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Belgium: Staff Report for the 2016 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. European Dept.
Published Date:
March 2016
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Fund Relations

(As of December 31, 2015)

Membership Status: Joined December 27, 1945; Article VIII.

General Resources Account:

SDR MillionPercent of Quota
Quota4,605.20100.00
IMF’s Holdings of Currency (Holdings Rate)4,089.9588.81
Reserve Tranche Position515.2911.19
Lending to the Fund
New Arrangements to Borrow766.07

SDR Department:

SDR MillionPercent of Allocation
Net Cumulative Allocation4,323.34100.00
Holdings4,067.2994.08

Outstanding Purchases and Loans: None

Latest Financial Arrangements:

TypeDate of ArrangementExpiration DateAmount Approved (SDR Million)Amount Drawn (SDR Million)
Stand-ByJun 19, 1952Jun 18, 195750.0050.00

Overdue Obligations and Projected Payments to Fund1/

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20152016201720182019
Principal
Charges/Interest0.200.200.200.200.20
Total0.200.200.200.200.20

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative: Not applicable

Safeguards Assessments: Not applicable

Exchange Rate Assessments:

  • Belgium’s currency is the euro, which floats freely and independently against other currencies.

  • Belgium has accepted the obligations under Article VIII, Section 2(a) and 3, and maintains an exchange system free of restrictions on payment and transfers for current international transactions except for restrictions maintained solely for security reasons, which have been notified to the Fund pursuant to Executive Board Decision No. 144-(52/51).

Last Article IV Consultation:

The last Article IV consultation was concluded on March 2, 2015. The associated Executive Board assessment is available at http://www.imf.org/external/np/sec/pr/2015/pr15111.htm and the staff report (IMF Country Report No. 15/70) at http://www.imf.org/external/pubs/ft/scr/2015/cr1570.pdf. Belgium is on the standard 12-month consultation cycle.

FSAP Participation and ROSC:

  • Belgium: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision and Regulation, and Insurance Supervision and Regulation

IMF Country Report No. 13/124

Summary: During the 2013 FSAP Update, staff assessed progress with the implementation of the 2006 FSAP recommendations. The report outlines that the authorities have made progress in addressing the recommendations of the 2006 FSAP but many recommendations in the area of conglomerate supervision and governance remain relevant. The new institutional model is a work in progress and better communication and coordination between supervisory institutions is needed. Improvements are evident in the intensity of banking supervision and the adoption of analytical tools to support system-wide monitoring, including the introduction of an intensive process for determining Pillar II capital requirements, liquidity stress testing for the banking sector, and introduction of macrofinancial risk dashboard to monitor systemic and emerging risk. Funding and risk management standards are being improved. Supervisory tools for monitoring group-wide risks need to be upgraded. The crisis management framework, while updated for handling systemic firms, is in need of a further upgrade owing in part to EU-wide developments.

Insurance supervision has been significantly strengthened although further work is needed, particularly, in strengthening the solvency framework. Both bank and insurance supervisory frameworks integrate vertical analyses of individual insurers with horizontal review of the sector. The adoption of the new institutional architecture has allowed the FSMA to focus solely on market and business conduct and the adoption of EU directives in the interim has addressed many of the recommendations for the securities sector. The FSMA’s plan to adopt a risk-based approach to conduct supervision must be adequately resourced. Pension regulation and supervision has been strengthened. While pension funds remain the remit of the FSMA, there is currently a debate as to whether this should be the responsibility of the NBB.

  • Belgium: Report on Observance of Standards and Codes—Fiscal Transparency Module

IMF Country Report No. 08/116

Summary: In many areas Belgium meets, and in some cases exceeds, the requirements of the fiscal transparency code. The basic government finance processes are supported by a sound institutional and legal framework. Roles and responsibilities in the budget process are clear, with a well-defined separation of powers between the executive and legislature. Fiscal information is provided through regular publications and extensive use of the internet. Budget formulation is appropriately supported by medium-term macroeconomic forecasts and clearly formulated medium-term fiscal policy goals, and fiscal policy is presented clearly, and in a medium-term context. Finally, audit processes are extensive and help improve budget management decisions, practices and standards, with government financial decisions evaluated ex ante and ex post by various institutions.

