, Hg, Ni, Pb), a 16% reduction in 
total  organic  carbon  emissions,  and  a  11% 
reduction  in  total  phosphorus,  as  reported  under 
(IED) (221). 
the 
However, 100% of Belgium’s surface water bodies 
still  fail  to  achieve  good  chemical  status due  to 
persistent, 
the 
bioaccumulative and toxic substances (uPBTs) (222) 
that  result  from  industrial  activities.  Belgium  has 
the  9th  highest  volume  of  emissions  of  heavy 
metals  to  water  and  ranks  11th  on  emission 
intensity  (above  the  EU  average  intensity  of 
0.864 kg/EUR  1  billion  GVA).  Belgium  is  the  most 

Industrial  Emissions  Directive 

ubiquitous, 

presence 

of 

(219) Dechezleprêtre  A.  &  Vienne  V  (2025)  The  impact  of  air 
pollution  on  labour  productivity:  Large-scale  micro  evidence 
from Europe, p.36, Table 13, OECD Science, Technology and 
Industry Working Papers 2025/14. 

studied  EU  Member  State  in  terms  of  PFAS 
pollution (223). Studies find that: Belgian companies 
use  8 330  tonnes/y  of  PFAS  and  that  depollution 
costs  are  EUR 2.5-40  million  (over  a  20-year 
period).  According  to  the  Public  Service  Scientific 
(ISSeP),  94%  of  the  population  of 
Institute 
Wallonia  have  a  high  level  of  PFAS  in  their 
blood (224). As at 1 March 2024, there were 22 934 
known  contamination  sites  across  32  European 
countries,  including  11 969  with  contamination 
levels above 100 ng/L (225). Almost half of all sites 
were  located  in  Belgium  and  the  Netherlands 
(6 791  and  4 989,  respectively).  Contamination 
levels  near  the  3M  facility  in  Zwijndrecht  are  the 
highest ever measured globally. Water pollution by 
Belgian  industry  imposes  direct  and indirect  costs 
of EUR 30 million a year, not yet sufficiently borne 
by polluters (226).  

in  2021.  This 

The  total  economic  cost  of 
industrial 
pollution  in  Belgium  was  just  over  EUR  13 
billion 
includes  healthcare 
expenses, 
lost  productivity  and  environmental 
degradation (227) (228).  Despite  these  findings,  the 
current level of investment still falls short. Meeting 
national  and  EU  targets  for  pollution  prevention 
and  control  would  require  spending  an  additional 
EUR 1.5  billion  every  year  (about  0.28%  of  GDP), 
largely  on  improving  air  quality,  particularly  in 
industrial 
transport 
and 
corridors (229). 

regions 

urban 

(223) pfas-belgian-industry-market-study-final-public-report.pdf. 

(224) Wallonia  residents  exposed  to  over  50  pollutants,  study 

shows (Financilal Times, 19 February 2025). 

(225) Peer-reviewed  scientific  article PFAS  Contamination 

in 
Europe:  Generating  Knowledge  and  Mapping  Known  and 
Likely  Contamination  with  “Expert-Reviewed”  Journalism  |. 
Environmental Science & Technology ((Figure 1 and Table 1). 

(226) European Commission (2021) IEEP, Green taxation and other 
economic instruments – Internalising environmental costs to 
make the polluter pay (p. 35, Table 5). 

(220) EEA  (2024)  The  cost  of  health  and  the  environment  from 
industrial  air  pollution  in  Europe  -  2024  update.  The  costs 
reported are computed as value of statistical life (VSL). 

(227) European  Commission  and  RPA  Europe  (2025)  In-depth 
assessments  on  environmental  priorities  to  support  the 
greening of the European Semester. 

(221) EEA (2024) Water pollutant releases changes from 2010 to 

2022 for the EU Member States, 2024. 

(222) European Commission (2025) Third River Basin Management 
Plans, Second Flood Hazard and Risk Maps and Second Flood 
Risk Management Plans, Member State: Belgium. 

(228) EEA  (2024)  The  cost  of  health  and  the  environment  from 
industrial  air  pollution  in  Europe  -  2024  update.  The  costs 
reported are calculated as value of a statistical life (VSL). 

(229) European Commission (2025) Environmental Implementation 

Review (2025), Belgium country report. 

74 

 
 
 
Table A8.1:  Key clean industry and climate mitigation indicators: Belgium 

Sources and notes: Industry decarbonisation: All data are from Eurostat; data following the UNFCCC Common Reporting 
Format (CRF) are from the European Environment Agency (EEA), republished by Eurostat. (1) Sectors covered: all divisions of 
section C - Manufacturing - of the NACE Rev. 2 statistical classification of economic activities, except C19 (manufacture of coke 
and refined petroleum products). (2) GHG emissions as per UNFCCC Common Reporting Framework (CRF) categories 1.A.2 - fuel 
combustion in manufacturing in industries and construction (that broadly correspond to the broadly correspond to the NACE 
sections C - Manufacturing and E - Construction, excluding C-19),  and CRF2 - industrial processes and product use. The figures 
shows the emissions in the 1.A.2 category as a share of the sum of CRF1.A.2. and CRF2 emissions. (3) Sectors covered: CRF 1.A.2 
as described above. Gross value added (GVA) data in the denominator aligned in sectoral coverage, in 2020 prices. (4) Sectors 
covered: NACE section C excluding C19. (5) Nominator: NACE divisions C17, 20, 23, 24; denominator: NACE section C excluding 
C19 (see above). (6) GVA (denominator) in 2020 prices. Reduction of effort sharing emissions: Data source: European 
Environment Agency, greenhouse gas data viewer; European Commission, Climate Action Progress Report, 2025. For details, see 
the footnote in the "Reduction of effort sharing emissions" section. Sustainable road transport: (7) Source: Eurostat; (8) Source: 
European Alternative Fuels Observatory; (9) Source: Eurostat. For all climate mitigation indicators, the trend arrows compare the 
latest available data (year t) with the data four years earlier (t-4). Sustainable industry: Bioeconomy value added, employment 
and productivity: JRC, Developments of Economic Growth and Employment in Bioeconomy Sectors across the EU. Bioeconomy 
R&D business expenditure: JRC, Business expenditure in Research and Development (R&D) in the EU bioeconomy. Damage cost for 
industrial pollution: EEA, The costs to health and the environment from industrial air pollution in Europe, 2024. Water industrial 
pollutants releases: EEA, Industrial releases of pollutants to water and economic activity in the EU-27, 2024. Water chemical 
status: WISE, Surface water bodies: Chemical status, 2024 and WISE Groundwater bodies: chemical status, 2024. Other indicators: 
Eurostat. For circular economy indicators, the trend arrows compare the latest available data (year t) with the data two years 
earlier (t-2). 

75 

Climate mitigationTrendIndustry decarbonisation201820192020202120222023202420182023GHG emissions intensity of manufacturing production, g/€ (1)563522507557456436462330-Share of energy-related emissions in industrial GHG emissions (2)40.141.242.043.643.144.4-55.557.9Energy-related GHG emissions intensity of manufacturing and construction, g/€ (3)251.3240.9241.9270.7217.8213.4-203.9163.0Share of electricity and renewables in final energy consumption in manufacturing, % (4)38.037.035.735.737.937.637.542.843.9Energy intensity of manufacturing, GWh/€ (4)2.092.012.142.351.821.761.871.271.05Share of energy-intensive industries in manufacturing production, % in GVA (5)29.7427.0425.8126.9228.6824.77---GHG emissions intensity of production in sector [...], g/€ (6)- paper and paper products (NACE C17) 384          397          414                 433            458                  471           -722             619            - chemicals and chemical products (NACE C20) 1 413       1 366       1 345              1 644         1 436               1 324        1 275          --- other non-metallic mineral products (NACE C23) 2 704       2 768       2 759              2 607         2 529               2 516        -2 495          2 352         - basic metals (NACE C24) 2 377       2 226       2 216              2 604         1 967               2 399        -2 842          3 099         Reduction of effort sharing emissions201820192020202120222023202420182023GHG emission reductions relative to base year, % -16.3-22.5-23.0-22.7- domestic road transport-1.6-2.5-18.5-10.1-9.1-7.7-8.3-1.4-5.6- buildings-17.8-19.8-21.9-18.8-32.8-33.9-32.7-20.3-33.520052021202220232024TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %81.668.363.262.963.1-47.0%-21.7%-42.6%Sustainable road transport2018201920202021202220232024202520182021New zero-emission vehicles, electricity motor, % (7)0.671.593.435.8010.0819.2928.031.038.96Number of publicly accessible AC/DC charging points (8)--80031225923830443627681998707446956n/aShare of electrified railways, % of total (9)85.8285.7885.7486.5688.0188.0487.9955.4756.49Sustainable industryTrendEU-27Circular economy transition20182019202020212022202320242018latest dataMaterial footprint, tonnes per person14.912.813.013.511.710.08.514.813.7Circular material use rate, %20.6          20.5         22.9                21.3           17.8                  21.8           22.711.612.2Resource productivity, €/kg3.2            3.2           3.4                  3.8             3.7                    4.1             4.52.13.0Employees in circular economy1.3            1.31.3                  1.4             1.2                    1.2             -2.12.0Patents in circular economy16.5920.3         11.8                12.0           12.312.0Recycling rate           54.4           54.7                  51.4             55.5                   54.7            55.8 56.2            46.4048.1Plastic recyling 42%47%45%49%54%60%-41%42%Construction and demolition waste (CDW) recovery 97-998889Bioeconomy industry 2018201920202021202220232024CAGR 2018-202320182023Value added, million EUR21 35223 78924 05824 85927 10531 103-6.5%642 438863 436Employment, total number of people employed214 003221 470220 072218 900224 407229 495-1.2%17 649 04017 085 642ProductivityValued added per worker, thousand EUR99.8107.4109.3113.6120.8135.5-5.2%36.450.5Valued added per worker, % of national average116.8122.2127.5124.4120.1128.0-1.5%62.270.7R&D business expenditureTotal bioeconomy (biomass producing and converting sectors)2 0542 0662 3022 6122 7803 0236.7%15 67223 335Total R&D business expenditure9 43311 14311 53812 87313 04714 085-6.9%196 587259 525Zero pollution industry201820192020202120222023202420182021Damage cost for industrial pollution14.814.113.213.5---414.9352.7Water industrial pollutants releases 2021change (2010)2021change (2010)2021change (2010)2021change (2010)3 754       -60%3 760 900       -18%2 069 094        -18%595 610      1% Water chemical statusGood-                  Good (%)-                   Poor560.0Poor (%)100%EUTOCPhosporusBelgiumBelgiumCd, Hg, Ni, Pbnitrogen 
 
  
 
ANNEX 9: AFFORDABLE ENERGY TRANSITION 

It 

reflects 

to  net  zero. 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  increasing 
energy  affordability,  while  advancing  the 
transition 
the 
implementation  of  past  energy-related  country-
specific  recommendations  (CSRs).  Belgium’s  2025 
CSRs  highlighted  challenges  in  shifting  the  tax 
burden  away  from  electricity  to  fossil  fuels, 
flexibility,  and 
improving  grid  capacity  and 
accelerating  the  deployment  of  renewable  energy 
and  energy  efficiency  (see  Annex  8).  Overall, 
Belgium  has  made  progress  in  aligning  its  fiscal 
framework with decarbonisation goals through an 
excise  duty  reform  and,  for  the  first  time,  is  now 
generating  as  much  renewable  energy  as  nuclear 
energy.  However,  regional  disparities  in  smart 
meter  deployment  and  budgetary  constraints  for 
renovation  schemes  persist,  while  the  national 
renewable  target  remains  below  the  national 
contribution calculated by the EU. 

Energy prices and costs 

The  Belgian  electricity  market  in  2025  was 
characterised  by  two  opposing  forces:  while 
a  high  share  of  clean  energy  generation 
successfully  brought  average  wholesale 
prices below the EU benchmark, retail prices 
were  still  high  and  structurally  imbalanced. 
To address the 2025 CSR on shifting excise duties 
from electricity  to fossil  fuels, Belgium initiated a 
fiscal  reform  in  March  2026  aimed  at  aligning 
country’s 
signals  with 
retail 
decarbonisation goals (230). 

price 

the 

The share of low-carbon energy in Belgium’s 
energy  mix  continues  to  keep  its  wholesale 
electricity  prices  (EUR  84/MWh)  competitive 
compared  to  the  EU  average  (EUR  85/MWh). 
In 2025, the share of renewable energy increased 
to  34.7%  of  the  electricity  mix,  effectively 
matching  the  contribution  of  nuclear  energy. 
Together,  these  sources  provided  over  68%  of 
Belgium’s  power,  ensuring  a  stable  and  relatively 
clean  energy  supple.  However,  Belgium’s  average 

(230) The  fiscal  reform  was  intended  to  begin  on  1  April  2026. 
However, in late March 2026, the federal government faced 
significant  pressure  as  global  oil and  gas  prices  surged  due 
to  the  conflict  in  the  Middle  East.  Therefore,  the  planned 
increase in excise duties on natural gas and heating oil was 
officially postponed until 1 August 2026. 

76 

day-ahead  electricity  price  was  nearly  EUR 
103/MWh in  2025,  while  fossil  fuels  continued  to 
account  for  over  26.8%  of  electricity  generation, 
retaining  their  role  as  marginal  price-setting 
technologies  (55%  of  price  setting  hours  for 
26.8% electricity generation). 

Graph A9.1: Electricity and gas prices for 
household and non-household consumers, first 
half of 2025 

(i) For household consumers, the consumption band is DC for 
electricity and D2 for gas. 
(ii) For non-household consumers, the consumption band is ID 
for electricity and I4 for gas. VAT and recoverable charges are 
not displayed for non-household consumers as these are 
typically recovered by businesses. This also applies to the ‘% 
of taxes and levies’, which is shown excluding VAT and 
recoverable charges for non-household consumers. 
(iii) ‘Without taxes and levies’ indicates the retail price 
excluding all taxes and levies. It always includes the 
energy/supply and network cost components, which are not 
disaggregated in Eurostat’s six-monthly price dataset. 
Source: Eurostat 

The expansion of solar power generation has 
intraday 
the  variability  of 
increased 
electricity  prices,  with  lower  prices  during 
periods of high solar output and higher prices 
during evening and early morning hours when 
solar  generation  declines.  Limited  non-fossil 
flexibility in the system requires thermal plants to 
ramp  up  generation  during  these  periods  to 
balance supply and demand. As a result, electricity 
price  spreads  in  Belgium  averaged  EUR  107/MWh 
in  2025,  a  15% increase compared to  2024.  This 
trend  highlights 
importance  of 
the  growing 
including  energy  storage, 
flexibility  solutions, 
demand-side  response  and  grid  reinforcement,  to 
facilitate  the  integration  of  increasing  shares  of 
renewable electricity. 

However,  final  energy  prices  for  both 
household 
consumers 
increased  slightly  during  the  first  half  of 

industrial 

and 

 
 
 
 
 
 
2025.  Household  gas  prices  in  Belgium  were 
below  the  EU  average  at  EUR  0.0919/kWh,  while 
electricity  prices  far  exceeded  the  EU  average  at 
EUR  0.3571/kWh,  due  to  network  charges,  taxes 
and  levies.  Retail  energy  prices  for  industrial 
consumers (EUR 166/MWh) also increased slightly, 
remaining close to the EU average (EUR 164/MWh) 
for  electricity  and  below  the  EU  average  for  gas. 
While  62%  of  the  electricity  price  for  industry  is 
accounted  for  by  the  wholesale  cost,  the  network 
cost,  carbon cost and taxes represent respectively 
13%,  9%  and  17%  of  electricity  bills.  Pending 
formal  submission  of  Belgium’s  Social  Climate 
Plan  and  its  validation  by  the  Commission,  the 
Social Climate Fund will support ongoing efforts in 
Belgium  to  address  energy  and  transport  poverty 
for the most vulnerable households and transport 
users (see Annex 12). 

industry 

to  decarbonise. 

The  2025  CSRs  called  on  Belgium  to 
In 
incentivise 
December 2025, the federal government approved 
in first reading a draft law introducing an ‘energy 
norm’  which  comprises  two  aspects:  1)  alignment 
with  the  CISAF  (Clean  Industrial  Deal  State  Aid 
Framework)  for  industries  facing  serious  global 
competitiveness  issues  due  to  high  electricity 
prices,  and/or  2) 
transmission 
charges,  in  line  with  EU  regulations  and  while 
respecting  the  independence  of  the  regulatory 
authority. The regional government plans to reduce 
electricity costs for energy-intensive companies, as 
authorised  by 
these 
companies  will  have  to  dedicate  at  least  50%  of 
the  aid  they  receive  to  decarbonisation.  The 
‘energy  norm’  measure  will  also  serve  as  an 
incentive to electrify industrial processes. 

reduction  of 

the  CISAF. 

return, 

In 

The  electricity-to-gas  price  ratio  remains  a 
major  barrier  to  delivering  cost-effective 
electrification of the economy. During the first 
half  of  2025,  electricity  for  large  non-household 
consumers  was  3.9  times  more  expensive  than 
gas. Taxes and levies (excluding VAT) accounted on 
average  for  17%  of  electricity  bills,  compared  to 
only  2%  for  gas.  In  this  regard,  network  tariffs 
constitute  a  separate  component  of  final  energy 
prices.  Excluding  taxes  and  levies,  the  electricity-
to-gas  price  ratio  would  have  fallen  to  3.3,  which 
would,  however,  still  be  too  high  to  incentivise 
electrification.  A  similar,  though  less  pronounced, 
effect can be seen for households, where the ratio 
would  have  decreased  from  3.9  to  3.6  if  taxes 
were excluded.  

To  address  the  2025  CSR  on  shifting  excise 
duties  from  electricity  to  fossil  fuels, 
Belgium is reforming excise duties on energy 
products. The federal  government has started  to 
progressively shift excise duties from electricity to 
fossil  fuels,  including  natural  gas  and  heating  oil. 
While this measure is intended to make electricity 
more  competitive  and  provide  an  economic 
incentive for adopting heat pumps and other clean 
technologies, excise duties on fossil fuels are due 
to 
in  Belgium  compared  with 
neighbouring  countries.  The  full  impact  of  the 
reform on the electricity-to-gas price ratio will only 
be  measurable  in the data  cycle  for the  first  half 
of 2026. 

remain 

low 

Graph A9.2: Low-carbon electricity generation vs. 
electricity wholesale prices, 2025 

Unavailable data for Cyprus and Malta. Wholesale price is 
given as average of day-ahead electricity prices over 2025. 
EU-27 average is calculated as consumption-weighted. EU 
low-carbon share is calculated out of total EU electricity 
generation. Low-carbon share by country is calculated out of 
total public electricity generation. Low-carbon includes 
renewables and nuclear. 
Source: Eurostat 

Flexibility and electricity grids 

supports 

Belgium  is  upgrading  its  grid  infrastructure 
to  accommodate  more  renewables  and 
comply  with  European  cross-zonal  capacity 
requirements.  This  progress 
the 
implementation  of  the  2025  CSR  on  upgrading 
grid infrastructure. Belgium’s interconnection level 
(12.77%) is unlikely to meet the 15% 2030 target. 
Key  projects  include  the  Princess  Elisabeth  Island 
(3.5  GW  offshore  integration),  with  foundation 
caissons due by June 2026. However, rising costs 
have  forced  design  modifications  to  the  Nautilus 
(UK)  and  TritonLink (DK)  interconnectors.  Onshore, 
the  Ventilus  and  Hainaut  380  kV  reinforcements 

77 

 
 
face 
local  opposition  and  permitting  hurdles, 
risking  green  energy  curtailment  if  not  completed 
by  2030.  To  support  these  projects,  Belgium  has 
implemented  the  permitting  provisions.  However, 
further  streamlining  of  administrative  procedures 
between Flanders and Wallonia grid reinforcement. 

is  making  progress 

Regional  disparities  in  the  deployment  of 
smart  meters  are  affecting  the  availability 
of  dynamic  retail  contracts  and  demand 
response.  Belgium 
in 
empowering  consumers  through  dynamic  pricing 
and energy sharing. However, while Flanders leads 
in  smart  meter  deployment 
(46%  national 
average)  and  photovoltaic  obligations,  Brussels 
excels in energy sharing and is providing additional 
efforts  to  speed  up  smart  meter  deployment  as 
well. In addition, the Decree of 19 December 2025 
strengthens 
install 
communicating  meters.  Administrative  and  fee-
based  barriers  in  Wallonia  and  Flanders  continue 
to hamper wider uptake. 

obligation 

the 

to 

The  number  of  prosumers  and  energy 
is  stable,  with  a  gradual 
communities 
increase  in  consumers  engaged  in  energy 
sharing. There were 22% of household prosumers 
and  74  active  energy  communities  in  2024. 
Regional  disparities  are  still  large.  In  2025,  307 
active  projects  were  reported  in  Brussels,  which 
has  regional  frameworks  allowing  energy  to  be 
shared between final customers, independent from 
their  supplier.  By  contrast, 
in  Flanders  and 
Wallonia,  energy  sharing  is  reportedly  subject  to 
supplier fees, hampering its uptake. 

Electricity accounted for 21.5% of Belgium's 
final  energy  consumption  (FEC)  in  2024 
(below  the  EU  average  of  23.4%),  a  share 
which  has  remained  largely  unchanged  over 
the last decade (231), partly due to an adverse 
electricity-to-gas 
that 
disincentivises  electrification  and  cost-
effective  decarbonisation.  Electricity  accounts 
for 19.8% and 30.5% of  household and industrial 
FEC  respectively  (see  also  Annex  8).  In  the 
transport  sector,  the  share  of  electricity  remains 
negligible 
in 
electrification  across  all  sectors  would  help  to 
cost-effectively  decarbonise  the  economy  and 

at  3.1%. 

progress 

Further 

price 

ratio 

the  benefits  of  affordable 

bring 
generation to consumers. 

renewable 

Renewables and long-term contracts 

Renewable  energy  generation  has  broken 
records, although there are still gaps to close 
to  achieve  the  2030  targets.  In  2025,  for  the 
first  time,  wind  and  solar  energy  provided  more 
electricity than fossil fuels in Belgium. Low carbon 
electricity  covered  more  than  half  of  national 
electricity  consumption  (68%).  Installed  capacity 
for  renewables  represented  17 085 MW.  The 
installed capacity for wind energy reached 5.9 GW 
(compared  to  5.6 GW  in  2024)  whilst  installed 
capacity for solar grew (+7.8% compared to 2024) 
reaching  10.4 GW (232)  in  2025.  Onshore  wind 
capacity  increased  by  13%  to  3.6 GW,  surpassing 
Belgium's  commitments  under  the  European  wind 
power action plan. Hydropower capacity remained 
unchanged at 1.4 GW. 

to  boost 

investment 

frameworks 

Belgium is taking steps to address the 2025 
CSR  on  accelerating  the  deployment  of 
renewable  energy.  The  2025  CSRs  called  on 
Belgium  to  improve  grid  infrastructure  by  further 
streamlining  permitting  procedures,  by  adopting 
legal 
in 
renewable  energy  installations  and  by  facilitating 
energy  sharing.  Belgium  has  worked  on  speeding 
up  permitting  procedures  for  renewable  energy 
sources,  although  public  acceptance  of  onshore 
projects  remains  a  challenge.  Significant  steps 
were  taken  in  2025,  including  the  legalisation  of 
plug-in  solar  systems  and  the  introduction  of  a 
photovoltaic  obligation  for  large  consumers  in 
Flanders.  While  administrative  procedures  are 
becoming  faster  thanks  to  Flanders’  digital  one-
stop-shop and new federal measures to accelerate 
appeals,  new  distance  rules  in  Flanders  and 
federal  aviation  constraints  continue  to  hinder 
onshore wind deployment. 

Belgium has increased its national renewable 
ambitions,  yet  its  targets  remain  below  the 
national contribution calculated by the EU. In 
its  updated  national  energy  and  climate  plan, 
Belgium  raised  its  2030  renewable  energy  target 
from  17.5%  to  20.4%,  which  remains  below  the 

(231) The  CAGR  (compound  annual  growth  rate)  was  0.25% 
between  2015  and  2024.  The  minimum/maximum  shares 
were 20.6% and 21.6% respectively. Source: Eurostat. 

(232) International Renewable Energy Agency (IRENA) - Renewable 

Capacity Statistics 2026. 

78 

 
 
 
expected  national  contribution  to  the  EU’s  2030 
target of 33%. By 2030, the country aims to have 
8.5 GW  of  wind  capacity  and  15 GW  of  solar 
capacity.  However,  Belgium  has  reduced 
its 
offshore  wind  targets  for  2035,  committing  to  a 
total  of  4.3 GW,  as  compared  with  6 GW 
previously,  due  to  cost  increases  and  delays  in 
onshore  grid  buildout  and  the  offshore  energy 
island. Consequently, some offshore auctions have 
faced  delays,  such  as  the  parcel  1  auction  in  the 
Princess  Elisabeth  Zone,  which  was  cancelled  in 
June  2025  and  is  now  due  to  be  relaunched  in 
2026. 

decreased  by  8.18%,  largely  driven  by  smaller 
housing  units  and  technical  renovations.  However, 
this  decrease  remains  insufficient  to  meet  the 
objectives  set  in  the  2020  long-term  renovation 
strategy. Currently, only Wallonia has submitted its 
draft  national  building  renovation  plan  under  the 
recast  Energy  Performance  of  Buildings  Directive. 
Given  that  buildings  account  for  33%  of  national 
energy  consumption,  it  is  essential  that  draft 
for  Flanders  and 
building 
Brussels  are  submitted  on  time  to  ensure  a 
predictable pathway for decarbonising the building 
stock. 

renovation  plans 

the 

solar  market 

The  Belgian  renewable  market  is  maturing, 
particularly  regarding  long-term  contracts. 
While  the  [two-way]  Contracts  for  Difference 
scheme  supports  offshore  wind,  and  green 
certificate  schemes  are  still  in  place  for  onshore 
renewables, 
is  already 
transitioning  away  from  government  support. 
Belgium  is  among  the  top  12  EU  countries  for 
power  purchase  agreements,  with  a  contracted 
volume  of  1  GW,  although 
is 
dominated  by  short-duration  deals  (66%  lasting 
less  than  3  years).  However,  there  has  been  an 
increase 
in  onshore  wind  power  purchase 
agreements,  while  public  schemes  are  under 
examination to further stimulate the market. 

the  market 

Energy efficiency 

Belgium’s  final  energy  consumption  (FEC) 
increased  in  2024,  reversing  the  downward 
trend  observed  since  2019.  In  2024,  FEC  rose 
by  2.5%  compared  with  2023,  reaching  32 286 
Mtoe.  This  increase  sets  Belgium’s  consumption 
trajectory  off  course  from  the  linear  path  needed 
to meet its expected contribution by 2030. Several 
key  sectors  saw  a  rise  in  energy  consumption, 
namely  industry  (3.9%),  services  (1.85%),  and 
transport  (1.8%).  While  industry  and  services 
maintain  their  longer-term  downward  trend  (of 
7.9%  and  12.9%  respectively,  relative  to  2019), 
transport  is  on  an  upward  trend,  with  a  2.7% 
increase  relative  to  2019,  primarily  driven  by 
international aviation and freight. 

energy 

has 
Residential 
continued to fall, but at an insufficient pace 
targets. 
to  meet 
residential  FEC 
Between  2019  and  2024, 

consumption 

renovation 

long-term 

High  electricity  prices  relative  to  gas 
continue  to  act  as  a  structural  barrier  to 
decarbonising residential heating. Heating and 
cooling  account  for  86%  of  residential  FEC,  yet 
renewables  supply  only  11%  of  the  total  energy 
used for these purposes. In the first half of 2025, 
electricity  was  3.89  times  more  expensive  than 
gas,  often  resulting  in  higher  operating  costs  for 
end-users  who  have  made  the  switch  to  heat 
pumps.  To  address  the  2025  CSR  on  reducing 
fossil fuel use in buildings, the federal government 
announced a progressive increase in excise duties 
on  natural  gas  and  heating  oil.  Moreover,  it 
decided  to  reduce  VAT  on  the  purchase  of  heat 
pumps  from  21%  to  6%.  Additionally,  regional 
measures have been implemented, such as a ban 
on new natural gas connections for residential new 
built in Flanders in 2025. Brussels has phased out 
most fossil fuel subsidies, as premiums for natural 
gas heaters and boilers have been abolished from 
2023 onwards. Since 2025, Brussels has abolished 
both CHP Green Certificates and preferential rates 
for gas distribution network connections. 

loan-based 

Budgetary  constraints  in  some  regions  have 
slowed  the  momentum  of  flagship  energy 
efficiency renovation schemes. In Brussels, the 
regional  government  announced  that  the  current 
‘Renolution’ grant scheme would be replaced by a 
instruments.  While  this 
series  of 
change  is  intended  to  reduce  public  spending,  it 
may  lead  to  lower  uptake,  especially  from  low-
income households, and could slow down building 
In 
renovation  and  decarbonisation  efforts. 
contrast, Flanders has chosen to focus support on 
low-  and  middle-income  households  by  scrapping 
renovation subsidies for high earners as of 2026.  

