Budget deficit of Belgium will be the largest in the eurozone within two years

Belgium will have the largest budget deficit in the eurozone over the next two years. This is said to be due to support measures to cope with rising energy costs and automatic wage indexation.

Belgium's debt will increase between 2023 and 2024. As it stands, Belgium would be the only country with debt above 100 per cent of gross domestic product (GDP) to face an increase in its debt. That is what the European Commission predicts and LN24 reports.

The budget deficit is said to be due to two factors. First, the government has taken strong support measures to help the population cope with rising energy costs.

The second reason is specific to Belgium: the automatic indexation of wages. According to European Economic Commissioner Paolo Gentiloni, it is not the time to change the system "because at the moment the social aspect is more important than in normal times, in the trade-off between social and competitiveness."

Gentiloni believes that Belgium is not in an exceptional situation, as its estimates are close to those of neighbouring countries such as France. However, the Commissioner reiterated that the European Union encourages member states to reduce extraordinary aid spending to offset rising energy prices.

In September, as part of Belgium's financial budget, Belgian prime minister Alexander De Croo pledged to reduce the budget deficit by 1.7 billion euros more over the next two years than previously planned.

"When the skies have cleared, and the storm has died down, the house should be back in order....". With a net effort of 0.6 per cent of GDP, or 3.6 billion euros. That brings the federal government to a structural deficit of 3.2 per cent of GDP in 2024." However, right-wing conservatives fiercely criticised his budget for not going far enough to reduce Belgium's spending, despite the numerous social crises facing people in the country today.

In his annual State of the Union in October, De Croo expressed concern about Belgium's deficit but maintained that further austerity was not sustainable. "What should we have done then? Should we have refused aid to the self-employed? Should we have left our middle class out in the cold?"

Like EU Commissioner Gentiloni, Belgian prime minister De Croo responded to the critics by acknowledging the second consecutive crisis. "You cannot do everything; you have to prioritise, and we chose to help people through the crisis," he said.


© BELGA PHOTO Nicolas Maeterlinck



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