Podcast Summary:

Les Clés – Que va devenir l’indexation automatique des salaires ?
Host: Arnaud Ruyssen (RTBF)
Date: 14 October 2025

Main Theme & Purpose

This episode explores Belgium’s unique system of automatic salary indexation (“l’indexation automatique des salaires”), its historical and economic underpinnings, the contentious debate it provokes between employers’ organizations and trade unions, and the prospects of its reform or suspension (the notorious “saut d’index”) under the new coalition government. Arnaud Ruyssen, with the help of expert guests and field reporting, aims to clarify key mechanisms, stakes, and the political tensions that govern the future of salary indexation.

Key Discussion Points & Insights

1. Definition and Current Political Context

• [00:16–01:58] The Arizona coalition government has explicitly reiterated its support for automatic indexation, highlighting its role in protecting purchasing power and economic stability.

  • Quote (Government Accord): “Nous maintenons le principe de l’indexation automatique des salaires, afin que les travailleurs puissent conserver un niveau de vie identique, même lorsque les prix des biens et des services augmentent.” — [01:34, Narrator]

• However, the same government agreement asks social partners to prepare proposals before 31 December 2026 for “a reform of the law on salaries and on the system of automatic indexation,” referencing an expanded definition of labor costs and the infamous “handicap salarial.”

2. How Does Indexation Work? Origins and Mechanism

• [03:43–05:33] Jean Faniel (CRISP):

  • Belgium is not unique in automatic wage indexation: Luxembourg, Cyprus, and Malta have similar (though not identical) mechanisms.
  • The mechanism dates back over a century, emerging from post-WWI paritarian commissions. Historically, indexation could adjust both up and down, tracking actual consumer prices—including periods of deflation.

• [05:33–07:10]

  • Indexation is calculated based on a representative “basket” (“panier”) of around 500 consumer goods.
  • Adjustments are made via the “index santé lissé”, notably excluding items such as alcohol, tobacco, and fuels (mainly for fiscal and technical, not health, reasons).

3. Indexation in Practice: Two Main Systems

• [09:21–11:07] Jean Faniel details Belgium’s dual system:

  • Fixed-date indexation (ca. 40% of workforce): Salaries are raised based on annual inflation, typically once a year.
  • Pivot-index system (ca. 60% + social allowances): Wages are bumped every time the “indice-pivot” threshold (usually +2% inflation) is crossed, which may happen several times per year during high inflationary episodes.
    • Memorable moment: During the 2022 spike, some workers saw five indexations in a single year—a cumulative 10%+ salary bump.

• [13:10] Host summarization:

  • Fixed-date increases result in “one big step” (e.g., 10% at year’s end after very high inflation), versus smaller, more frequent “stairs” for those on the pivot-index system.

4. Debates and Criticisms: Employers vs. Unions

• [14:58–16:25] Jean Faniel:

  • For employers, the system increases labor costs and reduces competitiveness, especially vis-à-vis neighboring countries without automatic indexation.
  • For unions, indexation assures stability and “pacifies” wage negotiations, offering a buffer against harsh inflation and contributing to social peace.
  • Quote (Jean Faniel): “C’est aussi le caractère pacificateur des relations sociales... ça a une tendance à pacifier les relations collectives de travail.” — [14:58]

• [16:25–17:34]

  • Indexation can benefit businesses indirectly by sustaining consumer demand—the higher costs are partially offset by steady client purchasing power.

