Belgium

VII - Six-Pack

The ‘Six-Pack’ is a package of six legislative measures (five regulations and one directive) improving the Economic governance in the EU. The Commission made the original proposals in September 2010. After negotiations between the Council and the European Parliament, the package was adopted in November 2011 and entered into force on December 13, 2011. Part of the ‘Six-Pack’ measures applies only to the Eurozone member states (see the individual titles below).         
The ‘Six-Pack’ measures reinforce the Stability and Growth Pact (SGP), among others by introducing a new Macroeconomic Imbalances Procedure, new sanctions (for Eurozone member states) and reversed qualified majority voting. Also, there is more attention for the debt-criterion.  
(
http://ec.europa.eu/economy_finance/economic_governance/index_en.htm)

Negotiation
VII.1
What positions did Belgium adopt in the negotiation of the ‘Six-Pack’, in particular in relation to the implications of the ‘Six-Pack’ for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process?

In a general sense, both public opinion and political decisions have been in favour of a strengthening of European economic governance, with an emphasis from the left side of the political spectre on the need for accompanying social policy.

Directive 2011/85/EU
Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States

Implementation  
VII.2
What measures are being taken to implement Directive 2011/85/EU on requirements for budgetary frameworks (required before 31 December 2013, article 15 Directive 2011/85/EU)?

Directive 85/2011 has been implement by two separate Acts of the same date: the Laws of April 10, 2014.[1] One law deals exclusively with the federal budgetary process and hence has been adopted by the House only.[2] The other law translates the obligations of the directive for the control of regional budgets and the Court of Auditors, and hence followed the bicameral legislative procedure.[3]

Those same Acts also address article 4(2) of Regulation 473/2013 ensuring the observance of the time-frame (October 15th). Before, the draft budget was to be put before the House before October 31st.

As to the content, the Law on the Federal Budgetary Procedure implements articles 3(1), 3(2), 4(4), 4(6), 9, 10, 11, 14(1) and 14(3) of Directive 85/2011. Additionally, the scope of implementation is extended to include federal social security.

The other Law envisages an identical implementation, but applied to the budgets of the regions and the communities. The implementing Acts amend the Law of May 22nd, 2003 on the budgetary procedure. 

Summarizing, the amendments to the Law of 2003 ensure that:[4]

       (article 3-3) The provisions derived from Directive 85/2011 are applied to the social security departments of the federal government.[5]

       (article 4-45) The draft budget will be presented on October 15 at the latest, following article 4(2) of Regulation 473/2013

       (article 5-46) In the general memorandum that accompanies the draft budget, a sensitivity-analysis is presented that gives a prediction of the evolution of most variables under different scenarios, following article 4(4) and 14(1) of Directive 85/2011.

       (article 5-46) Also included in the general memorandum is an overview of institutions and funds that are not part of the federal budget in strict sense, but are consolidated.

       (article 6-111) Starting in 2020, the Court of Auditors will certify the draft budgets, following article 3(1) of Directive 85/2011.[6]

       (article 8-124/1) Budgetary proceedings of all governments are published through monthly publications (on a website), following article 3(2) of Directive 85/2011.

       (article 9-124/2) Differences between the national forecasts employed and the (more recent) prognoses of the European Commission are to be explained in the accompanying Memorandum.

       (article 10-124/3) The medium-term budgetary framework is annually updated and included in the Memorandum of the draft budget, following articles 9, 10 and 11 of the Directive.

       (article 11-124/4) The Section “Public sector borrowing requirements” of the High Council of Finance will review each three years the methodology of budgetary prognoses, following article 4(6) of the Directive.

       (article 12-124/5) Obligation to publish all conditional budgetary obligations following article 14(3) of Directive 85/2011.

The second law of April 10, 2014 essentially installs the same requirements for the Communities and the Regions: additional information to accompany the annual draft budget, an evaluation by the High Fiscal Council of the methodology, conformity with the medium-term budgetary framework.

Implementation difficulties       
VII.3
What political/legal difficulties did Belgium encounter in the implementation process, in particular in relation to implications of the directive for (budgetary) sovereignty, constitutional law and the budgetary process?

