2023-11-01 13:35:01
The Central Economic Council has invited bosses and unions to rethink the socio-economic model in the face of the challenge of economic, social and climatic transition. Analysis.
The latest “competitiveness” diagnosis suggests an increase in Belgium’s salary handicap to 1.7% at the end of 2024. There is an urgent need to redesign a new model. “Find a new balanced paradigm which will allow our institutions to function, households to be protected, businesses to be competitive, public finances to be spared and salary negotiation to regain space, explains Luc Denayer, the general secretary of the CCE. And for that, we must be able to create a story that gives meaning to the decisions we take.”
Would this mean that we are moving towards a new social pact between social partners and politicians? We’ve been talking about it for a long time. But the 2022 crisis, which confronted us for the first time in 50 years with two simultaneous shocks (explosion in energy prices and strong tensions between global supply and demand), could trigger a shift. Forging this pact would make it possible to recreate social cohesion capable of meeting the challenges.
“We made this effort once, but we cannot do it a second time given the adjustments that will have to be made in the 2030-2050 perspective.”
We’re not there yet, say the union side. “The CCE is a place that allows us to think openly, says Thierry Bodson, president of the FGTB. He is not the only one to push us behind our backs, the BNB also asks us to sit around the table.” “But we must first identify the way in which we can position the economic actors, continues his colleague Marie -Hélène Ska (CSC). However, for the moment, we measure everything against instruments which mainly concern the industrial sector.” “Employers, too, will find themselves stuck with the competitiveness law of ’96. In certain sectors, this will end up imploding,” explains Thierry Bodson.
Unanimous findings
The social partners have already agreed on the findings. It’s a first step. Which? Firstly, automatic indexing helped protect householdsbut it overcompensated higher incomes, and undercompensated lower incomes. It remains our Achilles heel, facing neighboring countries. The government had to intervene to protect the lowest incomes and reconcile indexation and competitiveness, at the cost ofa gigantic budgetary coste. “This effort,” said Luc Denayer, “we did it once, but we cannot do it a second time.”
On the other hand, the profit margins of companies, particularly in industry, have not been too impacted by the crisis. “But they started to fall from the 3rde quarter 2022. The favorable conditions we have experienced – combining an increase in costs and prices – will not happen again.”
Finally, underlines Luc Denayer, Belgium remains particularly vulnerable to its neighbors, because “our industry remains very energy-intensive in its production processes, particularly in chemicals and cement.” As for individuals, they remain vulnerable due to the low energy efficiency of buildings and mobility.
“Employers remain focused on salary costs, margins, productivity. But they remain cautious about the concept of transition.”
On the way to global balance
Faced with this diagnosis, we must now find the optimal responses. “The answer will have to be found in a global balance. It is not by changing a single parameter that we will have an efficient and resilient model.“, said the general secretary of the CCE.
A first recipe, consisting of reviewing or eliminating the indexation mechanism, is favored by the employers’ bench. Unizo and FEB offer three alternatives to the current model. “In the best case scenario, automatic salary indexation and the salary standard would be abolished”say the employers’ federations.
But this radical solution is rejected en masse by the unions. The Unizo therefore offers an alternative model: change the health index towards a sustainability index which would no longer take into account the price of fossil fuels, but only the real cost of electricity bills. The FEB, for its part, suggests granting partial indexation.
At the FGTB, Thierry Bodson notes that the employers’ bench still remains attached to its mantras. “Employers remain focused on salary costs, margins, productivity. But they remain cautious about the concept of transition. However, postponing decisions on this issue would cost our economy even more. If we want a global discussion on the evolution of the ‘economic activity, The bosses must stop this systematic blackmail.“
“Our economic model has overheated, we must today move towards a model of non-exhaustion of natural and human resources.”
Productivity and energy efficiency on the belt
Among the other parameters to put on the table, continues Luc Denayer, there is firstly the problem of productivity, which since the 90s, has been systematically lower than in neighboring countries. “But the latest report from the National Bank also shows that it is regaining color,” adds Bodson.
Ensuite, focusing on energy efficiency will also help us to reconcile, in part, the protection of households and the competitiveness of businesses. “Consuming less fossil energy, being more efficient in terms of mobility, in particular by developing integrated and punctual public transport, will help to reduce the weight of energy in the consumer price index,” explains Denayer. . And therefore, our vulnerability caused by the indexing mechanism will reduce.
Another problem comes from the mechanism for forming energy prices. Germany and the Netherlands have managed to keep prices fixed in the long term for households, but here prices have exploded, which has created a wage gap because of the automatic indexation of wages. We should also work on this aspect.
Whoever it is, the unions conclude, we no longer have a choice. “Our economic model has overheated, we must move today towards a model of non-exhaustion natural and human resources”, concludes Marie-Hélène Ska.
The summary
- By releasing its new report “Employment/competitiveness”, the Central Economic Council launched an appeal to the social partners.
- It is more than time to look at a new balanced socio-economic modelnegotiated between the parties, but also politics.
- The diagnosis is made and is the subject of a consensus between employers and unionsbut the balance will be difficult to find.
- Of the work tracks are already emerging.
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