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Archive for February 2010

Pension and retirement: finally the paradise?

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During the month of February, the Belgian government published the “green book”, including conclusions about the payment of retirement pension, the challenge for the coming years. The conclusions were not a surprise, but only what everybody already knew, conclusions already done by economists and demographers. The government and some political people begin to admit that if people want to get a decent pension later, they have to save money. The problem of pension payment is due to the pyramid of ages. Indeed, the percentage of retired people is increasing. It means that the weight of pension costs on shoulders of active people will be more important.

An announced conclusion of the study was that people should work 3 years more than the average. It does not mean that the legal pension age would not be 65 years but 68 years. We have to know that in Belgium, only one person over ten who are between 55 and 60 years old is still working. We are one of the European countries where the activity rate of this generation is the lowest.  How to explain such fact? In Belgium the tax level on work is very high. For somebody who spent few years or his full career in the same company, the lay off indemnities are very high. Of course, each employee agrees to have the maximum of indemnities, but should not be better to have less indemnity but to work for a longer time?

In Belgium as in every country, there were several restructuring processes in large companies, creating social disasters. It is always a painful hardship, where people are wondering how they will pay the bills at the end of the month. Most of them, who were more than fifty five years old, were retired anticipatively. By hearing some politicians, I have the feeling they were considering this as a gift, the fact that people who were wrongfully fired, merit to be retired anticipatively. Does it mean that everybody is necessarily happy to stop working when he is fifty five years old? Does it not mean that you are considered as too old, and then useless? Some studies showed that people who were retired anticipatively, by their own or by force, have a lower quality of live after few years. So to be retired anticipatively is not precisely a gift.

It is of course more difficult for people with lower qualifications to find a job when they have a certain age. But on the other side, with such view I explained before, the qualities and knowledge acquired by experience are not valued at all. In a previous posting, I was talking about the employability, meaning that each worker needs to gain in knowledge and expertise in order to move with the environment changes, to acquire tools and develop capabilities in order to face new challenges. The combination of experience and trainings provides added value and know how for each worker and as consequence for the company too.

It has to be remembered that the education is also important, that everybody needs to have enough chances to start in the active life. There is a lot improvement to be done on that level, when we are noting that in a city like Brussels, capital of Europe, there is around 20 percent of workless people, and for young people who are between 15 and 24 years old count around 35 percent of workless people.

Work is a right, and the government should take initiative in order to give chances to everybody to get dignity to have a job, by empowering the education, by promoting entrepreneurship, by encouraging social and economical initiatives. Work is the way to ensure independence to everybody. It is only on this base that we can maintain a sustainable social system.

Work is a right, and should be more considered as this and not as a constraint. It is a constraint if you do not like what you do, or if you are not considered for what you are doing. Confucius said: “Choose a work you like, and you will never have to work a day in your life.”

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Written by Eric Saint-Guillain

February 24, 2010 at 21:31

The art to lose time

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Running after time

Most of the time, we are hearing people saying they have not enough time to do what they want or they have to do. I will not give here a training session of time management, but sometime, we have to think how are we using the “lost” time, because we are thinking always on the same way.

I am thinking about this, when it was snowing few times during this winter, as consequence that  traffic jams were still worse than usual. Every day, people are losing time in their cars in the traffic jams and during that lost time, what are they doing? Nothing! Only increase their stress and lost time.

A particularity in Belgium is that the percentage of company cars is important. Due to high tax level on salaries, companies are giving a company car to some employees as an alternative of salary increase. The consequence of this is that people are using this mode of transportation, because it is free of charges, even if they could take another mode of transportation which could take less time to go to the place you have to go. It is of course costless for the employee, and we could understand the reason he is acting in this way, but certainly not for the employer, for the reason explained before.

