(1)

Regulation (EU) 2021/241 of the European Parliament and of the Council (2), which established the Recovery and Resilience Facility (‘the Facility’), entered into force on 19 February 2021. The Facility provides financial support to the Member States for the implementation of reforms and investments, entailing a fiscal impulse financed by the Union. In line with the priorities of the European Semester for economic policy coordination, the Facility helps achieve the economic and social recovery and implement sustainable reforms and investments, in particular reforms and investments to promote the green and digital transitions and to make the Member States’ economies more resilient. It also helps strengthen public finances and boost growth and job creation in the medium and long term, improve territorial cohesion within the Union and support the continued implementation of the European Pillar of Social Rights.

(2)

Regulation (EU) 2023/435 of the European Parliament and of the Council (3) (‘the REPowerEU Regulation’), which was adopted on 27 February 2023, aims to phase out the Union’s dependence on Russian fossil-fuel imports. This would help achieve energy security and diversify the Union’s energy supply, while increasing the uptake of renewables, energy storage capacities and energy efficiency. Belgium added a new REPowerEU chapter to its national recovery and resilience plan in order to finance key reforms and investments that will help achieve the REPowerEU objectives.

(3)

On 16 March 2023, the Commission issued a communication entitled ‘Long-term competitiveness of the EU: looking beyond 2030’, in order to inform policy decisions and create the framework conditions for increasing growth. The communication frames competitiveness in terms of nine mutually reinforcing drivers. Among those drivers, access to private capital, research and innovation, education and skills, and a functioning single market emerge as paramount policy priorities for reform and investment to address current productivity challenges as well as to build up the long-term competitiveness of the Union and its Member States. On 14 February 2024, the Commission issued a communication entitled ‘The 2024 Annual Single Market and Competitiveness Report’. That communication details the competitive strengths and challenges of the European single market, tracking yearly developments according to the nine competitiveness drivers identified.

(4)

On 21 November 2023, the Commission adopted the 2024 Annual Sustainable Growth Survey, marking the start of the 2024 European Semester for economic policy coordination. On 22 March 2024, the European Council endorsed the priorities of the 2024 Annual Sustainable Growth Survey, which are centred around the four dimensions of competitive sustainability. On 21 November 2023, on the basis of Regulation (EU) No 1176/2011 of the European Parliament and of the Council (4), the Commission also adopted the 2024 Alert Mechanism Report, in which it did not identify Belgium as one of the Member States that may be affected, or may be at risk of being affected, by imbalances and for which an in-depth review would be needed. On the same date, the Commission also adopted an opinion on the 2024 draft budgetary plan of Belgium. The Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area and a proposal for the 2024 Joint Employment Report, which analyses the implementation of the Employment Guidelines and the principles of the European Pillar of Social Rights. The Council adopted the Recommendation on the economic policy of the euro area (5) (‘the 2024 Recommendation on the euro area’) on 12 April 2024 and the Joint Employment Report on 11 March 2024.

(5)

On 30 April 2024, the Union’s new economic governance framework entered into force. The framework includes the new Regulation (EU) 2024/1263 on the effective coordination of economic policies and multilateral budgetary surveillance, the amended Council Regulation (EC) No 1467/97 (6) on speeding up and clarifying the implementation of the excessive deficit procedure, and the amended Council Directive 2011/85/EU (7) on requirements for the budgetary frameworks of Member States. The objectives of the new economic governance framework are to promote sound and sustainable public finances, sustainable and inclusive growth and resilience through reforms and investments, and prevent excessive government deficits. The new economic governance framework also promotes national ownership and has a greater medium-term focus, combined with more effective and coherent enforcement. Each Member State has to submit to the Council and to the Commission a national medium-term fiscal-structural plan. A national medium-term fiscal-structural plan contains the fiscal, reform and investment commitments of a Member State, covering a planning horizon of 4 or 5 years, depending on the regular length of the national legislative term. The net expenditure (8) path in the national medium-term fiscal-structural plans has to comply with the requirements of Regulation (EU) 2024/1263, including the requirements to put or keep general government debt on a plausibly downward path by the end of the adjustment period, or for it to remain at prudent levels below 60 % of gross domestic product (GDP), and to bring and/or maintain the general government deficit below the 3 %-of-GDP Treaty reference value over the medium term. Where a Member State commits to a relevant set of reforms and investments in accordance with the criteria set out in Regulation (EU) 2024/1263, the adjustment period can be extended by up to 3 years. For the purpose of supporting the preparation of those national medium-term fiscal-structural plans, on 21 June 2024, the Commission published guidance on the information to be provided by Member States in their national medium-term fiscal-structural plans and in their annual progress reports. In accordance with Articles 5 and 36 of Regulation (EU) 2024/1263, the Commission transmitted to the Member States reference trajectories and technical information, where applicable. Member States have to submit their national medium-term fiscal-structural plans by 20 September 2024, unless the Member State and the Commission agree to extend the deadline by a reasonable period of time. In accordance with their national legal frameworks, Member States may debate their draft medium-term plans with their national parliaments, may ask the independent fiscal institutions to issue an opinion, and may conduct a consultation of social partners and other national stakeholders.

