We investigate the public-private wage differentials in ten euro area countries (Austria, Belgium, France, Germany, Greece, Ireland, Italy, Portugal, Slovenia and Spain). To account for differences in employment characteristics between the two sectors, we focus on micro data taken from EU-SILC. The results point to a conditional pay differential in favour of the public sector that is generally higher for women, at the low tail of the wage distribution, in the Education and the Public administration sectors rather than in the Health sector. Notable differences emerge across countries, with Greece, Ireland, Italy, Portugal and Spain exhibiting higher public sector premia than other countries. JEL Classification: J31, J45, O52

The article compares the fiscal consolidation effort currently being made in Belgium with two other periods of consolidation : the first in the 1980s and a second one in the 1990s. In the first part, the periods of budget restructuring are determined on the basis of changes in the structural financing balance. The second part compares the economic and politico-institutional context in which fiscal consolidation measures were adopted. The third part gives a brief overview of the main measures. The fourth part takes a closer look at the various instruments used for implementing the fiscal consolidation policy and describes the impact they have had. The fifth part explains the consequences of budget restructuring policies on public debt and on interest rates. The first period, which started in 1982 and lasted until 1987, is noteworthy for having begun at a time of recession and major imbalances in the Belgian economy, including a substantial government borrowing requirement. The rigorous restructuring effort made at the time was based on deep cuts in public expenditure and a limited increase in government revenues. The second period, which ran from 1993 to 1998, also started with a recession. The consolidation that took place during this period was achieved mainly through an increase in revenues, but also helped by a reduction in interest charges. The third consolidation period came in the wake of the economic and financial crisis and began back in 2011. This consolidation period was initially characterised by an increase in government revenues, but since 2015 the emphasis has shifted onto cutting expenditure. Moreover, interest charges have continued to shrink thanks to the fall in interest rates. The analysis of the restructuring policies followed since the early 1980s shows that fiscal consolidations have always begun in periods of low economic activity. Likewise, they are always accompanied by structural reforms. Competitiveness has thus recovered and employment has been boosted. Particular attention has also been paid to the financial sustainability of the social security system, not least through the adoption of pension reforms. As regards the current consolidation period, the major restructuring efforts underway are still relatively limited compared with efforts made during the previous two restructuring periods. However, the present fiscal consolidation programme is taking place in more difficult conditions, taking account of lower potential growth, high fiscal and parafiscal pressure, low public sector investment and rising costs of population ageing. So, extra measures still need to be taken as part of the ongoing fiscal consolidation in order to restore a structural budget balance.

The article outlines the current budgetary situation, explains why consolidation plans are urgently needed and provides an answer to the question as to what form those plans should preferably take. It also contains an insight into the strategies aimed at consolidating public finances. The financial crisis and the resultant economic recession have seriously undermined the health of public finances in almost all the developed economies. Budget deficits and public debt have risen sharply and these budgetary problems will not disappear automatically once the economy has fully recovered from the recession. On top of this, the budgetary impact of the ageing of the population could drive up budget deficits and cause public debt to rise even more quickly. To restore the sustainability of public finances, extensive consolidation efforts are required in a wide range of countries. Although a rapid and significant consolidation effort implemented simultaneously by a large group of countries could act as a brake on the economic recovery to some extent, a postponement of consolidation efforts, on the other hand, could shake the confidence of economic agents, give rise to financing risks and trigger a strong rise in interest rates. To remove doubts about the creditworthiness of countries, it is therefore advisable not to delay the announcement of concrete and credible austerity plans, even if the measures will only be implemented in the years to come. The timing and scope of consolidation efforts are dependent on country-specific circumstances. The scope of the consolidation efforts needed in most countries means that no limitations can be imposed with regard to the composition of consolidation plans. However, preference needs to be given to structural measures that reduce non-growth-promoting government expenditure or can dampen the increase in ageing-related expenditure. In spite of the already heavy burden of compulsory taxation in many countries, extra government revenues cannot be ruled out. Most countries have now begun preparing budgetary exit strategies. So there is some prospect of budgetary objectives that will herald a return to healthy public finances. In some countries, concrete austerity measures have already been worked out in the meantime. In other countries, plans of this type have yet to be detailed. However, firm government action is urgently required for this latter group of countries too, all the more so since postponing the necessary consolidation efforts would entail major risks.

The article gives an overview of pension system reforms that have been carried out in the EU15 since the beginning of the 1990s. It first of all briefly describes the main common features that the pension systems share and the basic differences that set them apart within this group of countries, all of which are confronted with the ageing problem and its social and fiscal implications. The paper then presents the main types of reform that have been implemented. Major structural reforms have only been made in a few countries, while the values of the parameters used for calculating pension rights have been revised and reforms made to public sector workers’ pension schemes practically everywhere. The way in which the reforms have been carried out in the countries that seemed to offer interesting case studies – Germany, the Netherlands, France, Sweden, Italy and Austria – is also examined. Following these reforms, several countries seem to have managed to contain the growth of their expenditure on pensions. In others, an explosion of pension costs may well be likely in the absence of any policy change. Lastly, a middle-range group seems to have already gone ahead with reform measures limiting the increase in pension costs, but not thoroughly enough to avoid a big rise in these costs. Replacement rates have meanwhile converged, or will soon converge, within the EU15. So, countries where these rates were lowest have higher post-reform replacement rates than they had before, while the countries that had high replacement rates have conducted sometimes substantial reforms which have brought these ratios down.

This paper uses the Free Disposal Hull framework in order to assess the relative efficiency of Belgian general government in the field of health care, education and public order and safety. In order to do so, this paper aggregates a large number of outcome indicators. Several drawbacks indicate that results must be interpreted cautiously. These drawbacks aside, the analysis reveals that Belgium is relatively efficient in the field of health care. As a whole, the Belgian education system is more expensive but also produces better results than the European average. However, an analysis based on a limited set of indicators reveals that the French-speaking education sector is very inefficient while the Flemish Community’s efficiency is markedly better. As far as public order and safety are concerned, major improvements could and should be made, either to improve service or cut costs