Budget conclave this Sunday?
But therefore, the pace imposed on the galley slaves of federal politics is accelerating. They now negotiate seven days a week, we are told. This Sunday, December 1, a budgetary high mass should also take place. A real crash test for the hypothetical coalition between the N-VA, the MR, the CD&V, Vooruit and Les Engagés. If this small group resists the inevitable tension of the meeting, all hopes will be raised. If things get stuck again, on the other hand, procrastination will no longer be possible: “plan B” will have to be implemented (the replacement of the Flemish socialists by a moribund Open VLD but willing to contribute to a solution at the federal level).
Time is running out. As it does for other countries in the Union, the European Commission takes a dark look at Belgian finances: an excessive deficit procedure was opened last summer. The Belgian “hole” is estimated at 4.6% of GDP for 2024 (instead of the 3% required by European rules). If nothing is done, it will become even deeper due, in particular, to the growing burden on the “pensions” item.
On Tuesday, in the absence of clear prospects and a draft budget for 2025, the Commission recommended to Belgium a plan to absorb its deficit in four years, accompanied by a stricter trajectory than expected in terms of reduction expenses. When full-function government has been established at the federal level and when it has developed a multi-year budgetary plan, the effort could however be spread over seven years (and therefore softened). The Commission’s tolerance towards the poor Belgian student will, however, not exceed April 2025. Beyond that, Belgium, having put the noose around its own neck, will be forced to rebalance its finances according to the initial plan ( in four years).
gullThe goal is obviously to move as quickly as possible but this negotiation is a human adventure and, therefore, it involves a lot of uncertainties..”
The 2025 budget in limbo…
If the hope of a big deal remains fixed at the end of the year, for Christmas, the negotiators have mourned the possibility of adopting before this deadline a complete budget for the coming year. In order to prevent any financial hiccups, in consultation with Bart De Wever, Prime Minister Alexander De Croo (Open VLD) has also introduced a system of “provisional twelfths” within his current affairs government (Vivaldi). the first three months of 2025. As a reminder, in the absence of budgetary agreement, the “provisional twelfths” mechanically reproduce the outline of the current year (indexed) divided into twelve tranches monthly.
Alexia Bertrand (Open VLD): “If the federal government remains in current affairs for months, we will hit a budget wall”
Unfortunate… This postponement of the next annual budget has the consequence of postponing until 2026 at the earliest the implementation of entire sections of the tax reform that the “Arizonians” dream of, certain taxes can only be calculated over a complete annual financial year.
More than ever, an “Arizonian” agreement is necessary… The negotiators are aware of the issues, but that does not mean that the solution is within reach. “The goal is obviously to go as quickly as possiblecomments a federal source. But this negotiation is a human adventure and, therefore, it involves a lot of uncertainties.“Discussions are progressing, but slowly. It seems that certain partners have a knack for throwing additional points on the table that have not yet been discussed.
