The situation is paradoxical: it was under the aegis of the Belgian Minister of Finance, Vincent Van Peteghem, whose country holds the rotating presidency of the European Union, that the agreement was concluded on the night of Friday 9 to Saturday 10 February, a European agreement which will be particularly painful for the kingdom. Indeed, the reform of the stability and growth pact adopted by the Twenty-Seven should force the country to significantly reduce its lifestyle over the coming years. It is one of the most indebted in the euro zone.
The European agreement, which retains the Maastricht criteria (public deficit limited to 3% of gross domestic product and debt at 60%) while adding a dose of flexibility intended to promote growth and investments in the “green” transition, means that Belgium will have to save 37 billion euros by 2031, even if it carries out reforms and financing deemed promising for the future. It will, in any case, be an unprecedented austerity cure since that which was applied in the 1990s, in order to allow the country to integrate the single currency.
Already warned by the European Commission – which invited him to ” adjust “ its budget for 2024 –, the International Monetary Fund (which advises it to reduce its expenditure to ensure its budgetary viability and financial stability), but also by the National Bank of Belgium, the Central Economic Council and the Federal Office of the plan, the government of liberal Alexander De Croo failed to contain the budget deficit. This amounted to 4.9% of gross domestic product (GDP) in 2023, the worst performance in the euro zone, apart from that of Slovakia.
Pressure from the Flemish nationalist right
The only consolation for the Secretary of State for the Budget, Alexia Bertrand: forecasters had counted on 5.2%. The coalition, which brings together four political currents and which includes this liberal leader, wanted to reduce this deficit by 1.2% in four years. But this time, a reduction four times faster will be required of Belgian leaders.
Public debt has exceeded 105% of national wealth and, without corrective measures, will reach more than 107% in 2025. The country is therefore very far from meeting the Maastricht criteria. Even made more “flexible” by taking into account future investments, they will force states like Belgium to tighten their belts.
Problem: the country goes to the polls in June in European, federal and regional elections, and the seven parties that make up Mr. De Croo’s coalition will not be inclined to make unpopular decisions between now and then , while at least 3.9 billion euros of savings should already be found. After the elections, it is likely that the negotiations for the formation of a new federal government will last a very long time: the polls announce a strong progression of the extreme right in Flanders, and of the radical left in Wallonia and Brussels.
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