Belgian 'wage handicap' harming economy, prime minister warns

Labour costs in Belgium have "destroyed thousands of jobs and prevented the creation of thousands of others", prime minister Charles Michel has told parliament.

In his state of the union address, Michel said more needed to be done to solve the "wage handicap" that made Belgian firms less competitive compared with neighbouring countries.

"Working in Belgium is too heavily taxed - every international study has shown that," he said. "We want to increase net wages and bring down the social charges that are putting people off employing staff."

Small and medium firms will now benefit from a five-year exemption on paying social charges for the first five members of staff that they hire. The measure previously applied to the first recruit only.

Other measures to bring down individuals' tax burden were announced earlier this week.

In his address, the prime minister told parliament that the Belgian economy "is now on track" and on "a path of sustainable growth".

However, he added: "We are optimistic but we are not naive. We must strengthen our comparative advantages and correct our weak points."