New EU budget rules: Belgium must drastically cut spending while investing more in defence
The agreement between EU member states and the European Parliament on new budgetary rules imposes unprecedented austerity measures on Belgium, writes De Standaard.
"Deal! After years of negotiations, we finally agree on the new European budget rules," Belgian Finance minister Vincent Van Peteghem announced on Friday evening on X.
The new budget deal, which still needs to be approved by the European Parliament, gives EU member states more room to invest but imposes stricter controls on countries with large deficits to keep spending under control and reduce their public debt. Each member state will receive a tailor-made budget plan for the next four or seven years if the conditions are met.
The new rules mean an unprecedented austerity drive in Belgium over the next few years. With a budget deficit of 4.9 per cent in 2023, Belgium has the second largest deficit in the EU after Slovakia, while its public debt is close to 106 per cent of GDP.
To reduce the budget deficit to 1.5 per cent by 2031, as the EU requires, Belgium must save 27 billion euros over the next seven years: 0.65 per cent of GDP per year, or 3.9 billion euros in 2024.
Room for negotiation
There is room for negotiation with the European Commission to make this "feasible", and important strategic investments such as digital infrastructure, defence or climate can be spread over several years. However, Belgium's complex structure and fragmented political landscape will make such austerity measures particularly challenging.
Countries not playing by the rules will face enforcement procedures and fines. These already exist under the current regulations but have been largely unenforced in practice because of the European Commission's reluctance to take action against large countries. With the new budget rules, the EU wants to end this.
Deputy prime minister and Finance minister Vincent Van Peteghem and prime minister Alexander De Croo © BELGA PHOTO HATIM KAGHAT