(6)

In 2024, the European Semester for economic policy coordination continues to evolve in line with the implementation of the Facility. The full implementation of the recovery and resilience plans remains essential for delivering the policy priorities under the European Semester, as the plans help effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations issued in recent years. The 2019, 2020, 2022 and 2023 country-specific recommendations remain equally relevant for the recovery and resilience plans which have been revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation (EU) 2021/241.

(7)

On 30 April 2021, Belgium submitted its national recovery and resilience plan to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant to Article 19 of Regulation (EU) 2021/241, the Commission assessed the relevance, effectiveness, efficiency and coherence of the recovery and resilience plan, in accordance with the assessment guidelines set out in Annex V to that Regulation. On 13 July 2021, the Council adopted its Implementing Decision on the approval of the assessment of the recovery and resilience plan for Belgium (9), which was amended on 8 December 2023 pursuant to Article 18(2) of Regulation (EU) 2021/241 to update the maximum financial contribution for non-repayable financial support, as well as to include the REPowerEU chapter (10). The release of instalments is conditional on the adoption of a decision by the Commission, in accordance with Article 24(5) of Regulation (EU) 2021/241, stating that Belgium has satisfactorily fulfilled the relevant milestones and targets set out in the Council Implementing Decision. Satisfactory fulfilment presupposes that the achievement of preceding milestones and targets has not been reversed.

(8)

On 30 April 2024, Belgium submitted its 2024 National Reform Programme, in line with Article 4(1) of Council Regulation (EC) No 1466/97 (11). In accordance with Article 27 of Regulation (EU) 2021/241, the 2024 National Reform Programme also reflects Belgium’s biannual reporting on the progress made in achieving its recovery and resilience plan.

(9)

On 19 June 2024, the Commission published the 2024 country report for Belgium. It assessed Belgium’s progress in addressing the relevant country-specific recommendations adopted by the Council between 2019 and 2023 and took stock of Belgium’s implementation of the recovery and resilience plan. On the basis of that analysis, the country report identified gaps with regard to those challenges that are not addressed or only partially addressed by the recovery and resilience plan, as well as new and emerging challenges. It also assessed Belgium’s progress in implementing the European Pillar of Social Rights and in achieving the Union headline targets on employment, skills and poverty reduction, as well as progress in achieving the United Nations Sustainable Development Goals.

(10)

According to data validated by Eurostat, Belgium’s general government deficit increased from a deficit of 3,6 % of GDP in 2022 to a deficit of 4,4 % in 2023, while the general government debt rose from 104,3 % of GDP at the end of 2022 to 105,2 % at the end of 2023. As announced in the Commission’s communication of 8 March 2023 entitled ‘Fiscal policy guidance for 2024’, the Commission is taking the first step for the opening of deficit-based excessive deficit procedures on the basis of the outturn data for 2023, in line with existing legal provisions. On 19 June 2024, the Commission issued a report under Article 126(3) of the Treaty. That report assessed the budgetary situation of Belgium, as its general government deficit in 2023 exceeded the 3 %-of-GDP Treaty reference value. The report concluded that, in light of that assessment, and after considering the opinion of the Economic and Financial Committee formulated pursuant to Article 126(4) of the Treaty, the Commission intends to propose in July 2024 to open an excessive deficit procedure for Belgium, by proposing that the Council adopt a decision under Article 126(6) of the Treaty establishing the existence of an excessive deficit situation in Belgium.

