National Bank of Belgium study urges greater transparency and review of Belgium’s EUR 25 billion enterprise subsidies

The National Bank of Belgium published an article mapping subsidies and investment grants to enterprises as captured in the national accounts and arguing for more systematic scrutiny of their objectives and efficiency. It estimates that such support totalled about EUR 25 billion in 2024, more than 4% of GDP, and links Belgium’s higher spending relative to neighbouring countries largely to measures that offset the high tax burden on labour income. Almost two-thirds of business subsidies are wage subsidies, including federal tax remittance exemptions for night and shift work, targeted reductions in social security contributions at federal and regional levels for specific worker groups such as first hires, and regional subsidies for service voucher companies. The overview also covers federal subsidies to public enterprises such as SNCB/NMBS and Bpost, regional support for wastewater companies, environmental subsidies including for solar panels and offshore wind farms, and measures to stimulate research and development, with differing regional priorities across Flanders, Wallonia and Brussels. The article notes mixed empirical evidence on the effectiveness and efficiency of some wage subsidies and argues that structural labour market reforms could reduce the need for certain measures. It calls for greater transparency on subsidies and recipients, pointing to the Flemish subsidies register as a good practice, and highlights that the federal government has committed to conducting spending reviews in its medium-term fiscal-structural plan submitted to the European Commission.