5. Government Reform Proposals & Upcoming Negotiations

• [17:34–18:55]
  • The government proposes delegating reform discussions to unions and employers’ groups, expecting a reform proposal by late 2026. Meanwhile, it already delayed civil servant and social allowance indexations by three months, slightly eroding real incomes.

a. Employers’ Perspective (FEB)

• [18:55–20:23]
  • The FEB (Fédération des entreprises de Belgique) seeks total abolition of both automatic indexation and the 1996 law on wages, calling the system a “bug” and root cause of repeated competitiveness crises.
  • Prefers free, sector-based bargaining over statutory indexation.
  • Summary by Host: The government’s invitation to the negotiating table “réjouit donc le patronat.”

b. Trade Unions’ Perspective (CSC/FGTB)

• [20:36–22:33]

  • Unions see the government’s move as a “hidden saut d’index.”
  • Absolutely reject shifting to one annual indexation date (risk of a wage-price spiral), or only indexing lower/middle salaries (undercuts universal protection logic).
  • For unions, indexation defends all purchasing power, not just redistributive aims.
  • Quote (Syndical representative): “L’indexation n’a pas pour but de redistribuer... elle sert à protéger le pouvoir d’achat de tous les ménages.” — [21:41]

• Host's conclusion: Positions are so polarized that even basic diagnosis (“le handicap salarial historique”) is disputed.

6. Chances of Consensus and What Happens Next

• [23:40–25:15] Jean Faniel:

  • Little prospect for compromise: “On peut difficilement imaginer que du côté syndical... on va tout renégocier... c’est relativement peu probable.” [23:40]
  • If no agreement is reached by 2027, government action or continued stalemate are both possible.

• [25:15–26:50]

  • Added tension: The specter of a new “saut d’index” as a budget measure is raised again by the government, with coalition partners divided and unions resolutely opposed.
  • Quote (Maxime Prévost, Les Engagés):
    “Il est normal que pour trouver 10 milliards tout soit sur la table, ça doit pouvoir être débattu.” — [26:13]

• Long-term stakes: Indexation costs the state budget dearly (via public sector salaries, social transfers), but discontinuing or skipping it risks a major confrontation that could undermine all future negotiations.

Notable Quotes & Memorable Moments

• Jean Faniel on Indexation’s Origins:
  “C’est un système qui a un peu plus de 100 ans... en 1919, que l’on commence à mettre des formes de mécanisme d’indexation automatique des salaires en place.” — [04:30]
• On Indexation’s ‘Pacification’ of Social Relations:
  “C’est aussi le caractère pacificateur des relations sociales, puisqu’en réalité, on ne se bat pas au sein des entreprises... pour obtenir des hausses... c’est automatique.” — [14:58, Jean Faniel]
• On Union Rigidity:
  “On peut difficilement imaginer que du côté syndical... on va tout renégocier... c’est relativement peu probable.” — [23:40, Jean Faniel]
• On Government’s Pragmatism:
  “Il est normal que pour trouver 10 milliards tout soit sur la table, ça doit pouvoir être débattu.” — [26:13, Maxime Prévost]

Timestamps for Important Segments

| Timestamp | Segment | |-----------|----------------------------------------------------------------------------| | 00:16 | Introduction, overview of government’s stance on indexation | | 04:30 | Jean Faniel explains the history and origins of indexation | | 08:47 | Technical explanation: how Belgium’s indexation basket and indices work | | 09:21 | Jean Faniel presents the two main indexation mechanisms | | 13:10 | Visualization: “marches/escaliers” (salary increase patterns) | | 14:58 | Social dialogue and pacifying role of indexation (Jean Faniel) | | 18:55 | Employers’ federation (FEB) viewpoint and reform priorities | | 20:36 | Unions’ (CSC, FGTB) strong opposition to reform or reduction | | 23:40 | Jean Faniel: near impossibility of real agreement between sides | | 25:15 | Host: End-of-2026 deadline, “saut d’index” as possible government option | | 26:13 | Maxime Prévost (Les Engagés) on pragmatic approach to budget negotiations |

Conclusion

The automatic indexation of salaries is a foundational—but fiercely contested—pillar of Belgium’s social model. Its future now hangs on the ability of profoundly divided social partners to propose a credible reform by late 2026, under the looming threat of budget-driven suspensions (sauts d’index) and amid sharp disagreements not just over fairness and economics, but also the very diagnosis of Belgium’s labor market challenges. The episode ends with the recognition that the issue is far from settled—and that Belgium’s socioeconomic model may be at a historic crossroads.