The time-gap between 2011 and the implementation in 2014 can be explained by the intergovernmental process governing these changes: an important additional element in the negotiation on the budgetary procedure is the Cooperation Agreement of December 13, 2013, which executes the Fiscal Compact.[7] Political negotiations were quite conflictual due to the different budgetary circumstances and objectives.[8]

Belgium failed to implement Directive 2011/85 before December 31, 2013, but when the Commission gave notice under article 258 TFEU, Belgium replied that draft legislation was introduced by that date.[9]

Parliamentary debates were very limited, and contained actually only technical questions by one Member of the Committee on Budgetary and Financial Affairs.[10]

Macroeconomic and budgetary forecasts 
VII.4
What institution will be responsible for producing macroeconomic and budgetary forecasts (article 4(5) Directive 2011/85/EU)? What institution will conduct an unbiased and comprehensive evaluation of these forecasts (article 4(6) Directive 2011/85/EU)?

According to article 9 of the Law of April 10, 2014, the macroeconomic and budgetary forecasts are produced by the Institute for National Accounts (INA). De facto, the Central Bank of Belgium, as an associated institution of the Institute for National Accounts, carries this responsibility.[11]

Article 4(6) of Directive 85/2011 is implemented through article 11 of the Law of April 10, 2014. It designates the Section “Public sector borrowing requirements” of the High Council of Finance to review each three years the methodology of budgetary prognoses.

Fiscal Council  
VII.5
Does Belgium have in place an independent Fiscal Council (article 6(1) Directive 2011/85/EU: ‘independent bodies or bodies endowed with functional autonomy vis-à-vis the fiscal authorities of the Member States’)? What are its main characteristics? Does Belgium have to create (or adapt) a Fiscal Council in order to implement Directive 2011/85/EU?

The Court of Auditors (enshrined in article 180 Const.) was erected in 1831. It will review (‘certify’) the draft budgets of the Federation and the Regions and Communities.[12]

An evaluation of the methodology used to draft the budget and to base the statistical data will be carried out each three years by the Section “Public sector borrowing requirements” of the High Council of Finance. This section was erected following article 49 (6) of the Special Act on Finance of 1989. This section is charged with providing annual advice on the budgetary status of the respective governments.[13] It is composed of 12 members, half of them appointed by the federal level, and half by the various Regions and Communities. It will additionally be charged with this review following article 9 of the Law of April 10, 2014.

The independence of the Court of Auditors is constitutionally assured: it is an institution of Parliament, and thus independent from executive authority.           
Whether the High Council of Finance qualifies as independent in the classification of Directive 85/2011 is doubtful.[14] The High Council of Finance is erected by Royal Decree[15], and chaired by the Minister of Finance.  Functional autonomy of the Section
Public sector borrowing requirements is guaranteed by article 49(6) of the Special Act on Finance.

Regulation No 1176/2011 on the prevention and correction of macroeconomic imbalances  
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1176:EN:NOT)

MEIP difficulties     
VII.6
What political/legal difficulties did Belgium encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process?

Because of the direct applicability of EU law and the general favourable political position on EU economic governance, no real debate in constitutional terms has been argued. In the general report to the House, the European Advisory Committee (consisting of members of the House, Senate, and Belgian MEPs) raised no real constitutional objections, though some members of parliament lamented the lack of social objectives and the lack of EU wide convergence in taxation.[16]

Regulation No 1175/2011 on strengthening budgetary surveillance positions    
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1466:20111213:EN:PDF)

MTO procedure  
VII.7
What changes to the rules on the budgetary process are made to accommodate the amended Medium-term Budgetary Objective (MTO) Procedure?

The annual stability program includes the obligation to attain the MTO.

Article 124/3 of the Law on the Budgetary Procedure (implemented by the Law of April 10, 2014) obliges the budget to adhere to the MTO (§1), and points out that the forecasts are based on the economic assessments of the Institute for National Accounts (§2), and that each deviation from the budgetary framework should be justified (again §2).[17]

A nearly identical obligation pertains to the Regions and Communities (including the Local Governments).[18]

European semester    
VII.8
What changes have to be made to the rules and practices on the national budgetary timeline to implement the new rules on a European Semester for economic policy coordination (section 1-A, article 2-a consolidated Regulation 1466/97)?

