New Belgian government priorities for the financial sector and the financing of the economy

After almost 500 days of negotiation, the new Belgian government has been sworn in on 1 October 2020.

While the coalition agreement understandably puts considerable focus on the current health and economic crisis, it also sets out a number of priorities that are of direct relevance to the financial sector and to the economy in general. While these priorities are principle-based at this stage, they are good indicators of where to expect legislative initiatives in the coming three years and should be taken into consideration for long-term strategic planning.  

We have summarised below the key finance-related priorities:

Temporary support measures

• Depending on the development of the Covid pandemic, the existing support measures can be extended or amended. However, as economic and societal activities restart, support measures will be reduced and a relaunch plan will be developed. Both the support and the relaunch measures will not be available to businesses that are active in tax havens without a justifiable financial or economic need.

Relaunch and transition plan

• The relaunch and transition plan is to support competitiveness and strategic sectors and transition towards a sustainable and resilient economy.
• To finance the relaunch and transition plan, the following measures will be taken:
  • A public investment plan will be launched with a focus on digitalisation and innovation of the healthcare system, energy transition, improvement of infrastructure and mobility, education and academic research, the digital agenda and cyber security.
  • Public financing, alternative financial instruments to enhance private financing such as public-private cooperation, private capital for the infrastructure investments, etc. will be used. Administrative and legal certainty as well as tax guarantees could be given to investors.
  • Private investments will be encouraged by the increased investment tax deduction regime which will be extended for two years.
  • The Belgian Federal investment vehicle (SFPI-FPIM) will launch a transformation fund to which institutional investors such as insurers and pension funds will be invited to participate, as well as private investors.
  • The government aims at entering into an agreement with the financial sector to enhance financing of projects that are within the government’s strategic focus. An investment conference will be organised to bring projects and investors together.
• Electronic payments will be strongly encouraged – consumers should have the possibility to pay contactless at any time.

Correct and affordable financial services

• The coalition agreement puts significant emphasis on consumer protection. We can expect timely transposition of EU legislation that aims at facilitating comparison of consumer products and enhancing consumer mobility on the banking and insurance markets. The government will develop online simulators and comparison tools for key banking and investment products. Additional initiatives will be taken to reinforce basic banking services and to fight against cyber criminality (internet fraud).
• The insurance sector may expect changes in minimal contract terms to enhance customer protection and comparability of products.
• The banker’s oath - introduced in the Belgian banking law in April 2019 but not yet applicable - will become reality.

Justice and safety

• In addition to other measures, the government announced that it will pursue the reform of the Civil Code that was launched by the previous government. The ongoing reform of economic law - in particular competition and market practice - will also be continued.

Although the exact timing for the implementation of those measures remains somewhat uncertain, we may expect that a number of measures will launch without further delay, in particular those for which preliminary work has already been undertaken by the previous government.