Belgium still has not made progress on the thorny pension reform issue even though it would unlock much-needed EU funds under the country’s recovery plan.

On Monday, the government decided to increase its borrowing by €408 million to implement the Federal pillar of the recovery plan, Belgian news media La Libre reported.

However, while the European Union paid Belgium €770 million of the €850 million of the first tranche in advance, the country was forced to postpone its first formal payment request.

In theory, Belgium could have submitted its first formal request in December, but it would have needed to have completed the first phase of its pension system overhaul and presented a plan to improve the financial and social sustainability of the pensions system to the government. As discussions were ongoing in the government, the request was postponed indefinitely.

A few weeks ago, it was postponed again, notably because Belgium had not been able to complete the pension reform and the “UBO file”, a register in which all Ultimate Beneficial Owners – who hold an interest of at least 25% of a company or other legal entity – should be registered. The UBO register is an EU requirement to combat fraud and money laundering.

In other words, failing to reach an agreement on pensions would delay EU funding for Belgium.

It “does not affect the progress of the projects in any way,” Secretary of State for Recovery, Thomas Dermine, told L’Echo at the end of April, and a large part of the expenditure has been pre-financed by the federal government itself.

In October of last year, Belgium had fulfilled 59 of the milestones and targets set in its plan, which includes 120 of 170 milestones and targets that rely on EU funding, while 73 were “on track.” Pension reform was already an issue at the time.

In its most recent report sent to the Commission on 28 April, Belgium states that of the 101 milestones and targets that had to be achieved in the past two years, were.

In addition, of the 53 milestones and targets that lie ahead in the next 12 months, 15% have already been achieved, 64% are “on track”, and 20% are lagging behind.

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