EU Commission deems Belgium's draft budget acceptable, thanks to relaxed defence spending
Despite concerns over rising public spending, the European Commission deems Belgium’s draft budget for 2025 acceptable. Relaxed EU rules on defence spending offer Belgium some leeway, a report released on Wednesday states.
Belgium's finances are intensely scrutinised since the EU started an excessive deficit procedure against the country last year. In response, the federal government struck a deal with the Commission two weeks ago, agreeing to a multi-year fiscal plan designed to bring the country’s budget deficit back below 3 per cent of GDP by 2029.
But Belgium's projected growth in public spending exceeds the Commission’s recommended limits, it says in a report released on Wednesday. While the commission accepts a maximum of 3.6 per cent rise in spending for 2025, the country's draft budget suggests a rise of 5 per cent.
Despite this overshoot, the Commission deems the spending increase acceptable. The rise in public spending is mainly attributed to an increase in defence investments. These are currently exempt from the EU's otherwise strict budget rules, in an effort to bring the bloc's military strength up to par.
"While Belgium's projected net expenditure growth in 2025 exceeds the ceiling of this recommendation, it remains within the flexibility provided by the national escape clause," the Commission writes.
Fossil fuel heavyweight
In the same report, the European Commission urged Belgium to reduce fossil fuel subsidies, calling it an effective way to rein in public spending. At 12 billion euros annually - or 2.4 per cent of GDP - Belgium is among the EU’s biggest spenders in this area, and its government has no plans to phase them out by 2030.
“This is a considerable amount of money,” EU sources told Belga on Wednesday. “Given what needs to be done to consolidate Belgium’s public finances, cutting these subsidies would significantly help address the issue.”
The Commission will continue to monitor Belgium’s public spending closely in the years ahead. Under the current plan, the EU expects the country's net expenditure growth to slow to 2.5 per cent in 2026 and 2027, and to 2.1 per cent in 2028 and 2029.
PHOTO © Nicolas TUCAT / AFP
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