Regarding  market  surveillance,  only  five 
ecodesign  and  energy  labelling  checks  were 
reported by Belgium in 2025. This is considered 

79 

 
insufficient  relative  to  the  size  of  the market  and 
overall levels of non-compliance in the EU. 

Security of supply and diversification 

The  2025  CSRs  called  on  Belgium  to  reduce 
overall  reliance  on  fossil  fuels.  Renewables 
(including  biofuels)  only  accounted  for  a  small 
share  of  Belgium’s  energy  mix  in  2025 (233), 
(similar  to  previous  years). 
specifically  11% 
Nuclear  energy  accounted  for  15%  of  the  total 
primary  energy  mix  while  representing  34%  of 
national  electricity  generation.  Natural  gas 
accounted  for  24.3%  of  the  energy  mix,  a  slight 
decrease  on  the  previous  year,  while  oil  and 
petroleum products (excluding biofuels) accounted 
for more than 42.8%. 

To  ensure  a  stable  medium-term  non-fossil 
energy  supply,  Belgium  has  extended  the 
operating  life  of  two  nuclear  power  plants 
providing  33.4%  of  its  electricity.  Following 
the final shutdown of three reactors in 2025, two 
nuclear reactors (Doel 4 and Tihange 3) are now in 
operation in Belgium with a total installed capacity 
of  2 GWe.  In  2024,  the  five  reactors  then  in 
operation produced 31 928 GWh, or 42.2% of total 
electricity  production.  In  February  2025,  following 
a  formal  investigation,  the  European  Commission 
approved a 10-year extension to the operating life 
of  the  two  newest  reactors  until  2035.  Belgium 
implemented  a  highly  diversified  supply 
has 
strategy  for  nuclear  materials  and  is  actively 
conducting research into small modular reactors to 
support its long-term decarbonisation pathways. 

Belgium  is  advancing  R&D  for  Generation  IV 
reactors and SMR deployment, which requires 
identifying  suitable  sites  and  fostering 
collaboration  across  the  industrial  value 
chain.  However,  regulatory  uncertainty  regarding 
the national phase-out policy necessitates a more 
predictable  licensing  framework.  To  support  this 
transition, targeted re-skilling initiatives under the 
EU  Skills  Agenda  are  essential.  Furthermore, 
developing 
financing 
mechanisms, potentially  integrated  with  European 
demonstration  projects—will  be  key  to  leveraging 
shared knowledge and securing early investment. 

de-risking 

tools 

and 

In  response  to  the  regional  crisis  in  the 
Middle  East,  Belgium  has  introduced  an  €80 

(233) Gross inland consumption (Eurostat). 

80 

million  support  package  (May-July  2026)  to 
mitigate  commuting  costs  and  protect 
vulnerable households. Measures include a 20% 
tax  credit  on  employer-paid  mileage  allowances, 
deferred social  security contributions for the self-
employed,  and  EUR 15 million  for 
low-income 
households  heating  with  gas  or  oil.  Belgium 
maintains  a  system  of  maximum  fuel  prices 
adjusted during sharp price spikes and has delayed 
planned excise duty increases until 1 August 2026. 

Fossil fuel subsidies 

road  freight 

limited  measures  to 
Belgium  has  taken 
address  the  2025  CSR  which  called  for 
specific steps to be taken to phase out fossil 
fuel  subsidies  in  particular  in  the  transport 
and  heating  sector.  In  2024,  environmentally 
harmful  fossil  fuel  subsidies  without  a  planned 
phase-out before 2030 represented around 0.47% 
of  Belgium’s  GDP (234).  Fossil  fuel  subsidies  such 
as  reduced  excise  duties  on  heavy  and  light  fuel 
oil,  company  fuel  cards  with  tax  benefits  for 
employees,  as  well  as  professional  diesel  refund 
schemes,  mainly  for 
transport, 
remained  in  place  in 2025  and  are  not  due  to be 
phased  out  before  2030.  No  comprehensive 
federal  phase-out  framework  for  these  measures 
has  been  adopted. 
federal 
government  updated  their  inventory  of  fossil  fuel 
subsidies 
plan. 
Additionally,  while  company  fuel  cards  remain  in 
use, the tax advantage for all new fossil-fuel cars 
ordered  from  2026  will  end  as  a  result  of  the 
2021 reform, with the tax deduction rate on these 
expenses  drop  to  0%  maintains  a  competitive 
advantage  over  neighbouring  countries.  Increased 
excise  duties  on  certain  fossil  fuels,  namely 
natural  gas,  heating  oil,  diesel  and  gasoline,  will 
only  moderately  reduce  fossil  fuel  subsidies 
overall.  Belgium’s  2023  Effective  carbon  rate 
averaged  EUR 74  per tonne  of  CO₂,  below  the  EU 
weighted average of EUR 84.80 (235). 

In  2025, 

reform 

inform 

future 

the 

to 

(234) European Commission calculation based on Study on energy 
subsidies  and  other  government  interventions  in  the  EU  – 
2025 edition, Enerdata. 

(235) 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. 

 
 
 
ANNEX 10: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

Belgium  has  made  progress  in  developing 
resilience and adaptation policies in the last 
year  (notably  through 
its  recovery  and 
resilience plan (RRP)), but several challenges 
remain.  Belgium  faces  significant  climate  risks 
(including  floods,  heatwaves  and  droughts).  It  is 
estimated  that  nearly  EUR 1.634 billion  will  be 
required  each  year  until  2050  for  climate 
adaptation (primarily for infrastructure retrofitting, 
agriculture  and  ecosystem  restoration).  Belgium 
has  a  policy  framework,  but  a  2025  report  that 
identified  28  climate 
risks  also  highlighted 
persistent  governance  fragmentation,  incomplete 
mainstreaming  of  adaptation  and 
insufficient 
long-term  funding  as  key  obstacles.  Climate-
proofing  efforts  are  underway  across  the  energy, 
is 
transport  and  other  sectors,  and  Belgium 
actively  deploying  nature-based  solutions  at  the 
federal  and  regional 
(notably  through 
Flanders’s  Blue  Deal  programme  and  various 
in  Wallonia  and 
wetland  restoration  projects 
Brussels). 

levels 

received 

Belgium  continues  to  face  significant  water 
quality  challenges,  mainly  due  to  diffuse 
pollution. from agriculture, including nutrient 
losses 
(nitrates  and  phosphates)  and 
pesticide use. Water management is increasingly 
recognised  as  a  key  vulnerable  sector,  as  floods 
(fluvial and pluvial) and droughts affect all sectors 
of  the  economy.  Most  surface  and  groundwater 
bodies  remain  under  pressure,  and  effective 
measures  are  needed  to  reduce  agricultural 
pollution  and  improve  water  quality.  In  2025, 
Belgium 
country-specific 
recommendation  (CSR)  to  strengthen  action  on 
sustainable  agriculture,  in  particular  by  reducing 
nutrient 
improving  water  quality. 
However,  only  limited  progress  was  made,  and 
concerns  persist.  Pesticide  contamination  remains 
widespread,  and  the  share  of  organic  farming 
(7.43%  of  utilised  agricultural  area  in  2024) 
remains  below  the  EU  average.  Many  Flemish 
water  bodies  still  suffer  from  excessively  high 
nutrient concentrations. In 2024, the percentage of 
water  bodies  meeting  the  standard  was: nitrate: 
35%;  
67%; total 
phosphate: 31%; total phosphorus: 7%. 

losses  and 

nitrogen: 

a 

Climate adaptation and preparedness 

The  increasing  frequency  and  duration  of 
extreme  weather  events  will,  along  with 
gradual  climate  shifts,  require  substantial 

81 

cross-sector  investment  to  address  their 
impact.  Belgium  is  in  one  of  three  regions  (low-
lying coastal regions) that have been identified as 
hotspots of risk that are highly affected by climate 
change (236).  Extreme  weather  events  have 
occurred in the last 10 years (e.g. major floods in 
2018 and particularly in 2021, with significant loss 
of 
life  and  economic  damage  estimated  at 
EUR 2.8 billion  in  Wallonia  alone).  The  annual 
heatwaves in 2015-2019 were unprecedented for 
Belgium,  causing  heat-related  mortality  at  an 
average  of  32  deaths  per  100 000  inhabitants 
between  2022  and  2024 (237).  Belgium  has 
identified  heatwaves  as  one  of  the  many  climate 
hazards  that  will  increase  significantly  in  the 
future. 
intense 
prolonged  droughts  occurred  in  2017-2022  as 
well  as  slow-onset  changes  (such  as  a  general 
temperature  rise  and  sea  level  rise).  If  current 
levels  of  coastal  protection  are  not  raised,  the 
direct  economic  damage  and  social  impact  of 
coastal flooding  in  Belgium  is  projected  to  rise 
sharply  this  century.  That  said,  the  benefits  of 
avoiding  flooding  are  estimated  to  significantly 
outweigh the costs of coastal protection (238). 

Increasingly 

frequent 

and 

A  recent  study  commissioned  by  DG CLIMA 
estimates (239)  that  Belgium  will  need  to 
invest almost EUR 1.634 billion per year until 
2050  in  climate  adaptation.  This  would  be 
0.2% of annual GDP, so lower than the EU average 
of  0.5% (240).  The  investment  would  mainly  be  in 
infrastructure retrofitting and reinforcement (more 
than  58%  of  the  total),  followed  by  agriculture 

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

(237) Janoš,  et  al.,  2025, Heat-related  mortality  in  Europe  during 
reduce 
p. 4069, 

2024  and  health  emergency 
preventable 
https://www.nature.com/articles/s41591-025-03954-7. 

forecasting 

deaths, 

to 

(238) Nature  in  2020:  Economic  motivation  for  raising  coastal 

flood defences in Europe. 

needs, 

(239) European  Commission,  2026,  Assessment  of  adaptation 
Table 25, 

investment 
https://op.europa.eu/en/publication-detail/-
/publication/d2039eac-f742-11f0-b9bc-
01aa75ed71a1/language-en%20(Table%208).  The  study 
provides detailed estimates of adaptation investment needs 
at the level of the EU and individual Member States per type 
of measure. It relies on a common methodology that makes 
estimates  comparable  across  the  EU.  Four  accompanying 
methodological reports provide a detailed description of how 
the results were estimated to ensure full transparency. 

(240) This 

represents  the  cost  of 

implementing  adaptation 
measures  that  are  required  to  adapt  to  climate  risks  in  the 
EU. 

 
 
 
 
(around  19%)  ecosystem  restorations  (around 
13%) and health (around 7%) (241). 

its 

years 

through 

(notably 

A  comprehensive  but  not  legally  binding 
policy framework is in place, but more action 
is  needed,  and  this  will  require  sustained 
political  attention,  strategic  foresight  and 
cross-sectoral  mobilisation.  Belgium  has  in 
RRP) 
recent 
strengthened  its  adaptation  and  disaster  risk 
management  policy  framework  at  different  levels 
by  adopting  strategies  and  plans (242),  and  by 
mainstreaming  adaptation  into  sectoral  policy 
documents.  Progress  is  monitored  and  evaluated 
but  only  on  an  ad  hoc  basis.  At  the  federal  level, 
the  end  of  the  2024  interim  evaluation  report  of 
the  federal  adaptation  action  plan  2023-2026 
(based  on  a  predetermined  set  of  indicators) (243) 
reinforces  confidence  that  progress  continues  to 
be made in achieving the intended outcomes. Work 
has  started  on  a  new  interfederal  action  plan 
against  extreme  weather  events,  but  no 
completion  date  has  yet  been  specified.  Belgium 
has also updated its national vulnerability and risk 
assessments  to  make  them  more  comprehensive. 
The  newly  established  Coordination  Centre  for 

them (245), 

followed  by 

Climate  Risk  (CERAC)  issued  its  first  report  in 
November  2025.  This  report  identified  28  climate 
risks  (classified  into  five  main  categories:  the 
economy; health and well-being; food; ecosystems; 
and  infrastructure  and  buildings)  and  several 
critical threats (244). For each of these, it assessed 
the  level  of  policy  readiness  and  ownership  to 
tackle 
key  policy 
recommendations.  The  report (246)  also  assessed 
the capacity of the existing governance system ‘to 
implement  policies  that  match  the  scale  and 
urgency  of  the  risks  identified’ (247).  It  highlights 
in  governance  and 
continuing  fragmentation 
institutional rigidity that is limiting the capacity to 
coordinate  adaptation  across  levels  and  sectors. 
The  report  also  concludes  that  mainstreaming  of 
climate  and environment adaptation  remains  only 
partial  –  despite  growing  recognition  of  their 
cross-cutting  nature.  The  temporal  misalignments 
between climate and ecosystem degradation risks 
and  political  cycles  are  hindering  investment  in 
long-term  resilience.  Financial  constraints  are 
preventing the scaling-up of adaptation measures 
in  the  absence  of  sustained  and  consistent 
funding. The report concludes that there is a need 
to  better  embed  climate  projections  in  planning 

(241) Typical  areas  of  investment  in  ecosystems  include  soil 
restoration,  wildfire  prevention,  biodiversity  protection  and 
coastal ecosystems restoration. Typical areas of investment 
in  health  include  occupational  health  and  safety,  upgrading 
wastewater 
facilities  and  wildfire  disaster 
response. 

treatment 

(242) In  Belgium,  adaptation  policy  is  shared  between  multiple 
levels of government. The 2010 national adaptation strategy 
was  followed  by  a  national  adaptation  plan  (2017-2020), 
which  set  out  measures  that  complemented  those  in  the 
regional  and  federal  plans.  The  2023-2026  federal  action 
plan  includes  28  federal  adaptation  measures  across  8 
policy areas. Flanders adopted a climate adaptation plan in 
2022, complemented by sectoral measures such as the Blue 
Deal  (2025)  and  the  Climate  Health  Plan  (2023).  Wallonia 
has  integrated  adaptation  into  its  air-climate-energy  plan 
(PACE  2030),  but  concrete  adaptation  measures  remain 
limited.  A  Walloon  Adaptation  Strategy  (SWA)  and  regional 
action plan are under development, based on a vulnerability 
assessment.  Brussels  has  also  integrated  the  enhancement 
of  resilience  to  climate  impacts  into  its  Air-Climate-Energy 
Plan.  Brussels’s  Water  Management  Plan  (2022-2027) 
includes  an  integrated  rainwater  management  strategy  to 
make  the  city  more  resilient  to  both  floods  and  droughts. 
89% of Belgium’s population is covered by the Covenant of 
Mayors,  which  requires  signatory  cities  to  assess  their 
climate vulnerabilities and develop adaptation strategies  as 
well as mitigation measures. 

(243) Tussentijdse  evaluatie  van  de 
set 

coherente 
Tussentijdse  evaluatie  van  de 
coherente set federale adaptatie maatregelen 2023-2026. 

implementatie  van  de 
federale  adaptatie-maatregelen,  Link: 
implementatie  van  de 

(244) CERAC  I  BCRA  report  2025.  These  critical  threats  relate  to: 
human  health  (it  is  projected  that  there  will  be  over  1 000 
additional  heat-related  deaths  annually  by  2050,  increased 
pollen allergies, mental health problems, air pollution and  a 
spread  of  pandemic  risks);  extreme  weather  events  (in 
October  2025,  Storm  Benjamin  struck  Belgium,  bringing 
strong  winds  and  rain  that  damaged  homes  and  brought 
down trees); high flood risks with infrastructure damage and 
food  supply  disruptions);  economic  threats  (losses  due  to 
extreme  heat,  drought  and  flooding  are  projected  to  reach 
EUR 9.5 billion annually by 2050, representing around 2% of 
Belgian GDP). 

(245) The  CERAC  assessment  identifies:  areas  for  urgent  action 
needs  (risks  to  crops  from  extreme  weather  and  soil 
ecosystem degradation, risks to buildings from flooding, risks 
to  human  health  from  heat  stress,  and  risks  to  property 
insurance from flooding); areas where more action is needed 
(preserving freshwater system from drought; soil ecosystems 
from  drought  and  erosion; 
from  diseases; 
infrastructure and buildings from invasive alien plant species; 
energy  and  transport  infrastructure  from  extreme  weather; 
water  infrastructure  against  drought;  and  precautionary 
action  against  pollinator  decline  and  wildfires).  In  only  one 
area  does  the  report  conclude  that  operationalising  existing 
policies  would  suffice  (risk  to  terrestrial  coastal  ecosystems 
due  to  sea  level  rise,  coastal  flooding  and  changes  in  soil 
salinity). 

livestock 

(246) CERAC I BCRA report 2025, pp. 154-159. 

(247) The assessment included the capacity to integrate resilience 
across  sectors  and  enable  consistent  policy  alignment; 
institutional coordination; and the capacity to anticipate and 
manage future risks. 

82 

 
 
 
instruments;  align 
investment  horizons  with 
ecological  timescales;  and  establish  long-term 
monitoring and evaluation mechanisms.  

Climate  risks  have  a  direct  and  significant 
effect  on  Belgium’s  economy,  but  insurance 
coverage  is  significantly  higher  than  the  EU 
average.  Between  1980  and  2024,  Belgium 
recorded  EUR 18.4 billion  in  economic  damage 
caused  by  weather  and  climate-related  extreme 
events.  Belgium  belongs  to  a  group  of  countries 
ratio  of  natural 
with 
in  the  EU (248). 
catastrophe  damage  to  GDP 
Belgium  does  have  significantly  higher  insurance 
coverage  than  the  EU-27  average  (41%  vs 
19%) (249).  This  is  true  for  most  risks  but  there  is 
notably  less  coverage  for  flood  risk  (250)  and  less 
coverage 
as 
in 
agriculture (251). 

the  second  highest 

sectors, 

specific 

such 

the  National  Bank  of 
Calculations  by 
Belgium (252)  have  revealed  the  significant 
macroeconomic  and  financial  impact  of  the 
July  2021  floods,  distinguishing  between 
their  direct  impact  on  firms  located  in  the 
flooded  area  and  their 
impact 
throughout  the  supply  chain.  The  turnover  of 
firms  directly  impacted  by  the  floods  fell  by  an 
average  of  15%.  In  addition,  customers  were 
affected  throughout  the  value  chain,  because 
sales  by these  firms  in  regions  unaffected  by the 
floods  also  fell  (by  0.3%  for  each  1%  of  input 

indirect 

catastrophe 

(248)ECB  and  EIOPA,  2024,  Towards  a  European  system  for 
natural 
Chart 
risk 
2, https://www.eiopa.europa.eu/document/download/d8c87070-
f602-4bf7-b8d8-726ec0b5c173_en?filename=eiopa-ecb-
climate-insurance-protection-gap.pdf. 
earthquakes which happened in the period 2020-2023. 

management, 

includes 

figure 

This 

(249)EEA,  2024, Economic  losses  from  weather-  and  climate-
Europe, 
related 
https://www.eea.europa.eu/en/analysis/indicators/economic-
losses-from-climate-related. 

extremes 

in 

from  an  affected  supplier).  The  fact  that  these 
effects  persisted  for  at  least  four  quarters  after 
the  shock  demonstrates  that  trade  and  supply 
chain 
impacts  beyond  the 
immediate vicinity of the disaster area. 

lead  to 

linkages 

Climate-proofing  has 
increasingly  been 
applied  in  Belgium  across  sectors  and  key 
infrastructure, but more is needed. The energy 
system  is  subject  to  several  climate-related  risks 
that require adaptation investment. The July 2021 
floods  demonstrated  the  vulnerability  of  energy 
infrastructure.  Reconstruction  of  some  facilities 
took  months,  and  the  restoration  of  roads  and 
electricity  networks  took  almost  a  year.  Under  a 
mid-range  warming  scenario  (2-3°C),  the  number 
of  heatwave  days  experienced  by  Belgian  cities 
could rise from 5.1 to 16.8 per year by 2050, with 
substations  and  transmission  lines  near  urban 
centres  facing  higher  electricity  loads  to  meet 
increased  cooling  demands (253).  The  focus  of 
investment  in  the  energy  system  in  Belgium  is 
currently  on  facilitating  the  energy  transition. 
Specific adaptation to climate change (resilience to 
heat,  drought  and  floods)  is  still  insufficiently 
detailed  in  Belgium’s  plans.  Zeebrugge  and  other 
Belgian  ports  require  climate-proofing  investment 
risks.  Belgium 
to  mitigate  extreme  weather 
risk 
the 
submitted 
preparedness plan for the electricity sector to the 
European  Commission 
in  January  2022.  This 
contains  a  risk  analysis  for  the  electricity  sector 
and 
to-be-developed 
preventive  and  corrective  measures.  The  2023-
2026 federal adaptation action plan foresees that 
the National Crisis Centre (NCCN) will follow up on 
this  work,  focusing  on  the  impact  of  climate 
change  on  energy  supply  security  and  on  the 
infrastructure (254).  Based 
relevant 
the 
identified  risk  scenarios,  some  adaptive measures 
have  been  identified  that  should  strengthen  the 
system’s resilience.  

identifies  existing  and 

version  of 

first 

the 

on 

(250)The  overall  insurance  protection  gap  score  estimated  by 
EIOPA  is  1.00  (on  a  scale  of  1  (good)  to  4  (bad))  and  1.5  for 
flood  protection.  See:  https://www.eiopa.europa.eu/tools-and-
data/dashboard-insurance-protection-gap-natural-
catastrophes_en.  

Belgium’s  transport  sector  is  moderately 
vulnerable  to  climate  change (255).  By  2050, 

(251)EIB,  2025,  Insurance  and  Risk  Management  Tools  for 
Agriculture in the EU, via Insurance and Risk Management Tools 
for Agriculture in the EU, p. 47. 

(253)High  Council  of  Finance,  2025,  Additional  investments  in 
existing net zero-emission scenarios for Belgium; a comparative 
analysis, Klimaat. 

(252)Bijnens,  G.,  Montoya,  M.  and  Vanormelingen,  S.,  2024,  A 
bridge  over  troubled  water:  flooding  shocks  and  supply  chains, 
Working  Paper  Research 466,  National  Bank  of  Belgium, 
https://www.nbb.be/en/publications-research/publications/all-
publications/bridge-over-troubled-water-flooding-shocks-and. 

(254)Tussentijdse  evaluatie  van  de 
implementatie  van  de 
coherente  set  federale  adaptatie  maatregelen  2023-2026, 
p. 56. 

(255)European  Commission,  2024,  Support  study  on  the  climate 
adaptation  and  cross-border  investment  needs  to  realise  the 

83 

 
 
 
 
to 

to  have 

is  expected 

Belgium 
invest 
EUR 500 million  a  year  in  adaptation  to  address 
the  impacts  from  the  hazards.  The  greatest 
adaptation  investment  will  be  required  for  port 
infrastructure,  followed  by  road  and  rail (256).  The 
rail network provider Infrabel already has summer, 
autumn and winter plans that include an overview 
of  the  measures  that  will  be  taken  to  limit  and 
prevent  the  impacts  of  extreme  weather  events. 
The  federal  adaptation  plan  for  2023-2026 
includes  plans  for  further  analysis  of 
the 
sensitivity  of  various  (strategic)  rail  assets  to  the 
impact  of  extreme  weather  events,  based  on 
climate projections up to 2100 (257). 

Belgium is extensively applying nature-based 
solutions  (NbS)  in  its  climate  adaptation 
strategies  at  both  federal  and  regional 
levels. Belgium’s comprehensive approach to NbS 
demonstrates  significant  political  commitment, 
investment  and  tangible 
substantial  financial 
results.  Belgium’s  updated  national  energy  and 
climate plan identifies NbS and nature restoration 
projects  in  Flanders,  and  reforestation  and  forest 
management  in  Wallonia  as  measures  to  reach 
LULUCF  targets.  Flanders  has  implemented  a 
comprehensive  NbS  programme  through  its  Blue 
Deal (258),  which  was  significantly  expanded  under 
the  RRP  in  2025.  The  2025  Blue  Deal  2.0  second 
strategic 
lever  emphasises  maximum  nature 
restoration  and  NbS,  with  a  commitment  that 
funded  measures  will  feature  NbS  as  much  as 
possible  (e.g. creating  green  buffers  and  blue-
green  infrastructure  in  rural  and  urban  areas). 
Similarly,  the Wetlands4Cities (259)  project  focuses 

TEN-T  network,  Table  4.6,  Publications  Office  of  the  European 
Union, 2024, https://data.europa.eu/doi/10.2832/7839720. 

(256)European  Commission,  2024, Support  study  on  the  climate 
adaptation and cross-border investment needs to realise the 
TEN-T  network,  Table 4.28,  Publications  Office  of  the 
European 
Union, https://data.europa.eu/doi/10.2832/7839720. 

(257) Tussentijdse  evaluatie  van  de 

implementatie  van  de 
coherente  set  federale  adaptatie  maatregelen  2023-2026, 
p. 30. 

(258) The Blue Deal invests in restoration of wetlands and NbS to 
manage  droughts  and  water  scarcity  simultaneously  while 
boosting biodiversity. This includes wetland creation, river re-
meandering,  desealing  and  greening  urban  areas,  and 
establishing green-blue networks. 

(259) This is a LIFE project (Belgium and Netherlands) that aims to 
minimise flooding and drought consequences by creating 
natural wetlands as buffers, increasing water infiltration in 
urban environments and improving blue infrastructure that 
connects cities with their surroundings. 

areas 

covering 

on  peri  urban  nature  in  cities  like  Antwerp, 
Mechelen,  Bruges,  Dendermonde,  Hasselt  and 
project 
Aalst,  with 
over 
In  Brussels,  the  Blue  Network 
200 hectares. 
Programme  aims  at 
integrated,  durable  and 
justified  management  of  open 
ecologically 
waterways  (including  small  rivers,  ponds  and 
marshes). Wallonia manages multiple LIFE projects 
for  wetland  restoration  and  humid  grasslands.  It 
in 
also 
Belgium’s  RRP 
(e.g. measure I-1.22  on  nature 
protection  projects  and  national  parks;  and 
measure I-1.23 on ecological defragmentation). 

through  measures 

implements  NbS 

Water resilience  

the 

industry, 

Large areas of Belgium are subject to water 
stress due to demand for water from energy, 
manufacturing  and 
public  water 
supply (260).  These  sectors  are  heavily  dependent 
on  the  water  supply.  Belgium  is  exposed  to  high 
water  stress.  It  uses  over  80%  of  its  renewable 
water  supply  for  energy, 
irrigation, 
livestock  and  domestic  needs.  The  baseline  water 
stress  of  the  Brussels-Capital  Region  is  very  high 
(5.00)  due  to  water  use  in  the  domestic  and 
industrial  sectors.  Flanders  scores  4.58  for  use  in 
the  industrial,  domestic  and  agricultural  sectors. 
Wallonia  scores  4.13  for  use  in  the  agricultural, 
domestic and industrial sectors. The drought risk in 
agricultural,  domestic  and  industrial  sectors  is 
medium in both Flanders (score 2.6) and Wallonia 
(2.48). This measures where droughts are likely to 
occur; the population and assets exposed; and the 
vulnerability  of  the  population  and  assets  to 
suffering adverse effects. Riverine flood risk, which 
measures  the  percentage  of  population  expected 
to  be  affected  by  riverine  flooding  in  an  average 
year,  is  low-medium  in  Flanders  (1.81),  low  in 
Wallonia  (0.84)  and  even 
in  Brussels 
(0.76) (261). 

lower 

The  national  Water  Exploitation 
Index+ 
decreased  to  3.42%  in  2023  from  6.87%  in 

(260)EEA,  2025,  Water  abstraction  by  economic  sector, 
https://www.eea.europa.eu/en/analysis/indicators/water-
abstraction-by-source-and/water-abstraction-by-economic-
sector. 

(261)Aqueduct Country Ranking, Belgium, 2026. 

84 

 
 
 
result 

(latest  EU  data: 4.53%) (262).  This 
2022 
is  being  used 
measures  how  much  water 
compared  with  the  total  renewable  freshwater 
resources  available  for  a  given  territory  and 
period.  Belgium’s 
indicates low  overall 
pressure  due to abundant  renewable  freshwater 
resources.  During  the  summer  months  of  2022, 
the  seasonal  WEI+  was  even  higher  (reaching 
10.3%).    It  is  noted  that  the  average  WEI+  result 
conceals  regional  variations  in  water  resource 
distribution  and  consumption,  with  manufacturing 
being  the  largest  water  consumer.  Between  2018 
and  2023,  water  abstraction  in  the  energy  sector 
increased  by  34%  and  and  public  water  supply 
increased  by  7%  and  6%  respectively,  while 
agriculture  remained  pretty  stable 
low 
consumption,  especially  in  2023).  The  energy 
sector  accounts  for  the  highest  share  of  water 
consumption  at  3 004 million  m3  (i.e.  60%  of  all 
abstraction 
in  2023),  significantly  straining 
Belgium’s water resources. The manufacturing and 
energy  sectors  together  88%  of  total  water 
abstraction (263)). 
remain 
significant,  particularly  in  regions  with  high  levels 
of water stress. 

challenges 

(with 

The 

Belgium’s  GDP  is  influenced  by  its  water 
resources,  which  are  essential  for  various 
economic  activities.  These  water  resources 
include  several  major  rivers  and  extensive  canal 
systems linking industrial hubs. The use of water is 
critical  in  agriculture,  industry  and  daily  life.  The 
Commission’s  European  Drought  Risk  Atlas  shows 
the  major 
river 
transportation  and  terrestrial  and  freshwater 
ecosystems in Belgium (264). 

impact  of  drought  on 

in  Belgium (265) 

Water  productivity 
is 
considerably lower  than  in other  EU  Member 
States (17th in the EU), at EUR 75 per m3 of 
abstracted water in 2022. It has been declining 
over the past five years  – reflecting inefficiencies 
(e.g. energy  and 
in  abstraction-heavy  sectors 

(262)Eurostat, 
Index, 
plus, https://ec.europa.eu/eurostat/databrowser/view/sdg_06_60/
default/table?lang=en. 

