The European Commission has provided clarifications regarding the path to cleaning up public finances that it expects from Belgium.
The country’s various governments will have to make savings equivalent to 0.5% of GDP on average over the next seven years. Belgium can also opt for a four-year journey, with an annual effort of 0.72%. We are therefore talking about twenty-five billion euros, or five billion effort per year.
The journey requested by the Commission could become longer, as the current estimate does not take into account a possible deterioration of the figures in the event of unchanged policy. On Wednesday, the European Commission opened an excessive deficit procedure against Belgium. At the end of 2023, the deficit amounted to 4.4% of GDP and the debt to 105.2% of GDP, i.e. proportions higher than the European maximums of, respectively, 3% and 60%.
The figure of 0.5% is the minimum effort required when we are in the excessive deficit procedure. In mid-July, the Higher Finance Council will issue an opinion on the distribution of effort between the federated entities. Belgium will then have to indicate, by September 20, how it intends to carry out its efforts. The Commission only imposes percentages, but not how to achieve them. Then, Europe will wait for the 2025 draft budget for October 15.
