A tough economic equation
Even the major balances have therefore not yet been determined. We know that the budget goes hand in hand with these reforms contained in the socio-economic note that The Free revealed last week (pension, taxation and labor market) but, again, no details. Even less on the contribution “from the broadest shoulders” (taxation of capital gains, increase in the securities account tax and new tax architecture). Obviously, the distribution key would be fairly consensual (two thirds of the effort to reduce the deficit through spending cuts, a third through measures), but each key point of these reforms can change everything. Example: doubling the securities account tax would bring in hundreds of millions more. The abolition of the special social security contribution is 1.2 billion. Financing the removal of the top marginal tax rate of 50% also costs billions of euros.
In short, optimism remains, but it is far from euphoria. No one at the table envisages a total failure of the negotiations, given the enormous budgetary stakes for Belgium. The deficit (more than 5% of GDP next year) must be reduced by around 27.5 billion euros. And it could be a little more, given the worsening economic situation in Europe from which Belgium will not escape, where inflation also remains a little higher than elsewhere. Primary expenditure savings, a key criterion for the European Commission, could therefore be around 20-21 billion euros over the period 2025-2029. This is more than the 16 billion that we were still talking about a few weeks ago, even if the increase in the amount is also due to the desire of negotiators to finance new policies.
Tax reform: a plenary session between party presidents scheduled for Monday
“Constructive” atmosphere, familiar refrain…
Either. The budget remains the crux of the matter. What is also worrying, in this context, is that no consultation with the Regions has yet taken place. However, we know that the measures contained in Bart De Wever’s famous super note can have a big impact on regional finances. This has not yet been agreed. However, the atmosphere remains constructive, we are told. No reason to panic, especially since Bart De Wever’s strategy was to reach agreements on ancillary matters before attacking the socio-economic. But rarely have discussions been so difficult. And the bulk of the work remains to come… Not sure, this December 10, the date on which the trainer will meet the King, that anything other than a renewal of his mission for a week (?) will be possible.