Exploitation 

Water 

(263)EEA (2025) Water abstraction by source and economic sector 
in Europe. 

manufacturing).  In  2023,  electricity  accounted  for 
60% of freshwater abstraction, manufacturing for 
22%  and  public  water  supply  for  16% (266). 
Between  2022  and  2023,  total  water  abstraction 
dropped by around 14%. 

of 

for 

surface 

concern 

Water  quality  in  Belgium  remains  a  major 
cause 
and 
groundwater  bodies.  The  assessment  of  the 
third  river  basin  management  plans  (RBMPs) 
indicates  that  there  has  only  been  a  minor 
improvement  in  the  ecological  status/potential  of 
surface waterbodies; and no improvement in their 
chemical status compared with the status reported 
in the second RBMPs (covering 2015-2021). 

The third RBMPs shows that effective action 
is  needed  to  improve  water  quality  (both  in 
surface  and  groundwater  bodies)  because 
most  water  bodies  in  Belgium  are  affected 
by  pressure  caused  by  diffuse  pollution 
sources. Only 27.4% of surface waterbodies have 
a  good  or  high  ecological  status/potential (267). 
Most of these are in the Wallonia (43%), whereas 
the  Flanders  only  has  0.5%.  All  three  surface 
waterbodies  in  the  Brussels-Capital  Region  have 
‘below good’ potential. The percentage is 51% for 
groundwater  bodies.  The  North  Sea  coastal 
waterbody  has  a  moderate  status.  The  main 
challenges  come  from  agriculture  (nitrates  and 
pesticides  pollution),  population  density  (land  use 
and 
and 
hydromorphological  pressures.  Legacy  pollution 
and transboundary pollution are also problems. 

wastewater 

discharges) 

related 

The  Commission’s  assessment  indicates  that 
it  would  be  beneficial  for  Belgium  to  tackle 
challenges 
to  hydromorphology 
(i.e. altering  river  flows  and  riverbanks)  and 
to  the  levels  of  nutrients  and  chemicals  in 
surface waters. It would also be useful to make 
better  use  of  cost-recovery  and  the  polluter-pays 
principle  in  groundwater  bodies  during  water 
shortages  in  dry  periods.  In  addition,  it  would  be 
beneficial  to  subject  permits  for  abstraction, 
impoundment  and  discharges 
to  mandatory 
periodic  reviews.  In  Flanders  in  particular,  nitrate 

(264)European Commission (2023) European Drought Risk Atlas. 

(265)Water  productivity  is  a  metric  that  is  calculated  by  dividing 
GDP  (in  chain-linked  volume)  by  total  water  abstraction.  It 
indicates  the  average  economic  value  (GDP)  a  Member  State 
creates for each unit of water it takes from nature. 

(266)EEA (2025) Water abstraction by source and economic sector 
in Europe. 

(267)Surface  water  bodies:  Ecological  status  or  potential  (group) 
[table]  |  Water  Framework  Directive  experts  dashboards  |  WISE 
Freshwater. 

85 

 
 
 
(second)  RBMP 

pollution  remains  very  high  and  water  quality 
continues  to  deteriorate.  In  the  two  Flemish  river 
basin  districts,  none  of  the  surface  water  bodies 
achieves  good  chemical  status  under  the  latest 
(third)  River  Basin  Management  Plans  (RBMPs).  , 
The  share  of  the  surface  water  bodies  in  good 
chemical  status  was  already  very  low  in  the 
previous 
cycle  2015-2021) 
reflecting  persistent  and  widespread  chemical 
pollution  and  only  a  very  small  share  of  water 
bodies  achieve  good  ecological  status,  indicating 
broader structural pressures on water quality. This 
pollution  is  directly  caused  by  excess  levels  of 
nitrogen  deposits,  which  threaten  biodiversity  and 
impair  surface  water  quantity  and  quality.  The 
revised seventh manure action programme (MAP7) 
was  adopted  in  December  2024  but  will  not 
ensure 
the  EU  Nitrates 
Directive (268). Several scenarios for more stringent 
protection  against  pollution  seem  to  be  under 
discussion at the ministry. 

compliance  with 

the  presence  of 

Chemical status remains a critical challenge. 
All  surface  waterbodies  fail  to  achieve  good 
chemical  status,  thus  limiting  access  to  high-
quality  water  for  industrial  and  agricultural  use. 
This failure is mostly due to ubiquitous persistent 
bioaccumulative and toxic substances (PFAS) along 
industrial  chemicals. 
with 
However,  there  has  been  an  increase  of  Ground 
Water  Bodies  GWBs  in  good  chemical  status, 
although  they  still  remain  at  only  53.1%.  For 
Flanders, the top five pollutants causing failure to 
achieve  good  chemical  status  in  groundwater 
bodies are nitrates, potassium, pesticides, nitrogen, 
For 
Ν,N--dimethylsulfamide  and  bentazone. 
Wallonia,  failure 
is  mainly  due  to  nitrates, 
phosphates  and  pesticides,  which  are  all 
associated with agriculture (269). 

is  addressing  these 

Belgium 
issues  by 
implementing  a  large-scale  modernisation 
programme as part of its RRP. In Flanders, the 
‘Blue  Deal’  (EUR 191.75 million)  (270)  sets  out  an 
ambitious  plan  to  combat  water  scarcity  and 

The 

‘great 

drought 

manage 
river 
risks. 
acceleration’  special  action  plan  includes  over 
1 000 actions to reduce, inter alia, the impacts of 
nitrates  and  phosphates  from  agriculture.  It  aims 
to  enhance  preparedness  for  longer  periods  of 
drought  and  more  frequent  heat  waves  by 
addressing  drought  problems  structurally.  The 
measure  consists  of  supporting  various  water 
management  actions.  Under 
investment 
(under the Belgian RRP), a total of 57 projects will 
be  delivered  by  August  2026  in  the  following 
categories: 
drought  mitigation  measures; 
contribution  to  the  construction  or  reconstruction 
of  water  way  pumps  or  water  way 
locks; 
installation  of  automatic  water  monitoring 
systems or digital data platforms; ecohydrological 
studies;  water  courses;  wetland  restoration;  and 
nature-based solutions. 

this 

tools); 

treatment (271).  Belgium 

The  quality  of  drinking  water  is  currently 
satisfactory,  but  substantial  investment  is 
needed  to  maintain  the  high  standards  of 
water 
(Flanders) 
addresses  challenges  regarding  the  equitable 
access  to  drinking  water  of  vulnerable  and 
marginalised  groups  (through  working  groups, 
surveys  and 
reducing  geographical 
disparities;  affordability  of  drinking  water  and 
sanitation  (through  the  mechanism  of  reduced 
tariffs);  public  drinking  fountains  (as  described  in 
the EU Drinking Water Directive DWD); and safety 
of  drinking  water  (information  campaigns) (272). 
The  reasons  for  the  observed  inequities  include  a 
lack  of  financial  capacity  and  investment  in 
infrastructure,  and  differences  in  the  quality  of 
source  water.  Most  people  have  access  to  safe 
drinking  water  services,  but  the  research  shows 
that  there  is  still  room  for  improvement  even  in 
high-income EU Member States. 

Compared  with  2020,  Belgium  has  slightly 
decreased its compliance rate with the Urban 
Waste 
(Directive 
91/271/EEC), achieving 99.4% in 2022 (down 
five 
from  99.8% 

in  2020) (273).  Only 

Treatment  Directive 

(268)Vlaamse 

Land 

Maatschappij 

(2024) 

Nieuwe 

(271) European Semester 2025 country report for Belgium, p.86. 

mestmaatregelen vanaf 2025. 

(269) European  Commission, 

(2025), 

Review 
https://op.europa.eu/webpub/env/eir-country-reports-
summaries/en/belgium.html, p. 32. 

country 

Environmental 
Belgium 

Implementation 
report, 

(272) Research paper, Equitable access to drinking-water; focus on 
EU Member States, Journal of Water, Sanitation and Hygiene 
for  Development,  vol. 14,  No 11,  1178, 
IWA  2024, 
https://iwaponline.com/washdev/article/14/11/1169/105673/
Equitable-access-to-drinking-water-focus-on. 

(270) Blue Deal - Flemish Region - Reforms and Investments - 

(273) 12th  technical  assessment  of  UWWTD  implementation  – 

European Commission. 

Publications Office of the EU. 

86 

 
 
 
to 

implement 

in  2021-2027.  This 

agglomerations  (generating  456 000  population 
equivalent  of  urban  wastewater)  did  not  comply 
with the Directive’s requirements. This is above the 
EU  average  of  76%.  Belgium’s  annual  water 
investment  needs  amount 
to  an  estimated 
covers 
EUR 2.26 billion 
investment  needs  for  the  water  industry  and  for 
water protection and management. EUR 1.8 billion 
(the  largest  part  of  the  total  annual  need)  is 
needed  for  wastewater  management  (including 
additional  costs 
revised 
directive).  A  further  EUR 59 million  is  needed  for 
investments  related  to  drinking  water.  Around 
EUR 363 million  is  needed  for  water  protection 
and  management.  Water  investments  in  Belgium 
are  estimated  to  be  around  EUR 868 million  per 
year  in  2021-2027.  To  meet  the  environmental 
objectives  of  the  Water  Framework  Directive  and 
the  Floods  Directive,  Belgium’s  annual  water 
investment  gap  is  EUR 1.4 billion  (0.25%  of  GDP). 
to  wastewater 
Most  of 
(EUR 1.2 billion  per  year).  Additional  provisions 
under  the  Water  Framework  Directive  require 
around  EUR 217 million  per  year  over  and  above 
existing levels of financing (274). 

related 

this 

the 

is 

Nature restoration 

Nature degradation poses significant risks to 
the economy and to competitiveness. 20% of 
the gross value of Belgium’s supply chain is highly 
dependent on ecosystem services. This is close to 
the  EU-27  average  of  22% (275).  Overall,  38%  of 
is  highly  dependent  on 
Belgium’s  economy 
ecosystem  services  to  create  gross  value  added. 
Several  sectors 
(e.g. agriculture,  forestry  and 
fisheries,  mining  and  metals,  construction,  water 
particularly 
utilities 
dependent (276). 100% of the gross value added by 
these  sectors  is  directly  dependent  on  ecosystem 
services.  Failure  to  maintain  the  capacity  of 
ecosystems  to  deliver  services  could  therefore 
entail  significant  costs  or  even  stop  production  in 

healthcare) 

and 

are 

these  sectors.  Protecting  and 
restoring  key 
ecosystems  would  help  maintain  the  long-term 
competitiveness of these sectors(277). 

Belgium  in  2023  legally  protected  15.5%  of  its 
land  area  (EU-27  average: 26.4%)  and  38.1%  of 
its marine area (EU average: 13.7%) (278). Belgium 
therefore  exceeded  the  30%  EU  target  for 
protected  marine  areas.  The  completeness  of  the 
Belgian  Natura  2000  network  is  considered  to  be 
high  overall,  but  some  insufficiencies  remain  in 
relation to Habitats Directive Annex II species that 
Belgium (279). 
have 
Furthermore,  Belgium’s  common  farmland  bird 
index  score  of  56.6  in  2020  was  below  the  EU 
average  of  68.7  in  2023  and  showed  a  steady 
decline since 78.4 in 2011. 

recolonised 

recently 

The  low  coverage  of  Natura  2000  and 
nationally protected land areas is due to the 
above-average level of urbanisation and the 
very high population density. However, there is 
still room to further consolidate the protected area 
coverage (as illustrated by the designation of two 
national parks in Wallonia under the RRF). Belgium 
still needs to restore up to 2 925 km2 of the land 
habitats listed in Annex I to the Habitats Directive, 
corresponding  to  up  to  9.5%  of  its  land (280) 
between  2013  and  2018.  Just  under  5%  of 
habitats  and  25%  of  species  have  a  good 
conservation  status.  The  mean  forest  condition 
index was 0.58 in 2018 (EU-27: 0.62)(281) . 

Nature  degradation  is  further  amplified  by 
invasive  alien  species.  61  were  recorded  in 

(277) In the short term, the nature restoration actions themselves, 
although  necessary,  can  also  have  a  significant  impact  on 
these  sectors.  For 
instance.  the  dedication  of  Marine 
Protected Areas limits the available fishing grounds, and also 
the areas used for offshore wind energy and other activities, 
there is a significant spatial squeeze in the North Sea. 

(278) Eurostat, 

Protected 

Areas 

Indicator, 

https://ec.europa.eu/eurostat/databrowser/view/env_bio4/def
ault/table?lang=en&category=env.env_biodiv 
into 
consideration  both  the  Natura  2000  network  and  other 
nationally designated protected sites). 

(taking 

(274) European Commission, 2025, Environmental Implementation 

(279) European Commission (2025) Environmental Implementation 

Review, Belgium country report, 
https://op.europa.eu/webpub/env/eir-country-reports-
summaries/en/belgium.html. 

(275) Hirschbuehl  et  al. 

(JRC),  2025,  The  EU  economy’s 

dependency on nature. 

(276) Dataset  from  the  Commission/JRC,  based  on  Hirschbuehl  et 

al. (2025) The EU economy’s dependency on nature. 

Review, Belgium country report. 

(280) European 

Commission 

assessment 
accompanying  the  proposal  for  a  regulation  on  nature 
restoration, p. 23 (Table II). 

Impact 

(2022) 

(281) Maes et al. (2023) Accounting for forest condition in Europe 
international  statistical  standard,  Nature 

based  on  an 
Communications. 

87 

 
 
 
Belgium in 2024 (282), inflicting estimated damage 
increased 
of  EUR 0.08 billion.  This  damage 
between  1960  and  2020,  primarily  affecting 
agriculture (283). Rising North Sea temperatures are 
also  altering  marine  ecosystems:  (i)  cold-water 
fish  stocks,  such  as  North  Sea  cod,  are  shifting 
northwards,  forcing  local  fleets  to  move  away 
from  traditional  fishing  grounds  (284)(285)(286);  and 
(ii)  while  invasive  species  such  as  the  Pacific 
oyster and the comb jelly alter marine ecosystems 
by  competing  with  or  preying  on  planktonic 
organisms, 
thereby 
threatening  native  species  (e.g.  mussel  beds)  and 
commercial  fisheries  (287)(288).  In  this  context,  it  is 
essential to improve data collection and ensure an 
effective fisheries control enforcement. 

including 

larvae, 

fish 

Belgium  needs  to  align  with  the  EU’s 
biodiversity strategy in order to contribute to 
the  EU  target  of  making  at  least  25 000 km 
of  rivers  free-flowing  by  2030.  These  efforts 
support  the  aims  of  the  Water  Framework 
Directive  of  restoring  freshwater  ecosystems  and 
the  natural  function  of  rivers,  and  mitigating  the 
impact of floods. Free-flowing rivers also generate 
broader 
(including 
enhanced  rural  landscape  quality,  new  recreation 
and  tourism  opportunities,  strengthened  local  job 
improved  water  quality  and  better 
creation, 
sediment  transport  that  protects  deltas  and 
coastal  areas  against  erosion  and  rising  sea 
levels). 

socio-economic 

benefits 

(282) European Commission (2025) Environmental Implementation 

Review, Belgium country report, p.23. 

(283) NeoBiota  (2021)  Economic  Cost  of  invasive  alien  species 
across  Europe.  European  Commission:  EMRC,  Logika  Group 
and  RPA  Europe  (2025)  Update  of  the  costs  of  not 
implementing EU environmental law, p. 62. 

(284) Engelhard et al. (2014) Climate change and ﬁshing: a century 
of  shifting  distribution  in  North  Sea  cod.  Global  Change 
Biology. 

(285) Camapana et al. (2020) Shifting fish distributions in warming 

sub‑Arctic oceans. Nature Research: Scientific reports. 

(286) DeFilippo  et  al.  (2023)  Characterizing  dominant  patterns  of 
spatiotemporal  variation  for  a  transboundary  groundfish 
assemblage. Fisheries Oceanography. 

(287)Javidpour  et  al.  (2020)  Cannibalism  makes  invasive  comb 
jelly,  Mnemiopsis  leidyi,  resilient  to  unfavourable  conditions. 
Communications Biology. 

(288)Joyce  et  al.  Relative  impacts  of  the  invasive  Pacific  oyster, 
Crassostrea gigas, over the native blue mussel, Mytilus edulis, 
are mediated by flow velocity and food. 

The  situation  regarding  eutrophication  (a 
to  biodiversity  and  ecosystem 
threat 
integrity) has partially improved. The areas at 
risk  have  fallen  from  86%  to  52.2%  since 
2005 ((289).  Nitrogen  deposition  from  agriculture 
and industrial combustion remains a critical driver 
of  this  degradation.  The  2024  nitrogen  decree 
states that appropriate management should be in 
place  for  all  site-specific  conservation  objectives 
by 2030. The decree aims to progressively reduce 
nitrogen deposition in Natura 2000 sites, with the 
goal  of  reaching  levels  that  do  not  degrade 
protected  habitats  by  2045.  The  decree  includes 
mandatory  and  unpopular  measures,  such  as 
significantly  reducing  pig  numbers  in  Flanders  by 
2030.  Several  appeals  have  been  made  against 
the  decree.  By  contrast,  Wallonia’s  scheme  to 
prevent  site-level  deterioration  applies  to  all 
individual  land  sections  within  the  Natura  2000 
network – irrespective of ownership status. 

for 

are 

Natura 

estimated 

ecosystems 

prioritised 
the 

Belgium’s  investment  needs  for  biodiversity 
and 
at 
EUR 0.5 billion  per  year  (in  2022  prices)  in 
2021–2027. This includes the following financing 
action 
needs: (i) Belgium’s 
frameworks (290) 
2000 
areas: EUR 343 million  per  year  –  mostly  running 
costs;  (ii) additional  Biodiversity  Strategy  (BDS) 
costs (291): EUR 22 million  per  year  on  top  of  the 
frameworks; and (iii) sustainable soil management 
costs (292): EUR 126 million.  0.3%  of  the  total 
financing  is  estimated  to  come  from  the  EU’s 
cohesion  policy,  20%  from  the  CAP,  3.3%  from 
Horizon  Europe  and  around  1%  from  both  the 
EMFAF  and  the  LIFE  programme.  The  EU’s 
multiannual 
altogether 
accounts  for  21.2%  of  the  financing  and  the  RRF 
for 3.5%  – adding up  to a total  of 25% from the 
EU  budget.  The  remaining  75%  comes  from 
national  sources (293)).  Belgium’s  2.9%  share  of 

framework 

financial 

(289)EEA,  Ecosystem  area  at  risk  of  eutrofication  and  the 

magnitude of exceedance. 

(290)European  Commission,  Financing  Natura  2000  –  Prioritised 

action frameworks. 

(291)European  Commission  (2022)  Biodiversity  Financing  and 

Tracking, 2022 Final report. 

(292)Proposal  for  a  directive  of  the  European  Parliament  and  of 
the Council on soil monitoring and resilience (Soil Monitoring 
Law), COM(2023) 416 final of 5 July 2023. 

(293)This figure is based on biodiversity tracking in the EU budget 
(https://circabc.europa.eu/ui/group/3f466d71-92a7-49eb-
9c63-6cb0fadf29dc/library/8e44293a-d97f-496d-8769-
50365780acde)  and  national  expenditure  on  biodiversity 

88 

 
 
 
 
RRF funding dedicated to supporting measures for 
biodiversity is relatively high compared with other 
Member States (EU-27:1.8% with a note that 8 MS 
did  not  allocate  anything 
in  their  RRPs  to 
biodiversity)(294).  Flanders  and  Wallonia  have  also 
together  allocated  21%  of  their  combined  CAP 
budget  for  2021–2027  for  biodiversity  –  3.9%  of 
the  EU’s  contribution  to  Belgium’s  cohesion  policy 
is  estimated 
to  biodiversity 
to 
(disregarding ESF+) (EU-27: 6.1%)(295). 

contribute 

Belgium’s  financing  resources  are  estimated 
to  be  sufficient  to  meet  the  environmental 
objectives  concerning  the  protection  and 
restoration  of  biodiversity  and  ecosystems 
and  other  relevant  cross-cutting  measures. 
The  currently  available  data  do  not  point  to  a 
major financing gap. 

Sustainable agriculture and land use 

Belgium’s  carbon  removals  are  in  line  with 
its 2030 target for land use, land-use change 
and forestry (LULUCF). In Belgium, forests cover 
around 11% of the land area, with relatively small 
annual forest losses. Belgium’s LULUCF sector has 
been  a  net  carbon  sink  since  1990,  but  removals 
have  been  decreasing.  No  additional  carbon 
removals  are  required  to  meet  Belgium’s  2030 
LULUCF  target (296),  but 
latest  available 
projections  do  show  that  there  is  no  longer  any 

the 

from  the  Classification  of  the  Functions  of  Government 
Accounts. 

(294)European  Commission,  Draft  Budget  2026:  Statement  of 
Estimates 
2025, 
https://commission.europa.eu/document/download/525beef4-
12c6-4bac-9dc0-e48282def1db_en?filename=DB2026-
Statement-of-Estimates_new%20SP.pdf, page 96. 

(SEC(2025) 

250), 

June 

in 

(295)According to the Statement of Estimates 2026 the average 
EU-27  %  of  biodiversity  expenditure  in  the  Regional  Policy 
(European  Regional  and  Development  Fund  and  Cohesion 
Fund) 
6.1%, 
2021-2027 
https://commission.europa.eu/document/download/525beef4-
12c6-4bac-9dc0-e48282def1db_en?filename=DB2026-
96, 
Statement-of-Estimates_new%20SP.pdf, 
https://commission.europa.eu/document/download/83ae884a
-db42-4423-aca0-
3cf8dfb0e02d_en?filename=Budget%20contribution%20-
%20biodiversity.pdf. 

page 

was 

or 

(296)National  LULUCF  targets  of  the  Member  States  in  line  with 
Regulation  (EU)  2023/839,  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:02018R0841-20230511. 

89 

surplus  over  the  target  of  CO2-eq  for  2030 (297). 
Belgium cannot therefore deviate from its current 
track to meet this target. In addition to increasing 
LULUCF  net  removals,  further  investments  in 
healthy  forests  and  soils  are  key  to  building 
resilient  biobased  product  value-chains  and 
enabling  a  growing,  competitive  EU  bioeconomy. 
Continued improvements in the monitoring system 
of  net  removal  data  and  projections  will  play  a 
crucial  role  in  supporting  timely  and  effective 
action in the sector. 

carbon 

rates  and 

carbon  accounting 

Belgium  is  taking  further  steps  to  improve 
its  nature-based 
sequestration 
capacities. Belgium’s national energy and climate 
plan  (NECP)  identifies  several  measures  (e.g. 
strengthening  the  carbon  monitoring  system, 
developing  a  system 
for  monitoring  wood 
production, managing soil carbon storage, reducing 
artificial  land,  clearing  land  of  rubble,  ensuring 
reforestation  and  adapting  forests  to  climate 
change). Belgium has a national forest accounting 
plan  for  2021-2026,  which  projects  annual 
harvest 
for 
forests (298).  However,  forest  management  is  a 
regional  competence,  so  there 
is  no  unified 
national  forest  management  plan.  In  2025  the 
Flemish  government  established 
the  Flemish 
Action  Platform  for  Carbon  Removals  and  Carbon 
Farming.  This  builds  on 
the  LIFE-funded 
CarbonCounts,  which  includes  mapping  carbon 
storage  in  soils  through  geodata  platforms.  The 
Platform will initially focus on carbon farming and 
carbon  storage  in  biomaterials (299).  Flanders’s 
common  agricultural  policy  supports  soil-related 
measures.  Flanders  has  also  been  implementing 
an  afforestation programme  since  2019,  with  the 
aim of realising 4 000 hectares of new forests by 
2024. Wallonia has (via LIFE projects, its common 
agricultural  policy’s  strategic  plan  and  regional 
measures) set up several programmes to increase 
soil organic carbon sequestration (as laid out in its 
PACE  2030  plan (300)),  thus  protecting  peatlands, 
as  well  as  a  scheme  to  remunerate  soil  organic 
carbon increases in agricultural soils. Wallonia also 

(297)Climate  Action  Progress  Report  2025,  Figure  20, 
https://climate.ec.europa.eu/eu-action/climate-strategies-
targets/progress-climate-action/eu-climate-action-progress-
report-2025_en. 

(298)National_forest_accounting_plan_-_belgium.pdf. 

(299)Carbon removals and carbon farming (Koolstofverwijderingen 

and koolstoflandbouw) | Landbouw en Zeevisserij. 

(300)Plan Air Climat Énergie à l’horizon 2030,. PACE 2030. 

 
 
 
encourages forest owners to diversify tree species 
and build climate resilience, focusing on replanting 
forests  affected  by  pests  and  promoting 
sustainable  forest  management.  The  Brussels 
region  has  limited  LULUCF  initiatives  compared 
with  Belgium’s  other  regions.  Brussels’s  PACE 
2030  plan  includes  brief  mentions  of  carbon 
removal,  primarily  focusing  on  planting  trees  in 
neighbourhoods  with 
limited  tree  cover  and 
promoting soil health. 

Belgium’s  agricultural  sector  continues  to 
have  a  significant  impact  on  air,  water  and 
soils.  Belgium’s  utilised  agricultural  area  (UAA) 
has  been  relatively  stable  but  on  a  slight 
downward  trend  in  recent  years,  amounting  to 
1.35 million  hectares  in  2023.  However,  its  soils 
have  been  significantly  impacted  by  nutrient  loss, 
mainly from mineral fertilisers and manure. This is 
a  significant  environmental  concern  and  a  threat 
to  human  health.  It  is  reflected  in  Belgium’s 
nitrogen balance of 132 kg of nitrogen per hectare 
of UAA (last available  estimate from 2015)  – the 
fourth  highest 
the  EU  behind  Cyprus, 
Netherlands and Malta (EU-27: 40.2 kg per hectare 
of UAA in 2014). According to data collected under 
the  Nitrates  Directive,  nitrates  in  groundwater 
account 29.96 milligrams per litre(301) and 16% of 
in  Belgium 
groundwater  monitoring  stations 
recorded  average  nitrate  concentrations  above 
50 mg/l  between  2016  and  2019 (302),  thus 
threshold  for  human 
exceeding 
consumption.  This  trend  underscores  systemic 
agricultural  pressures,  given 
the  Belgium’s 
relatively  high  livestock  density  (2.51  livestock 
units  per  hectare  in  2023 (303)),  the  third  highest 
score in the EU and well above the EU average of 
0.75. 

the  healthy 

in 

Belgium  faces  environmental  and  public 
health  risks  due  to  persistent  agricultural 
pollution  pressures  and  rapid  transfer  of 
contaminants 
systems. 
Belgium’s  functional  urban  area  has  considerably 
expanded in recent years. Net land taken between 
2018  and  2021  accounted  for  708  parts  per 
total  urban 
million 

(ppm)/year  of  Belgium’s 

in  groundwater 

(301)Eurostat, [sdg_06_40] Nitrate in groundwater (last update 

20.02.2026) 

(302)Nitrate in groundwater, EEA. 

(303)Eurostat, 

index, 
https://ec.europa.eu/eurostat/databrowser/view/tai09/default/t
able?lang=en. 

Livestock 

density 

less 

surface.  Most  land  has  been  taken  from  arable 
land.  This  ongoing  ‘land  take’  and  the  associated 
soil-sealing  make  ecosystems 
resilient, 
decrease  carbon  sequestration  and  impair  flood 
protection (304).  In Flanders the  speed  of  net  land 
take has slowed down in recent years in line with 
the  strategic  spatial  policy objective aiming  at 
achieving  zero.  On  29 October 2025,  the  Court  of 
First Instance in Brussels ordered a moratorium on 
the urbanisation of the city’s natural sites until the 
Brussels-Capital  Region  revises  its  regional  land-
use  plan (305).  A  9%  reduction  in  agricultural 
ammonia emissions between 2018 and 2023 (306) 
underscores  improvement in  emission  control  and 
is  projected (307)  to  meet 
Belgium 
its  2030 
reduction  commitments.  During  the  same  period, 
total ammonia emissions of Belgium decreased at 
the same rate (from 68 kT to 62 kT). The ratio of 
agriculture  emissions  to  total  national  emissions 
remained stable (94.54% vs 94.64%), while other 
sectors  (accounting  for  the  other  5%  of  total 
emissions)  slightly  increased  (transport  rose  by 
2.3%  to  1.2 kT  in  2023;  residential  commercial 
and  institutional  by  3%  to  0.2 kT)  or  significantly 
decreased  (manufacturing  and  extractive  industry 
fell by 60% from 2.2 kT to 1.5 kT (308). In addition, 
persistent  nitrate  pollution 
in 
nutrient management strategies. 

indicates  gaps 

Pesticide  contamination  remains  a  critical 
issue.  52%  of  rivers  water  bodies  exceed 
regulatory  thresholds  for  pesticide  residues (309). 
Pesticides  not  only  threaten  aquatic  ecosystems 
but  also  pose  long-term  risks  to  human  health 
through  contaminated  drinking  water  and  food 
chains. In 2017-2022, pesticides were detected in 
52%  of  surface  water  bodies  at  levels  exceeding 
the  thresholds  (310)  and  in  55%  of  groundwater. 

