Flanders and Brussels keep Belgian economy afloat, National Bank study shows
Flanders and Brussels make a positive contribution to the sustainability of the Belgian economy, while Wallonia remains a net drain on public finances. This is the conclusion of a new long-term study by the National Bank of Belgium (NBB), which maps economic flows between the three regions over the period 2010–2021.
Flanders and Brussels act as the country’s economic engines, generating enough revenue to cover their expenditure, whereas Wallonia’s income falls short of its spending needs. The southern region is therefore structurally dependent on financial solidarity transfers from the other two regions, the study shows.
One of the study’s most striking findings is the paradox of Brussels’ economic wealth versus the relative poverty of its residents. The capital region produces enormous added value — notably through government institutions, the financial sector, and high-value services — yet much of that wealth flows out of Brussels in the form of wages, dividends, and taxes paid to other regions.
Each year, an estimated 20 billion euros in wages is earned by Flemish and Walloon commuters working in Brussels, alongside 1.4 billion euros in dividends and 3 billion euros in interregional fiscal transfers (taxes and social contributions). As a result, the NBB notes, Brussels’ net fiscal contribution is higher than previously estimated.
Flanders, too, is a net contributor to the Belgian economy. Although the region consumes slightly more than it produces, this is offset by high inflows of income and wages. On balance, Flanders contributes around 4.2 billion euros annually to interregional solidarity mechanisms.
Wallonia, by contrast, records a structural economic deficit. Its production levels are significantly lower than those of Flanders and Brussels, and income from wages or business activity only partially compensates. The NBB calculates Wallonia’s net dependency at roughly 7.3 billion euros per year.
Over the full period studied, the current balance (revenues minus expenditure) was positive for both Brussels and Flanders, averaging 3.1 billion euros and 4.5 billion euros per year respectively. Wallonia’s current balance, however, averaged a negative 4.2 billion euros.
While Brussels and Flanders contribute positively to the sustainability of the Belgian economy, Wallonia contributes negatively
“While Brussels and Flanders contribute positively to the sustainability of the Belgian economy, Wallonia contributes negatively,” explains Cédric Duprez, an NBB economist and one of the study’s authors. It seems that the private sector in Wallonia is not in a position to offset the regional government’s deficit.
The Bank also modelled a purely hypothetical scenario in which each region would have to finance its own expenditure independently, without any interregional transfers. In such a case, Brussels would record a fiscal surplus, Flanders a modest deficit, while Wallonia’s deficit would grow sharply, with the region unable to cover its own spending through revenues.
The National Bank stresses that no political conclusions are attached to the report. Its timing, coinciding with Belgium’s ongoing budget talks, is described by the authors as entirely coincidental.
© ELGA PHOTO BENOIT DOPPAGNE