It is true also that sometimes, another mode of transportation could take more time than the car to go somewhere, but does it mean that you will lose more time? Not necessarily, but it depends how you will use it. Let me tell you an example. I have a former colleague who is IT consultant. This person has no drive license. It means that when he is visiting his customers, he is using the public transports. When he takes the train to go to a customer located at one hour from Brussels, he has the time to work in the train with his laptop, answering to mails, preparing some documentation, planning his agenda. He reads also books or documentations. By using the time of transportation in this way, he is performing tasks he will not have to do at home on the evening or losing time to do it when he is working for a customer. If you have to cover the same distance by car, you are only driving and not doing anything else. In fact it is a question to use our time on a more efficient way.

By thinking about this, each of us can find some tips to use our time on another way and to increase our quality of life. You will say that it is probably easier to say it than to do it. Of course, each change in our life needs to provide an effort and a period of adaptation. It is a matter of fact we are falling easily in the routine, and we are taking some comfortable habits, moving slowly to a kind of apathy and laziness. But we probably need also some motivation too to change our habits. It is well known that if you have enough time to do something, you will have trend to slow down the rhythm and take more time than needed. This motivation is a part of self motivation first, and also motivation coming from the others. If you want to have time to do sports, social activities, or to spend more time with your family, then you will use your time better, for example by doing some tasks in the train, and not at home. More fundamentally, our attitudes are guided by our ambitions, our goals, our projects, and the middle we are allowing to then.

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Written by Eric Saint-Guillain

February 17, 2010 at 19:02

The financial crisis is over and good practices back! Really?

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The fall of Lehman Brothers on 15th of september 2008

Most of you probably know through the media the solvability problems some countries are facing, like Greece. And some speculators are finding an opportunity to make money by creating additional problems in an already difficult environment. And Greece is not the only country facing to budget deficit. Let us remember that with the financial crisis and the uncontrolled risks taken by some banks, a lot of countries over the world have to make actions by funds injections, in order to save then and to save the money of their customers. The consequence is that the private debts of the banks became public debts, it means a charge for each citizen.

This subject was discussed by the finance ministers of the G7, but until now, it is the status quo! And it seems that the game of speculation and risky investments started again. The problem is that in such games, like in most of games, they are winners and losers. But what is unacceptable is that the losers are not part of the game, I mean the people who will have to support the increase of the national debt and who will suffer of the consequences of budget deficits. For who is the crime profitable?

I can notice that today, in such context, there is a confusion between the speculators and the entrepreneurs. The financial and economical world is considered in a negative way. In this difficult time, it is not a good thing, as we absolutely need the creation of companies and activities in order to compensate the jobs losses. In order to maintain a social environment, we need to have a strong economy where everybody can play a role and live with dignity. But to have a strong economy, we need entrepreneurs with innovative projects and activities, and the essential tools, financing sources, to develop such projects and activities.

By meeting recently some entrepreneurs, there were mentioning to me the financing problems they were facing. They were wondering how to find financing sources and partners without dealing with sharks? The traditional banks are not enthusiastic to finance such projects, because they have not enough return on investment on it. But how could we explain and understand that they are investing in more lucrative investments but much more risky too? The explanation could be the following:  if things go wrong again for the banks, they count to the government to make new capital injections. But with the debts the governments contracted to save banks, will their still have the capacities to perform another capital injection? And what could be the economical, social and political consequences of such new intervention?

Is the human being able to learn from his mistakes? Yes, he is, but on another way, he thinks that things are linear, that he can always have control on things, and that there will be always a solution to solve a problem without too much consequence, that he can always escape to critical situations and not be concerned by then. That is what was probably thinking a certain..Bernard Madoff !

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Written by Eric Saint-Guillain

February 10, 2010 at 22:22

Posted in Economy

Tagged with , , ,

Let us start up !