(304)EEA (2022) Land take and land degradation in functional 

urban areas. 

(305)Court of First Instance in Brussels (2025) 24/885/A. 

(306)EEA,  Air  pollutant  emissions  data  viewer 

(Gothenburg 

Protocol, (Air Convention) 1990-2023. 

(307)EEA (2025) Magnitude of emission reductions required by EU 
reduction 

Member  States 
commitments for 2030 onwards, based on 2023 data. 

their  emission 

to  meet 

(308)Eurostat (2025) Air Pollutants by source sector. 

(309)EEA  (2024)  Pesticides  in  rivers,  lakes,  and  groundwater  in 

Europe. 

(310)The  Water  Framework  Directive  (WFD)  and  its  daughter 
directives on environmental quality standards in water policy, 
as amended in 2013, and quality standards for groundwater 
set  quality  objectives  and  targets  for  pesticides  in  surface 

90 

 
 
 
 
Belgium  has  the  fourth  highest  pesticide  use  per 
hectare  in  the  EU  (after  the  Netherlands,  Malta 
and Cyprus): 7 kg per hectare of arable land. Many 
recent  studies  have  shown  that  this  has  a  severe 
impact  on  Flemish  nature  and  public  health  in 
Flanders (311). On 15 December 2025, the Court of 
First  Instance  Construction  in  Brussels  ruled  that 
Flemish  legislation  did  not  adequately  transpose 
Article 12  of  the  Pesticides  Directive  as  regards 
Natura  2000  sites  and  that  Article 6  of  the 
Habitats  Directive  had  not  been  transposed 
correctly as regards the management of a site in a 
special  area  of  conservation.  An  action  plan  has 
been  adopted  and  extra  measures  are  under 
discussion in the government. 

level  of  soil 
Belgium  has  the  highest 
contamination  by  pesticides  in  the  EU  with 
concentration  over  0.5 mg/kg  in  89%  of  its 
soil  (EU-27:  57%).  More  than  10  substances 
in  45%  of  the  soil  samples 
were  detected 
examined (EU-27: 11.09%) (312). 

waters  and  groundwater  and  should  protect  water  quality 
from pesticide pollution. 

(311)Court  of  First  Instance  Construction  Brussels,  Third  Civil 
Chamber,  role  number  2023/339/A,  date  of  final  judgment 
15.12.2025. 

(312)Vieira  et  al.  (JRC)  (2023)  Pesticides  residues  in  European 
agricultural soils - Results from LUCAS 2018 soil module. 

91 

 
 
Table A10.1:Key Adaptation Indicators 

(1) EFFIS (European Forest Fire Information System), https://forest-fire.emergency.copernicus.eu/apps/effis.statistics/estimates. 
(2) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters, based on modelling of the 
risk from floods, wildfires and windstorms, and on the insurance penetration rate. Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2025, 
Dashboard on insurance protection gap for natural catastrophes. 
(3) This 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 to or greater than 40% indicate severe water 
scarcity. 
(4) European Commission, 2024, Seventh 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). 
(5) Indicator refers to concentrations of nitrate (NO3) in groundwater, measured as milligrams per litre (mgNO3/L). Nitrate 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 is limited to 50 mgNO3/L to avoid threats to human health. 
(6) Net removals are expressed in negative figures and net emissions are expressed in positive figures. Reported data are from the 2025 
greenhouse gas inventory submission. The 2030 value of net greenhouse gas removals is taken from Regulation (EU) 2023/839 – Annex IIa. 
Sources: Eurostat, EEA and JRC. 

92 

Climate adaptation and preparedness:EU-27201920202021202220232024latest dataDrought impact on ecosystems4,6938,560,0156,990-2,76[area impacted by drought as % of total]Forest fires burned area (1)287          -          659          382          240          -           354.510     [burned area in ha. per year]Economic losses from extreme events296          617          11.653     946          121          202          40.452       [EUR million at constant 2022 prices]Insurance protection gap (2)---1              1              1              -[composite score between 0 and 4]Sub-national climate adaptation action57            79            87            89            89            89            34              [% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:EU-27201920202021202220232024latest dataWater Exploitation Index Plus, WEI+ (3)4,21         3,69         3,13         6,87         3,42         -4,53            [total water consumption as % of renewable freshwater resources]Water productivity91            97            86            75            --151[EUR per m3]Water abstractionWater abstraction by source (% from surface water)86,51%84,41%87,28%---Water abstraction by sectorAgricultureElectricity coolingManufactu-ringPublic water supplyMining and QuarryingConstru- ction 0,87%60,41%22,03%15,88%0,81%0,00%Status of water bodies (4)[% of water bodies in a good status]Surface water bodies (ecological)-----27%38%Groundwater bodies (quantitative)-----88%93%Nature restoration:EU-27201920202021202220232024latest dataEcosystem dependency---38%--44%[% of direct dependency]Protected area14,614,614,714,715,526,4[% of terrestrial protected areas]Invasive alien species (IAS)----6129,2[number of IAS of Union concern]Damage cost of IAS----0,081,69[EUR billion]Eutrophication 439439295[AAE of area at risk of euthrophication]Sustainable agriculture and land use:EU-272012-20182018-2021latest dataYearly net land taken by Member State763          708          670            [ppm of total urban surface per Member State]Land conversion in functional urban area [% of total land taken from 2018-2021]Arable land44%Complex and mixed cultivation0%Forests8%Herbaceous vegetation associations6%Open spaces with little or no vegetation0%Pastures40%Permanent crops0%Water2%Wetlands0%201920202021202220232024latest dataNitrates in groundwater (5)30,530,530,330,230,0[mgNO₃/l]Livestock density2,682,510,75(number of livestock units per hectare of utilised agrictultural area)Ammonia emissions 95%95%95%95%95%-94%[% of total utilised agrictultural area]Pesticide contamination on rivers and lakes water bodiesrivers52%27%[% of monitoring sites with pesticides exceeding thresholds, 2018-2023]lakesn.d.18%Pesticide contamination in soil 89%57%[% of samples with a concentration over 0.5 mg/Kg⁻¹]Net greenhouse gas removals from LULUCF (6)-387,0-398,6-330,4-516,4-306,1--198.421 [ktCO₂-eq] 
 
  
 
FAIRNESS 
ANNEX 11: LABOUR MARKET 

labour  market 

Belgium’s  labour  market  remains  resilient, 
but  employment  growth  is  slowing  amid 
structural  challenges  related  to 
labour 
inclusion. 
shortages  and 
Despite  recent  gains,  the  employment  rate  is  still 
low  and  labour  shortages are  still  high in  relative 
terms,  with  large  regional  differences.  Addressing 
skills  mismatches  and  boosting  labour  market 
integration  of  disadvantaged  groups  across  all 
regions  will  be  essential  to  ensure  an  inclusive, 
competitive  and  robust  labour  market.  The  2025 
country-specific 
for 
Belgium highlighted the need to: (i) foster workers’ 
job  mobility,  including  in  research  and  innovation; 
(ii) tackle labour shortages and skills mismatches, 
including for the green and digital transitions; and 
(iii)  make  active  labour  market  policies  more 
effective  and 
integrate 
disadvantaged  groups,  in  particular  people  with  a 
low level of education, older people, people with a 
migrant background and persons with disabilities. 

recommendations 

targeted 

further 

(CSR) 

to 

Graph A11.1: Key labour market indicators (BE) 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, lfsi_neet_a, 
une_ltu_a] 

The  employment  rate  reached  a  new  high  in 
2025  but  is  still  below  the  EU  average,  and 
regional  disparities  persist.  The  employment 
rate  (20-64)  reached  a  record  high  of  72.8%  in 
2025.  Nevertheless,  the  rate  is  well  below  the 
national 2030 target of 80% and lags behind the 
EU  average  both  in  level  (EU:  76.1%)  and  in 
cumulative  growth  since  2016  (+5.1  pps  vs  EU: 

93 

lower 

+6.4  pps).  The  underperformance  mainly  reflects 
the  low  activity  rate  (77.4%  vs  EU:  80.8%). 
Regional differences are among the largest in the 
EU:  employment  is  high  in  Flanders  (77.3%)  but 
substantially 
(67.9%)  and 
Brussels  (63.9%)  (see  Annex  18).  The  gender 
employment  gap  stands  at  7.1  pps,  below the  EU 
average (9.6 pps). Narrowing the gap further could 
help expand the workforce while fully closing it by 
2060 could increase Belgium’s annual GDP growth 
per capita by up to 0.2 pps (313). 

in  Wallonia 

in 

labour  shortages 

The labour market is showing signs of easing, 
with slower employment growth and a slight 
labour  market  slack.  Employment 
rise 
growth  eased  to  0.3%  in  2024  and  it  stayed 
roughly  stable  in  2025  (0.4%).  In  2026-2027, 
employment  growth  is  forecast  to  rise  gradually, 
supported by reforms aimed at longer careers and 
better reintegration of long-term sick workers (314). 
Between 2023 and 2024, hours worked in in flexi-
jobs increased by 25%, representing roughly 0.9% 
of  salaried  labour  volume  (FTE)  in  Q4-2024. 
Belgium  plans  to  expand  this  fiscally  attractive 
contract  type  to  all  sectors  in  2026.  This  may 
exacerbate 
like 
education  and  healthcare (315)  and  poses  a 
potential risk to the tax base. Overall, the share of 
high-wage,  high-productivity  jobs  has  declined 
since 2022, and low-productivity jobs with low and 
medium  wages  have  expanded.  If  this  trend 
continues, it may have implications for job quality 
and competitiveness (316). Labour market slack has 
slightly  increased,  reaching  12.3%  in  Q4-2025, 
above  the  EU  average  (11.0%),  and  up  from 
10.7%  in  Q4-2024,  reflecting  a  higher  share  of 
unemployed  and  underemployed  people  working 
part-time.  The  unemployment  rate  increased  to 
6.2%  in  2025,  up  0.5  pps  from  2024  and  now 
exceeding the EU average (6.0%). In Brussels, the 
unemployment  rate  (12.6%)  is  more  than  double 
the national rate (6.2%), with lower unemployment 
Youth 
Flanders 
in 

surrounding 

in  sectors 

(4.3%). 

(313)Fluchtmann, J., Adema, W., & Keese, M. (eds.) (2024): Gender 
equality  and  economic  growth:  Past  progress  and  future 
potential. OECD  Social,  Employment  and  Migration  Working 
Papers, OECD Publishing, Paris. 

(314)European Commission, Spring 2026 Economic Forecast. 

(315)National Bank of Belgium (2026). Yearly Report 2025. 

(316)European  Commission, 

Labour  Market 

and  Wage 

Developments in Europe – Annual Review 2025. 

697071727374757677780510152025302010201120122013201420152016201720182019202020212022202320242025%%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) 
 
 
  
 
 
 
unemployment  (15-24)  is  above  the  EU  average 
regional 
(17.4%  vs  15.2%),  with  marked 
differences  (see  Annex  18).  The  share  of  young 
people neither in employment nor in education and 
training  (NEETs;  15-29)  stood  at  9.8%  in  2025. 
Although  the  rate  is  below  EU  average  (11.0%), 
the associated economic costs are high, estimated 
at about EUR 28 800 per NEET per year (317). The 
European  Social  Fund  Plus  (ESF+)  supports  youth 
employment  and  implementation  of  the  Youth 
Guarantee  in  Brussels  (EUR  17.1  million)  and 
Wallonia 
Long-term 
unemployment stood at 2.0% in 2025 (EU: 1.9%). 
A  major  reform  that  caps  unemployment  benefit 
to  maximum  two  years  entered  into  force  in 
January 2026 and is expected to cause about one-
third of the people affected to transition to social 
assistance (see Annex 12). 

56.8  million). 

(EUR 

Labour shortages are easing but remain high. 
Labour shortages remain among the most acute in 
the  EU,  with  a  job  vacancy  rate  of  3.8%  in  2025 
(EU: 2.1%). While job vacancy rates have declined 
in line with the EU trend, they remain above the EU 
average  in  all  regions (318).  Labour  shortages  are 
still  widespread  across  several  sectors  and  are 
especially  high  in  administrative  and  support 
service  activities  (7.5%),  professional,  scientific 
and technical activities (5.8%), construction (5.5%) 
and  ICT  (4.6%).  Demographic  change  is  causing 
labour  supply  growth  to  slow,  which  may  affect 
sectors  such  as  public  administration,  transport, 
and  manufacturing. 
education, 
Considering  labour  shortages,  Belgium  has  taken 
several flexibility measures (Annex 5). 

healthcare 

Skills  mismatches  also  persist,  suggesting 
scope  for  improved  interregional  mobility. 
The  macroeconomic  skills  mismatch (319)  has 
declined in recent years, reaching 25.4% in  2025, 
still  one  of  the  highest  in  the  EU  (EU:  19.2%). 
Overqualification  rates  have  slightly  declined  to 
19.7% in 2025 (EU: 21.4%), the lowest level since 
2016.  Although  61.2%  of  individuals  aged  16–74 
had  at  least  basic  digital  skills  in  2025  (EU: 

60.4%),  there  are  still  significant  gaps  across 
population  groups.  On  advanced  digital  skills,  ICT 
specialists  accounted  for  5.9%  of  the  number  of 
people  in  total  employment  in  2025  (EU:  5.0%), 
yet  demand  continues  to  outpace  supply  across 
many activities. In science and technology, low job 
mobility is hampering innovation (see Annex 4). In 
line  with  the  2025  CSR  to  foster  workers’  job 
mobility,  Belgium  has 
introduced  a  one-time 
entitlement  to  unemployment  benefits  for  people 
who  leave  their  job  voluntarily  in  an  effort  to 
improve 
labour 
job-to-job  mobility.  Regional 
to  further 
market  differences suggest  scope 
improve interregional labour mobility, for instance 
in  Brussels  where  the  ratio  of  vacancies  to  low-
skilled jobseekers is low (320).  

into  the 

Belgium underperforms in integrating non-EU 
nationals 
labour  market.  The 
employment  rate  of  non-EU  citizens  is the lowest 
in the EU (51.6% vs EU:  65.2% in  2025), and the 
relative employment gap (21.2 pps) is  among the 
largest  in  the  EU.  The  weak 
labour  market 
integration  is  associated  with  markedly  higher 
poverty risks (Annex 12). The employment rate for 
women  with  non-EU  citizenship  is  even  lower, 
standing at 39.5% (EU: 54.0%). This can partly be 
attributed to care responsibilities and more limited 
access to early childhood education and care (321). 
However,  differences  in  household  composition 
and  education 
level  only  partly  explain  this 
employment  gap  (322).  Moreover,  labour  market 
lower  for  native-born 
participation  rates  are 
individuals with two foreign-born parents than for 
foreign-born  individuals.  Lastly,  non-EU  nationals 
are  more  likely  to  work  in  poor-quality  jobs,  with 
significantly higher  risks of in-work-poverty and a 
higher  prevalence  of  temporary  contracts.  Posted 
non-EU  nationals  face  additional  vulnerabilities  in 
their  working  conditions,  as  shown  by  higher 
infraction  rates  uncovered  by  Belgian  social 
investigations (323). 
inspections 

in  transnational 

(320) See  2025  Country  Report  for  Belgium;  OECD  (2023): 
Unleashing  Talent  in  Brussels,  Belgium,  OECD  Reviews  on 
Local Job Creation, OECD Publishing, Paris. 

(317) European 

Commission, 
Developments in Europe (‘ESDE’) 2025. 

Employment 

and 

Social 

(321) OECD/European Commission (2023), Indicators of Immigrant 

Integration 2023: Settling In, OECD Publishing, Paris. 

(318) Flanders:  4.0%;  Brussels:  3.0%;  Wallonia:  2.8%  in  Q4-2025 

(EU: 2.1% in Q4-2025). 

(319) This  indicator  shows  the  relatively  higher  difficulty  of  low- 
and medium-qualified  people  in entering the labour market, 
as  compared  with  high-qualified  people.  DG  EMPL 
calculations based on Eurostat data. 

94 

(322) Gap  compared  with  Belgian  women.  Instituut  voor  de 
Gelijkheid  van  Vrouwen  en  Mannen  (2025).  De  positie  van 
vrouwen 
de  Belgische 
arbeidsmarkt. The study uses a broader concept of ‘migrant 
origin’ encompassing both first and second generations. 

niet-EU-herkomst 

van 

op 

(323) Higher than the share of ‘positive’ investigations among non-
(2025). 

investigations.  De  Wispelaere,  F. 

transnational 

 
 
 
 
Belgium is taking several measures against social 
fraud.  Strengthened  policy  actions  comprising  the 
talent pipeline  from  education  and training  to  the 
labour market, focusing on enabling services, could 
help  improve  labour  market  integration  of  people 
with  a  migrant  background,  in  line  with  the  2025 
CSR. 

Graph A11.2: Employment rate by citizenship 

rate  by  20.5  pps.  Still, 

improved markedly, from 35.3% in 2009 to 61.5% 
in  2025,  narrowing  the  gap  with  the  overall 
employment 
the 
employment  rate  of  older  people  remains  below 
the  EU  average  (66.4%).  Recently  agreed  pension 
reforms  aim  to incentivise  longer  working  careers 
(see  Annex  12),  although  age  discrimination  in 
hiring may also affect employment prospects. 

The  share  of  people  in  low-work  intensity 
households  is  high.  At  11.0%  in  2025,  Belgium 
has one the highest shares in the EU of people (0-
64)  living  in  households  with  very  low-work 
intensity.  Regional  disparities  are  wide,  with  high 
rates  in  Brussels  (22.1%)  and  Wallonia  (14.6%). 
The  relatively  high  rate  of  clustered  low-work 
intensity, alongside higher associated poverty risks 
and 
intergenerational 
transmission  of  poverty,  remains  a  concern  (325). 
Very 
require 
improved  access  to  the  labour  market  through 
enhanced  and 
including 
employment-oriented  measures,  like  training  and 
enabling services (see Annex 12). 

intensity  households 

low-work 

potential 

targeted 

support, 

the 

for 

in 

the  health  of 
improved 

The  number  of  people  on  long-term  sick 
leave  is  high  and  growing,  weighing  on 
Belgium’s  productivity.  The  share  of  people 
receiving  disability  benefits  is  higher  than  in 
neighbouring Member States like Germany and the 
Netherlands.  This  cannot  be  explained  by  a 
the  overall 
deterioration 
population,  but  the 
labour  market 
participation of women and older workers plays a 
role as  they  are  more  likely  to  experience  health 
issues (326). Improved prevention and reintegration, 
including 
cross-
institutional  cooperation,  could  help  curb  this  rise. 
To  deal  with  this  challenge,  Belgium  is  further 
‘Return-to-Work’  measures (327). 
expanding 
Robust  monitoring  and  evaluation  of 
these 
measures, which takes into account other ongoing 
reforms  and  the  existing  institutional  set-up,  will 
be essential to assess their effectiveness. 

timely  action  and  better 

its 

Financial  incentives  to  work  or  to  increase 
remain 
the  number  of  hours  worked 

(325) See Annex 12 on child poverty risks and Annex 13 on socio-

economic gaps in educational outcomes. 

(326) OECD (2024): Economic Survey Belgium 2024. 

(327) Since  2021,  the  federal  government  has  taken  several 
measures to improve the reintegration of people with a long-
term illness and strengthen the ‘Return-to-Work’ policy. 

Source: Eurostat, LFS [lfsa_ergan] 

Sizeable labour market disparities remain for 
persons  with  disabilities,  people  with  lower 
levels  of  education  and  older  workers.  The 
disability  employment  gap  in  Belgium  remains 
high (34.7 pps vs EU: 24.2 pps in 2025). The rate 
has  slightly  increased  relative  to  2024  (33.1pps) 
and  remains  well  above  the  national  target  of 
reducing the gap to below 24.5 pps by 2030. The 
activity  rate  of  persons  with  disabilities  at  50.9% 
is  low  (EU:  64.4%;  2023),  pointing  to  limited 
is 
incentives 
strengthening  its  ‘Return-to-Work’  policy  to  tackle 
this. People with lower levels of education have an 
employment  rate  of  46.7%  (EU:  58.2%)  and  their 
participation  in  lifelong  learning  is  lower  (see 
Annex 13). The ESF+ is investing around EUR 134 
million  in  improving  access  to  the  labour  market, 
including 
The 
disadvantaged 
employment  rate  of  older  people  (55-64)  has 

to  work (324), 

and  Belgium 

groups. 

for 

Inspectiestatistieken  over  de  strijd  tegen  sociale  fraude  en 
sociale  dumping:  meten  is  weten.  Belgisch  Tijdschrift  voor 
Sociale Zekerheid (Vol. 66, Issue 4, pp. 567–598). 

(324) European  Semester  2025-2026,  Country  fiche  on  disability 

equality, Belgium. 

95 

20304050607080902010201120122013201420152016201720182019202020212022202320242025% of population 20-64BENationalsEU mobile workersThird countries 
   
 
 
constrained. According to the OECD, Belgium has 
the  highest  tax  wedge  in  the  EU  (52.6%;  EU: 
40.3%) (328),  and  there  are  significant  low-wage 
traps.  A  recent  study (329)  nuances  the  prevalence 
of  low  financial  incentives  to  work,  finding  that 
they  vary  considerably  depending  on  individual 
characteristics.  However,  it  identifies  weak  work 
incentives  for  single  mothers,  even  without 
considering  the  cost  of  early  childhood  education 
and care. Some measures were introduced in 2026 
by  the  federal  government  to  make  work  more 
financially rewarding, including increasing the tax-
free allowance and the work bonus (see Annex 3). 

Belgium  is  focusing  on  active  labour  market 
policies,  but  challenges  remain.  Belgium  is 
implementing a reform of unemployment benefits 
and  youth  integration  allowances,  under  which 
people  under  55  who  have  been  unemployed  for 
more than two years will generally lose access to 
unemployment  benefits.  Given  the  strong  impact 
of unemployment duration on the likelihood to find 
work,  targeted  and  effective  active labour market 
policies (ALMP) are crucial to mitigate the reform’s 
social  impact  and  to  better  reach  disadvantaged 
groups  and  the  inactive  population.  Belgium  has 
above-average  investment  in  ALMPs  and  ALMP 
participants  have  a  relatively  high  willingness  to 
work,  but  the  evidence  on  the  cost-effectiveness 
of demand-side ALMPs is mixed (330). There is also 
scope 
in 
Brussels (331).  In  line  with  the  2025  CSR,  Wallonia 
has  strengthened  its  follow-up  of  jobseekers  with 
a  reform  of  the  public  employment  service,  and 
Flanders is rolling out an action plan to absorb the 
impact of the unemployment benefits reform. 

jobseeker  processes 

to  streamline 

Nominal wages rose in 2025, and real wages 
stayed  broadly  flat.  Wages  grew  by  3.3%  in 
nominal  terms  (EU:  4.3%)  and  by  0.2%  in  real 
terms  (EU:  1.7%)  in  2025.  In  2026,  nominal  and 
real  wages  are  projected  to  increase  by  2.4%, 
while real wages are expected to fall by 0.7%. This 

(328) The figures reflect the situation of a worker earning 67% of 
the average wage and living alone. See (OECD, 2025b). 

(329) Aerts,  Marx,  and  Verbist  (2025).  Revisiting  the  'make  work 
pay'  debate:  how  pervasive  are  dependency  and  poverty 
traps really? Centre for Social Policy Herman Deleeck Working 
Papers, University of Antwerp. 

(330) Cockx, B., Deng, H., Desiere, S., Toniolo, T., & Van der Linden, 
B. (2025). De loonlastenverlaging voor de eerste werknemer 
– enkele inzichten. Gent: Universiteit Gent. 

(331) OECD (2023), Unleashing Talent in Brussels, Belgium. 

evolution follows a real wage decrease in 2024 (-
1.3%),  after  sizable  real  wage  growth  in  2023 
(+5.1%). Overall, compared with 2019, real wages 
were 2.0% higher in 2025 and are expected to be 
2.5%  higher 
in  2026,  contributing  to  some 
in  the  post-
recovery  of  purchasing  power 
pandemic  period.  From  a  cost-competitiveness 
perspective,  unit  labour  costs  rose  by  2.5%  in 
2024,  against  4.9%  in  the  EU,  and  a  similar 
growth  rate  is  expected  for  2025  (2.6%).  The 
statutory  minimum  wage  increased  by  10.5%  in 
real terms between January 2022 and July 2026. 
the  wage-setting 
A  balanced 
mechanism,  comprising  wage  indexation  and  the 
wage norm law, could help enhance labour market 
efficiency (332). The federal government has asked 
social  partners  to  propose  a  modernised  wage 
norm by end of 2026 and plans a two-time cap on 
indexation of wages above EUR 4,000 gross (333). 

reform  of 

climate 

transition 
in 

to 
energy-intensive 

Belgium appears relatively well positioned in 
neutrality. 
the 
Employment 
industries 
represents a moderate share of total employment, 
slightly  below  the  EU  average  (2.7%;  EU:  3.5%  in 
2025).  This  points  to  more  limited  transition-
related  risks  for  workers  compared  with  Member 
States  with  larger  energy-intensive  industries.  Of 
particular  significance  is  the  chemical  industry, 
which  employs  an  above-average  proportion  of 
workers (1.0% vs EU: 0.7% in 2025), with a strong 
regional concentration in Flanders. This industry is 
expected  to  be  further  affected  by  international 
competition and higher energy prices. 

Social dialogue remains well-established. The 
collective bargaining coverage rate, at 96%, is the 
fourth  highest  in  the  EU,  and  trade  union  density 
stood  at  47.5%  in  2023.  Belgium  operates  a 
multilevel  system  of  social  dialogue,  with  social 
partners  active  at  federal  and  regional  levels,  as 
well  as  in  interprofessional  and  sectoral  contexts. 
Around 4 in 10 workers are trade union members, 
one  of  the  highest  rates  in  the  EU.  Belgian  social 
partners  have  underlined  the  continued  need  for 
sufficient time and space for social dialogue (334). 

(332) International Monetary Fund. European Dept. "Belgium: 2025 
Article  IV  Consultation-Press  Release;  and  Staff  Report", IMF 
Staff Country Reports 2025, 069, accessed 26/3/2026 

(333) Draft Programme Law of 23/02/2026, ref. 56K1378. 

(334) ESDE 2025; National Labour Council (2025): Opinion 2471 
on the European Recommendation on strengthening Social 
Dialogue in the EU. 

96 

 
 
 
ANNEX 12: SOCIAL POLICIES 

Belgium’s  strong  welfare  system  tackles 
poverty  and  social  exclusion,  but  some 
groups  face  persistent  challenges.  Belgium 
reached  its  overall  2030  poverty  reduction  target 
in  2025.  Social  benefits  play  an  important  role  in 
reducing  poverty  and 
inequalities.  However, 
vulnerable  groups  continue  to  face  significant 
disparities,  especially  people  with  a  migrant 
background,  persons  with  disabilities  and  single-
parent  households,  partly  associated  with  weaker 
labour  market  outcomes.  In  2025,  the  country-
specific  recommendations  for  Belgium  called  for 
making  the  long-term  care  system  more  cost-
effective while keeping access to care and services 
affordable.  Further  efforts 
these 
challenges  will  help  contribute  to  Belgium’s 
competitiveness, inclusive growth and prosperity. 

tackle 

to 

Poverty  and  social  exclusion  risks  are 
relatively  low  and  decreasing.  The  at-risk-of-
poverty or social exclusion (AROPE) rate decreased 
by  1.8  percentage  points  (pps)  to  reach  16.5%  in 
2025  (EU  average:  20.9%).  With  these  latest 
efforts,  Belgium  has  reached  its  2030  target  for 
reducing  the  number  of  people  at  risk  of  poverty 
or  social  exclusion,  with  a  decrease  of  344 000 
people  compared  to  2019  levels  (2030  target:  -
279 000). For 2025, the at-risk-of-poverty (AROP) 
rate  in  Belgium  is  the  second  lowest  in  the  EU 
(10.9%  vs  EU  16.3%),  while  the  rate  of  severe 
material  and  social  deprivation  is  also  below  EU 
average  and  decreasing  (4.9%  vs  EU  6.3%).  The 
poverty gap (335) was the lowest in the EU in 2025 
at 14.6% (EU: 22.5%).  