There is room to improve the quality and openness of budget processes: (i) there is limited insight about the objectives and targets of government expenditure; (ii) the medium-term budget estimates need to make budgetary decision-making more oriented to the medium-term; (iii) the presentation of new policy measures and their medium-term costs could be clarified; (iv) and budget implementation by departments and agencies could be streamlined. Information available to the public on the following topics could be increased: (i) fiscal risk and tax expenditures in budget documents; (ii) in-year budgetary data on local government and agencies; (iii) the content of the final government accounts; and (iv) the governance of state-owned equity holdings.

Institutional arrangements for fiscal policy coordination could be strengthened by (i) reinforcing and expanding the role of the High Council of Finance, including by providing additional institutional safeguards as to its continuity and independence, and having the Council cover all important issues bearing on fiscal policy; and (ii) converting the budget agreements between the federal government, regions, and communities into published agreements which specify the targeted balance for each partner and identify the measures needed to achieve this target.

Finally, internal audit processes could be better coordinated and simplified by reducing the number of internal control and audit layers. This makes the Court of Audit’s recent Single Audit initiative to minimize overlap, coordinate work programs, and to share common data and analysis, timely.

Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT):

Belgium’s AML/CFT framework was last assessed in July 2014. The assessment was conducted by the Financial Action Task Force (FATF) against the 2012 FATF standard using the 2013 assessment methodology, both of which place greater emphasis on the effectiveness of AML/CFT measures in mitigating the money laundering and terrorist financing risks. The evaluation report was adopted during the FATF February 2015 plenary meeting and found that the core elements of a sound AML/CFT regime were present, although some elements remained to be brought in line with the 2012 FATF standard.

Statistical Issues

Belgium’s economic and financial statistics are adequate for surveillance purposes. The National Bank of Belgium (NBB) regularly publishes a full range of economic and financial data and provides calendar dates of main statistical releases. On-line access to these comprehensive databases is facilitated by the NBB’s data search engine, Belgostat. Belgium is a SDDS subscriber. Statistics for International Financial Statistics on banking institutions and monetary aggregates are prepared on a monthly basis and are timely.

Belgium adopted the European System of Integrated Economic Accounts 2010 (ESA 2010) in 2014. Revisions of national accounts were released in September, 2014, to comply with EUROSTAT requirements to provide national accounts statistics in ESA 2010. Unlike in other countries, the central bank is responsible for compiling national accounts statistics. Quarterly accounts are published within a lag of three months. Both annual and quarterly accounts data are of good quality, with shortcomings mainly related to export and import deflators, which are based on unit values, rather than prices collected directly from exporters and importers.

Belgium compiles and publishes a complete set of general government accounts on an accrual basis (ESA 2010). The NBB publishes annual and quarterly data on general government revenue, expenditure, and net lending/ borrowing; transactions in financial assets and liabilities and a financial balance sheet data; and details on the consolidated gross debt.

The overall quality and availability of financial indicators are good. The authorities are providing quarterly updates of financial sector indicators (FSIs) in a timely manner.

Key publicly accessible websites for macroeconomic data and analysis are:

National Statistical Portal, www.belgostat.be

National Statistics Institute, www.statbel.fgov.be

National Bank of Belgium, www.nbb.be

Federal Planning Bureau, www.plan.be

High Council of Finance, www.docufin.be

Central Economic Council, www.ccecrb.fgov.be

Belgium: Common Indicators Required for Surveillance(As of January 2016)
Date of latest observationDate receivedFrequency of Data6Frequency of Reporting6Frequency of Publication6
Exchange Rates1/29/161/29/16DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities112/151/16MMM
International Investment Position2015:Q31/16QQQ
Reserve/Base Money12/151/16MMM
Broad Money12/151/16MMM
Central Bank Balance Sheet12/151/16MMM
Consolidated Balance Sheet of the Banking System12/151/16MMM
Interest Rates21/29/161/29/16DDD
Consumer Price Index12/151/16MMM
Revenue, Expenditure, Balance and Composition of Financing3—General Government42015:Q31/16QQQ
Revenue, Expenditure, Balance and Composition of Financing3—Central Government512/151/16MMM
Stock of Central Government Debt12/151/16MMM
External Current Account Balance9/151/16MMM
Exports and Imports of Goods and Services9/151/16MMM
GDP/GNP2015:Q31/16QQQ
Gross External Debt2015:Q31/16QQQ

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

This information is provided on a budget-accounting basis (not on a national accounts basis).

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I), and not available (NA)

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

This information is provided on a budget-accounting basis (not on a national accounts basis).

Daily (D), weekly (W), monthly (M), quarterly (Q), annually (A), irregular (I), and not available (NA)

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