Moody’s downgrade piles pressure on Belgian government
Belgium’s latest credit rating downgrade has increased pressure on the federal government. It has raised concerns about higher borrowing costs and deepening political divisions within the ruling coalition.
Ratings agency Moody’s cut Belgium’s score, warning that rising debt, ageing costs and higher spending are outpacing government efforts to control the deficit. The move could push up interest rates on state borrowing, worsening public finances in the coming years.
Prime minister Bart De Wever will likely use the downgrade to highlight the need for fresh budget cuts worth several billion euros. However, agreeing on new savings is likely to prove difficult as tensions grow between coalition partners.
The government is already under strain after struggling to finalise energy support measures. A planned package to help households with high fuel costs has been delayed, triggering a backlash from coalition party MR. Its leader, Georges-Louis Bouchez, has threatened to block other government business until a deal is reached.
Budget negotiations are expected in the coming months, but the coalition remains deeply divided. Previous talks led to a complex VAT reform that failed to fully deliver expected savings, leaving a gap in the budget.
Economic forecasts add to the pressure. Weak growth, rising inflation and global uncertainty risk further damaging Belgium’s finances. Interest payments alone are projected to increase sharply by the end of the decade.
Some analysts already warned that stabilising the country’s debt may require politically sensitive measures, such as tax changes or cuts to public spending. But such steps could further strain the coalition.
© BELGA PHOTO ERIC LALMAND