Belgium’s €7 Billion Budget Effort Falls Short, Minister Warns

Belgian Budget Minister Vincent Van Peteghem (CD&V) has told parliament that the government’s planned €7 billion budget exercise will not be sufficient to stabilise the country’s finances, warning that more ambitious structural measures are needed to address a deepening fiscal crisis.

Appearing before the Finance Committee of the Chamber of Representatives on Tuesday, Van Peteghem said an effort of €7 billion “will not suffice to get the budget into calmer waters,” according to Het Laatste Nieuws. He stressed his preference for long-term structural measures over “cosmetic interventions” that only provide short-term relief.

Widening Gap Between Ambition and Reality

The minister’s warning comes just days after the National Bank of Belgium (NBB) published stark new projections. According to La Libre Belgique, the budget deficit is expected to reach 5.3% of GDP in 2026 and could rise to 5.7% by 2028.

NBB Governor Pierre Wunsch calculated that approximately €11 billion would be needed to bring the deficit below 4% of GDP by the end of the legislative term in 2029. Adding the tax cuts the government intends to implement — worth around €3.5 billion — the total required effort rises to approximately €14 billion, or about 2% of GDP.

“Despite the many, sometimes relatively severe, measures that governments have already taken, it is not yet enough — and in fact far from enough — to stabilise or reduce the deficit,” Wunsch said, as reported by the Belga News Agency.

No Fixed Deadline

Van Peteghem refused to commit to July 21 as a target date for a budget agreement, telling the committee: “My deadline is the day we have a sufficiently ambitious agreement that improves the budgetary situation.” However, he confirmed that the European Commission expects Belgium’s draft budget by mid-October 2026, adding that there is sufficient time to meet that deadline.

“At school, I was a good student. I don’t know the concept of second sessions,” he remarked, according to La Libre Belgique, referring to the EU’s October deadline.

Coalition Divisions Deepen

The governing five-party coalition — comprising N-VA, MR, Vooruit, CD&V, and Les Engagés — remains deeply divided on how to achieve the necessary savings. MR leader Georges-Louis Bouchez has repeatedly stated that his party opposes new taxes, while Vooruit is pushing for a millionaire’s tax. CD&V has suggested cutting defence spending, and N-VA emphasises spending cuts.

Bouchez has proposed a “conclave” of party chairpersons to negotiate the budget, similar to the format used during government formation talks, as reported by VRT NWS.

Wunsch warned that the governing parties must lift their vetoes to get the budget back on track. “If we do not engage in the debate on revenue, but also, for example, on social security or the long-term sick, then we will not get there,” he said.

Broader Fiscal Pressures

Belgium’s fiscal challenges extend well beyond the current legislative term. The Brussels Times notes that the €7 billion figure represents a significant increase from the earlier estimate of €4.9 billion, partly due to the economic impact of the Middle East conflict. The Federal Planning Bureau has warned that the combined budget deficit of all Belgian governments could reach nearly €50 billion by 2031.

Looking further ahead, NATO member states must spend 3.5% of GDP on defence by 2035, up from the current 2%, adding further pressure on future budgets. Rising interest costs on Belgium’s high public debt — around 107% of GDP — and the increasing costs of an aging population continue to strain public finances. Even if the government succeeds in reducing the deficit to 4% by 2029, the NBB warns that “the next government will also have its work cut out for it.”

What’s Next

The next report from the Monitoring Committee will help clarify the exact effort required. Van Peteghem confirmed that reducing the deficit to 3% for all public authorities must remain the objective. With the EU’s October deadline approaching and deep coalition divisions unresolved, the coming weeks will be critical for Belgium’s fiscal trajectory.

The question remains whether the coalition parties can overcome their ideological differences to agree on a package that satisfies both the EU’s fiscal rules and the country’s long-term economic needs. The government previously implemented a partial indexation skip for higher incomes — the “centenindex” — and a program law that faced significant opposition, but these measures have proven insufficient against the scale of the deficit.

As Van Peteghem himself acknowledged, the path to fiscal stability requires more than quick fixes. “Reducing the deficit to 3% for all public authorities, that must remain our objective,” he told the committee, signalling that tougher negotiations lie ahead for Belgium’s fragile coalition.