(11)

On 12 July 2022, the Council recommended (12) that Belgium ensure in 2023 a prudent fiscal policy, in particular by limiting the growth of nationally financed primary current expenditure below medium-term potential output growth (13), taking into account continued temporary and targeted support to households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. At the same time, Belgium was also recommended to stand ready to adjust current spending to the evolving situation. Belgium was also recommended to expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Facility and other Union funds. In 2023, according to the Commission estimates, the fiscal stance (14) was expansionary, by 0,7 % of GDP, in a context of high inflation. The growth in nationally financed primary current expenditure (net of discretionary revenue measures) in 2023 provided an expansionary contribution to the fiscal stance of 0,4 % of GDP. This includes the 0,1 %-of-GDP reduction in the cost of the targeted emergency support measures for households and firms most vulnerable to energy price hikes. The growth of nationally financed primary current expenditure in excess of medium-term potential output growth was therefore not due to the targeted support to households and firms most vulnerable to energy price hikes. The expansionary growth in nationally financed primary current expenditure (net of discretionary revenue measures) was driven by permanent increases in public sector wages and social benefits resulting from the mechanism of automatic indexation, a temporary reduction in employers’ social contributions in 2023, and rising budgetary costs related to demographic ageing. In sum, the growth of nationally financed primary current expenditure in 2023 was not in line with the Council Recommendation of 12 July 2022. Expenditure financed by grants under the Facility and other Union funds amounted to 0,3 % of GDP in 2023. Nationally financed investment amounted to 2,8 % of GDP in 2023, representing an increase of 0,1 percentage point as compared to 2022. Belgium financed additional investment through the Facility and other Union funds. It financed public investment for the green and digital transitions and for energy security, such as investment in rail and cycling infrastructures, the renovation of public buildings, and hydrogen infrastructure. That public investment is partly funded by the Facility and other Union funds.

(12)

In the 2024 Stability Programme, the macroeconomic scenario underpinning the budgetary projections projects real GDP growth at 1,4 % in 2024 and 1,3 % in 2025, while projecting inflation measured by the consumer price index (CPI) at 2,8 % in 2024 and 1,8 % in 2025. The general government deficit is expected to increase to 4,6 % of GDP in 2024 and decrease to 3,6 % of GDP in 2025, while the general government debt-to-GDP ratio is set to increase to 106,2 % by the end of 2024 and 106,8 % by the end of 2025. After 2025, the general government balance is projected to decrease to 2,9 % of GDP in 2026 and 2,3 % in 2027. Therefore, the general government deficit is planned to go below the 3 %-of-GDP Treaty deficit reference value in 2026. In turn, after 2025, the general government debt-to-GDP ratio is projected to decrease gradually to 106,6 % in 2026 and 106 % in 2027.

(13)

The Commission’s 2024 spring forecast projects real GDP to grow by 1,3 % in 2024 and 1,4 % in 2025, and inflation measured by the harmonised index of consumer prices (HICP) to stand at 4 % in 2024 and 2,3 % in 2025.

(14)

The Commission’s 2024 spring forecast projects a government deficit of 4,4 % of GDP in 2024, while the general government debt-to-GDP ratio is set to remain at 105 % in 2024. The stabilisation of the debt-to-GDP ratio in 2024 mainly reflects a temporary excess of cash buffer accumulated by the end of 2023 as a result of an emission of state bonds. According to the Commission’s estimates, the fiscal stance is projected to be contractionary by 0,1 % of GDP in 2024.

(15)

Expenditure amounting to 0,2 % of GDP is expected to be financed by non-repayable support (‘grants’) under the Facility in 2024, compared to 0,1 % of GDP in 2023, according to the Commission’s 2024 spring forecast. Expenditure financed by grants under the Facility will enable high-quality investment and productivity-enhancing reforms without a direct impact on the general government balance or debt of Belgium.

(16)

On 14 July 2023, the Council recommended (15) that Belgium ensure a prudent fiscal policy, in particular by limiting the nominal increase in net nationally financed primary expenditure (16) in 2024 to not more than 2 %. When executing their 2023 budgets and preparing their draft budgetary plans for 2024, Member States were invited to take into account that the Commission would propose to the Council the opening of deficit-based excessive deficit procedures on the basis of the outturn data for 2023. According to the Commission’s 2024 spring forecast, Belgium’s net nationally financed primary expenditure is projected to increase by 4 % in 2024, which is above the recommended maximum growth rate. This excess spending over the recommended maximum growth rate in net nationally financed primary expenditure corresponds to 1 % of GDP in 2024. There is a risk that this will not be in line with what was recommended by the Council.