The proportion of children at risk of poverty 
or social exclusion also decreased by 1.3 pps 
to reach 18.9% in 2025 (EU 24.3%). With this 
evolution  Belgium  has  achieved  a  decrease  of  86 
000 children at risk of poverty  or social  exclusion 
compared  to 2019  levels,  bringing  Belgium  closer 
to  reaching  its  2030  sub-target  on  reducing  child 
poverty (target 93 000). Ensuring adequate human 
strengthening 
resources  and 
and 
cooperation  between  national,  regional  and  local 
bodies,  including  in  the  area  of  data  collection, 
could  be  considered  in  order  to  bolster  the 
implementation  of  the  European  Child  Guarantee 
recommendation.  

financial 

There  are  significant  regional  disparities  in 
the  risk  of  poverty  or  social  exclusion.  The 
AROPE rate was higher in Brussels (33.6%) than in 
Wallonia  (20%)  and  Flanders  (11.4%)  in  2025. 
Brussels, and to a lesser extent Wallonia, also has 
a  significantly  higher  risk  of  monetary  poverty 
than  Flanders  (Brussels:  23.3%;  Wallonia:  13.4%; 
Flanders:  7.2%).  Brussels 
is  characterised  by 
marked  social  inequalities  and  more  polarised 
wages (with the lowest 10% of earners being paid 
EUR 985 per month compared with EUR 1250 per 
month for Belgium overall), while poverty risks are 
compounded by high housing costs, particularly for 
(see  Annex  16) (336).  While  Belgium 
tenants 
achieved  its  poverty  reduction  targets  in  2025, 
sustained and comprehensive anti-poverty policies 
in  line  with  the  EU  Anti-Poverty  Strategy  remain 
essential to ensure continued progress.  

Graph A12.1: At-risk-of-poverty or social exclusion 
rate and its components (AROP, SMSD, LWI) 

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

The  high  percentage  of  people  living  in  low 
work intensity households poses a structural 
challenge.  In  2025,  Belgium  had  one  of  the 
highest proportions of people (under 65 years old) 
living in households with very low work intensity or 
quasi-jobless households, in the EU  (11.0% vs EU 
7.9%).  At  the  same  time,  the  poverty  risk  for 
people living in quasi-jobless households has been 

(335) The  poverty  gap  measures  the  depth  of  poverty,  i.e.  the 
difference  between  the  median  equivalised  disposable 
income of people below the at-risk-of-poverty threshold and 
the poverty threshold. 

(336) Observatoire de la Santé et du Social de Bruxelles-Capitale, 
Baromètre Social : Rapport Bruxellois sur l’état de la Pauvreté 
et des inégalités sociales et de santé 2023 et 2025. 

97 

05101520252016201720182019202020212022202320242025% of populationBEAt-risk-of-poverty-or-social-exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
 
     
 
 
 
decreasing,  from  58.9%  in  2020  to  50%  in  2025 
(EU: 64.5% vs 66.3%), suggesting an improvement 
in  the  effectiveness  of  social  protection.  Despite 
this, poverty risks for children living in households 
with  very  low  work  intensity  remain  very  high  at 
68.3% (337).  Measures  to  address  the  structural 
challenge  of  very  low  work  intensity  households 
could  focus  on  improved  access  to  the  labour 
market 
targeted  support, 
increased 
employment-oriented 
alongside 
measures  and  strengthening  enabling  services 
such  as  early  childhood  education  and  care  (see 
Annex 11). 

boosting 

through 

The  risk  of  living  in  a  household  with  very 
low  work  intensity  is  significantly  higher  in 
certain  groups  and  regions.  In  2025,  certain 
groups  presented  an  increased  risk  of  living  in  a 
household  with  very  low  work  intensity.  Belgium 
has the highest percentage of non-EU-born adults 
living  in  very  low  work  intensity  households 
(20.6%  vs  EU  13.2%).  Additionally,  adults  with  a 
lower  educational  attainment 
level  had  a 
significantly  higher  risk  of  living  in  a  household 
with very low work intensity (34.1% vs EU 17.3%) 
compared  to  those  with  a  medium  (11.6%  vs  EU 
7.3%) or higher level (5.3% vs EU 4.1%). Moreover, 
regional disparities are significant, with higher and 
increasing  rates  in  Brussels  (22.1%,  up  1.9 pps 
since  2024)  compared  to  Wallonia  (14.6%)  and 
Flanders (6.7%).  

Poverty risks remain persistently high among 
certain  groups  and  are  closely  linked  to 
weaker  labour  market  outcomes.  At  35.7%, 
people  born  in  a  non-EU  country  face  an  AROPE 
rate  22.9 pps  higher  than  people  born  in  Belgium 
(while  people  born  in  another  EU  country  face  an 
AROPE  rate  7.4 pps  higher  than  those  born  in 
Belgium).  This  is  tied  to  lower  employment  rates 
and  an  increased  likelihood  for  non-EU  nationals 
to experience poor job quality (see Annex 11), with 
a  significant  gap  between  the  rate  of  in-work 
poverty  for  workers  born  in  non-EU  countries 
compared  to  those  born  in  Belgium  (12.3%  vs 
2.8%).  Additionally,  persons  with  disabilities  were 
twice  as  likely  to  face  poverty  or  social  exclusion 
risks  (27.2%)  than  persons  without  disabilities 
(12.2%).  This  is  linked  to  worse  labour  market 
outcomes  for  persons  with  disabilities  and  a  high 
disability  employment  gap  (see  Annex  11).  The 
AROPE rate was also high for households with one 

(337) SPPM 2024. 

in 

to 

and 

social 

poverty 

improve 

adult  living  alone  (26.1%  vs  EU  31.7%)  and  for 
single  parents  (33%  vs  EU  44.3%).  Beyond 
employment  status,  disparities 
job  quality 
among  vulnerable  groups  play  a  key  role  in 
determining 
inclusion 
outcomes (338).  The  European  Social  Fund  Plus 
(ESF+)  helps  support  poverty  reduction  through 
around  EUR 418  million  in  investments  in  social 
inclusion and integration, while EUR 50.6 million is 
allocated  for  material  aid  to  the  most  deprived. 
Greater  efforts 
labour  market 
outcomes,  both  in  quality  and  intensity  of  work, 
including  through  the  social  economy,  could  help 
create  economic  opportunities  and promote  social 
inclusion. Since 2025, Belgium (Wallonia) has been 
benefiting  from  technical  support  through  the 
Technical  Support  Instrument  (TSI)  to  design  its 
new  social  economy  strategy  that  will  integrate 
wider  policy  objectives  and  a  monitoring  and 
evaluation  framework.  The  project  will  also  help 
develop  a  communication  plan  that  promotes 
social  economy  initiatives  and  fosters  public  and 
private  sector  support,  thereby  bolstering  the 
social economy ecosystem. 

Social  benefits  are  very  effective  at 
mitigating the risks of poverty, but coverage 
gaps  and  regional  differences  persist.  Social 
protection  expenditure  in  Belgium  is  among  the 
highest in the EU (28.7% of GDP in 2024 vs 27.3% 
in the EU). The effectiveness of social protection in 
reducing poverty  risks through social  benefits has 
improved from  41.7% in 2019 to 52.6% in 2025, 
making Belgium one of the best performers in the 
EU. This means the poverty risk is reduced by over 
half  through  social  benefits,  while  in  the  EU  this 
risk is reduced by a third (33.2%). For Brussels, the 
poverty-reducing effect of social benefits is lower 
(45.9%)  than  in  Flanders  (55.8%)  and  Wallonia 
(53.2%).  Moreover,  in-work  benefits  provided  to 
low-income 
are  working 
contributed  to  reducing  the  risk  of  poverty  by 
2.3 pps (339). Coverage of in-cash benefits remains 
high  overall,  with  87.0%  of  eligible  individuals 
receiving 
(EU  83.1%). 
Nevertheless,  coverage  gaps  persist  and  certain 
groups, such as unemployed people and temporary 
or  part-time  workers,  have  persistently  higher 

individuals  who 

in  2024 

benefits 

(338) SPF  Social  Security,  Evolution  of  the  social  situation  and 
social  protection  in  Belgium  in  a  comparative  perspective 
2025. 

(339) Employment  and  Social  Developments  in  Europe  2025 

Annual Review. 

98 

 
 
 
AROP rates after social benefits (see 2025 country 
report).  

to 

the 

limits 

duration 

changes, 

facilitate 

reform  aims 

Federal  Government 

labour  market  and  prevent 

fiscal-structural  plan, 
adopted 

An  ongoing  reform  of  the  unemployment 
benefits system aims to boost labour market 
participation. In 2025, in line with commitments 
in  the  Belgian  recovery  and  resilience  plan  (RRP) 
the 
and  medium-term 
an 
Belgian 
unemployment  benefits  reform  which,  among 
other 
of 
unemployment  benefits  to  a  maximum  of  two 
the 
years.  The 
reintegration  of  the  long-term  unemployed  into 
the 
long-term 
dependency  on  unemployment  benefits.  Initial 
government  calculations  estimated  that  around  a 
third  of  the  long-term  unemployed  would  find 
employment,  while  a  third  would  transition  to 
social  assistance.  However,  recent  analyses  by 
Belgium’s  Court  of  Audit (340)  and  the  National 
Bank  of  Belgium (341)  concluded  that  the  outflow 
to  employment  may  have  been  underestimated, 
with  between  10%  and  20%  expected  to  find 
the  unemployment 
employment.  To  prevent 
reform  from  negatively 
impacting  the  most 
vulnerable  groups,  it  is  necessary  to  continue 
focusing on skills development, to ensure targeted 
support for jobseekers, to strengthen the capacity 
of social assistance providers (CPAS/OCMW) and to 
ensure 
those  providers  cooperate  with 
regional  employment  services.  In  this  regard, 
Belgium  is  benefitting  from  support  through  the 
TSI  to  develop  digital  solutions  to  support  job 
matching  and  career  progression  for  vulnerable 
groups.  This  may  facilitate  job  searching  and 
support  for  vulnerable  groups,  helping  to  shorten 
the  duration  of  unemployment  and  leading  to 
more sustainable,  higher-quality career paths and 
improved social inclusion.  

that 

An adequate and sustainable pension system 
remains  crucial  to  mitigate  poverty  risks  in 
old  age.  The  risk  of  poverty  for  people  over  65 
years  old  has  decreased  from  17.9%  in  2022  to 
9.3%  in  2025  (16.3%  in  the  EU).  Still,  the  gross 
aggregate  pension  replacement  ratio  (excluding 
other social benefits) was 0.48 in 2025, indicating 
that  pensioners  experience  a  more  considerable 

drop  in  income  compared  with  their  gross  pre-
retirement income than the EU average (0.60). The 
gender pension gap in Belgium is also higher than 
the  EU  average,  at  26.2%  (66-79;  EU:  23.9%), 
which can be attributed to past gender inequalities 
on  the  labour  market  or  less  accrual  of  pension 
rights due to care responsibilities (342). 

in 

line  with 

The  new  pension  reform  aims  to  improve 
social and fiscal sustainability. In March 2026, 
the  federal  government  presented  a  draft  law  to 
reform the pension system to the parliament (343). 
its  efforts  on 
The  government  has  focused 
improving  the  adequacy  and  sustainability  of  the 
pension  system, 
reforms 
undertaken  as  part  of  the  Belgian  RRP  and  the 
medium-term  fiscal-structural  plan.  The  draft  law 
aims  to  further  harmonise  the  three  statutory 
pension  schemes  (employee,  self-employed,  civil 
servant),  introduces  a  ‘bonus-malus’  system  to 
encourage  longer  working  careers  and  reviews 
how  working  years  are  counted.  Retaining  older 
people in the labour market is central to ensuring 
that both the labour market and the social system 
remain sustainable in the long term. 

the 

long-term  care 

Demographic  ageing  is  expected  to  place 
long-term  care 
increased  strain  on  the 
(LTC)  system 
system.  The 
generally  performs  well 
in  Belgium,  but 
demographic  trends  are  expected  to  exacerbate 
increased 
existing  vulnerabilities  and  place 
financial  pressure  on  the  system. 
In  2022, 
spending  on  LTC  in  Belgium  was  among  the 
highest  in  the  EU  (2.3%  of  GDP  vs  1.7%  in  the 
EU) (344), reflected in the high proportion of people 
aged 65 and over who receive public home care or 
residential  care  (15.2%  and  5.2%  respectively  vs 
5.5%  and  3.3%  in  the  EU).  The  Federal  Planning 
Bureau  calculated  that  the  expenditure  for  LTC 
would increase to 2.9% of GDP by 2050 (345). The 
Belgian LTC system is also characterised by a high 
reliance  on  residential  care  (61.3%  of  total  LTC 
expenditure  in  2022  vs  46.2%  EU  average), 
although  Belgium  has  recently  increased  the 
provision  and  awareness  of  home  care.  The 

(342) Federal  Planning  Bureau,  Karel  van  den  Bosch,  The  Gender 
Pension  Gap,  past  gender  labour  market  inequalities  and 
pension systems in the EU, April 2024. 

(340) Cour  des  comptes,  Commentaires  et  observations  sur  les 
projets de budget de l’État pour l’année budgétaire 2026. 

(343) Pension reform draft law of 10 March 2026. 

(344) Ageing Report 2024. 

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

(345) Federal  Planning  Bureau,  Annual  Report  2025  of  the  Study 

– December 2025. 

Committee on Ageing. 

99 

 
 
 
income 

Belgian LTC system presents certain vulnerabilities 
in  affordability,  especially  given  the  high  out-of-
pocket cost for residential care as a proportion of 
support (346). 
old-age 
Additionally, with labour shortages recorded in the 
LTC  sector  in  all  three  regions  and,  with  21%  of 
LTC workers aged over 55 (EU 27%), demographic 
ageing  may  accentuate  challenges  with  the 
workforce supply.  

public 

after 

‘ToekomstZorg’ 

(FutureCare)  aims 

Belgium  has  taken  some  measures  to  keep 
access  to  care  and  services  affordable. 
Belgium  has  focused  on  digitalisation  in  the  care 
sector  under  the  RRP.  In  Flanders,  a  four-year 
project 
to 
develop intersectoral LTC. In parallel, the extension 
of  the  use  of  the  BelRAI  tool  to  LTC  facilities  in 
Flanders in 2023, with further plans to also apply 
it to home care, makes it easier to assess the care 
and  support  needs  of  older  people  and  develop 
individual care plans in residential and community-
based  settings.  In  Wallonia,  primary  care  is  being 
reformed  to  strengthen  prevention  and  improve 
the  efficiency  of  community-based  care  and 
services.  Brussels  is continuing  its  work  to  ensure 
older  people  and  people  with  reduced  autonomy 
receive  adequate  care  and  services,  through  a 
large-scale reform of the LTC sector that includes 
measures  to  improve  the  financing  of  Iriscare  (a 
social  protection  organisation), 
facilitate 
transparency  of  costs  and  to  strengthen  the 
alternatives  to  residential  care.  The  ESF+  also 
supports  the  diversification  of  care  settings  and 
the provision of independent living services with a 
budget of EUR 15 million in Wallonia and Brussels. 
It  will  be  essential  to  continue  improving  data 
collection,  forecasting  and  planning  mechanisms, 
as  well  as  to  engage  in  collaboration  between 
different  levels  of  government,  to  ensure  an 
adequate,  affordable  and  sustainable  LTC  system 
that takes demographic ageing into consideration. 

to 

significantly  higher  among  people  at  risk  of 
poverty (13.2% vs EU average 19.6%), due to both 
high energy prices and the increased likelihood for 
this  group  to  live  in  homes  with  low  energy 
efficiency (347).  Regional  disparities  were  also 
significant,  with  much  higher  rates  in  Brussels 
(9.6%) and Wallonia (7.6%) compared to Flanders 
(1.4%).  Belgium  addresses  energy  poverty  mainly 
through  social  support  measures  and  financial 
assistance  for  low-income  households  targeted 
towards  improving  energy  efficiency  of  buildings 
and  helping  with  the  payment  of  energy  bills. 
the 
Concerning 
population was unable to afford a car (around the 
5.5% EU average). However, the risk is higher and 
above the EU average for people living below the 
In 
poverty  threshold 
Wallonia’s  rural  areas,  public  transport  faces 
bottlenecks (see Annex 18).  

transport  poverty,  5.7%  of 

(22.7%  vs  EU  16.5%). 

is 

implementing  a  series  of 
Belgium 
investments  and  measures  to  tackle  energy 
inefficiency  and  transport  challenges.  The 
Belgian  RRP  supports 
investments  aimed  at 
renovating  private  and  social  housing  (see  Annex 
16),  providing  energy  grants  for 
low-income 
households  and  improving  public  transport  in  all 
three  regions.  The  Belgian  national  energy  and 
climate  plan  also  aims,  among  other  things,  to 
address  energy  and  transport  poverty  through  a 
levels  of 
coordinated  approach 
government (348). 
the 
by 
Commission,  the  Belgian  social  climate  plan  will 
support  ongoing  efforts  to  address  energy  and 
transport  poverty  among  the  most  vulnerable 
households  and  transport  users,  in  particular  to 
cushion  the  upcoming 
impacts  of  the  new 
emissions trading system (ETS2). 

involving  all 
adoption 

Upon 

Energy  and  transport  poverty  in  Belgium 
remain  relatively  low,  but  some  groups  are 
disproportionately  affected,  and  significant 
regional  disparities  persist.  In  2025,  4.2%  of 
the  population  was  unable  to  keep  their  house 
adequately  warm,  while  4%  of  the  population 
faced  arrears  on  utility  bills,  both  well  below  the 
EU  average 
respectively). 
(8.8%  and  7%, 
Nevertheless,  the  percentage  of  people  unable  to 
their  house  adequately  warm  was 
keep 

(346) OECD. 

(347) Fondation  Roi  Baudoin,  Baromètre  de 

la  précarité 

énergétique 2024. 

(348) Belgian National Energy and Climate Plan 2021-2030. 

100 

 
 
 
 
ANNEX 13: EDUCATION AND SKILLS 

rate  of 

taken,  a 

top  performers 

long-term  vision 

Deteriorating  basic  skills  and  inequalities  in 
the education systems, combined with limited 
adult  learning,  call  for  further  policy  action. 
Significant  socio-economic  disparities 
in  basic 
skills  persist,  exacerbated  by  academic  tracking. 
The  declining 
in 
mathematics  and  science  could  adversely  affect 
early  orientation  towards  science,  technology, 
engineering  and  mathematics  (STEM)  careers. 
Although  measures  to  address  teacher  shortages 
are  being 
for 
professional  development  and  diversified  career 
opportunities could help make the profession more 
attractive. Adult participation in lifelong learning is 
low  and  groups  with  weaker 
labour  market 
attachment participate substantially less. Boosting 
information  and  communications 
STEM  and 
technology  (ICT)  enrolment  at  all  levels,  including 
among  girls  and  women,  would 
support 
competitiveness,  while  better  aligning  education 
training  offers  with  needs  could  help 
and 
overcome labour shortages and skills mismatches. 
While  several  reforms  are  under  way,  there  is 
further scope for policy action to address the 2025 
country-specific recommendations (349). 

systems  (351).  Top  performance  has  also  declined 
(352),  which  could  negatively  impact  the  pool  of 
students  potentially  pursuing  higher  education  in 
STEM  fields,  among  others.  The  gender  gap  in 
science  and  mathematics  is  significant  and  has 
increased  among  fourth  graders,  suggesting  that 
early  interventions  to  attract  girls  to  STEM  are 
crucial  to  address  the  gap  (353).  In  2025,  the 
Flemish Community allocated additional resources 
introduced  new 
for 
minimum goals in primary education, with a focus 
on  teaching  mathematics  and  Dutch.  The  French 
Community  continues  to  implement  the  curricular 
reform  under  its  Pact  for  an  Excellent  Education 
and  will  introduce  standardised  tests  in  2026  to 
assess basic skills in the beginning of fourth grade. 
These  reforms  are  important  for  supporting  and 
monitoring basic skills, but it is too early to assess 
their impact.  

language  support  and 

Graph A13.1: Share of advantaged vs 
disadvantaged students that perform well in at 
least one PISA domain. EU vs Be(Fl) vs Be(Fr) 

Socio-economic  gaps  and  the  decline  of  top 
performance in basic  skills  undermine  young 
people’s  future  prospects.  The  deterioration  of 
mathematics  and  science  skills  over  time  can  be 
observed  among  both  younger  (fourth  graders, 
TIMSS)  and  older  cohorts  of  pupils  (15-year-olds, 
in  basic  skills  are 
PISA  2022). 
Inequalities 
correlated  with  pupils’ 
socio-economic  and 
migration  background  (350).  While  two  thirds  of 
advantaged  students  (66.3%)  perform  well  in  at 
least  one  OECD  Programme  for  International 
Student  Assessment 
(reading, 
mathematics,  science),  this  ratio  is  only  16.6% 
among  disadvantaged  students,  a  gap  above  the 
EU  average  (49.6  percentage  points  (pps)  vs 
42.7 pps).  The  early  tracking  of  students  by 
academic  ability  and  high 
levels  of  grade 
inequalities  as 
these 
repetition  exacerbate 
students  progress  further  through  the  education 

(PISA)  domain 

(349) ‘Address labour shortages and skills mismatches […]. Improve 
the  performance  and  equity  of  the  education  and  training 
systems  and  enhance  their  labour  market  relevance,  in 
particular  in  ICT  and  STEM  fields.  Continue  reforms  to 
strengthen  the  teaching  profession  by  developing  more 
flexible and attractive career paths and training for teachers.’ 

(1) Share of 15-year-olds performing well in at least one 
domain by socio-economic status. 
Source: PISA 2022 Equity Indicator (DG EAC calculations). 

Belgium  has  a  high  level  of  participation  in 
early  childhood  education  and  care  (ECEC), 
although the sector faces challenges related 
to shortages and affordability. In 2025, 48.0% 
of  children  under  three  participated  in  formal 
childcare  or  education,  above  the  EU  average 
(40.5%),  but  below  the  national  Barcelona  target 
(53.9%).  A  sizeable  gap  exists  between  children 
that  are  at  risk  of  poverty  and  social  exclusion 

(351) See European Semester Country Report 2025. 

(352) In  PISA  2022,  from  15.7%  to  11.5%  between  2018  and 

2022 (BE-nl: 15%, BE-fr: 6.8%, BE-de: 6.3%).  

(350) European  Commission 
Monitor 2024 - Belgium. 

(2024).  Education  and  Training 

(353) European  Commission 
Monitor 2025 – Belgium. 

(2025).  Education  and  Training 

101 

16.320.413.159.066.765.70.020.040.060.080.0EUBelgium(FlemishCommunity)Belgium (FrenchCommunity)EUBelgium(FlemishCommunity)Belgium (FrenchCommunity)Low-performingHigh-performing% 
 
 
     
 
 
 
(AROPE)  and  those  who  are  not.  In  the  AROPE 
group,  1.9%  of  children  under  three  attended 
25 hours of ECEC per week or more, vs 35.4% for 
children  in  the  non-AROPE  group.  Demand  for 
early-age ECEC (under three) is larger than supply, 
and  shortages  of  childcare  workers  and  staff 
absence  complicate  quality  provision  (354).  To 
address these challenges, Flanders has launched a 
'Masterplan  Childcare  2025-2029'  to  expand 
childcare places, and with Recovery and Resilience 
Facility  support,  Wallonia  is  investing  in  ECEC 
infrastructure  to  create  1 700  new  childcare 
places.  However,  planned  budget  cuts  in  the 
French  Community  and  priority  rules  for  income-
based subsidised childcare in Flanders have raised 
concerns  among  stakeholders  (355).  For  children 
over three years old, participation in ECEC remains 
high  at  98.1%  in  2024,  above  the  EU  target  of 
96%.  However,  staff  shortages  are  rampant  in 
both Communities (356). 

and 

action 

Early  school  leaving  is  increasing.  While  the 
share of early leavers from education and training 
remains  below  the  EU-level  target  of  9%  (BE: 
7.3%;  EU:  9.1%  in  2025),  it  has  increased  by  0.6 
percentage  points  compared  to  2021.  Rates  are 
higher  than  the  national  average  in  the  Brussels 
Region  (8.8%)  and  Wallonia  (9.8%),  especially  in 
Hainaut  and  Liège,  which  warrants  the  need  for 
targeted 
further  monitoring. 
Administrative  data  in  Flanders  show  that  early 
school  leaving  and  absenteeism  are  above  the 
Community  average  in  cities  such  as  Antwerp, 
Brussels  and  Gent(357).  Since  2016,  the  Flemish 
Community  has  been  financially  supporting  the 
‘Together Against School Dropout’ project network, 
which provides coordination and targeted guidance 
at  the  regional  and  local  levels.  The  French 
Community  adopted  a  decree  on  combating 
dropout and absenteeism in 2024. Implementation 
in  pre-primary  and  primary 
begins 
in  secondary 
education  and  only 

in  2027 

in  2026 

(354) European  Commission,  EACEA  (2025).  Key  data  on  early 
childhood education and care in Europe; OECD (2025). TALIS 
Starting Strong 2024 (data for Flemish Community only). 

(355) Education and Training Monitor 2025 – Belgium. 

(356) Idem.  

(357) Dataloep 

(2026).  Absenteeism 

in  primary  and 
secondary education. Department of Education and Training, 
2026. Early school leavers based on administrative data. 

rates 

education,  where  the  highest  absenteeism  rates 
are observed (358). 

(EU  average:  15.4%); 

Amid  shortages,  teachers  need  further 
professionalisation  and  diversified  career 
opportunities.  Although  teachers  in  Belgium  are 
generally  satisfied  with  their 
job,  they  feel 
underappreciated.  According  to  OECD  TALIS  2024 
(359),  only  15.4%  think  that  they  are  valued  by 
society 
in  the  French 
Community,  this  figure  is  only  5.8%.  Teachers’ 
participation  in  impactful  professional  learning 
lags  the  EU  average  (46.9%  (360)  vs  56%), 
indicating unmet needs. In the French Community, 
teachers  lack  clear  incentives  to  pursue  training 
(361) and in Flemish schools, in-school professional 
remain 
development 
underused (362). While the Communities continue to 
implement measures to combat shortages, a large 
share of new teachers leave the profession within 
the first five years (363). Flanders has increased the 
number  of  lateral  entrants,  but  the  uptake  of 
newly  created  specialised 
teacher  positions 
remains  limited,  also  due  to  the  absence  of  a 
coherent  school  staffing  policy  (364).  The  French 
Community  reformed  initial  teacher  education  in 
2023, but  new enrolments have dropped by close 
to  39%  since  2016  (365),  which  is  likely  to 
exacerbate  shortages  in  the  short  term.  The 
government  has  also  announced  plans  to  reform 
the  employment  status  of  teachers  (366),  which  is 

opportunities 

often 

(358) In 2023/2024, the ratio of students with at least 9.5 days of 
unexcused  absences  in  the  last  two  years  of  secondary 
education  was  22.25% 
(Administration  Générale  de 
l’Enseignement, 2026). 

(359) OECD, TALIS 2024. 

(360) BE-fr: 30.5%, BE-nl: 57%, OECD TALIS 2024. 

(361) Ibid. 

(362) Flemish Education Inspectorate (2025). Onderwijsspiegel 

2025 

(363) De  Witte,  K.  &  Iterbeke,  K.  (2022).  Het  lerarentekort  als 
katalysator  voor  onderwijshervormingen.  KU  Leuven. 
Lafontaine,  D.,  Dupont,  V.,  &  Quittre,  V.  (2024).  La  pénurie 
d’enseignants : mise en perspective. Université de Liège. 

(364) Commissie  van  Wijzen  (2023).  Priority  for  professionalism: 
Contemporary  personnel  policy  with  competent  teachers, 
powerful schools and strong school boards. 

(365) ARES 

(2022).  La 

initiale  des  enseignants 
(Teachers’  initial  training).  StatSup’Info,  no  4.  Data  for 
2025/2026 provided by: ARES/MFWB – Statistiques. 

formation 

(366) Fédération  Wallonie-Bruxelles. 
Politique Communautaire. 

(2024).  Déclaration  de 

102 

 
 
 
expected  to  increase  job  security,  particularly  for 
novice teachers. 

Graph A13.2: Adult participation in learning 

Adult  participation  in  education  and  training 
is  low  with  significant  participation  gaps, 
although adults’ basic skills remain robust. In 
2022,  34.9%  of  adults  took  part  in  education  or 
training  (367),  far  below  the  national  2030  target 
(60.9%) and the EU average of 39.5%. Contrary to 
the EU trend, there has been a decline relative to 
2016.  However,  recent  Labour  Force  Survey  (LFS) 
results suggest a positive development since 2022 
(368).  Adults  that  are  low-qualified  (12.5%)  or 
outside  the  labour  market  (15.2%)  participate 
substantially  less  in  learning.  More  recent  data 
also  show  lower  participation  among  non-EU 
nationals.  Bridging  these  participation  gaps  is 
essential  for  a  resilient  and  inclusive  workforce, 
also considering the widening inequality in adults’ 
basic  literacy  skills (369).  Still,  Belgium  (Flanders) 
performs  strongly  on  adult  basic  skills  overall, 
despite  declining  basic  skills  among  younger 
cohorts.  Only  13.3%  of  adults  underperform 
across  all  three  domains:  literacy,  numeracy,  and 
adaptive  problem-solving  (EU:  19.9%).  Demand-
side challenges play a role in low lifelong learning 
rates:  over  half  of  adults 
(25-64)  do  not 
participate in learning and do not perceive to have 
a  learning  need  (AES).  To  boost  lifelong  learning, 
the  French  Community  has  launched  ‘Contrat 
2035’  for  adult  education,  and  Wallonia 
is 
undertaking  a  reform  of  its  lifelong  learning 
schemes. In Flanders, the online ‘Training Credit' is 
being  rolled  out,  while  the  European  Social  Fund 
Plus  (ESF+)  is  investing  over  EUR 152 million  in 
strengthening  lifelong  learning.  Belgium  plans  an 
interfederal  cooperation  agreement  to  build  an 
individual  learning  account  following  the  abolition 
of  the  federal  learning  account.  Progress  towards 
the 2030 national target will require enhanced and 
effectively  targeted  efforts  to  reach  under-
represented groups. 

