No sweat, no glory

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20 April 2022

Maintaining our level of prosperity and protecting the most vulnerable requires more sustainable economic growth. That comes through work and entrepreneurship. Too much is now being counted on the government.


Our prosperity and our social model are under pressure. After several decades after the collapse of the Soviet Union and the fall of communism in which everything seemed possible anytime, anywhere, today we are faced with a series of harsh restrictions. What was obvious yesterday may become impossible tomorrow.

It has become much less easy to create wealth. Moreover, we have already spent part of the future prosperity. Climate change means we have to rethink our way of creating wealth. We cannot say with certainty today how we will produce and what the cost price will be. We rely a lot on research and development, but successful technological innovation is not predictable.

We are entering a period of change and uncertainty that makes us realize that our level of prosperity is not guaranteed. As usual, we turn to the government in such a situation. She has the power to solve problems, has deep pockets and can provide financial assistance. She has done this successfully several times, such as during the corona crisis.



In some situations, however, you may wonder whether an excessively large and continuous flow of government interventions would not be counterproductive. Micromanagement and patronizing lead to a tangle of rules and a lack of transparency. That slows down or kills any initiative. Moreover, we have so often called on the financial strength of our government, which is now under heavy pressure. The government is actually financially unable to meet the major challenges without any problems.

One option is to push spending to Europe and take on debt at the European policy level. This will draw on the budgetary reserves of financially strong countries such as Germany and the Netherlands, which could offer a way out for the financially more limited countries. In the short term that is a solution, in the longer term probably not. The reserves of those countries are not infinite. And where do you stand if the debt ratio of Germany or the Netherlands rises to 100 percent? It is not a sustainable strategy.

How can we ensure our current level of prosperity and continue to protect the most vulnerable population groups? The only sustainable solution lies in developing more sustainable economic growth. It is the result of work and entrepreneurship. The government contributes to this growth by creating a stable and transparent framework, but it cannot replace work and entrepreneurship. We must accept that an effortless and risk-free society does not exist.



With the social challenges in mind, it is necessary that we increase our economic growth in a sustainable way. We have to work in a different way to achieve this. More people must be employed in the private sector in our country, and our government must conduct a core task debate and review its expenditure in favor of productive investments.

These must be chosen based on the objectives to be achieved and their effectiveness must be monitored. The quality of our education must also improve quickly. To quote the Club Brugge slogan: 'No sweat, no glory.'

Karel Baert, CEO Febelfin