No one-year government bond in December, Finance minister announces

It will not be possible to subscribe to a one-year government bond in December, Belgium's Finance minister, Vincent Van Peteghem, announced on Friday. A new bond issued on 11 December will have maturities of five and eight years, with a withholding tax of 30 per cent.

In the previous bond, issued in September, it was possible to subscribe to a one-year bond with a reduced withholding tax of 15 per cent. Van Peteghem's aim was to put pressure on banks to raise their interest rates. In total, the government was able to raise more than 20 billion euros from private investors.

But the economic situation has changed since then. Many banks have raised their interest rates and the Belgian state does not need another influx of cash. That is why Van Peteghem opted for maturities of five and eight years. The gross interest rate will be published on 28 November. Direct subscription will be possible from 30 November to 7 December, and subscription through a bank until 8 December.

Competitive interest rate

"Since its launch in September, the government bond has become a widely known financial product. Many Belgians have chosen this safe and guaranteed investment, thereby activating their savings," said Van Peteghem. The gross interest rate will again be competitive with products on the market, he said.

Government bonds are issued by the National Debt Agency and are intended exclusively for private individuals. In principle, they are issued four times a year, but sometimes they can be skipped. Maturities range from one to 10 years and subscriptions start at 100 euros.

^{Finance minister Vincent Van Peteghem © BELGA PHOTO BENOIT DOPPAGNE}