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Belgium: Business environment at a glance

September 25, 2006
Belgium: Business environment at a glance. Check it out:
(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW

FROM THE ECONOMIST INTELLIGENCE UNIT

Policy towards private enterprise and competition

2006-07: Increased energy competition, with separation of infrastructure from production; part-privatisation of a telecoms operator, Belgacom, to continue, while a competitor, Telenet, joins BEL-20; competition introduced into rail freight.



2008-10: Liberalisation of postal services in line with EU directives.

Policy towards foreign investment

2006-07: Regions compete to attract foreign investors; attitude towards foreign direct investment (FDI) remains welcoming.

2008-10: New initiatives may be introduced to attract research and research-based commercial activity.

Foreign trade and exchange controls

2006-07: Trade will remain liberal, except for agriculture. Belgian banking becomes increasingly international.

2008-10: Imports of Chinese textile products to be fully liberalised from 2008. Agricultural protection, although continuing, will probably diminish a little as a result of reforms of the EU's common agricultural policy.

Taxes

2006-07: Programme of personal income tax reductions is completed in 2006; relief on notional interest introduced for company tax, which will be highlighted in an effort to attract FDI. Introduction of controversial tax on mutual funds.

2008-10: Further moderate reductions in social security charges. Increase in energy taxes and other indirect taxes.

Financing

2006-07: Short-term interest rates rise gradually. Long-term rates will also rise from recent low levels, but remain subdued. More equity and bond financing.

2008-10: Short-term interest rates level out just below 4%. Equity and bond financing should increase further.

The labour market

2006-07: Rising inflation triggers wage indexation in 2006, giving rise to pressure by business lobbies to hold down labour costs, which are increasing faster than in Germany or the Netherlands.

2008-10: Less favourable conditions for early retirement begin to have an impact on employment rate of older workers, but overall employment rate, although rising, will remain well below EU average and Lisbon target of 70% in 2010.

Infrastructure

2006-07: Continued rapid expansion of broadband Internet connections. New Brussels commuter rail services and high-speed rail links with Netherlands and Germany.

2008-10: Long-term rail investment programme improves passenger and freight transport, but roads are more congested.

Copyright 2006 Economist Intelligence Unit


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