cases. moreover, the pact has also established a framework to encourage people reaching the end of their career to keep their job or return to work. financial incentives have therefore been introduced, including a new bonus system granting a pension supplement for people continuing to work after the age of 62. this should push up the actual retirement age itself. the pact bears witness to an awareness and brings in an indispensable change of trend. according to the work done by the study group on ageing set up within the high council of finance, it is a significant stage in the process, but still not enough in itself to bring the employment rate in belgium up to a satisfactory level. * * * before summing up, i just have to say a few words about the question posed by the organisers of this debate to each of the contributors, namely, which is the best method : harmonisation or decentralisation? do these few selected examples of measures taken in belgium enable us to draw some lessons about the best strategy for continuing and speeding up implementation of the structural reform so badly needed by european economies? first of all, i would point out that this reform applies to existing situations which differ radically from one country to another, even from one region to another. these specific characteristics, which can range from the institutional set - up to the labour relations and social security system, the structure of the economy or even the preferences of the various parties involved, must be taken into account when drawing up appropriate measures, likely to get sufficient backing from society at large. faced with these arguments in favour of decentralisation, we should not overlook the importance of the common approach developed at european level, in the context of the lisbon strategy. its contribution has been primordial in making structural reform a subject of national debate. the use of benchmarking and promoting " best practice " also come into this awareness - raising effort at national level. furthermore, the european dimension helps reap the benefits of positive externalites factors stemming from close coordination of reform measures between countries, and helps keep the risk of possible " beggar - my - neighbour ” policies to a minimum. in the updated lisbon strategy that they endorsed in 2005, the member states and the eu authorities have put together a useful combination of a common and decentralised approach. the broad lines are drawn up at european level while the member states are now given more responsibility in implementing reform measures. individual member states mainly have their say by adopting national reform programmes, setting out government

live in a quality environment. indeed, the overall objective of structural reform must be to raise the standard of living in a sustainable way for each of us today, and for generations to come. i believe that the diagnosis for the european economy is already well known. labour force mobilisation is relatively weak in europe - and this has certainly proved to be the case in belgium - while productivity gains have slowed down, despite remarkable scientific and technological progress. in the light of these observations, there has been a consensus for several years now - under the influence of work carried out notably by the imf, the oecd and the european commission - on the need to stimulate labour market participation, reinforce the quality of the labour force, improve the functioning of markets in goods and services, including financial services, and step up the innovation effort. this strategy was endorsed by the governments of the european union member states at the march 2000 european council in lisbon. i think we have to acknowledge that progress has been made, albeit at varying speeds from one country to another, but that there is also still a long way to go. european economies today are faced with many challenges. i am of course thinking of globalisation of the economy, demographic shifts and climate change. the current improvement in the economic climate must not be used as an excuse for postponing reforms ; on the contrary, it should be seen as an opportunity to put them into practice with even greater resolve. my expose will obviously not cover the whole issue of structural reform. owing to time constraints, i will not go into nonetheless important topics like education and innovation. in line with what has been suggested, i would like to illustrate the subject of reform with some concrete examples drawn from my country ’ s experience and pointing up encouraging progress, even though it is often still not enough. * * * first and foremost, in belgium ’ s case, reforms were carried out in areas where they were deemed most urgent. significant progress has been made towards improving the country ’ s public finance situation, which had become unsustainable in the 1980s, and with wage - setting, taking account of the need to remain sufficiently competitive, because belgium has such an open economy. apart from these characteristics that are peculiar to the belgian economy, reforms have also been started in the field of pensions and employment of the older age bands of the population. 1. on the public finance front, the results so far are quite satisfactory. belgium brought down its budget deficit from 8 p. c