(367)Adult  Education Survey (AES). 

(368) This positive evolution is partly due to a time series break. 

(369) OECD (2023). Survey of Adult Skills (PIAAC). 

(1) Participation in learning in the last 12 months (excluding 
guided on-the-job training) 
Source: Eurostat – Adult Education Survey (AES 2022) 

Skills  shortages  continue  to 
impact  the 
Belgian  labour  market,  hindering  the  digital 
and  green  transition.  With  one  of  the  highest 
job  vacancy  rates  in  the  EU  in  2025  (3.8%;  EU 
average: 2.1%), labour and skills shortages remain 
elevated  across  the  country  (see  Annexes  11  and 
19).  The  macroeconomic  skills  mismatch  (370)  has 
declined  in  recent  years,  reaching  25.4%  in  2025 
(EU average: 19.2%), but is still among the highest 
in  the  EU.  While  overqualification  rates  (371)  in 
Belgium are slightly below the EU average  19.7% 
vs  21.4%),  overqualification  is  significantly  higher 
among  non-EU  citizens 
(37.0%).  Except  for 
regulated  professions,  equivalence 
federally 
recognitions  of  diplomas  awarded  by  one 
Community  are  not  automatically  recognised  by 
the other Communities, hindering skills recognition. 
lacks  a 
The  German-speaking  Community 
the  European 
qualifications  database  under 
Qualifications  Framework  Recommendation. 
In 
Belgium, the proportion of people aged 16-74 with 
at least basic digital skills is slightly above the EU 
average (61.2% vs 60.4%). Nevertheless, Belgium 
has  a  high  job  vacancy  rate  in  ICT  (4.6%),  which 
points  to  unmet  needs  for  advanced  digital  skills. 

(370) The  macroeconomic  skills  mismatch  indicator  measures  the 
dispersion  of  employment  rates  across  skill  groups  (proxied 
by qualification levels). Source: DG EMPL’s own calculations. 

(371) Definition:  the  share  of  workers  with  higher  education 
qualifications  who  were  employed  in  occupations  that  did 
not require that level of qualification. Source: Eurostat. 

103 

0102030405060TotalMenWomenLow-skilledMedium-skilledHigh-skilled25-3435-4545-5555-64EmployedUnemployedOutside lab. forceGenderEducationAgeEmploymentStatusEUBE 
 
     
 
in 

(14.9%;  EU  average:  24.3% 

Indeed,  Belgium  performs  below  average  for  the 
share  of  tertiary  students  in  ICT  (4.4%;  EU 
average:  5.5%  in  2023),  and  the  number  of  ICT 
graduates is among the lowest  in the EU  (2.4 per 
1 000  aged  25-34).  Belgium  ranks  last  in  the 
share of women among all ICT students at tertiary 
level 
in  2023), 
although  more  women  have  been  enrolling  in 
recent  years  (372).  Continued  action  to  boost 
ICT  programmes,  with  special 
enrolment 
attention  for  girls  and  women,  will  be  important 
for  competitiveness  and  the  digital  transition. 
Belgium  also  faces  workforce  challenges  for  key 
sectors in the green transition. In particular, the job 
vacancy  rate  is  relatively  high  in  manufacturing 
(2.9%;  EU:  1.5%);  energy  (4.3%;  EU:  1.4%)  and 
In  2025,  14 
(5.5%;  EU:  2.8%). 
construction 
occupations  relevant  to  the  green  transition  or 
climate adaptation recorded shortages of workers, 
from  civil  engineers  to  roofers.  The  high  job 
vacancy  rate  and  the  number  of  shortage 
occupations (373) suggest scope to further increase 
the labour-market relevance of the education and 
training  offer,  in  line  with  the  2025  country-
surveyed 
recommendation.  Wallonia 
specific 
businesses’  recruitment 
intentions  to  support 
its  public  employment  services’ 
decisions  on 
training  offer.  Flanders 
is  developing  skills 
forecasting  at  macro  level  and  has  reduced  fees 
for  adult 
shortage 
occupations. 

education 

related 

to 

The demand for STEM specialists is expected 
to  grow,  but  Belgium  encounters  challenges 
in boosting their supply. Demand for STEM jobs 
is  forecast  to  increase  in  Belgium  by  2035  (374). 
However,  STEM  graduates  remain  scarce:  the 
number  of  new  STEM  graduates  is  limited  (12.9 
per  1 000;  EU  average:  17.5),  and  tertiary-level 
STEM  enrolment  is  also  low  (18.7%;  EU  average: 
26.9%) and below the proposed EU target of 32%. 
In medium-level vocational education and training 
(VET), only 27.2% of students are enrolled in STEM 
subjects in Belgium (2024), below the EU average 
of 36.6% and below the proposed 2030 target of 
45%.  Under  ‘OTLAV’,  Wallonia  and  the  French 
Community  wish  to  strengthen  the  appeal  of 
STEAM  careers,  particularly  in  sectors  with  skills 
shortages, but no targets have been set so far. In 

(372) See Education and Training Monitor 2025 for detailed data. 

the  STEM  Agenda  monitors 

Flanders, 
set 
objectives.  Despite  efforts,  progress  on  enrolment 
has been slow so far. Moreover, the share of STEM 
students 
in  medium-level  VET  has  slightly 
declined,  despite  high  demand  and  persistent 
shortages (375). Girls make up 21.0% of students in 
medium-level  VET  programmes  in  STEM,  above 
the EU average (15.9%), although this number has 
recently declined in Belgium, down from 33.6% in 
2020.  Efforts  to  attract  students,  including  girls 
and  women,  to  STEM  fields  –  and  retain  them  – 
could  be  enhanced,  particularly 
tertiary 
education, where only 26.8% of STEM students are 
women 
(EU  average:  32.2%),  although  their 
number is increasing (376). 

in 

is  scope 

the  same 

(66.0%).  At 

Despite  performing  relatively  well  on  the 
enrolment  of  medium-level  students  in  VET, 
there 
to  expand  work-based 
learning.  The  share  of  medium-level  pupils 
attending  a  VET  programme  (57.9%  in  2024)  is 
above  the  EU  average  (52.9%).  In  2024,  in 
Belgium, 
just  over  half  of  those  who  had 
completed  VET  had  experienced  work-based 
learning during their programme (51.6%), short of 
the EU target of 60% by 2025, and below the EU 
average 
the 
employment  rate  of  those  who  had  recently 
completed  VET  stood  at  75.4%  (EU  average: 
80.2%).  To  increase  the  labour-market  relevance 
of  VET,  Belgian  Communities  are  strengthening 
work-based  learning  by  making  conditions  more 
flexible in Flanders and better integrating relevant 
stakeholders  into  VET  decision-making  in  the 
French  Community.  However,  uptake  remains 
modest  and  changes  to  the  ‘seventh  year’  in  the 
French  Community  provoked  reactions  among 
stakeholders  (377).  Making  VET  more  attractive  is 
essential, as this is linked with risks of early school 
dropout  (378)  and  considering  the  socio-economic 
segregation within VET systems (379). 

time, 

(375) [educ_uoe_enrs10__custom_19279805];  for  Flanders  see 
also the STEM monitor for a widening gap with the Flemish 
targets set in secondary education. 

(376) Education and Training Monitor 2025. 

(377) For  details  on  the  measures  taken:  ibid.  The  ‘seventh  year’ 
pertains  to  one-year  post-secondary  professional  training 
programmes  for  adults  and  secondary  education  certificate 
holders, which was discontinued in favour of adult education. 

(373) EURES – Shortages and Surpluses Report 2024. 

(378) Education and Training Monitor 2025. 

(374) CEDEFOP Skills Forecast 2035. 

(379) See 2025 Country Report Belgium. 

104 

 
 
 
in 

the 

and 

inclusion. 

In  Belgium,  where 

Accessibility and inclusivity of the education 
systems can help build a solid foundation for 
lifelong 
the 
disability  employment  gap  is  large,  young  adults 
with  disabilities  (18-29  years  old)  are  more  likely 
to leave school early (23.8%) compared to the EU 
peers  (20.0%)  and  their  Belgian  counterparts 
without  disabilities  (7.7%).  Belgian  data  suggest 
that  enrolment  in  special  education  is  increasing, 
notably  due  to  the  rise  in  Flanders (380).  In  the 
Flemish  Community,  5.8%  of  primary  school 
children  are  educated  outside  of  mainstream 
German-speaking 
education, 
Community,  this  figure  is  4.5%,  compared  to  an 
average of 1.4% across 35 European systems (381). 
In 2025, the Flemish government launched a new 
policy  framework  for  inclusive  education  until 
2040,  aiming  to  better  integrate  students  with 
special learning needs into mainstream education. 
Pioneer schools will pilot the model in 2026. More 
students  with  disabilities  are  enrolling  in  Flemish 
higher  education,  as  a 
tailored 
arrangements  and  support  from  the  Support 
Centre  for  Inclusive  Higher  Education.  However, 
they also drop out faster than other students (382). 
In  the  French  Community,  territorial  clusters  were 
created  in  2021  to  support  full  mainstream 
integration,  but  the  results  of  the  evaluation  of 
these clusters are not yet available. 

result  of 

the  theoretical  time  frame  of  their  programme 
(EU-25:  43%)  and  26%  (BE-nl)  to  43%  (BE-fr) do 
not  graduate  and  are  no  longer  enrolled  three 
years later (384).In both Communities, the results of 
the  evaluation  of  measures  to  improve  study 
efficiency  are  yet  to  be  released.  The  Flemish 
government  has  launched  a  revision  of  needs-
based  scholarships  and  has  decided  to  limit 
funding  for  foreign  (non-EU)  students  to  2%  at 
institutional  level.  Universities  (385)  and  student 
organisations  have  voiced  concerns  over  these 
measures,  estimating  that  up  to  20 000  students 
(6%)  could  lose  their  entitlement  to  financial 
support (386). While universities and basic research 
face funding cuts, more will be invested in applied 
higher  education  institutions,  with  an  aim  of 
graduate 
rationalising 
programmes  and  improving  their  labour-market 
relevance.  However,  institutions  do  not  find  the 
funding  sufficient  for  a  growing  number  of 
students (387). The French Community is examining 
a structural reform of its higher education funding. 
The model  under consideration (individual  right to 
higher education – DIES) would combine a revision 
of  enrolment  fees  with  the  granting,  for  resident 
students, of a portable entitlement in the form of 
in  case  of 
maintenance  grants,  usable  both 
enrolment 
the  French 
institution  of 
Community and abroad (388). 

short-cycle 

in  an 

their 

Participation  in  higher education  is  high,  but 
budget  cuts  and  fee  increases  may  hinder 
access  for  under-represented  and  foreign 
students.  In  2025,  over  half  (52.7%)  of  young 
people  aged  25-34  held  a  tertiary  education 
degree  (EU  average:  44.8%)  and  the  number  of 
new enrolments is growing (383). However, students 
in  Belgium  take  much  longer  to  complete  their 
studies  than  in  other  countries:  only  33%  (BE-nl) 
and 23% (BE-fr) of bachelor students finish within 

(380) Statistics  Flanders  (2025).  Social  position  and  participation 
of  persons  with  disabilities;  French  Community  (2024), 
- 
indicators  2024;  Ostbelgien 
Education 
Schülerzahlen 2024-2025. 

Statistik 

(381) European Agency for Special Needs and Inclusive Education, 
(2025).  European  Agency  Statistics  on  Inclusive  Education: 
2022/2023  School  Year  Dataset  Cross-Country  Report).  For 
the  French  Community,  community  data  indicate  5.2%  in 
specialised  primary  education  for  the  same  reference  year 
(Les Indicateurs de l’Enseignement 2024). 

(382) Commissie  voor  Onderwijs  (2025).  Vraag om  uitleg  over  de 
beperkte doorstroom van studenten met een handicap in het 
hoger onderwijs. 

(384) OECD (2025). Education at a Glance 2025: OECD Indicators, 

OECD Publishing, Paris. 

(385) VLIR (2025). Press release, https://vlir.be/nieuws/besparing-

op-universiteiten-en-studenten/. 

(386) Open letter of the Vlaamse Vereniging van Studenten 2025. 

(387) SERV 

(2025).  Gezamenlijk  advies  van  de  Sociaal-
Economische  Raad  van  Vlaanderen  en  de  Vlaamse 
Hogescholenraad. 

(388) Vandenberghe, V. & Yzerbyt, V. (2025). Etudiants mobiles et 

(383) 6.9% between 2018 and 2023, Eurostat: educ_uoe_ent01. 

financement de l'enseignement supérieur en Europe.  

105 

 
 
 
ANNEX 14: SOCIAL SCOREBOARD 

Table A14.1:Social Scoreboard for Belgium 

Update of 4 May 2026. 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 2026 for details on the methodology 
(https://employment-social-affairs.ec.europa.eu/joint-employment-report-2026_en). 
Source: Eurostat 

106 

34.97.361.29.87.13.2572.86.22.0107.116.518.952.634.76.748.00.9Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2025)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2025)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2025)Self-reported unmet need for medical care (% of the population aged 16+, 2025)Disability employment gap (percentage points, population aged 20-64, 2025)Housing cost overburden (% of the total population, 2025)Adult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2025)Young people not in employment, education or training(% of the population aged 15-29, 2025)Gender employment gap(percentage points, population aged 20-64, 2025)Income quintile ratio (S80/S20, 2025)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2025)Employment rate(% of the population aged 20-64, 2025)Unemployment rate(% of the active population aged 15-74, 2025)Long term unemployment(% of the active population aged 15-74, 2025)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2025) 
 
 
 
  
 
 
ANNEX 15: HEALTH AND HEALTH SYSTEMS 

Belgium’s  health  system  faces  challenges 
that  negatively  affect  the  health  of  its 
population,  social  fairness  and  productivity. 
There  are  significant  disparities  in  healthcare 
access  between  income  groups  and  the  share  of 
for  healthcare  has 
out-of-pocket 
increased. 
health 
of 
professionals  raise  concerns  about  access  to 
services amid rising demand. 

Persistent 

shortages 

spending 

Life  expectancy  at  birth  in  Belgium  was 
higher  than  the  EU  average  in  2024,  and 
Belgium fares comparatively well in avoiding 
deaths  from  treatable  causes.  As  in  other  EU 
countries,  women  can  expect  to  live  longer  than 
men  (4.1  years  longer).  However,  they  can  expect 
to  live  around  0.9  years  less  than  men  in  good 
health. At age 65, Belgians can expect to live both 
longer  and  with  more  healthy  life  years  than  the 
EU  average.  In  2023,  the  mortality  rate  from 
treatable causes was one of the lowest in the EU, 
suggesting  that  the  health  system  is  effective. 
Diseases of the circulatory system (‘cardiovascular 
diseases’)  and  cancer  were  the  leading  causes  of 
death in 2023, but with mortality rates lower than 
the  EU  average.  Despite  falling  since  2014,  the 
suicide  rate  was  still  above  the  EU  average  in 
2023.  Suicide  is  now  reported  to  be  the  leading 
cause of death in Belgium in the age group 15-54 
(389). 

Graph A15.1: Treatable mortality 

rate 

increase  efforts.  In  2023,  spending  on  disease 
prevention in Belgium accounted for 1.8% of total 
spending  on  health  (390),  much  lower  than  the  EU 
average  of  3.7%.  While  the  rate  of  preventable 
mortality  in  Belgium  was  around  9%  lower  than 
the  EU  average  in  2023,  it  lagged  behind  the 
corresponding 
in  several  western  EU 
countries.  There  is  therefore  room  for  preventing 
more deaths by reducing exposure to risk factors. 
Although,  fruit  and  vegetable  consumption  is 
comparatively high in Belgium, the lack of physical 
activity among adults is a public health concern. A 
(35.5%) 
significant  share  of  Belgian  adults 
reported  never  exercising  outside  working  time  in 
2022  (higher  than  the  31.6%  of  the  population 
across  the  EU).  In  recent  years,  the  obesity  rate 
among  adults  has  risen  slightly  to  exceed  the  EU 
average in 2022, raising concerns about the future 
prevalence  of  diabetes  and 
cardiovascular 
diseases.  Heavy  alcohol  consumption  among 
adolescents  has  also  risen  between  2018  and 
2022.  In  2025,  Belgium  reinforced  activities  to 
improve young people’s health literacy, particularly 
in  the  areas  of  mental  health  and  alcohol 
introduce 
consumption.  There  are  plans 
to  curb 
additional  measures 
harmful 
robust 
regulations and, possibly, minimum alcohol pricing. 
lung 
Together  with  alcohol-related  disorders, 
cancer and chronic obstructive pulmonary disease 
(COPD)  were  the  leading  causes  of  preventable 
mortality  in  2022.  This  highlights  the  need  to 
increase  efforts  in  preventing  non-communicable 
diseases.  Belgium  participates  in  several  joint 
actions  funded  by  EU4Health  aimed  at  reducing 
the  burden  of  cardiovascular  diseases,  cancer, 
diabetes  and  respiratory  diseases,  such  as  the 
joint  actions  PreventNCD(391),  JACARDI(392)  and 
EUCanScreen(393).  

to 
in  2026-2028 
including  more 

drinking, 

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

Investment  in  disease  prevention  in  Belgium 
is  comparatively  low  and  there  is  scope  to 

(389) The Brussels Times, 'Demand is growing': Brussels suicide 
prevention centre helps 300 people in one year, accessed 
online on 22/01/2026.  

Health spending in Belgium is higher than the 
EU  average  but  the  share  covered  by  public 
funds  is  lower.  In  2023,  health  spending  per 
capita  in  Belgium  (adjusted  for  differences  in 

(390) Ambiguities in the boundary of prevention spending have 
been reported by Belgium, which may underestimate the 
level of spending on disease prevention. 

(391) JA PreventNCD - Reducing Europe's cancer and NCD burden 
through coordinated strategies on health determinants. 

(392) JACARDI - Joint Action on CARdiovascular diseases and 

DIabetes. 

(393) EUCanScreen - Implementation of cancer screening 

programmes. 

107 

74.965.262.761.662.358.894.889.291.793.389.786.8201420192020202120222023per 100 000 populationBelgiumEU 
 
          
 
 
 
 
the 

care, 

payments 

long-term 

supplements 

out-of-pocket 

care,  dental 

purchasing power) was almost 20% above the EU 
average. However, public spending as a proportion 
of  total  health  spending  (73.6%)  was  lower  than 
the average across the EU (80.6%). This translated 
into  a 
comparatively  high  proportion  of 
for 
households’ 
healthcare  in  Belgium  (21.5%  in  2023,  compared 
to  an  EU  average  of  15%),  which  has  effectively 
increased  since  2014.  These  out-of-pocket 
payments  relate  mainly  to  costs  for  outpatient 
care, 
retail 
pharmaceuticals  and  the  widespread  charging  of 
‘non-conventioned’ 
by 
fee 
practitioners (those who charge additional fees on 
top  of  the  official  tariffs  agreed  between  health 
insurance  funds  and 
representatives  of 
practitioners).  A  royal  decree  from  2024  aims  to 
address  the  issue  of  fee  supplements.  Since  the 
beginning of 2025, ‘non-conventioned’ doctors and 
dentists  are  prohibited  from  charging  extra  fees 
for outpatient care to patients who are entitled to 
preferential  reimbursement  (due  to  eligibility  for 
other social benefits or based on the level of their 
annual  income).  A  preliminary  draft  law  tabling 
several  health  reforms  was  presented  in  June 
2025  and  is  being  discussed  with  healthcare 
organisations, which have expressed concerns. The 
reforms  propose  reducing 
this  type  of  fee 
supplements  and  enhancing  the  attractiveness  of 
the  convention  mechanism 
(for  example,  by 
making  some  premiums  available  exclusively  to 
conventioned  healthcare  providers).  If  adopted, 
these  amendments  will  take  effect  in  2028. 
However, cost-saving measures in the 2026 health 
insurance  budget 
introduce  higher  patient 
contributions  for  some  medicines,  in  order  to 
finance  reimbursement  for  innovative  treatments. 
From  2026,  patients  pay  a  minimum  co-payment 
of  EUR  2  per  package  of  medication  at  public 
pharmacies.  However,  people  on  low-incomes  pay 
a  reduced  minimum  co-payment  of  EUR  1. 
Furthermore,  fees  for  midwifery  services  are 
introduced for the first time. 

Health spending is skewed towards inpatient 
care,  reflecting  a  hospital-centred  model  of 
healthcare  delivery.  In  2023,  the  largest  share 
of  health  spending  in  Belgium  was  directed  to 
inpatient  care  (a  share  higher  than  the  EU 
average),  while 
the  share  of  spending  for 
outpatient care was slightly below the EU average. 
This  reflects  a  continued  reliance  on  hospital-
based  care.  However,  the  occupancy  rate  of 
hospital  beds  is  low  (62.5%  in  2023)  suggesting 
an inefficient use of resources. In recent years, day 

inpatient  care.  For 

regions  and  hospitals 

surgery  rates  in  Belgium  have  risen,  indicating  a 
instance,  the 
shift  from 
percentage  of  tonsillectomies  and  inguinal  hernia 
repairs performed as day surgeries exceeds the EU 
average.  Nonetheless, 
there  are  significant 
variations in the proportion of day surgery activity 
across 
in  Belgium, 
room  for  more  efficiency  gains. 
suggesting 
Furthermore, 
rate  of  avoidable  hospital 
admissions  for  conditions  that  are  sensitive  to 
management  at  ambulatory  care  level  is  higher 
than  the  EU  average.  This  is  particularly  the  case 
for diabetes, asthma and COPD, pointing to a need 
to  strengthen  the  role  and  effectiveness  of 
primary care in managing these chronic conditions 
(394). 

the 

Graph A15.2: Out-of-pocket payments: share in 
healthcare spending and categories, 2023 

Household out-of-pocket payment: direct payment for 
healthcare goods and services from the household primary 
income or savings, where the payment is made by the user at 
the time of the purchase of goods or the use of the services 
(Eurostat). VHI: voluntary health insurance 
(1) Others: eyeglasses, hearing aids, lab tests... 
Source: Eurostat and Country Health Profiles - Dashboard 

Belgium  faces  challenges  with  unequal 
access  to  healthcare.  The  overall  proportion  of 
the  Belgian  population  reporting  unmet  needs  for 
medical  care  (1%)  was  below  the  EU  average 
(3.6%)  in  2025.  However,  lower  income  groups 
were  disproportionally  affected.  Among 
the 
population  who  declared  having  medical  needs, 
the  gap  between  people  below  and  above  the 
poverty  threshold (defined as 60% of the median 
equivalised  income)  is  higher  in  Belgium  than 
across the EU. As public coverage of dental care is 

(394) OECD/European Observatory on Health Systems and Policies 
(2025),  Country  Health  Profile  2025:  Belgium.  State  of 
Health in the EU.  

108 

74%22%5%13%26%15%28%14%5%Gov. & CompulsoryOut-of-pocket (OOP)Voluntary (VHI)PharmaceuticalsOutpatient careLong-term careOthersDental careInpatient careShare ofspendingOOP BreakdownOOP share -EU-27 average:15% 
           
 
Table A15.1: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 2023 data (or latest available). 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 Portugal (licensed to practice) and Slovakia (professionally active). Latest data 
update on nurses for Belgium and Sweden: 2022; for France: 2021; for Luxembourg: 2017. 
** latest available 10-year trend: ratio 2023/2014 or 2024/2013; a factor of 2.00 means that it has doubled in 10 years. 
***‘Available hospital beds’ covers somatic care, not psychiatric care. 
Source: Eurostat 

comparatively  low  in  Belgium,  unmet  needs  for 
dental  care  are  higher:  identified  by  3.9%  of  the 
population  who  reported  needing  dental  care  in 
2025 (versus an EU average of 6.3%), with people 
at  risk  of  poverty  nearly  four  times  as  likely  to 
forgo  dental  care.  Beyond  its  direct  impact  on 
health  status,  healthcare  coverage  is  also  a 
powerful  tool  against  poverty  and  inequality. 
Analysis  shows  that  in  Belgium’s  case,  income 
inequality  as  measured  via  the  Gini  coefficient, 
would  increase  by  almost  24%  in  the  absence  of 
public coverage for healthcare (395).  

Shortages of health professionals undermine 
access  to  healthcare.  The  number  of  practising 
doctors  per  1 000  population  in  Belgium  (3.4)  in 
2023  was  considerably  below  the  EU  average 
(4.3);  in  fact,  among  the  lowest  in  the  EU. 
Moreover,  around  39%  of  doctors  in  Belgium  are 
aged 55 and over, and only around 17% are aged 
below  35,  raising  concerns  about  the  long-term 
accessibility  of  healthcare  services.  Although  the 
proportion of general practitioners (GPs) among all 
doctors is high (much higher than the EU average), 
shortages  of GPs  are  observed  in  both  urban  and 

(395) European Commission: Directorate-General for Health and 
Food Safety, Cruces et al. (2025), The role of healthcare in 
reducing inequalities and poverty in the EU. 

To note that as regards health coverage, in this analysis 
poverty and income refer to a different measure than the 
usually reported one, which is defined for instance in Annex 
12. The analysis also estimates the impact of benefits in 
kind, while the standard measure only accounts for cash 
transfers. 

rural  areas (see Annex  18). This, combined with a 
growing demand for healthcare, has resulted in an 
increasing  number  of  GPs  refusing  new  patients, 
which  poses  challenges  in  access  to  healthcare. 
The number of nurses per 1 000 population (11.5) 
in  2023  stood  higher  than  the  EU  average  (7.6), 
yet  there  are  shortages  of  nursing  staff  in 
hospitals,  which  lead  to  bed  closures.  Despite 
policy measures aiming to improve nurse staffing 
levels  in  hospitals  by  increasing  hospital  budgets, 
hospitals continue to have difficulties in recruiting 
and retaining nurses. Improving the attractiveness 
of  the  health  professions  has  been  an  area  of 
focus,  with  the  creation  of  new  roles  and  profiles 
to  support  nurses  and  GPs  (see  2025  Country 
Report).  Complementary  efforts  aim  at  improving 
awareness  about  employment  opportunities  in 
healthcare  and  promoting  training.  However,  the 
numbers  of  medical  and  nursing  graduates  have 
not  increased  since  the  COVID-19  pandemic.  The 
pipeline of nursing graduates is in practice reduced 
by  the  fact  that  a  significant  share  of  new 
graduates  (up  to  35%  in  the  French-speaking 
community)  are  foreign  students  who  typically 
leave  Belgium  after  completing  their  studies  (396). 
In  order  to  address  the  shortage  of  GPs,  the 
government  announced  a  plan  to  increase  the 
share of postgraduate training places allocated to 
general  medicine  from  39%  in  2022  to  47%  by 
2028.  Furthermore,  the  government  approved  the 
quotas  for  2031,  which  set  both  the  number  of 
doctors  entering  specialisation  following  their 

(396) Country Health Profile 2025: Belgium – see earlier footnote. 

