Pieter Timmermans: ‘This election campaign has gone wild’

We are experiencing an election campaign in which companies and competitiveness are forgotten, says VBO CEO Pieter Timmermans. ‘We cannot wait until our backs are against the wall.’

“It’s as if Sinterklaas, Christmas, May 1 and Rerum Novarum fall on the same day,” says Pieter Timmermans, the managing director of the Federation of Belgian Enterprises (VBO), about the election campaign for June 9. ‘This is the seventh election that I have witnessed from this chair. Never before have I received so many concerned telephone calls and responses from entrepreneurs wondering where this is going. A 32-hour week, a wealth tax, additional taxation of ‘super profits’, overhauling the wage law, maintaining automatic indexation, introducing a capital gains tax, higher minimum wages, five extra days of vacation. This can’t turn out well. This campaign has gone wild.”

In recent weeks it reminded him of Winston Churchill’s famous quote about companies: ‘Some see companies as predators that need to be driven out, some see them as cows that need to be milked and too few see them as the draft horses that pull the cart forward. .’ If the campaign does not raise awareness that we need to strengthen the foundation for prosperity, all other debates are beside the point, says Timmermans.

Pieter Timmermans: ‘I think they are completely wrong there. For example, Federal Deputy Prime Minister Frank Vandenbroucke (Vooruit) referred to the need for a new Global Plan, just as Prime Minister Jean-Luc Dehaene implemented in the 1990s.’

Timmermans: ‘Yes, and I know how that plan worked. One: restore competitiveness so that the pie grows bigger. Two: some taxes for higher incomes, such as the special contribution to social security. But all in all, these were small, non-market disruptive interventions. Three: privatize public companies to reduce debt. Four: cut corners and save money. The socialists in the government then made the choice not to save too much in health care, but to go along with the privatization.’

‘But there was margin then that is no longer there today. Our tax burden has never been as high as it is now. In terms of privatization, the big chunks are gone. And our competitiveness problems are just as great as they were then.’

Timmermans: ‘A quarter of our pensions are based on years not worked. But apparently that shouldn’t be looked at. The extreme left and extreme right parties even want to reduce the retirement age from 67 to 65. So a new Global Plan? I want to, but the levers today are different than then.’

Timmermans: ‘I do not understand why the government does not focus more on digitalization and therefore limits the civil service. The biggest task there lies with the federal states. Review the 26 systems of leave or absence at work. View those non-worked (equal) years for the pensions.’

‘That is a reform that is only slowly starting to yield results. In the first years you can supplement this with one-off revenues such as the sale of government companies. But once you get a grip on those major expenditure items, you will save more money every year.’

‘What also bothers me: I don’t hear any chairman talking about the investment climate in the election debates. While the list of companies that are struggling is getting longer and longer. I don’t feel any sense of urgency about that.’

Timmermans: ‘It’s quite simple. The Belgian economy suffered a very quick and sharp energy shock in 2022, which will give us an additional wage handicap of five percent in no time. And then you get the message: that extra handicap will disappear by 2026. In the meantime, everyone has to get through those four years, which is not always possible. That’s what we’re experiencing now.’

Timmermans: ‘Van Hool, Audi Vorst, the clothing store Esprit, the sports store Decathlon, the paper factory Sappi, the chocolate company Barry Callebaut, in the textile sector Balta and Mc Three Carpets, in the chemical sector 3M and Celanese, the packaging materials group Avery Dennison, the pharmaceutical group Pfizer , the dairy cooperative Milcobel, the medical equipment group Baxter… There will be more to come once the social elections are over this month.’

‘On top of the wage handicap is the energy handicap and then the diarrhea of ​​additional administrative burdens. We have done well there in recent years: 1 billion extra hassle for companies! My message to the voter is simple. Don’t be guided by the Sinterklaas announcements. They return to our faces like a boomerang.’

Timmermans: ‘She has handled the crises well – from the pandemic to Ukraine. But the major reforms – pensions, taxation, the labor market – have lingered. To some extent that is to be expected with seven parties. A cocktail with seven ingredients usually does not stand out in terms of taste. They did what they could.’

Timmermans: ‘And the next government will have to do it now, under greater pressure from the European Commission and perhaps also the financial markets. I don’t think we will have the luxury of spending five hundred days in a castle in the government formation.’

Timmermans: ‘I fear that the financial markets will move and I sincerely hope that I am wrong. I also fear that industrial activity will shrink further. That our exports will decline. We have to work harder on that. We must act preventively instead of waiting until our backs are against the wall.’

‘One of Jean-Luc Dehaene’s legendary sayings was that he would solve the problems as they arose. But then he always said internally to his employees: and now we have to guarantee that no problem will arise later.’

Timmermans: ‘That the extreme parties on both sides of the political spectrum are deadly dangerous to our prosperity. That no party had proposals calculated to save on government administration. And that the Planning Bureau was able to calculate the impact on jobs, budget and purchasing power, but not on the competitiveness of companies, on imports and exports and on the fiscal pressure. That is forgotten everywhere in this campaign.’