Brussels region keeps credit rating despite ongoing financial woes

Standard & Poor’s has decided to keep the Brussels-Capital Region’s credit rating unchanged at A with a negative outlook, despite its continuing financial troubles and political deadlock. The US rating agency made the decision following its annual review, reports Bruzz.

The outcome spares Brussels a further downgrade after its rating was already cut in June from A+ to A, the sixth-highest investment grade. Another reduction had been feared, especially given the region’s political uncertainty and worsening debt position.

A further downgrade would have been costly: it would likely have increased the interest rates Brussels pays on new borrowing. The region’s annual interest bill already stands at 415 million euros, out of a total budget of around 7 billion euros.

However, the negative outlook remains in place, meaning that the risk of a future downgrade is still real.

Brussels continues to face serious fiscal challenges, with a budget deficit of 1.5 billion euros. That is the weakest balance sheet of all Belgian regions. Investigations by De Tijd and The Brussels Times have also shown that the city’s finances were presented in an overly optimistic light in recent years.

Meanwhile, David Leisterh (MR), the region’s coalition formateur, is working on laying the groundwork for Brussels’ next budget.

^{Illustration shows Brussels region flag with Belgian and European flags © BELGA PHOTO NICOLAS MAETERLINCK}