Federal government faces further cuts of 5 bn euros to meet European obligations
According to a report by the monitoring committee, the federal government must make an additional 4.9 billion euros in savings by 2029 to meet European obligations. That is considerably more than the 3 to 4 billion euros prime minister Bart De Wever has mentioned so far, reported various Belgian media outlets. The figure could rise further due to the consequences of the war in Iran.
The report drawn up by the monitoring committee on the budget traditionally marks the start of the budgetary review. According to budget minister Vincent Van Peteghem, that review will begin as early as Tuesday. In any case, working groups comprising technical experts will then convene at the cabinet level.
As expected, these experts are faced with grim figures. By the end of its term, the De Wever government still needs to make an effort equivalent to 0.67 per cent of GDP to meet the European spending standard. That amounts to 4.9 billion euros. And that does not even take into account the consequences of the war in Iran, which could lead to slower economic growth.
The figure is considerably higher than the additional effort the prime minister put forward last month. At the time, De Wever was talking about 3 to 4 billion euros.
For this year, the government also needs to carry out a catch-up operation. Taking into account the agreements from the multi-year budget that the federal government defined at the end of last year, the government is already 1.4 billion euros behind.
The federal deficit is rising further from 3.7 to 3.8 per cent of GDP. This is mainly due to the failure to implement certain measures, such as those relating to VAT. Tax revenues are 500 million euros short.
European exemption clause
The leader of the Flemish socialist party Vooruit, Conner Rousseau, pointed out that European budgetary rules are not set in stone and that an exemption clause is provided for international crises of this magnitude. “We must activate that now. Not only for defence investments, but also for measures to support businesses and households,” said Rousseau.
"Europe must put the public interest first through emergency legislation"
He also wants to see joint financing for investments in energy and in the industry of the future. “Belgium led the way with the financing of Ukraine via Eurobonds,” said Rousseau, who is looking at investments in cross-border power grids, battery parks and energy islands. “And if rules block progress, Europe must put the public interest first through emergency legislation.”
Finally, the socialist leader is campaigning for the reactivation of SURE, a European instrument established in 2020 that provided financial support to member states to cover the costs of national temporary unemployment schemes. “During the COVID crisis, SURE saved 30 million jobs and 2.5 million businesses by funding temporary unemployment schemes. Reactivate SURE immediately. The instrument exists, it works, and it costs member states nothing extra.”
Budget minister Vincent Van Peteghem and prime minister Bart De Wever © BELGA PHOTO ERIC LALMAND