See above, section II.2.

MTO difficulties          
VII.9
What political/legal difficulties did Belgium encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

No specific debate on this point.

Respect MTO     
VII.10
How is respect of the Medium-term Budgetary Objective included in the national budgetary framework (section 1A, article 2a consolidated Regulation 1466/97)?

The annual stability program includes the obligation to attain the MTO.

Article 124/3 of the Law on the Budgetary Procedure as implemented by the Law of April 10, 2014,  obliges the budget to adhere to the MTO (§1), and requires each deviation from the budgetary framework to be justified (§2).[19] The section public borrowing requirements of the High Council of Finance will monitor the budgetary developments of each level of government, and, in case of a significant deviation in the Fall assessment, starts a bilateral procedure between the Section and that level of government.[20]

Current MTO    
VII.11
What is Belgium’s current Medium-term Budgetary Objective (section 1A, article 2a consolidated Regulation 1466/97)? When will it be revised?

Currently, Belgium’s MTO is a surplus of 0,75 % of the GDP.[21]

Adoption MTO   
VII.12
By what institution and through what procedure is Belgium’s Medium-term Budgetary Objective adopted and incorporated in the stability programme (Eurozone, article 3(2)(a) consolidated Regulation 1466/97)?

1. Macro-economic forecasts by the Institute for National Accounts

2. Advice by the High Council for Finance

3. Draft budget by the government – which needs to comply with the MTO as laid down in the Law on Budgetary Procedure

4. Adoption of the budget by Parliament

5. Monitoring by the section Public Borrowing Requirements of the High Council for Finance

Regulation No 1177/2011 on the excessive deficit procedure
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1467:20111213:EN:PDF)

EDP difficulties 
VII.13
What political/legal difficulties did Belgium encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

No specific debate on this point.

Regulation No 1173/2011 on effective enforcement of budgetary surveillance
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1173:EN:NOT)

Sanctions
VII.14
What political/legal difficulties did Belgium encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

No specific debate on this point.

General changes
VII.15
What further changes have to be made to the rules on the budgetary process in order to comply with the Six-Pack rules?

None.

Miscellaneous
VII.16
What other information is relevant with regard to Belgium and the Six-Pack?

Not applicable.

[1] Official Gazette April 25th, 2014. http://www.ejustice.just.fgov.be/mopdf/2014/04/25_1.pdf

[2] Article 78 Const. – optional involvement of the Senate (see the debate Parl. Doc. Senate, 2013-14, nr. 5S2811/2, without resulting amendments). http://www.senate.be/www/?MIval=/publications/viewPub.html&COLL=S&LEG=5&NR=2811&VOLGNR=2&LANG=fr

[3] Article 77 Const. http://www.const-court.be/en/basic_text/belgian_constitution.pdf

[4] The first article numbers refer to the Law of April 10, 2014, the second number to the final version of the Law of May 22, 2003.

[5] Those falling within the institutional sector S1314 as defined by Regulation 549/2013.

[6] Certification is no strict requirement of the Directive. As set out by the government, it aims to ensure the truthfulness and reliability of the draft budget and will help to strengthen internal and external audits. See Parl. Doc. House, 2013-14, nr. 53K3408/1, p. 9. Http://www.dekamer.be/FLWB/PDF/53/3408/53K3408001.pdf The Council of State raised the issue of compliance by December 31st, 2013 (as opposed to 2020 as envisaged) – see Parl. Doc. House, 2013-14, nr. 53K3408/1, p. 27. http://www.dekamer.be/FLWB/PDF/53/3048/53K3048001.pdf

[7] See below, section IX on the Fiscal Compact for a detailed discussion of the cooperation agreement.