(17)

Moreover, the Council recommended that Belgium take action to wind down the emergency energy support measures in force, using the related savings to reduce the government deficit, as soon as possible in 2023 and 2024. The Council further recommended that, if renewed energy price increases necessitate new or continued support measures, Belgium ensure that such support measures are targeted at protecting vulnerable households and firms, are fiscally affordable, and preserve incentives for energy savings. According to the Commission’s 2024 spring forecast, the net budgetary cost (17) of emergency energy support measures is estimated at 0,4 % of GDP in 2023 and projected at 0 % of GDP in 2024 and 2025. If the related savings were used to reduce the government deficit, as recommended by the Council, those projections would imply a fiscal adjustment of 0,4 % of GDP in 2024, whereas net nationally financed primary expenditure (18) provides a contractionary contribution to the fiscal stance of 0,1 % of GDP in that year. The emergency energy support measures have been wound down in 2023 and 2024. This is in line with what was recommended by the Council. However, the related savings are not projected to be fully used to reduce the government deficit. There is a risk that this will not be in line with the Council recommendation.

(18)

In addition, the Council also recommended that Belgium preserve nationally financed public investment and ensure the effective absorption of grants under the Facility and of other Union funds, in particular to foster the green and digital transitions. According to the Commission’s 2024 spring forecast, nationally financed public investment is projected to increase from 2,8 % of GDP in 2023 to 2,9 % of GDP in 2024. This is in line with what was recommended by the Council. In turn, public expenditure financed from revenues from Union funds, including grants under the Facility, is expected to remain stable at 0,3 % of GDP in 2024.

(19)

On the basis of the policy measures known at the cut-off date of the forecast and on a no-policy-change assumption, the Commission’s 2024 spring forecast projects a government deficit of 4,7 % of GDP in 2025. The general government debt-to-GDP ratio is set to increase to 106,6 % by the end of 2025. The increase in the deficit and in the debt-to-GDP ratio in 2025 mainly reflects structurally rising current expenditure, driven in particular by costs related to demographic ageing, and by higher interest payments on public debt.

(20)

Long-term fiscal sustainability risks are high in Belgium. Beyond the unfavourable initial budgetary position, the driving factor behind the assessment of high risks is the impact of the projected increase in age-related expenditure on public finances given the country’s rapidly ageing population. In the Commission’s 2024 Ageing Report, ageing-related expenditure is projected to steadily increase from 26,8 percentage points of GDP in 2022 to 31,9 percentage points of GDP in 2070. The increase of 5,1 percentage points of GDP by 2070 is mostly due to pension and long-term care expenditure. Pension expenditure is projected to increase by 3,5 percentage points of GDP over 2022-2070, compared to 0,4 percentage point of GDP on average in the Union. Belgium’s recovery and resilience plan includes a pension reform that aims to help address that challenge, alongside other objectives such as improving the social sustainability of the system, incentivising people to remain active in the labour market after meeting early retirement conditions and ensuring greater convergence between and within pension systems. On long-term care, public spending amounted to 2,3 % of GDP in 2022 (union average 1,7 %), which made Belgium one of the Member States with the highest spending on long-term care in the Union. By 2070, long-term care expenditure is projected to increase by 1,7 percentage points of GDP, against an average increase of 0,8 percentage point in the Union. In 2022, spending on institutional care at 1,4 percentage points of GDP in Belgium was substantially higher than on average in the Union (0,8 percentage point of GDP). Available data suggest that the share of older people placed unnecessarily or at least prematurely in a residential care facility remains high, although it has been decreasing over the last decade. In particular, the data pointed out that the share of individuals who are independent or mildly dependent on care and living in residential care facilities was high in Brussels and Wallonia. The federated entities have started reforms to make the use of the different care settings more cost-efficient, particularly to avoid and delay unnecessary or premature institutionalisation. However, the level of progress made on addressing the fiscal sustainability challenge needs to be improved.

