Belgium misses out on 31m euros of European recovery funds
The European Commission is provisionally withholding 31 million euros from the first tranche of 974 million euros of recovery money for Belgium. The country’s resigning government's pension reform falls short of ensuring the financial sustainability of the system, according to the Commission.
The European Commission on Tuesday provisionally approved the first Belgian request for payment from the EU’s Recovery and Resilience Facility (RRF), a 723 billion euro financial instrument set up by the European Union to help member states recover from the economic and social consequences of the Covid-19 pandemic.
In September last year, secretary of state for Economic Recovery Thomas Dermine, of francophone socialists PS, requested the first tranche of 974 million euros. Of that amount, as much as 31 million, or 4 per cent, will be retained by the Commission because of insufficient improvements in the sustainability of pensions.
Month to respond
Belgium was promised a total of 4.5 billion euros of the RRF by the Commission, to be paid in instalments. In return, the country must meet 20 milestones, including pension reform, the greening of the car fleet and the rollout of the 5G network.
Pension reform, which was implemented by the last government and included a pension bonus and a gradual increase of minimum pensions, was not enough to get the first tranche paid in full. The Commission therefore plans to withhold 31 million euros of the first instalment.
Belgium now has one month to respond. If the Commission stands firm, the country will be given another six months to comply. For the payment of the next instalments, Dermine said there would be no problem for the time being: 87 per cent of the projects that were to be finished next year are already ready or under implementation. He will submit the file for a second payment tranche, totalling 1 billion euros, on 19 July.
Thomas Dermine © BELGA PHOTO HATIM KAGHAT
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