Walloon Cities Sound Alarm Over Financial Crisis: ‘We Need to Save Our Towns’

The Union of Walloon Cities and Municipalities (UVCW) has issued an urgent warning about the deteriorating financial situation of towns across Wallonia, the French-speaking southern region of Belgium. At a press conference on June 17, 2026, mayors from Wallonia’s nine largest cities presented a study revealing a growing imbalance between the costs borne by central cities and the revenues they receive, threatening essential public services for the 55% of Walloons who live in these urban centers, as RTBF reported.

A Structural Crisis

The nine cities under particular strain — Charleroi, Liège, Mons, Namur, Tournai, La Louvière, Verviers, Seraing, and Mouscron — concentrate a significant share of Wallonia’s economic activity and public services. Yet their financial foundations are crumbling under the weight of structural costs that no amount of belt-tightening can easily resolve.

Charleroi, one of the hardest-hit cities, operates with a structural budget deficit of approximately €74 million despite being among the lowest-spending cities per capita in Wallonia — €211 per inhabitant compared to the regional average of €308. Liège and Charleroi together account for 60% of Wallonia’s total municipal debt.

“It’s all the big cities, regardless of current or past authorities, that are affected by the human flow,” said Thomas Dermine (PS), Mayor of Charleroi, describing the structural nature of the crisis. “The challenge of Wallonia is that of its cities.”

Rising Costs, Insufficient Funding

The structural costs driving deficits include pensions, police, fire services, and CPAS (Public Social Welfare Centers) — €234 million annually for Charleroi alone, representing nearly half its budget. These recurring expenses far outstrip the one-off revenue that cities can generate through asset sales.

In recent months, Charleroi moved to sell its “Marcinelle en Montagne” ski resort in Savoie (purchased in 1965), Liège put its Maison de la Presse on the market, and Mons began selling houses too expensive to renovate. But as RTBF economic columnist Amid Faljaoui noted, “Selling the silverware won’t change anything” — one-off asset sales cannot solve structural budget deficits, as RTBF analyzed.

Political Tensions Over Rescue Conditions

The crisis has exposed sharp political divisions between Wallonia’s regional government — a center-right coalition led by the liberal MR party with the centrist Les Engagés — and the socialist PS-led city governments.

In December 2024, the Walloon government approved a €235 million rescue loan via the Centre régional d’aide aux communes (CRAC) for Liège, Charleroi, and Mons. The loan came with strict conditions, including a requirement for balanced budgets by 2025 and a 15% reduction in aldermanic cabinets, as RTBF detailed.

François Desquesnes (Les Engagés), Walloon Vice-President and Minister for Local Authorities, defended the approach: “If banks are reluctant to help these three municipalities, why is the Region doing it? Because we must prevent the municipalities from falling into payment default. Wallonia stands in solidarity with the affected municipalities.”

But Nicolas Martin (PS), Mayor of Mons, called the conditions a political power grab: “For us, this is not a solution. It’s an opportunity the government seized to impose a political austerity agenda on cities.”

Banking Sector Adds Pressure

The crisis deepened in November 2024 when major banks — Belfius and ING — refused to grant new credit to several Walloon cities under the “Plan Oxygène” financing program, as Le Soir reported. The banking sector’s reluctance signaled a structural loss of confidence in municipal creditworthiness that may persist even after the CRAC intervention.

Meanwhile, the Walloon government’s 2026 budget requires €95 million in savings from local authorities — representing 35% of the total €270 million regional budget adjustment. The UVCW has described this as a “disproportionate contribution” from municipalities, as La Libre Belgique noted.

What’s Next

Willy Demeyer (PS), Mayor of Liège, has identified 2027 as a critical horizon, warning that without changes to financing mechanisms, major cities could face even greater difficulties. He stressed that regional economic development cannot ignore the major cities.

The UVCW is calling for a new structural financing mechanism that adequately compensates cities for their “centrality functions” — services provided to non-residents who work, study, or use amenities in the city without contributing to its tax base.

With the 2027 municipal elections on the horizon, the political dynamic between the regional government and city governments will be tested. The fundamental question remains: can Wallonia’s cities continue to provide essential services to more than half the region’s population without a fundamental overhaul of how they are financed?

As Thomas Dermine put it: “The challenge of Wallonia is that of its cities.” The answer to that challenge will determine not just the fate of nine municipalities, but the future of the region itself.