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Thomas Leysen, president of the FEB (Fédération des Entreprises de Belgique)

End of January, the Belgian employer’s organizations were shouting of alarm, by setting up a petition named “Let us Start up”. As most of countries, Belgium did not escape to the financial and economical crisis. But this initiative was launched after the announcement of General Motors restructuring plan in her European subsidiary Opel. It means the closing of the Antwerp factory with 2300 axed direct jobs and negative economical consequences for the country.  Belgium is a country where the production of cars was important, and this sector was providing a lot of jobs. But since many years, the jobs in the automotive sector are decreasing after several restructuring and delocalization plans.

But automotive is not the only sector where the number of jobs in the big companies is decreasing. The Belgian economy, as it is the case in other countries, is in a transformation process. But some statistics are showing that Belgium is one of the European countries where the creation of companies is the lowest. In such economical circumstances, some leaders are thinking that it is time now to do something in order to reverse this negative trend.

Why have we reached such situation? There are few elements to explain this. It is important to understand that the economical picture of the two regions of the country is not the same. In the south of country, there was a huge presence of steel industry and coalmine. In the year seventies, these industries declined, and the number of unemployed people increased constantly. Some economist are saying that the mistake of the authorities is that they invest a lot in social measure, which is good on a short term basis, but not enough in economical measure in order to boost the economy. In the north of the country, the industry was most diversified, but since few years, the trend of the economy begins to be the same, with the restructuring of the automotive industry.

The petition launched by the employers organizations intend to make people sensitive to the fact we need to create incentives for people who want to create their own business. One of the major obstacles is a high tax level. Regarding that point, everybody does not share the same point of view.  We have to know that the applicable tax rate for companies amounted to 34%. This is the theoretical tax rate. But some measures were voted by the government some years ago, in order to attract some investors and companies from foreign countries. One of these measures, which are discussed presently, is the “notional interests”. These notional interests are deductible from the taxable income, and are calculated on the equity of the companies. The goal of such measure was to reduce the tax charge, and on the other side, to encourage companies to create jobs with the realized savings. But in fact, a lot of big companies realized tax and charges savings, but never created new jobs. The unions want to suppress such measures as the initial goal of these was not respected.

The problem is that the suppression of such measures represents a difficulty for the small and medium sized companies which have less equity and have to face bigger difficulties to finance their growth and to develop new channels of products. For such companies, which are taxed with a theoretical rate amounted to 34%, the effective rate is sometimes higher than the theoretical rate, after excluding the non deductible expenses from the taxable basis. By suppressing the notional interests for these companies, the effects will be the opposites of the expected and needed ones.

What I explained here is about the income tax. But we have to speak also about the employee’s taxation. When a people receive 50 Euros as net salary, it cost around 135 Euros to the company. This amount does not include the possible redundancy indemnities. The social securities expenses are heavy.

By explaining these different points, I want to explain that the conditions to create companies in Belgium are not optimum. And these last years, the government invests a lot of money in different employment plans in order to create jobs for unskilled workers, which is a good point, but these jobs are precarious. The government should invest first in the education, in order to revalue professions which for we are missing qualified workers, mainly in the sector of construction.  They should also invest in the universities in order to sustain the research and development which are the pillars of new economical developments. By developing our economy with small and medium companies, we can ensure a sustainable social system where everybody could act following his expectation. We have to encourage people to do what they want to do, and not only to look after job security. But to encourage people to create their own business, we need to give them real incentives. It is important to have public infrastructures and an efficient administration, but a strong social system could only be financed by a strong economy.

It is for sure that everybody can not create a company. Each of us, we have different capacities, our strengths and our weaknesses. There are people who could become entrepreneurs, other who will become brilliant scientists, efficient state employees, but I am convinced that there are a lot of people who do not use their potential and who ignores the talents they could have. Most of the time, it is because the prevailing attitude does not incite to use their potential. If you tell somebody he is stupid during all his life, he will be stupid.

What we need today, is people who wants to start up, with the sense of ethics. To start up is a way to conquer our freedom, and we do not have to be afraid of our freedom. But the authorities have to give us that freedom. So, …..Let us start up!

Petition website: –

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Written by Eric Saint-Guillain

February 2, 2010 at 00:03