| Summary: | This paper discusses economic development and policies of Belgium. The new government has taken important steps to support job creation and address the cost of aging—notably through wage moderation, pension reform, and a tax shift. But growth prospects remain mediocre, public debt very high, and the labor market severely fragmented. The central task is to achieve a lasting reduction in public debt while nurturing the recovery and social cohesion. The government’s goal of achieving structural fiscal balance by 2018 is laudable but ambitious—with almost two percent of GDP of measures yet to be identified. Tapping Belgium’s full labor market potential requires a comprehensive and inclusive jobs strategy
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