When Belgium's Finance Minister, Mr Didier Reynders, presented his budget in October, he was determined to shed his country's image as a profligate advocate of tax and spend economics. Mr Reynders announced €3.35 billion in tax cuts aimed at reducing labour costs.
The top level of income tax - a stinging 55 per cent - has been abolished and workers on low incomes will receive generous tax credits.
Under the leadership of Mr Guy Verhofstadt, Belgium's coalition of Liberals, Socialists and Greens has adopted an economic approach that is closer to Ireland and Britain than to most of continental Europe. But with tax and social charges accounting for more than 46 per cent of GDP and a budget surplus not expected until next year, Mr Reynders's room for manoeuvre is more limited than Mr McCreevy's.
When Belgium assumes the EU Presidency in the second half of 2001, its government is determined to promote its vision of a European economy in which the state exercises a light touch on business. Mr Verhofstadt believes that social security should serve as a springboard into jobs rather than a security net for society's weakest and that pensions systems must be made sustainable.
Although Mr Reynders has made a start in applying this philosophy at home, his critics complain that Belgium's social welfare system remains bloated and that his budget has done nothing to reform the pension system.
