Belgian PM stresses urgency of planned reforms after rating downgrade
As expected, both Belgium and Brussels received a rating downgrade on Friday evening, from Fitch and Standard & Poor's (S&P) respectively. According to Belgian prime minister Bart De Wever, this demonstrates the need for the social and fiscal reforms that his coalition wants to implement. In Brussels, MR leader David Leisterh lashed out at the PS and the N-VA argued that this proves the failure of the current Brussels government.
Credit rating agency Fitch downgraded Belgium's rating from AA- to A+, the lowest level in at least 30 years. Prime Minister Bart De Wever said that “this was to be expected after the two negative opinions our country already received under the previous government”. A negative opinion is usually a precursor to a rating downgrade.
According to De Wever, the downgrade “once again demonstrates the urgency of the situation we find ourselves in”. “Now is the time to take action and implement the reforms in the coalition agreement as quickly as possible,” he said. “There is no alternative.”
“Existing budget imbalances are only partially addressed, while increased defence spending is adding to the pressure"
However, Het Nieuwsblad points out that the downgrade is not only related to the previous government. Fitch is also remarkably critical of certain plans of the De Wever government. For example, Fitch states in its report that “existing budget imbalances are only partially addressed, while increased defence spending is adding to the pressure”. “Belgium has struggled to implement promised austerity measures in recent years,” Fitch also states.
Reactions in Brussels
On Friday evening, the American credit rating agency S&P downgraded Brussels' rating from A+ to A with a “negative outlook”. This downgrade could make it more expensive for Brussels to borrow on the financial markets.
“This could have been prevented, it should have been prevented,” stated David Leisterh, Brussels leader of francophone liberal party MR, in a post on X. He lashed out at the francophone socialists of the PS. “We have published our list of reforms, but some prefer to join forces with the communists,” he wrote.
In recent weeks, the PS organised meetings with left-wing parties, including the PVDA, with a view to securing a majority for a new Brussels government without the MR. That attempt seems to have failed, as the Flemish socialists of Vooruit withdrew from these negotiations. Vooruit insists that the MR and PS return to the negotiating table, which the two major French-speaking parties have been refusing to do for some time. MR leader Leisterh is also attempting to form a new government.
“Can we finally start negotiating and drop unfounded vetoes?”
According to Brussels MP Gilles Verstraeten of the N-VA, the rating downgrade is “the logical consequence of years of disastrous budgetary policy and mismanagement” and proves the “total failure” of the current government. Party colleague and Flemish minister for Brussels Cieltje Van Achter stated that the downgrade could have been avoided “if the PS had not pulled the plug on the negotiations and had been prepared to reform Brussels”. “Can we finally start negotiating and drop unfounded vetoes?” she asked. “Brussels needs reforms and a decent budgetary policy, sooner rather than later.”
“The problems have more to do with a rotten institutional framework, structural underfunding of Brussels and an accumulation of administrative levels"
In a Facebook post, Zakia Khattabi, parliamentary group leader of the francophone green party Ecolo, however argued that “the problems have less to do with Brussels' inability and more to do with a rotten institutional framework, structural underfunding of Brussels and an accumulation of administrative levels".
Belgian prime minister Bart De Wever © BELGA PHOTO BELGIAN_FREELANCE
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