109 

2020202120222023202410-year change**EU average* (latest year) Cancer mortality per 100 000 population223.2220.1218.2216.1n.a.0.86233.1 (2023)Mortality due to circulatory diseases per 100 000 population 217.9 217.0 221.6 209.6n.a.0.74313.0 (2023)Current expenditure on health, purchasing power standards, per capita3 9664 2054 3364 570n.a.1.353834.9 (2023)Public share of health expenditure, % of current health expenditure 76.0 75.1 73.8 73.6n.a.0.9780.6 (2023)Spending on prevention, % of current health expenditure 1.92.92.31.8n.a.0.983.7 (2023)Available hospital beds per 100 000 population*** 412 408 404 399 3980.91440 (2023)Doctors per 1 000 population*3.23.23.33.4n.a.1.164.3 (2023)*Nurses per 1 000 population* 11.6 11.6 11.5 11.5n.a.1.117.6 (2023)*Mortality at working age (20-64 years), % of total mortality12.914.213.413.212.90.8214.3 (2023)Consumption of antibiotics in the community and hospital sectors,      defined daily doses per 1 000 inhabitants 16.7 17.4 20.5 20.6 20.60.8420.3 (2024) 
 
 
 
          
 
initial medical training, and the quotas for dentists 
for  2030.  Both  quotas  have  been  slightly 
increased to help mitigate shortages and improve 
to  healthcare.  Foreign-trained  health 
access 
professionals 
considered  when 
not 
determining such quotas, so that Belgium does not 
depend  on  unpredictable 
foreign 
graduates.  

flows  of 

are 

of 

phone) 

instead 

Belgium  has  increased  investment  in  digital 
technologies  for  health, 
improving  their 
uptake.  Belgium  has  been  investing  consistently 
in  digital  technologies  for  health,  more  so 
following the COVID-19 pandemic. Since 2015, the 
amount 
in  EUR 
invested  annually,  expressed 
million  per  100 000  population,  has  been  more 
than  twice  the  EU  average.  As  a  result,  the  share 
of  the  population  accessing  their  personal  health 
records  online  or  using  online  health  services 
(excluding 
in-person 
consultations  both  increased  between  2020  and 
2024,  and  stood  above  the  EU  average.  An 
important  target  in  Belgium’s  strategy  for  the 
digital  transformation  of  its  health  sector  is  the 
development  of  the  Belgian  integrated  health 
record:  a  digital  platform  providing  real-time 
access  to  comprehensive  patient  information  for 
health professionals across different care settings. 
Belgium’s  recovery  and  resilience  plan  includes 
additional investments in digital health and health 
data. These have supported the set-up of a Health 
Data  Authority,  in  line  with  the  European  Health 
Data  Space.  The investments  also  aim  to  develop 
standardised  care  sets  for  patient  data  collection 
and  storage,  extend  the  electronic  prescription 
system,  expand  the  use  of  teleconsultations,  and 
provide  digital  tools  for  integrated  care  teams. 
Moreover, Belgium participates in joint actions and 
benefits  from  direct  grants  under  EU4Health, 
which aim to improve the semantic interoperability 
of  health  data  and  facilitate  the  implementation 
of the European Health Data Space. 

significance. 

Employment 
is  among 

Belgium’s  pharmaceutical  sector  is  of  high 
in 
economic 
pharmaceutical  manufacturing 
the 
highest  in  the  EU.  The  country  stands  out  as  a 
leading hub for clinical research and innovation. In 
2024,  Belgium  reported  one  of  the  highest 
numbers of clinical  trials per million population in 
the EU (42.1), more than twice the EU average of 
18.3 (397). Research and development in Belgium’s 

(397) US National Library of Medicine, https://clinicaltrials.gov. 

the  EU  average 

pharmaceutical  industry  has  been  consistently 
among  the  most  intensive  in  the  EU  over  the 
years.  The  amount  spent  per  capita  annually  has 
(398). 
stood  well  above 
Furthermore,  the  number  of  patents  granted  for 
pharmaceuticals  per  million  population  (4.2)  in 
2024  was  more  than  twice  the  EU  average  (1.8) 
(399).  Regarding 
trade  and  commercialisation, 
Belgium’s  pharmaceutical  industry  maintains  a 
high  share  of  the  exports  to  non-EU  countries 
(24.8% in 2025 vs an EU average of 13.9%). 

(398) The Pharmaceutical Industry in Figures, EFPIA (European 

Federation of Pharmaceutical Industries and Associations). 

(399) European Patent Office: Statistics & Trends Centre | epo.org. 

110 

 
 
 
 
 
ANNEX 16: HOUSING 

Belgium’s  housing  market  has  seen  a 
continuous rise in  nominal house prices over 
the years, characterised by moderate overall 
growth. Although at national level nominal house 
prices  are  rising  steadily  without  interruption, 
regional  disparities  are  pronounced,  with  the 
Brussels  Capital  Region  (BCR)  and  neighbouring 
provinces  generally  commanding  higher  prices 
than  Wallonia.  The  price-to-income  ratio  remains 
relatively  stable,  yet  rental  prices  have  outpaced 
house  prices 
recent  years,  exacerbating 
affordability issues across regions, in particular for 
vulnerable groups.  

in 

The  construction  sector  is  facing  labour 
shortages  and  increasing  costs  of  building 
materials  following  the  COVID-19  pandemic. 
The  reduced  activity  in  the  construction  sector, 
combined with a decline in the number of building 
permits  issued  since  2022,  indicates  that  the  low 
rate  of  construction  will  persist  at  least  in  the 
short  term.  A  factor  influencing  the  sector’s 
activity is the labour shortage, which remains high, 
with  a  vacancy  rate  significantly  above  the  EU 
average.  This  restricts  the  sector’s  capacity  to 
increase  housing  supply  and  quality  and  to  meet 
demand,  leading  to  intensified  pressures  on  the 
housing market.  

Belgium faces a challenge  in fulfilling  social 
housing  needs,  illustrated  by  persistently 
long  waiting  lists  despite  regional  efforts. 
Social  housing  represents  around  6%  of  the  total 
stock  in  Belgium (400),  which  is  not  sufficient  to 
meet  demand  from  eligible  households  in  all 
regions.  Recent  or  planned  efforts  to  expand 
supply – although aimed at making social housing 
management  more  efficient  –  will  face  financial 
constraints and complexities arising from the land 
available and long permitting periods. 

Housing market developments 

Belgium’s  nominal  house  prices  have 
experienced  a  steady  increase,  moderating 
growth  and  regional  disparities,  while  rental 
prices  have  risen  slowly.  Nominal  house  prices 
in Belgium have been increasing steadily over the 
past  20  years,  with  some  episodes  of  faster 

(400) Regional sources. 

growth and others with stagnating or even slightly 
decreasing  prices,  for  example  after  the  2008-
2009  crisis.  With  price increases mostly  matching 
income  growth,  the  price-to-income  ratio  has 
remained  broadly  stable  over  the  last  decade 
(Graph  A16.1).  The  most  recent  figures  from 
Eurostat  show  that  annual  growth  in  property 
prices  has  increased  significantly  after  two  years 
of  moderate  growth,  reaching  3.2%  in  2025. 
Rental prices have increased at a lower pace than 
house  prices  since  2005,  albeit  with  a  visible 
acceleration  since  2021.  There  are  significant 
regional differences in house prices. Housing units 
are  most  expensive 
its 
in 
neighbouring 
Flanders, 
particularly in the Antwerp and Ghent regions and 
on  the  Belgian  coast,  while  house  prices  are 
relatively lower in Wallonia. 

the  BCR  and 
in 
and 

provinces 

Graph A16.1: House prices, rents and price-to-
income evolution in BE and EU27 since 2005 

Source: Eurostat 

Construction  of  new  dwellings  continues  to 
decrease,  primarily  in  response  to  rising 
producer costs and supply challenges, with a 
continued slowdown in building permits. After 
remaining  broadly  constant  for  15  years,  the 
construction  of  new  dwellings  has  been  steadily 
decreasing since 2022, corresponding to a spike in 
the  prices  of  construction  materials  following  the 
COVID-19  pandemic  and  the  associated  supply 
chain disruptions (Graph A16.2). High interest rates 
have  also  played  a  part.  According  to  the  Belgian 
statistical office Statbel, in the first half of 2025, 
the 
lowest  number  of  building  permits  was 
granted since 1998, even though the need for new 
construction is particularly high (see Annex 5). This 
indicates  that  the  low  rate  of  construction  will 
persist,  at  least  in  the  short  term.  According  to 
Commission  estimates,  138 000  units  will  be 

111 

751001251501752000507091113151719212325Index (2005 = 100)Nominal prices BENominal prices EU27Rental prices BERental prices EU27Price-to-income ratio BEPrice-to-income ratio EU27 
 
 
        
 
 
needed  in  Belgium  between  2025  and  2035 (401). 
According  to  national  estimates  there  will  be  a 
shortfall of 375 000 units by 2030, which equates 
to 75 000 per year (402). 

Graph A16.2: House supply indicators in BE since 
2005 

lower  levels  than  those  registered  before  2022 
(Graph  A16.3).  The  number  of  new  loans  can 
deviate  from  the  number  of  housing  transactions 
for several reasons. The 2025 notaries’ barometer 
also  shows  a  increase  in  new  deeds  signed:  up 
14.2%  nationally,  following  a  decrease  of  0.7% 
between  2023  and  2024,  with  record  increases 
seen in Wallonia – up to 28% in Walloon Brabant, 
where  the  lowering  of  registration  fees  for  new 
deeds  may  reinforce  the  impact  of  the  relative 
reduction in borrowing costs. 

Graph A16.3: Borrowing costs and housing loans, in 
BE and EA since 2018 

(1) 4-quarters moving sums (average for prices) 
Source: Eurostat 

in  2025 

Labour  shortages  in  the  construction  sector 
are  constraining 
its  productive  capacity. 
Labour  shortages  remain  high  (see  Annex  11)  in 
the construction sector, which had a vacancy rate 
of  5.5% 
(EU  average:  2.8%).  The 
availability  of  skilled  staff  is  an  obstacle  to 
investment,  as  reported  by  74%  of  Belgian 
construction  firms  (EU  average:  84%) (403).  As  the 
need  for  labour  in  the  construction  sector  is 
expected to grow faster than the Belgian average 
by  2035 (404),  the  sector  faces  challenges  in 
aligning  the  supply  of  construction  professionals 
with 
various 
demand 
qualification and skill levels.  

increasing 

across 

There  is  a  notable  increase  in  housing  loans 
and  property  transactions,  particularly  in 
regions  benefiting  from  reduced  registration 
fees.  In  a  context  in  which  interest  rates  have 
come  down  from  their  peak  but  remain  higher 
than 
loans 
in  the  pre-2022  period,  housing 
expressed as a percentage of GDP have recovered 
to 6% after a few years of decline, but remain at 

(401) Balouktsi et al. (2026) Housing investment needs in the EU. 

JRC Technical Report 144419. 

(402) Embuild | Embuild. 

(403) EIB Investment Survey 2025: Belgium overview. 

(404) Cedefop (2025 Skills Forecast). Link tool; link report. 

Source: Eurostat and ECB 

Structural policies 

building 

regulation, 

Belgium’s  housing  policy  is  shaped  by  an 
institutional  structure,  with  responsibilities 
shared  between  federal,  regional  and  local 
governments.  Each  region  –  Flanders,  Wallonia 
and  BCR,  and,  since  2021,  the  German-speaking 
Community  –  is  responsible  for  housing,  land  use 
and 
diverse 
creating 
approaches  within  the  country  and 
in  some 
instances  redundancies.  Because  housing  policy  is 
a  regional  responsibility  in  which  municipalities 
play a key role, the different regions often advise 
local 
municipalities  to,  for  example,  develop 
housing strategies that weigh local housing needs 
against available housing supply, both in terms of 
existing  stock  and  undeveloped  plots.  Rental 
policies,  although  formally  codified  at  regional 
level, 
fundamental 
similarities,  and 
principles  (decent  housing,  transparency,  anti-
discrimination), and are set at federal level.  

share 

112 

4060801001201401601800507091113151719212325Index (2005 = 100)Residential building permits in m2, indexResidential buildings producer prices, index0246810121819202122232425in % (interest rates) or in % of GDP (loans)Interest rates BEInterest rates EAPure new loans BEPure new loans EA 
       
 
       
Belgium  faces  significant  challenges 
in 
meeting social housing needs, despite targets 
to  increase  the  stock.  Belgium's  social  housing 
stock  remains  limited  and  unable  to  meet  the 
needs  of  all  households  in  its  target  group,  with 
social  housing  comprising  approximately  6%  of 
the  total  housing  stock.  Regional  targets  exist  for 
increasing the share of social housing (405). 

to 

for 

Belgium’s  approach 
social  housing 
involves both  direct government  and  private 
funding,  seeking  to  address  demand  through 
new construction and renovation. Belgium has 
leveraged EUR 294 million of the EU Recovery and 
Resilience  Facility 
the  construction  and 
renovation  of  social  housing  in  the  different 
regions  (see  Annex  12).  In  Wallonia,  the  social 
housing sector relies solely on public funding. The 
delay  in  establishing  a  functioning  government  in 
the  BCR  has  stalled  the  allocation  of  public 
budgets,  with  a  direct  impact  on  the  social  and 
affordable  housing  sector. 
In  Flanders,  even 
though  the  budget  for  social  housing  has  been 
investment  needs  (new  build  and 
increasing, 
renovation) seem to surpass this budget. As rents 
the 
are 
on 
indexed 
impoverishment  of 
tenants 
fragilises  the  financial  stability  of  social  housing 
providers and their capacity to build and renovate. 
Recently,    Flanders  (EUR  1.7  billion  loan)  and 
Wallonia (EUR 1.3 billion loan) have mobilised also 
significant financing with the European Investment 
Bank to build and renovate social housing units. 

household 
social  housing 

income, 

Reforms in the social housing sector in some 
to  boost  efficiency  and 
regions  aim 
transparency. 
social  housing 
In  Flanders, 
providers  and  social  rental  offices  have  been 
merged  to  increase  efficiency,  professionalise  the 
social housing provider sector, simplify application 
procedures  for  potential  tenants  and  allow  for 
more  transparency.  Over  the  current  legislative 
term(406),  Wallonia 
rationalise 
implementation  of  its  housing  policy  significantly 
by  creating  a  single  Walloon  housing  agency  and 
local  housing  hubs.  BCR  has  been  working  to 
restructure  the  social  housing  sector  to  improve 
efficiency.  

intends 

to 

(405) Flanders’ current government strategy aims to bolster social 
housing with targets, such as quadrupling production to 
100 000 homes by 2035. 

(406) 2024-2029. 

Complementary  regional  strategies  exist  to 
improve  housing  affordability  by  trying  to 
activate  the  private  rental  sector.  Flanders 
implements  a  budget  rentals  scheme  to  help 
middle-income  earners  secure  housing.  This 
initiative allows them to rent below market value, 
determined  by  a  statistical  tool,  with  the  aim  of 
ensuring  fair  pricing.  Budget  rentals  can  be 
developed by housing companies or integrated into 
mixed-use  projects  by  private  developers,  who 
receive  subsidies  and  a  rent  guarantee  for  up  to 
27  years.  Tenants  benefit  from  reduced  rents, 
while  housing  companies  enjoy  increased  returns, 
expanding  their  influence  in  local  housing  policy. 
The  scheme  uses  regular  evaluations  and  caps 
rental  prices,  depending  on  the  region,  to  prevent 
overcompensation  of  developers  and  to  maintain 
affordability.  This  policy  option  has  not  gained 
much  attention  from  private  landlords  and/or 
developers  so  far.  In  Wallonia  and  BCR,  social 
rental  agencies  act  as  intermediaries  between 
private landlords and low-income tenants, offering 
tax benefits to encourage participation.  

Rent  regulation  policies  in  various  regions 
demonstrate  a  range  of  approaches  and 
challenges  in  ensuring  fair  rental  practices 
rent 
and  accurate  market  data.  While 
regulation  exists 
in  the  three  regions,  their 
specifics  and  implementation  vary.  In  BCR,  rents 
can be challenges when they exceed the reference 
rent  by  more  than  20%.  The  Rent  Assessment 
Commission provides non-binding guidance on rent 
fairness, using reference rents based on historical 
data. However, this reliance on data highlights the 
need  for  high  quality  data  and  insights  into  the 
private rental market. The introduction of a rental 
contract  registration  system  in  2025  is  a  step 
towards improving data accuracy, focusing initially 
on new contracts. At present, at federal level, there 
is  a  rent  register  based  on  tax  information  and 
Flanders  is  exploring  similar  initiatives  to possibly 
use federal tax registrations to obtain oversight.  

Belgium has adopted rent regulation policies 
linking  rent  indexation  rights  to  energy 
performance  certificate  ratings.  Properties 
with  a low rating (E, F or G)  face restrictions or  a 
ban  on  imposing  annual  rent  increases.  This 
approach aims to encourage landlords to  improve 
energy  efficiency  while  shielding  tenants  from 
price hikes in substandard housing (see Annex 9).  

Most land in Belgium is privately owned and 
municipalities  have  limited  instruments  to 

113 

 
 
steer  or  acquire  it (407).  Decentralised  planning 
and  high  levels  of  private  ownership  make  it 
difficult to coordinate land development or control 
land  acquisition.  Decreasing  land  availability  and 
increasing land prices, in particular in high-demand 
areas,  mean  new  solutions  need  to  be  found  to 
produce  housing.  This  all-increases  production 
costs  for  housing  and  poses  a  challenge  for  the 
balance sheet for social and affordable housing. In 
Flanders,  a  task  force  on  housing  and  spatial 
planning is seeking solutions to optimise available 
land.  

Leasehold  agreements  in  BCR  try  to  tackle 
land  scarcity  and  support  housing  projects, 
yet  bureaucracy  and  limited  government 
authority delay vital financial frameworks. In 
the  BCR,  leasehold  agreements  (erfpacht)  are 
employed  to  manage  land  scarcity,  negotiating 
long-term  land  use  rights  to  facilitate  housing 
projects.  However,  the  former  caretaker  status  of 
the  government  had  a  significant  impact  on 
financing  mechanisms,  restricting  the  decisive 
financial  frameworks  needed  to  drive  housing 
initiatives  forward.  Bureaucratic  delays  often 
impede housing permits in the BCR.  

Wallonia plans to undertake several reforms 
in  the  short  to  medium  term  to  accelerate 
permitting  and  reduce  administrative  costs. 
Initiatives  to  accelerate  permitting  in  Wallonia 
include  implementing  a  single  window  procedure, 
digitalising  permitting  procedures  and  introducing 
stricter  procedural  time  limits.  Such  reforms  are 
expected 
to  accelerate  affordable  housing 
projects, making permitting more efficient and less 
costly.  Wallonia  also  aims  to  activate  public  land 
for  social  and  affordable  housing  through  public-
private  partnerships  (‘Design,  Build,  Finance  & 
Maintain’ (DBFM) partnerships) to be implemented 
by the Société Wallonne du Logement.  

Taxation  related  to  housing  in  Belgium  is 
shifting,  with  planned  federal  changes  to 
mortgage  interest  deduction  and  Wallonia 
cutting  registration  fees  for  first-time 
buyers. While mortgage interest relief for primary 
residences has already been abolished, the 2025-
2029  federal  government  agreement  now  also 
plans  to  abolish  mortgage  interest  deduction  for 

(407) Research  for  HOUS  Special  Committee  -  Mapping  the 
housing  needs  in  the  EU,  assessing  the  impacts  of  scarcity 
and providing an overview of relevant EU legislation (Study). 

non-primary 
longstanding 
residences,  altering 
incentives for property investment. In Wallonia, the 
recent  cut  in  registration  fees,  from  12%  to  3% 
has increased the purchasing capacity of first-time 
buyer  households  and  has  led  to  a  significant 
increase in the number of transactions. 

to  be  well-versed 

Belgium’s  regional  policies  on  regulating 
social  housing  quality  reveal  disparities  and 
challenges  in  maintaining  standards  across 
the  country. 
In  Flanders,  stringent  building 
regulations ensure that social housing units are of 
a  higher  quality  and  larger  than  those  in  the 
private  sector,  focusing  on  durability  to  reduce 
long-term  maintenance  costs.  These  regulations 
pose  challenges  for  construction  companies, 
in  public 
requiring  them 
procurement  processes  and  familiar  with  the 
additional  regulations.  Social  housing  providers 
face  financial  challenges  because  of  price  limits 
and  rising  (material)  costs,  which  affect  financial 
sustainability. BCR meanwhile faces relatively high 
vacancy 
its  social  housing  sector, 
impacting  its  capacity  to  serve  eligible  groups 
effectively.  To  address  housing  quality  issues  in 
the  private  sector,  a  dedicated  unit  verifies  the 
adequacy  of  housing  units  and  has  recently 
implemented resettlement allocations for tenants.  
To  address  housing  quality  issues  in  the  private 
sector,  all  regions  have  dedicated  units  to  verify 
the  adequacy  of  housing  units  with  resettlement 
policies  for  tenants.  Limited  available  housing 
however impedes such policies, leading some time 
to evictions without resettlement options. 

rates 

in 

Vulnerable groups 

in 

challenges 

housing 
Significant 
affordability  persist  for  vulnerable  groups. 
While  Belgium’s  overall  housing  cost  overburden 
rate  is  lower  than  the  EU  average  at  6.7%  (EU: 
7.7%)(408),  vulnerable  groups  face  heightened 
pressures.  Persons  at 
risk  of  poverty  and 
individuals  with  disabilities  have  above-EU-
average  housing  cost  overburden  rates  (31.3% 
and  12.0%  respectively (409)).  Regional  disparities 
are evident, with housing cost overburden rates of 

(408) The overburden rate should be read together with the tenure 
structure  (homeowner,  tenants),  that  may  differ  across 
country and regions.  

(409) While the EU averages are 29.1% and 9.9% respectively. 

114 

 
 
 
4.6%  in  Flanders,  7.2%  in  Wallonia  and  16.6%  in 
Brussels.  Persons  at  risk  of  poverty  in  Belgium 
spend  32.3%  of  their  income  on  rent,  slightly 
below the EU average (EU: 33.5%). In 2024, 8.0% 
of  people  felt  discriminated  against  during  their 
housing  search in  Belgium  (EU:  5.8%),  a  rate  that 
is  higher  among  people  at  risk  of  poverty  and 
persons with disabilities.  

The  demand  for  social  housing  exceeds 
supply  in  all  regions,  causing  substantial 
waiting lists. In Flanders 215 337 people are on 
the  waiting  list  for  social  housing,  exceeding  the 
existing  stock  of  about  180 000  units,  prompting 
the Council  of  Europe  to  call  for improvements in 
housing policy for vulnerable groups (410). Similarly, 
55 000 Brussels households are waiting for social 
housing  against  a  stock  of  41 014  units,  with 
numbers up by 18% since 2020. In relative terms, 
8.2% of all Brussels households are registered as 
candidates  for  social  housing.  Wallonia  has 
49 945 households currently on the waiting list for 
social  housing,  against  a  total  housing  stock  of 
103 293 units. The waiting time differs across all 
regions,  with  average  wait  times  exceeding  5 
years in Flanders and around 12 years in Brussels. 
Waiting  times  are  even  longer  for  one-person 
households  and  households  needing 
larger 
housing units. As a result, many individuals eligible 
for  social  housing  must  rely  on  the  private  rental 
or  owner-occupied  market,  which  can  lead  to 
unaffordable  housing  situations  and/or  poor 
conditions.  

There is some concern on housing quality for 
vulnerable  groups.  Vulnerable  groups  endure 
higher  rates  of  overcrowding  in  Belgium  (see 
Annex 19), posing risks for housing quality. Under 
the  Social  Climate  Fund,  Belgium  is  allocated 
EUR 1.6 billion  of  EU  funding  to  support,  among 
others,  the  vulnerable  groups  most  affected  by 
rising  energy  and  transport  costs.  Generally, 
however,  severe  housing  deprivation  is  below  the 
EU average and the share of the population living 
in housing with leaking roofs or damp walls, floors 
or foundation has been declining in Belgium.  

Homelessness  remains  a  pressing  challenge, 
especially in BCR.  Homelessness is a significant 
to  affect 
concern 

in  Belgium,  estimated 

(410) Council  of  Europe  (2025).  European  Federation  of  National 
Organisations  working  with  the  Homeless  (FEANTSA)  v. 
Belgium. 

increased  by  24.5% 

approximately  49 500  persons  in  2024 (411).  The 
problem  is  significant  in  BCR (412),  where  9 777 
people are homeless, including 1 678 children, and 
the  total  figure  of  homelessness  in  Brussels 
having 
since  2022. 
Fragmented  data  across  time  and  regions  hinder 
trend  monitoring  and  comparison.  In  addition, 
providing  adequate  and  sufficient  housing  for 
asylum  seekers  is  challenging,  with  1 127  people 
on a transit list for a place in the regular reception 
network for asylum seekers (413)  and  court rulings 
pointing  to  shortcomings  in  meeting  minimum 
reception  standards (414).  The  federal  government, 
jointly  with  the  communities  and  the  regions,  is 
preparing  a  new  cooperation  agreement  on 
homelessness 
to 
strengthen  inter-federal  cooperation  and  improve 
the 
to 
integrated  and  preventive  approach 
homelessness. 

exclusion, 

housing 

and 

(411) Mertens et al. (2025). Dénombrements du sans-abrisme et 

de l’absence de chez-soi. 

(412) Bruss’help, Dak- en thuislozentelling in het Brussels 

Hoofdstedelijk Gewest (2024). 

(413) Fedasil, Réseau d’accueil pour demandeurs d’asile en 

Belgique, au 1er mai 2026.  

(414) Flemish Agency for Integration (2025). Legal framework and 

jurisdiction on lack of reception for asylum seekers. 

115 

 
 
 
Graph A16.4: Housing affordability selected indicators 

Source: Eurostat and European Commission calculations. The overburden rate should be read together with the tenure structure 
(homeowner, tenants), that may differ across country and regions. 

116 

 
 
HORIZONTAL 
ANNEX 17: 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 
(i.e.  R&D  expenditure  as  a 
R&D 

intensity 

Graph A17.1: Progress towards the SDGs in Belgium 

percentage of GDP) of 3.36% in 2024 - well above 
the  EU  average  of  2.24%  that  same  year.  The 
percentage  of  households  with  a  high-speed 
internet  connection  in  2024  (93.8%),  although 
slightly lower than in 2023 (96.0%), was still well 
above the EU average (82.5%). 

Belgium  is  performing  well  and  is  improving 
on  education  indicators  overall,  although 
there are still concerns over high inequalities 
in  educational  outcomes  linked  to the  socio-
economic background of pupils. The percentage 
of  adults  with  at  least  basic  digital  skills  was 
above  the  EU  average  in  2025  at  61.2%  (EU 
the  country  still  faces  a 
60.4%).  However, 
significant  challenge  to  improve  digital  skills.  The 
recovery  and  resilience  plan  (RRP)  includes  large 
investments  to  improve  digital  infrastructure  and 
equipment in schools. 

While Belgium is improving on nearly all the 
SDGs  related  to  sustainability,  it  is  losing 

For a detailed progress assessment towards the various SDGs, see the annual Eurostat report ‘Sustainable development in the 
European Union’; for extensive data on the short-term SDG progress of EU countries, see Key findings – Sustainable development 
indicators; for an interactive visualization of SDG progress of EU countries, see SDG country overview. 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 or six 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 29 April 2026. Data refer mainly to the period 2019-2024 or 2019-2025. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

117 

 
 
 
 
 
 
low  in  particular  for  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  14.3%  in  2024  -  well  below  the  EU  average 
of  25.2%.  However, 
the 
population  unable  to  keep  their  home  adequately 
warm is lower than the EU average (4.8% in 2024; 
EU average: 9.2%). 

the  proportion  of 

and 

justice 

(Peace, 

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 
strong 
institutions)  and  SDG 17  (Partnerships  for 
the  goals).    On  SDG  16,  Belgium  performs 
relatively well on the quality of its institutions and 
on  access  to  justice,  but  worse  than  the  EU 
average  on  peace  and  personal  security.  The 
perceived  independence  of  the  justice  system  by 
the  population  in  2025  is  the  same  as  in  2018, 
namely  64%,  but  was  substantially  above  the  EU 
average of 54% in 2025. 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  72.8%  in 
2025, hence below the EU average of 76.1. 

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

and 

energy 

in  gross 

consumption 
indicators, 

ground  on  SDG  14  (Life  below  water)  and 
needs  to  catch  up  with  the  EU  average  on 
SDG 7 (Affordable and clean energy), SDG 15 
(Life  on  land),  SDG 13  (Climate  action)  and 
SDG 11 (Sustainable cities and communities). 
Although  Belgium  has  made  some  progress  on 
energy 
change 
climate 
mitigation 
its  overall  performance 
remains  below  the  EU  average.  The  share  of 
renewable 
energy 
consumption  (SDGs 7  and  13),  which  increased 
from  9.1%  in  2017  to  14.7%  2023,  decreased 
back to 14.3% in 2024, while the EU average was 
at 25.2% in 2024. The final energy consumption in 
household  per  capita  (SDG 7)  decreased  from 
704 kg  of  oil  equivalent  in  2018  to  599 kg  in 
2024.  Although  a  slight  increase  from  2023 
(591 kg),  this  was  still  above  the  EU  average  of 
507 kg in 2024. Belgium’s RRP includes measures 
to support the shift from fossil fuels, in particular 
buildings, 
of 
renovation 
energy 
for 
decarbonisation  of 
industrial  production,  and 
sustainable transport. 

final 

the 

Belgium  performs  less  well  on  sustainable 
agriculture  (SDG 2)  and  clean  water  (SDG 6) 
while  improving  on  responsible  consumption 
(SDG  12).  Emissions  from  agriculture  (ammonia, 
nitrates)  are  well  above  the  EU  average  (SDGs 2 
and  6);  so  is  phosphate  in  rivers  (SDG 6).  On 
SDG 12,  the  circular  material  use  rate  increased 
in  2024, 
from  20.6% 
comfortably  maintaining  its  position  well  above 
the EU average (12.2%). 

to  22.7% 

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 persons at risk of poverty or 
social exclusion fell in 2024 to 18.3% compared to 
20.1%  in  2019,  hence  staying  below  the  EU 
average  of  21%.  Belgium  has  made  progress  on 
various employment indicators, including the long-
term  unemployment  rate  (2.6%  in  2018  against 
2.0%  in  2025)  and  the  number  of  young  people 
not in employment, education or training (11.4% in 
2018, 9.8% in 2025). Several measures in the RRP 
aim  to  further  tackle  unemployment,  in  particular 
learning. 
by 
However, despite these measures the employment 
rate remains well below the 2030 national target, 
being  held  back  by  a  low  activity  rate  (see 
Annex 11).  Labour  market  participation  remains 

improving  training  and 

life-long 

118 

 
and 

Vlaams-Brabant 

the  EU  average,  but  internal  disparities  are 
growing.  The  more  developed  provinces  of 
Brabant-Wallon 
have 
experienced solid productivity growth over the past 
decade. While the Brussels-Capital Region has high 
productivity  per  hour  worked,  it  exhibits  muted 
annual  productivity  growth.  Hainaut  and  Namur 
have low annual productivity growth (0.4 and 0.1% 
respectively)  paired  with  lower  productivity  levels, 
compared  with  the  most  dynamic  regions  of  the 
country (110 and 106 respectively) (Graph A18.1). 

