Reforms agreed to "Maribel" system of social security subsidies

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Intervention from the European Commission has compelled the Belgian Government to amend its procedures for reducing social security costs (the Maribel system) and to extend them across-the-board to all sectors of the economy.

At the beginning of March 1997, the Belgian Government announced a set of reforms to its so-called "Maribel system", a long-standing mechanism designed to increase the competitiveness of companies by reducing social security costs. It eases employers' social security costs for manual workers by partially transferring them to the Government's social security budget, though in recent years it has applied only to export-oriented industrial sectors which face stiffer international competitive pressures

However, the European Commission and the commissioner responsible for competition, Karel Van Miert, regarded these transfers as state aid, contrary to the terms of Article 92 of the Treaty of Rome which regulates competition policy. Mr Van Miert condemned the system on the grounds that it was applied selectively, on a flat-rate basis and for an indefinite period of time.

The Government has therefore now decided to extend the mechanism to all sectors across the board. However, this will mean a further loss of BEF 6 billion in social security contributions, even though the social security system is already in crisis (loss of income owing to falling contributions in 1995 amounted to BEF 14.8 billion). Companies greatly appreciated the Maribel system because of its simplicity. In the first quarter of 1996, the number of manual workers in aided companies came to over 700,000 - that is, some 65% of the national total.

The European Commission's challenge to the Belgian Government gave sectors which had benefited most, such as textiles, serious cause for concern. That is why the Government had been endeavouring for several months to find ways of retaining and even extending the system without infringing European legislation. This has now been achieved. The new "Maribel" system has already been approved by Commissioner Van Miert and will come into force on 1 July 1997.

The new system will certainly have repercussions on the development of the current collective bargaining round in industrial sectors, as the drop in government social security revenue will be financed through the BEF 6 billion which it had earmarked in July 1996 to help the social partners negotiate agreements on employment at sectoral level (covering issues such as reductions in working time, early retirement and job creation). However, irreconcilable differences in these talks have meant that a sizeable proportion of this budget has not in fact been used. It is still not known how the new "Maribel" system is to be financed in 1998.

Reference

"La politique fédérale de l'emploi, rapport d'évaluation" (Federal employment policy, evaluation report), Ministère de l'Emploi et du Travail, 1996