(21)

Belgium belongs to the Member States that have the highest tax and spending levels in the union. Total spending includes a high level of tax expenditure and wage subsidies. Moreover, the design of its tax system and social benefits creates financial disincentives to work and contributes to the low labour market participation rate in Belgium (76,1 % versus the Union average of 80,0 % in 2023 (20-64 age group)). Labour taxes (personal income taxes and social contributions) are the highest in the Union for low wage and average wage earners, while revenues from consumption taxes, including energy taxes, are below the Union average. For second earners, specific tax features like the ‘marital quotient’ (19) create strong disincentives to work. Moreover, the design of social benefits discourages people from taking up work or working more hours. Many social benefits are status-dependent and not means-tested, hampering the efficiency of the benefits system. Unemployment benefits are unlimited in time and not means-tested for the long-term unemployed, which worsen existing unemployment traps. Shifting the tax burden away from labour to other tax bases and improving the efficiency of the tax and benefit system could help increase employment.

(22)

In a context of structural consolidation needs, a labour tax reduction would need to be fully financed, including by reducing tax expenditure and by gradually phasing out fossil fuel tax subsidies. The heavy tax burden on labour is offset by many wage subsidies and tax deductions are extensively used in Belgium. Analysis by the High Council of Finance in 2020 found that tax expenditure are costly for the budget, tend to favour high-income earners and create inefficiencies. Tax expenditure with the highest budgetary cost include the company car scheme and the withholding tax exemption for R&D and shift work. Wage subsidies and other tax expenditure also make the tax system complex, adding to the high regulatory burden and weighing on the business environment. Moreover, R&D tax support is not targeted towards companies with the highest growth potential. Some features of the tax system also distort investment choices and risk leading to overinvestment in certain assets. In 2021, Belgium’s direct fossil fuel subsidies were estimated to amount to EUR 12 billion (2,4 % of GDP) and indirect subsidies to more than EUR 2,6 billion. Direct fossil fuel subsidies include low excise duties on gas and heating oil as compared to electricity. In combination with high electricity network costs, this creates high price differences between fossil fuels and electricity, hindering the switch to greener heating systems. Moreover, this persistent support for heating oil and natural gas contradicts Belgium’s commitments to reduce greenhouse gas emissions and improve air quality. Transport and pollution taxes are underused (e.g. smart road pricing only applies to heavy-duty vehicles) and could also help generate additional revenue. In a context of increasing traffic congestion and air pollution, tax expenditure, like the partial refund of excise duties on diesel for professional road transporters, are particularly costly and harmful to the environment.

(23)

In accordance with Article 19(3), point (b), of Regulation (EU) 2021/241 and criterion 2.2 of Annex V to that Regulation, the recovery and resilience plan includes an extensive set of mutually reinforcing reforms and investments to be implemented by 2026. Those reforms and investments are expected to help effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations. Within this tight timeframe, proceeding swiftly with the effective implementation of the recovery and resilience plan, including the REPowerEU chapter, is essential to boost Belgium’s long-term competitiveness through the green and digital transitions, while ensuring social fairness. To deliver on the commitments of the recovery and resilience plan by August 2026, it is essential for Belgium to significantly accelerate the implementation of reforms and investments by ensuring effective governance. The systematic involvement of local and regional authorities, social partners, civil society and other relevant stakeholders remains essential in order to ensure broad ownership for the successful implementation of the recovery and resilience plan.

(24)

As part of the mid-term review of the cohesion policy programmes, in accordance with Article 18 of Regulation (EU) 2021/1060 of the European Parliament and of the Council (20), Belgium is required to review each programme supported by the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), the Cohesion Fund and the Just Transition Fund (JTF) by March 2025, taking into account, among other things, the challenges identified in the 2024 country-specific recommendations, as well as its national energy and climate plan. That review forms the basis for the definitive allocation of the Union funding included in each programme. Belgium has made progress in implementing cohesion policy programmes and the European Pillar of Social Rights, but challenges remain. Intra-regional disparities in terms of economic and social development continue to be high in Belgium. It is crucial that the implementation of cohesion policy programmes be stepped up. The priorities agreed in the cohesion policy programmes remain relevant. It is particularly important that there be a quick implementation of the investments to help boost research, innovation and digitalisation as well as those related to the green transition, climate change adaptation and energy efficiency. Improving access to employment and activation measures, particularly for vulnerable groups, long-term unemployed people and young people remains a priority. Continuing support to lifelong learning to improve the mobility and adaptability of workers is of key importance. Furthermore, encouraging active inclusion and employability of disadvantaged groups continues to be necessary. Belgium could also make use of the Strategic Technologies for Europe Platform, established by Regulation (EU) 2024/795 of the European Parliament and of the Council (21), to support industrial transformation, by further developing advanced digital technologies and services, circular and advanced materials as well as capacities related to sustainable clean energy, resilient housing and innovation for health.