Graph A18.1: Labour productivity growth (2014 - 
2024) and labour productivity (2024), Belgium 
(NUTS 2 regions) 

ANNEX 18: COMPETITIVE REGIONS 

Regional development trends 

in 

Belgium 

disparities 

Regional 
are 
significant  and  have  persisted  over  time. 
Economic activity is mostly concentrated along the 
axis  of  the  Brussels-Capital  Region  and  the 
provinces  of  Antwerpen,  Brabant-Wallon  and 
Vlaams-Brabant,  with  regional  GDP  per  head  (in 
purchasing power standard, PPS) exceeding 130% 
of  the  EU  average.  Since  2004,  the  average  GDP 
per head (in PPS) compared to the EU average has 
declined in the provinces Hainaut and Luxembourg 
(by  8  in  Hainaut,  10  in  Luxembourg)  to  less  than 
75%  of  the  EU  average.  The  provinces  of  Namur 
and  Liège  in  Wallonia  and  Limburg  in  Flanders 
have also seen a significant decline. Similarly, the 
Brussels-Capital  Region  has  declined  compared 
with the EU average (EU = 100), even though from 
much  higher  levels,  from  248  in  2004  to  190  in 
2024.  By  contrast,  the  neighbouring  regions 
Vlaams-Brabant 
have 
improved  their  relative  position,  suggesting  some 
shift  of  economic  activity  from  Brussels  to  its 
periphery.  

Brabant-Wallon 

and 

Map A18.1:  GDP per head compared with the EU 
average 

Source: Commission calculations based on Joint Research 
Centre (JRC) data 

2021 - 2023 average GDP per head in purchasing power 
standard compared with the EU average. 
Source: European Commission calculation based on Eurostat 
16 July 2025 data 

Labour productivity (GDP per hour worked) in 
the  less  developed  regions  remains  above 

119 

0.70.51.70.80.70.60.60.50.50.50.40.20.1100134176104121145169115144125110118106EUBelgiumProv. Brabant wallonProv. Luxembourg (BE)Prov. West-VlaanderenProv. Vlaams-BrabantRégion de Bruxelles-Capitale/…Prov. Limburg (BE)Prov. AntwerpenProv. Oost-VlaanderenProv. HainautProv. LiègeProv. NamurAverage annual growth2024 (%)Productivity in 2024GDP/hour, EU27 = 100 
 
 
 
 
  
  
 
 
Table A18.1:Main development trends, challenges and the concentration of resources 

Source:  European Commission based on Eurostat data; categories of regions based on Map A18.1 

Key challenges for regional 
competitiveness 

Wallonia  struggles 
to  be  competitive, 
according  to  the  Regional  Competitiveness 
Index 
(see  Annex  4).  Despite  significant 
investment in research and innovation in Wallonia, 
its  impact  on  the  economy  and  employment 
remains  limited,  reflecting  a  fragmented  support 
landscape,  complex  procedures  and  insufficient 
technology 
transfer.  Boosting  competitiveness 
remains  a  key  challenge  for  Wallonia,  but  efforts 
are being made by modernising the research policy 
framework  and  rationalising  competitiveness  hub 

and  clusters.  These  efforts  aim  to:  (i)  create  a 
clearer  and  more  agile  research  and  innovation 
ecosystem;  (ii)  bring  the  smart  specialisation 
strategy  closer  to  firms’  needs;  and  (iii)  better 
align structures with regional priorities. The goal is 
to  strengthen  the  contribution  of  research  and 
innovation  to  regional  economic  growth  and  job 
creation. 

The  2025  country-specific  recommendations 
for Belgium highlighted the need to increase 
innovation diffusion by better targeting R&D 
public support to companies with the highest 
growth  (see  Annex  4).  Investment  in  R&D  in 
Flanders  stands  at  3.5%  of  GDP,  slightly  higher 
than  Wallonia  (3.2%)  (see  Table  A18.2)  and 
the  Brussels-Capital 
than 
significantly  more 

120 

Main development trendsLess developed regions (population 1.7 million)In the provinces of Hainaut and Luxembourg, the average 2021-2023 GDP per capita (in PPS) remains less than 75% of the EU average, with limited convergence over time, reflecting persistent structural gaps in productivity and employment creation. Hainaut’s economic convergence is restricted by its historical reliance on energy-intensive and declining industrial activities, combined with weaker innovation ecosystems, lower business density, and subdued labour market performance. This underscores the importance of a green and just industrial transition and economic diversification to more innovation-intensive and high value-added activities. By contrast, the province of Luxembourg is more rural and less industrialised, facing challenges related to low population density, limited agglomeration effects, and weaker productivity, rather than the legacy of large energy-intensive industries.Transition regions (population 2.5 million)Transition regions in Wallonia and Limburg (Flanders) show moderate performance, with average annual GDP growth and productivity levels that remain below the EU average.More developed regions (population 7.6 million)In the more developed regions, productivity levels are consistently above the EU average. However, growth patterns vary. Over the past decade, Brabant Wallon and Vlaams-Brabant have recorded both productivity and economic growth above the EU average, widening the gap with other Belgian provinces. Brussels appears to be caught in a development trap, with stagnant economic growth and productivity growth well below the EU average. Other more developed provinces in Flanders show intermediate performance, with growth rates close to or slightly below the EU average.Specific territories Wallonia faces significant structural challenges stemming from both historical and ongoing industrial restructuring, skills mismatches, and the need for accelerated investment in clean technologies and infrastructure. The Flemish province of Limburg, also shaped by a legacy of coal mining and heavy industry, records export performance below the Flemish average and faces challenges related to the shortage of highly skilled workers and the transition from manufacturing to higher value-added and knowledge-intensive activities.Urban areas in Belgium face a distinct set of challenges, particularly related to social deprivation and mobility/congestion. Poverty and social exclusion, compounded by low employment rates and limited access to affordable housing, are predominantly urban issues, most pronounced in the Brussels-Capital Region. Larger metropolitan commuting zones experience significant congestion, and despite efforts to promote public transport and active mobility, private car use for work and daily commutes continues to exacerbate these pressures.Rural areas in Belgium generally benefit from relatively good access to essential services such as schools and hospitals compared with the EU average. However, in less densely populated parts of Wallonia, residents experience poorer access to primary care and face challenges in accessing efficient public transport. 
 
  
 
Table A18.2:Key regional indicators for Belgium (NUTS 1 and NUTS 2 level) 

Dark green - the indicator is at least 120% of the EU average. 
Light green - the indicator is at least 100% of the EU average. 
Yellow - the indicator is at least 90% of the EU average. 
Light red - the indictor is at least 75% of the EU average. 
Dark red - the indicator is less than 75% of the EU average. 
For 'negative' indicators (where higher values are unfavourable), the colours are reversed. 
Source: Eurostat and JRC 

Region  (2.5%).  The  lower  levels  of  investment  in 
the  Brussels-Capital  Region  is  largely  accounted 
for by reduced spending in the business enterprise 
sector. By contrast, the relatively lower investment 
in  Wallonia  is  due  to  lower  public  funding,  while 
business  enterprise  investment  in  R&D  is  on  par 
with Flanders. Patents reflect the degree to which 
R&D 
to  economic  activity 
through  innovation.  The  provinces  of  Brabant-
Wallon  and  Vlaams-Brabant  are  leading  in patent 
applications  and  rank  among  the  top  in  the  EU. 
There  is  a  significant  gap  between  Flanders,  with 
179  applications,  and  Wallonia,  with  86.3, 
reflecting  very  low  rates  in  the  provinces  of 
Hainaut, Liège, Luxembourg and Namur. 

investment 

leads 

Belgian  regions  face  diverse  challenges  in 
providing  favourable  framework  conditions 
for  entrepreneurship.  Flanders,  particularly 
Ghent,  performs  better  than  the  other  Belgian 
regions  in  terms  of  scale-ups.  In  2023,  Wallonia 
its  business  support  structures  by 
reformed 
merging  its  three  public  investment  agencies  into 
a 
Entreprendre. 
agency,  Wallonie 
Coordination  between  this  agency  and  sub-

larger 

regional  agencies  is  key  to  streamlining  business 
improving  service 
instruments  and 
support 
delivery.  Wallonia  suffers 
lack  of 
from  a 
diversified  funding,  relying  mostly  on  public 
structures.  This  limits  the  ability  of  companies  to 
raise  funds  at  scale  and  attract  international 
investors.  The  ‘Circular  Wallonia’  strategy  has 
supported  the  uptake  of  circular  practices,  but 
scaling  these  up  is  hindered  by  regulatory  and 
economic  constraints (415).  The  Brussels-Capital 
Region  lacks  an  integrated  industrial  strategy  to 
support 
urban 
constraints.  Developing  such  a  strategy  could 
facilitate  stronger  coordination  between  public 
authorities  and  social  partners  to  align  land  use, 
job creation, skills development and mobility, while 
prioritising  high-value,  space-efficient  activities, 
such  as  high  tech,  circular  economy  and  urban 
manufacturing.  

sustainable 

growth 

under 

(415) European  Environment  Agency  (2024)  Circular  economy 

country profile 2024 – Belgium. 

121 

GDP per head (PPS, index)Real GDP per head growthPopulation aged 25-34 with high educational attainmentEmployment in high-technology sectorsEmployment in knowledge-intensive servicesEmployment rate 20-64Unemployment rateAt-risk-of-poverty or social exclusion rate (AROPE)R&D expenditureR&D expenditure in business enterprise sector (BERD)EU27=100Average annual % change% of population aged 25-34% of total employment% of total employment% of population aged 20-64% of labour force% of population% of GDP% of GDP20242014-202420252025202520252025202520232023EU1001.444.85.141.776.16.021.02.241.51Belgium1171.052.75.951.472.86.216.53.362.36Région de Bruxelles-Capitale/Brussels Hoofdstedelijk Gewest1900.263.58.252.163.912.633.62.451.45Vlaams Gewest1191.253.55.849.577.34.311.43.502.50Région wallonne871.246.35.355.467.97.820.03.162.68Région de Bruxelles-Capitale/Brussels Hoofdstedelijk Gewest1900.263.58.252.163.912.633.62.451.45Prov. Antwerpen1351.051.56.650.176.24.314.24.08Prov. Limburg (BE)941.149.24.549.575.04.410.21.91Prov. Oost-Vlaanderen1101.556.45.748.378.84.212.13.40Prov. Vlaams-Brabant1271.257.87.455.977.15.58.85.17Prov. West-Vlaanderen1171.451.33.943.779.23.09.81.72Prov. Brabant wallon1552.666.79.860.974.26.713.98.68Prov. Hainaut720.840.95.054.365.39.024.81.58Prov. Liège860.947.04.455.066.07.219.62.52Prov. Luxembourg (BE)721.046.43.954.173.06.715.40.57Prov. Namur801.043.65.055.171.17.715.71.09  
 
 
  
 
Key manufacturing sectors face challenges in 
some provinces in ensuring a successful just 
transition (416).  Although  all  three  regions  are 
tackling the just transition through decarbonisation 
strategies  (Wallonia,  Flanders)  and  digitalisation 
initiatives  (Brussels,  Flanders),  the  impact  varies 
across  provinces.  The  automotive  sector  is  under 
pressure in all of Belgium, but its decline has had 
the  largest  impact  on  the  provinces  Limburg  and 
East 
non-metallic  minerals 
production  sector (417)  has  also  seen  a  general 
decline  nationwide,  but  the  provinces  of  Limburg, 
Hainaut  and  Namur  are  the  most  severely 
affected.  Among  these,  Hainaut  and  Namur  face 
the  biggest  challenges  in  providing  employment 
security 
economic 
their 
due 
diversification. 

Flanders. 

limited 

The 

to 

Employment  rates  are  low  in  Wallonia  and 
the  Brussels-Capital  Region.  Labour  market 
outcomes  are generally  better  in Flanders than in 
the  Brussels-Capital  Region  or  Wallonia.  Flanders 
leads  with  an  employment  rate  of  77.3%,  while 
Wallonia  (67.9%)  and  Brussels  (63.9%)  lagged 
behind  (see  Annex  11).  Overall,  the  disparities  in 
employment  rates  in  Belgium  are  among  the 
highest in the EU. Unemployment rates in Wallonia 
(7.8%)  and  the  Brussels-Capital  Region  (12.6%) 
(6%).  Youth 
the  EU  average 
are  above 
unemployment 
is  a  concern, 
(age  15-24) 
particularly  in  Brussels  (23.6%),  Namur  (26.3%) 
and Hainaut (28.1%), where the rates significantly 
exceed both the national (17.4%) and EU averages 
(14.9%).  These  high  unemployment  rates  are  a 
major  challenge  not  only  to  the  growth  potential 
of  the  less  developed  regions  of  the  country  and 
to  social  cohesion  but  also  to  the  risk  of  poverty 
and  social  exclusion.  Improving  labour  mobility 
between  regions  could  help  tackle  labour  market 
imbalances and skills shortages. 

Belgium’s  regions  face  challenges  with 
education  attainment,  with  Hainaut  and  the 
Brussels-Capital  Region  most  affected.  In 
Hainaut,  only  13.2%  of  25-34-year-olds  had  a 
tertiary  education  attainmentin  2025.  This  is  less 
than  in  the  rest  of  Wallonia  (17,6%)  and  far  less 

(416) Automotive,  basic  metals,  chemicals,  fabricated  metals, 
machinery and non-metallic minerals. Mapping the impact of 
industrial  decline  on  European  regions  -  Internal  Market, 
Industry, Entrepreneurship and SMEs. 

than in Flanders (26,6%) and the Brussels-Capital 
Region  (20,1%).  On  a  positive  note,  despite  a 
nationwide increase in average rates, the share of 
early school leavers in Wallonia fell from 10.9% in 
2019  to  9.8%  in  2025.  This  downward  trend  can 
also  be  observed  in  Hainaut,  whereas  in  the 
Brussels-Capital  Region,  the  number  of  early 
school  leavers  is  8.8%  and  increasing  (above  the 
EU average of 9.1%).  

Poverty  and  social  exclusion  are  high  in  the 
Brussels-Capital  Region  and  intertwine  with 
other challenges.  The share of people at risk of 
poverty and social exclusion is significantly higher 
in urban areas (25.4%) than in rural areas (13.2%) 
and  town/suburbs  (12.6%)  and  exceeds  the  EU 
average for urban areas (21.3%). This set of urban 
social  challenges is particularly pronounced in the 
Brussels-Capital  Region  (see  Annex  12).  High 
poverty  rates  in  Brussels  are  associated  with  the 
region’s  low  employment rate  and  the  prevalence 
of  low-work  intensity  households  (see  Annex  12). 
These  rates  are  partly  exacerbated  by  relatively 
high  housing  costs,  which  are  driven  by  multiple 
economic  factors  (see  Annex  16).  Brussels  faces 
the  steepest  affordability  pressures  in  Belgium. 
residential  segregation 
There 
between 
lower-income 
households  increasingly  clustered  in  old  industrial 
neighbourhoods offering low-quality housing from 
the  private  rental  market (418).  The  demand  for 
social  housing vastly exceeds  supply,  with  around 
55 000  households  on  the  waiting  list  for  social 
housing in the Brussels-Capital Region (see Annex 
16). 

income  groups,  with 

is  also 

rising 

Flanders 

logistics 

combines 

insufficient 

Congestion is a significant regional challenge 
for the Brussels-Capital Region and Flanders, 
with  the  capital  particularly  suffering  from 
system 
an 
infrastructure. 
strong 
logistics  assets  with  heavy  congestion,  especially 
around  Antwerp,  which  hosts  one  of  the  largest 
ports in Europe. The region's high freight intensity 
and car dependency increase environmental costs, 
including  costs  from  air  pollution,  despite  good 
public transport, a strong cycling culture and major 
investments  in  green  mobility (419).  The  Brussels-
Capital  Region  is  one  of  the  most  congested 

(418) OECD Economic Surveys: Belgium 2022 (EN). 

(417) This  sector  covers  cement,  ceramics,  glass,  lime,  concrete 

(419) Flemish  productivity  and  competitiveness  agenda  (Flemish 

and stone products. 

Acceleration) | Department of WEWIS. 

122 

 
 
 
public 

despite 

metropolitan  areas  in  the  EU,  with  persistent  car 
transport 
extensive 
usage 
options (420).  The  region  is  working  to  develop  a 
more coherent logistics system, structured around 
major  hubs,  a  network  of  local  hubs  and  more 
efficient  management  of  goods  flows.  The 
potential  of  the  canal  for  freight  transport  could 
be  better  explored,  and  better  knowledge  of  the 
subsoil  could  improve  both  the  planning  and 
execution of infrastructure developments.  

Map A18.2:  Average number of hours per year lost 
by a commuter due to congestion during rush 
hour across Belgian metropolitan areas 

This indicator measures the average number of hours lost by 
a commuter in traffic during rush hour, compared with the 
time it would take to make the same commuting trip outside 
of rush hour. It is assumed that there are 230 working 
days/commuting trips per year. A trip includes travel to work 
and back in the morning and evening rush hours. The most 
common commuting times are used. 
Source: TomTom traffic data 

Wallonia 
in  public 
faces  bottlenecks 
transport provision in rural areas. The region’s 
high  car  dependency,  urban  sprawl  and  relatively 
weak  public  transport,  especially  in  rural  areas, 
hinder mobility, raise emissions and limit access to 
transport  options (421). 
affordable,  sustainable 

(420) Is  Brussels  a  performing,  competitive  and  attractive 
European  metropolitan  region  ? | National  Bank  of  Belgium; 
OECD  Territorial Reviews:  Brussels-Capital  Region,  Belgium  | 
OECD. 

Transport  poverty  is  higher  than  the  EU  average 
for people below the poverty threshold (Annex 11). 
A  key  challenge  is  the  declining  availability  and 
frequency  of  public  transport  in  rural  and  peri-
urban  areas.  Improving  access  to  public  transport 
in these areas could reduce car dependency and, in 
turn, alleviate the congestion in more urban areas 
caused by daily commutes. 

The  region  of  West  Flanders  faces  both 
challenges  and  opportunities  relating  to  the 
sustainable  blue  economy.  The  sector 
is 
dominated  by  port  activities,  which  generate 
roughly  40%  of  blue  gross  added  value  (GVA)  in 
Belgium,  followed  by  maritime  transport (422). 
However, the marine living resources sector, while 
contributing  a  smaller  share  of  blue  GVA  (18%), 
accounts  for  approximately  41%  of  all  blue 
in  the  country (423).  The  blue 
economy 
economy’s  socio-economic  impact is  concentrated 
almost  entirely  in  West  Flanders,  where  its  North 
Sea territory is a pioneer in offshore wind energy.  

jobs 

Efforts  to  achieve  net-zero  emissions  in 
carbon-intensive  industries  in  Wallonia  and 
port  activities  in  Flanders  are  insufficient. 
The  2025  country-specific  recommendations  for 
Belgium highlighted the need to further incentivise 
industry  to  decarbonise.  Brussels  has  the  lowest 
per capita emissions (2.3 tCO2eq), while Hainaut’s 
are  seven  times  higher.  Carbon-intensive  industry 
drives  29.7%  of  Wallonia’s  emissions  due  to  the 
activities  of  its  cement,  chemicals  and  power 
plants.  Three  Hainaut  districts  are  targeting 
economic  diversification  under  the  just  transition 
plan,  aiming  to  improve  sustainable  production, 
reduce emissions and accelerate new/clean energy 
infrastructure.  However,  more  action  is  needed  to 
reach  the  climate  target  goals.  Flanders  has  a 
industrial  base,  with  harder-to-abate 
strong 
activities  around  the  port  of  Antwerp.  The  region 
faces  bottlenecks  in  tackling  electrification  of 
industrial  heat,  carbon  capture  and  storage,  and 
creating the appropriate enabling conditions to be 
put in place in the transition to cleaner energy (see 
Annex 8).  

Employment  in  sustainable  and  competitive 
sectors  is  less  than  10%  in  four  out  of  five 

(422) European  Commission:  EU  Blue  Economy  Observatory  - 

Belgium Country Profile (2024). 

(421) Interaction  mobilité/aménagement  du  territoire  en  Wallonie 

(423) European  Commission:  EU  Blue  Economy  Observatory  - 

dans une perspective de transition juste - Iweps. 

Belgium Country Profile (2024). 

123 

 
 
 
 
 
 
rates (425).  While  Wallonia 
a 

Walloon  regions,  whereas  the  average  in 
Belgium  is  19.3% (424).  Hainaut  (5.8%)  and 
Luxembourg  (4.2%)  have  particularly  low  green 
employment 
is 
establishing 
sustainable 
framework 
development,  underpinned  by  measures  to  train 
underqualified  workers  for  specialised  sectors, 
efforts  are  insufficient  so  far.  Advancing  the 
industrial  and  green  transitions  in  Hainaut  is 
crucial  for  local  economic  resilience  and  social 
cohesion. 

for 

industrial  strategy 

these  mechanisms  need 

energy (429), 
to  be 
effectively  implemented.  The  limited  interfederal 
cooperation  on 
impedes 
synergies between federal and regional levels and 
limits  Belgium’s  competitiveness.  Strengthening 
regional  and 
cooperation  between 
municipal  authorities  – 
including  metropolitan 
coordination around Brussels – could lead to more 
coherent  policies,  efficient  investment (430)  and  a 
to  societal  and 
more 
economic challenges. 

responsive  approach 

federal, 

Wallonia  faces  bottlenecks  in  the  access  to 
healthcare and childcare, particularly in rural 
areas.  Physical  access  to  hospitals  and  primary 
schools in Belgium’s rural areas is generally better 
than  in  the  EU  on  average.  However,  data (426) 
indicate a need to increase the number of general 
practitioners  in  Wallonia  in  the  medium  term, 
particularly 
in  provinces  already  experiencing 
shortages  (such  as  Luxembourg)  (see  Annex  15). 
Wallonia has also been suffering from a deficit in 
childcare,  which  reached  a  coverage  of  37%  in 
2022 (427),  although  new  childcare  places  are 
expected  to  be  created  by  the  end  of  2026, 
including  1 700  with  support  from  the  Recovery 
and  Resilience  Facility  (see  Annex  15).  Increasing 
access  to  childcare  in  the  Brussels-Capital  Region 
is  one  measure that  can help  boost the  relatively 
low  female  employment  rate  (58.9%  compared 
with  the  EU  average  of  71.3%  and  national 
average  of  69.3%),  in  addition  to  employment-
oriented  measures,  including  training  (see  Annex 
11). 

in 

interfederal 
Belgium  faces  challenges 
coordination  due  to  its  complex  institutional 
set-up,  where  multiple  federated  entities 
have  exclusive  competence  over  certain 
policy  areas.  Although  coordination  mechanisms 
exist  in  areas  such  as  research,  innovation  (see 
Annex  4) (428),  industrial  policy  (see  Annex  5),  and 

(424) JRC  data:  Jobs  from  56  NACE  activities  that  produce  less 
greenhouse  gas  emissions  per  worker  and  are  more 
productive per worker than the EU median value. 

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

(426) Cadastre  des  médecins  généralistes  actifs  en  Wallonie 

2016-2022. 

(427) https://www.iweps.be/indicateur-statistique/accueil-

(429) Belgium 2022 Energy Policy Review | OECD. 

prescolaire-taux-de-couverture/. 

(428) Mesures  d’aide  à  la  recherche  et  au  développement  à 

l’impôt... | Cour des comptes. 

(430) Le niveau d’investissements publics en Belgique a connu une 
hausse  ces  dernières  années,  mais  n’atteindrait  pas  le 
niveau visé | Bureau fédéral du Plan. 

124 

 
 
 
ANNEX 19: TRANSPORT 

This  Transport  Annex  presents  the  state  of  play 
and  the  challenges  Belgium  faces  with  the 
implementation  of  the  trans-European  transport 
network  (TEN-T)  and  the  European  railway  traffic 
management system (ERTMS). 

is  crossed  by 

Belgium 
two  European 
transport  corridors  (North  Sea  –  Baltic  and 
the  North  Sea  –  Rhine  –  Mediterranean).  The 
TEN-T  in  Belgium  comprises:  2 387 km  of  rail  (of 
which  1 243 km  are  on  the  core  network), 
2 753 km  of  roads  (of  which  804  on  the  core 
network),  and  1 071 km  of  inland  waterways.  In 
addition,  Belgium  has  four  airports  (including  two 
core  airports),  20  ports (including  nine  core  ports) 
and 11 urban nodes on the TEN-T network (431). 

The  country  has  one  of  the  densest  and 
busiest  rail  networks  in  Europe,  reflecting  its 
compact  geography  and  central  role  in  European 
transport.  The  system  is  well-integrated,  meeting 
overall key technical  TEN-T requirements, such as 
electrification, track gauge and axle load.  

railways 

and  modernising 

The  European  railway  traffic  management 
system  (ERTMS)  is  essential  to  digitalising 
and 
the 
railway  operations  across 
harmonising 
Europe.  ERTMS  ensures 
the  safety  of  rail 
networks  by  providing  a  unified  signalling  system 
that  significantly  reduces  the  risk  of  accidents.  It 
also provides interoperability between national rail 
systems, improving cross-border train movements. 
Finally,  ERTMS  enhances  network  capacity  and 
operational 
the 
competitiveness of the rail sector. 

efficiency, 

increasing 

Belgium  is  among  the  frontrunners  in  terms 
of  ERTMS  deployment (432).  A  major  gap 
remains  the  high-speed  Brussels-Paris  line,  which 
has  not  yet  been  equipped  with  ERTMS,  which 
creates a barrier to cross-border rail services. 

Rail  network  priorities  are  focused  on 
improving  port  access  and 
increasing 
To 
capacity 
network 
supplement  the  key  cross-border  projects  in  the 
core TEN-T network and ensure an efficient traffic 

resilience. 

and 

flows  along  the  two  European  transport  corridors 
crossing  Belgium,  it  is  critical  to  remove  the 
capacity  bottleneck  on  the  Ghent-Zeebrugge  line 
freight  and 
by  adding 
passenger  traffic,  reducing  delays  and  improving 
reliability by 2030. 

to  separate 

tracks 

The Port of Antwerp is a main entry point to 
the  North  Sea  –  Baltic  corridor,  and  its  rail 
connection would benefit from upgrading and 
electrification.  Moreover,  capacity  upgrades  in 
the  Brussels  rail  node  including  the  north-south 
junction,  would  help 
resolve  structural 
bottlenecks and improve interoperability.   

to 

Given that inland waterways play a vital role 
in  both  Belgian  and  European  logistics  by 
ensuring  efficient,  sustainable  connections 
between  major  ports,  industrial  hubs,  and 
neighbouring  countries,  investment  priorities 
for  Belgium  include  modernisation  works 
along  the  canals  connecting  the  Scheldt  and 
Meuse  rivers.  De  Vlaamse  Waterweg  and  the 
Service  Public  de  Wallonie  are  in  charge  of  an 
inland  waterways 
lock 
plan 
construction and upgrades on the Albert Canal and 
Bocholt–Herentals Canal.  

focused 

on 

in  rail 

railway 

infrastructure 

Belgian 
faces 
significant  modernisation  and  maintenance 
challenges.  In  addition  to  budgetary  constraints, 
in  Belgium 
progress 
is 
infrastructure 
hampered  by  complex  and 
lengthy  permit 
procedures,  including  the  risk  of  appeals.  Lengthy 
land  acquisition  processes  and  slow  public 
procurement  and  project 
implementation  also 
delay the completion of projects and contribute to 
high project costs. Moreover, harmonising technical 
and  operational  rules  with  the  minimisation  of 
national rules in line with the EU directives on rail 
interoperability  and  safety  remains  critical  to 
ensuring seamless cross-border rail transport. 

(431) TENtec Information System, according to Reg. 2024/1679. 

(432) Based  on  ERTMS  –  Third  work  plan  of  the  European 

coordinator Matthias Ruete. 

125 

 
 
 
 
Map A19.1:  TEN-T Cross-Border & National Priority Sections in Belgium. 

Table A19.1:ERTMS deployment in Belgium. 

Source: Based on ERTMS – Third work plan of the European Coordinator Matthias Ruete. 

126 

yearlength% of total TEN-Tend 20241683 km79%by 20352387 km100%EUR 170 millionTEN-T rail networkERTMS (trackside) in operation2387 kmMinimum estimated cost of additional deployment until 2035