Belgian Chamber Approves 2026 Budget Adjustment

The Belgian Chamber of Representatives approved the first adjustment to the 2026 budget on Thursday, June 25, in a plenary session vote that split along majority-opposition lines. The vote finalizes technical fiscal measures for the current year while setting the stage for far more contentious negotiations over a multi-year budget agreement.

A Technical Adjustment with Limited Scope

The adjustment is described as technical in nature, based on forecasts established in February 2026 — before the outbreak of the war in the Middle East. While those projections are now outdated, Budget Minister Vincent Van Peteghem (CD&V) noted that the budget process “cannot be relaunched at every turn,” according to La Libre Belgique.

The financing balance of Entity 1 (federal government and social security) improved slightly, from -25.144 billion euros (-3.8% of GDP) to -24.530 billion euros (-3.7% of GDP), driven by several mainly technical modifications. However, the deficit is projected to continue deteriorating through 2029, reaching a financing balance of -5% of GDP by that year.

The Road to a Broader Agreement

Following this adjustment, the government intends to conclude a broad budget agreement with a fiscal trajectory extending through the end of the legislature in 2029. The Arizona coalition’s objective is to return the deficit to 3% of GDP by 2029 — the threshold required under EU fiscal rules.

The broader budget effort is estimated between 7 and 14 billion euros. The next monitoring committee report, expected on July 6, will determine the exact amount needed. Prime Minister Bart De Wever (N-VA) had set July 21 as a target date for concluding the broader agreement.

“July 21 would be a nice moment to achieve it, but I prefer a good agreement to a quickly concluded one,” Van Peteghem said, as reported by La Libre Belgique. “So, I don’t want to lock myself into this deadline.”

Coalition Tensions Over Fiscal Strategy

The vote exposed deep divisions within the governing coalition over how to address Belgium’s structural fiscal challenges. Prime Minister De Wever has emphasized spending cuts over tax increases, with N-VA parliamentary group leader Axel Ronse stating: “The Prime Minister wants to save as much as possible. The magic wand of new taxes is completely exhausted,” as reported by La Libre Belgique.

Ronse acknowledged the constraints of coalition governance: “If the government were composed only of the N-VA, we could save even more, but we have coalition partners and we must reconcile water and fire in these difficult times.”

On the other side of the debate, Ismael Nuino of Les Engages proposed a wealth tax on high-value assets, arguing: “In the coming weeks, we will have to find billions of euros. We must also be able to ask those who have the most. This proposal can be improved, it can be modified, but it is fair.”

The proposal drew sharp criticism from coalition partners. Vincent Van Quickenborne of Anders reacted with: “Have you gone mad?” while Mathieu Michel of MR warned that excessive taxation risks driving businesses out of the country, citing the case of Walloon tech unicorn Odoo, whose CEO has threatened to relocate.

European Pressure and Structural Challenges

Belgium faces significant pressure from the European Union, which has placed the country under its excessive deficit procedure. The European Commission estimates Belgium’s overall public deficit will reach 4.9% of GDP in 2026, with total debt approaching 110% of GDP. The federal debt ratio alone stands at 85.6% of GDP.

Van Peteghem did not mince words about the gravity of the situation: “The budgetary situation of our country is particularly serious.”

What to Watch

The coming weeks will be critical for Belgium’s fiscal trajectory. The July 6 monitoring committee report will set the exact figure for the required budget effort, while the July 21 target date for a multi-year agreement will test coalition cohesion. Key points of contention include the balance between spending cuts and tax increases, the proposed wealth tax and its implications for business competitiveness, and the impact of the Middle East conflict — which has not yet been incorporated into the current forecasts.

Belgium’s ability to chart a credible path toward fiscal consolidation will also be closely watched in Brussels and across European capitals, as the country seeks to demonstrate compliance with EU fiscal rules while navigating a complex coalition landscape.