European Commission gives green light to Belgium’s budget plans
On Wednesday, the European Commission approved Belgium's multi-year budget. This gives the country seven years to improve its public finances. A strict limit on spending growth should see the budget deficit fall below the 3 per cent threshold by 2029.
Following the recent reform of European surveillance of national budgets, member states now have the option of spreading their budget path over seven years. In exchange for this flexibility, however, they must present a credible programme of reforms and investments.
The Belgian government seized this opportunity, citing reforms to pensions, the labour market and taxes as examples. On Wednesday, the Commission approved that multi-year plan. According to Budget minister Vincent Van Peteghem, this approval recognises that the reforms are "credible, necessary and realistic".
"It is now up to us to quickly and efficiently translate these measures into policy"
"It is now up to us to quickly and efficiently translate these measures into policy. In doing so, it is important that each measure meets the agreed standards for reform and budgetary return. The plans are ambitious; the policies must be too," said the minister.
Limits to expenditure
Adopting Belgium's multi-year plan does limit the country's expenditure growth. As the government only took office in January, spending is permitted to increase by 3.6 per cent this year. However, net expenditure growth should be limited to an increase of 2.5 per cent in 2026 and 2027, and 2.1 per cent in 2028 and 2029. This spending path should bring the country's budget deficit below the 3 per cent of GDP threshold by 2029.
But some questions remain. Firstly, the recent increase in defence spending was not included in the plans submitted to the EU. And earlier this month, the Court of Audit said that the federal government was overestimating the returns on payback effects, complicating its path to a healthy budget.
By 15 October, Belgium must submit the necessary measures to eliminate the deficit, together with the draft budget for 2026. After that, the country must report on its progress every six months.
Budget minister Vincent Van Peteghem. © BELGA PHOTO HATIM KAGHAT
Related news
