Competitiveness: the Ultimate Economic Theme for 2006?

The competitiveness of the Belgian economy seems to be endangered. To safeguard our international competitiveness, the social partners want to elaborate control mechanisms securing that the evolution of the Belgian wage cost resembles the trends in our neighbouring countries. Johan Albrecht argues that wage cost policy will probably not impact the Belgian unemployment rate because our fiscal system continues to price labour out of the market, and this observation also holds for labour that is not exposed to international competition. Our future welfare level will be determined by the successful integration in our economy of economically non-active groups and of the evolution of labour productivity. Therefore we need fundamental reforms. The focus on industrial wages in our neighbouring countries risks crowding out concerns for essential reforms.

This study is only available in Dutch