(25)

Beyond the economic and social challenges addressed by the recovery and resilience plan and other Union funds, Belgium faces several further challenges related to labour shortages and skills mismatches, the integration of disadvantaged groups into the labour market, the performance and equity of the education system, and the teaching profession, as well as challenges related to the business environment, regulatory burden and complexity, and restrictions in the service sector. Addressing those challenges could help improve the skills of workers and educational outcomes of all students, resulting in increasing labour productivity, and bring employment closer to the national 2030 target of 80 %.

(26)

The high job vacancy rate points to persisting labour shortages, more pronounced among technical occupations that are needed to accelerate the green transition. The integration of disadvantaged groups, including people who attained a lower level of education, come from a migrant background or with disabilities, continues to pose a concern. The number of graduates, especially women, in science, technology, engineering and mathematics (STEM) remains low (16,4 per 1 000 inhabitants aged 20-29 versus 21,9 in the Union). In addition, the transition rate from unemployment to employment is below the Union average. This suggests scope to increase the effectiveness of activation policies, particularly by improving the efficiency of public employment services, better targeting measures to support the labour market integration of disadvantaged groups and of workers on long-term sick leave. Increasing the number of STEM graduates and the labour market relevance of vocational education and training (VET) in technical professions could further help to address labour shortages. The participation of adults in learning is low, especially among people with lower level qualifications. While measures, such as an individual right of 5 days of training per year for employees and individual learning accounts, have been implemented to increase adult learning, their impact needs time to materialise and those measures warrant an evaluation.

(27)

Despite high public spending on education, learning outcomes have deteriorated and there remain concerns regarding the inclusiveness and equity of the education and training systems. The 2022 OECD Programme for International Student Assessment results show a long-term deterioration in reading, mathematics and science among 15-year-olds (25 % underperformed in mathematics, 25,3 % in reading and 22,4 % in science). While Belgium had the highest share of top performers in mathematics in the Union in 2012 (19,5 %), this sharply declined over the following 10 years (11,5 % in 2022, Flemish Community: 15 %, French Community: 6,9 %, German-speaking Community: 6,4 %). In addition, the gap in underachievement between advantaged and disadvantaged students has widened since 2018. The underachievement rate of disadvantaged students increased by 9,2 percentage points, reaching 45,8 % in mathematics (Union: 48 %, Flemish Community: 41,4 %, French Community: 51,1 %, German-speaking Community: 35,6 %). Improving the proficiency in basic skills of all students is crucial to favour labour market participation, including of disadvantaged groups. Increasing the attractiveness of the teaching profession, in particular by ensuring job stability and providing continuous training adapted to evolving needs, would help reduce a growing shortage of qualified teachers, which risks further increasing educational inequalities.

(28)

Belgium’s business environment is impaired by a high regulatory burden and a high level of complexity. The administrative burden on firms is heavy, particularly in relation to tax and labour law. The costs that small and medium-sized enterprises (SMEs) face in complying with labour and tax systems are comparatively high in Belgium, in particular for companies that need to manage multiple regional systems. Moreover, Belgium has one of the lowest levels of business dynamism in the Union. In spite of a recent increase, the rate of new businesses starting up remains low, in particular for firms with employees. The share of high-growth firms in Belgium is significantly below the Union average. High trade restrictions in the service sector may play a role in weakening business dynamism. Lifting restrictions on regulated professions would also need to be addressed.

(29)

In view of the close interlinkages between the economies of euro-area Member States and their collective contribution to the functioning of the economic and monetary union, in 2024 the Council recommended that euro-area Member States take action, including through their recovery and resilience plans, to implement the 2024 Recommendation on the euro area. For Belgium, recommendations (1), (2), (3) and (4) help implement the first, second, third and fourth recommendations set out in the 2024 Recommendation on the euro area,