[8] See for instance the discussion on “European economic governance and the ‘six-pack’ in the Flemish Parliament: Parl. Doc. Flemish Parl., 2011-2012, nr. 1410/1, p. 12. https://docs.vlaamsparlement.be/docs/stukken/2011-2012/g1410-1.pdf

[9]  L. Buffel & E. Vanalme, “De omzetting van de nieuwe Europese budgettaire regelgeving in België” Service Public Fédéral Finances – Belgique, Bulletin de Documentation, 74ème année, n° 1, 1er trimestre 2014, p. 97. – see the Commission’s webpage and the decision to send a formal notice on March 28, 2014: http://ec.europa.eu/eu_law/eulaw/decisions/dec_20140328_1.htm ; and the closing of the case on July 23, 2014: http://ec.europa.eu/eu_law/eulaw/decisions/dec_20140723.htm

[10] See Report, Parl. Doc. House 2013-14, nr. 3408/4. http://www.dekamer.be/FLWB/53/3408/53K3408004.pdf

[11] The Central Bank is also charged with providing the statistics for the excessive deficit procedure – see the Law of February 28, 2014, Official Gazette April 4, 2014. http://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=fr&la=F&cn=2014022816&table_name=loi

[12] Art. 3 of the Law of April 10, 2014. See also higher, on “certification” in footnote 39 in section VII.2. See also L. Buffel & E. Vanalme, “De omzetting van de nieuwe Europese budgettaire regelgeving in België” Service Public Fédéral Finances – Belgique, Bulletin de Documentation, 74ème année, n° 1, 2014, p. 132-133.

[13] See also the cooperation agreement of 22 May 2014, which organizes the monthly publication of budgetary statistics and charges the Section Public Borrowing Requirements with the evaluation: published in the Official Gazette, 18 august 204. http://www.ejustice.just.fgov.be/mopdf/2014/08/18_1.pdf

This cooperation agreement adds to the implementation of Directive 85/2011, both stipulations of the agreement needed the explicit approval of the substate levels, see the Advice of the Council of State, Parl. Doc. House, 2013-14, nr. 53K3408/1, p. 28-29. http://www.dekamer.be/FLWB/PDF/53/3048/53K3048001.pdf

[14] See also K. Brams & T. Corthaut, ‘De financiering van de gemeenschappen en de gewesten na de Zesde Staatshervorming – responsabilisering in de schaduw van Europa’ in A. Alen et al. (eds.), Het federale België na de zesde staatshervorming (die Keure 2014) 615.

[15] Royal Decree of April 3, 2006, Official Gazette April 13, 2006. http://www.ejustice.just.fgov.be/cgi_loi/change_lg.pl?language=fr&la=F&cn=2006040331&table_name=loi

[16] Report, Economic governance and the European semester: implications for the Belgian budgetary process, Parl. Doc., House, 53-1343/1 (March 31, 2011). Some of the objections were voiced at p. 12-13 for instance. See also higher, II.2. http://www.dekamer.be/FLWB/PDF/53/1343/53K1343001.pdf

[17] See also L. Buffel & E. Vanalme, “De omzetting van de nieuwe Europese budgettaire regelgeving in België” Service Public Fédéral Finances – Belgique, Bulletin de Documentation, 74ème année, n° 1, 2014, p. 105-106.

[18] Article 16/12 of the Law on the Budgetary Procedure for Regions and Communities of 22 May 2003.

[19] See also L. Buffel & E. Vanalme, “De omzetting van de nieuwe Europese budgettaire regelgeving in België” Service Public Fédéral Finances – Belgique, Bulletin de Documentation, 74ème année, n° 1, 2014, p. 105-106; 137-138.

[20] See Advice of the High Council of Finance, March 2014, p. 23-24: (in French) http://www.docufin.fgov.be/intersalgfr/hrfcsf/adviezen/PDF/csf_fin_avis_2014_03.pdf

[21] See point 14 of Council Decision of 21 June 2013 giving notice to Belgium to take measures for the deficit reduction judged necessary in order to remedy the situation of excessive deficit – OJ 190/87 of July 11, 2013.

See also the 2014-2017 Stability Program: http://ec.europa.eu/europe2020/pdf/csr2014/sp2014_belgium_en.pdf