The new Walloon & Wallonia-Brussels Federation governments – Key takeaways

Baudouin Velge

Shortly after the elections of 25 May 2014, the PS (socialists) and the cdH (social-democrats) announced they would form the governments of the Walloon Region and the Wallonia-Brussels Federation, leaving the MR (liberals) and Ecolo (greens) in the opposition.

With 43 seats out of 75 in the Walloon parliament and 52 seats out of 94 in the parliament of the Wallonia-Brussels Federation, both parties started talks to establish the programme of both governments for the next 5 years.

The priorities of those two governments will be to get back to budget balance over the next two years while reviving the Walloon economy and investing in education in order to boost the employment rate.

Economy and Education at the core of the regional policy

As often in such forward-looking exercises, the programmes of the Walloon government and the Wallonia-Brussels government is a collection of intentions that lack clear targets and the concrete means to reach the objectives the government aims at.

Government of the Walloon Region

  • The main challenge of the Walloon government will be to return to budget balance despite a deficit of 1.1 billion euros in 2015. 
  • New investments will be pushed back and budget efforts will be concentrated on the period 2015-2016 (355 million euros in 2015 and 660 million euros in 2016). 
  • Other budgetary measures will include a limitation of spending, a reduction of the administration staff and the appointment of a monitoring committee to manage the debt. 
  • The economic policy of the government focuses on the revival of the Walloon industry through the Marshall Plan and its competitiveness clusters. However, due to the government’s economy programme, the financing of new projects within the competitiveness clusters may be frozen for 2 years. 
  • Special attention will be paid to the growth and internationalisation of SMEs and to job creation. 
  • Subsidies to companies will be conditioned to job creation. 
  • The creation of new economic zones will be coupled to the reconversion of former industrial sites. 
  • In cooperation with the social partners, the government intends to adapt the fiscal framework and to lower the cost of employment for companies, without mentioning concrete targets. 
  • In order to boost employment, the Walloon government will focus on young graduates. For those who have trouble finding a job 18 months after they graduated, a so-called “insertion contract” will enable them to sign a 12-months contract in the private, public or association sectors. The government also incentivises companies to hire less qualified young workers with a 0% national insurance contribution.

Government of the Wallonia-Brussels Federation

  • The government of the Wallonia-Brussels Federation will also be implementing a budget balance strategy. In 2015, 140 million euros will have to be saved, and 280 million euros in 2016. 
  • In order to reach the objective, the same measures as for the Walloon Region will be implemented: limitation of spending and non-replacement of 4/5 of staff. 
  • The government has made of education one of the priorities of the next 5 years. Education is rightly believed to contribute to increasing the employment rate both in Brussels and Wallonia. 
  • Despite its saving plan, the government announced a few investments in education with the creation of new places in elementary and high schools, the recruitment of 750 teachers and the refinancing of higher education. 
  • An evaluation test will also be implemented at the end of the high school program in order to assess a minimum level of competences in French, maths, sciences and modern languages.

The Walloon trade federation UWE (Union Wallonne des Entreprises) stated that the programme of the new government goes in the right direction but judges it too vague. They regret it does not emphasise enough the competitiveness of the Walloon economy although the federation supports the call for dialogue between the social partners. With the announced budget freezing, the federation fears that investments in education and innovation might be affected. And more importantly, the government should urgently reduce employers’ contributions.

A new casting that denotes the focus of PS and cdH on the regional level

The formation of the Walloon government and the government of the WalloniaBrussels Federation saw the appointment again of two Minister-Presidents instead of one previously for both governments. Paul Magnette (President of the PS and Mayor of Charleroi) becomes Minister-President of the Walloon government and Rudy Demotte (former Minister-President of the Walloon government and the government of the Wallonia-Brussels Federation) is now Minister-President of the Wallonia-Brussels Federation only.

Moreover only 2 ministers will sit simultaneously in both governments, vs. 4 in the previous legislature. Together, both governments have now 13 ministers, which is 2 more than before, although there are only 2 parties governing, vs. 3 previously (Ecolo is now in the opposition).

This is a consequence of the Parti Socialiste (PS) being excluded from the formation talks for a federal government. As a result, the PS had less possibilities to appoint the personalities of the party in ministries. The cdH party, which refused to take part in the formation talks at the federal level, was facing the same situation. Consequently, some cdH and PS personalities have returned from the federal level to the regional level such as Joëlle Milquet (cdH – Education) and André Flahaut (PS – Budget of the Wallonia-Brussels Federation).

In these new governments, we also note the presence of new names such as the Mayor of Namur, Maxime Prévot (cdH – Public infrastructure and Health), René Colin (cdH – Agriculture) and Christophe Lacroix (PS – Budget of the Walloon Region).

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Author

Baudouin Velge

Managing Partner, Belgium

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