Belgium Budget Conclave: Government Must Not Fall

As Belgium’s Arizona coalition prepares for a critical budget conclave at the end of September, Les Engagés president Yvan Verougstraete has issued a stark warning: the federal government must not fall. Speaking on RTBF’s La Première radio, Verougstraete acknowledged the coalition faces a “complicated situation” as it seeks to find €10 billion to reduce the public deficit, but insisted that stability is paramount.

A Triple Debt Looming

Verougstraete framed the budget challenge as a matter of intergenerational responsibility, warning that inaction would bequeath what he called a “triple debt” to Belgium’s children: an unfunded pension and healthcare liability, a climate debt, and mounting interest payments.

“If we do nothing, it’s a full €10 billion in additional interest that we risk having to pay to the banks,” Verougstraete said. “So we have a responsibility. We must act.”

The stakes are considerable. Belgium closed 2025 with a budget deficit of 5.2% of GDP, the highest in the eurozone, according to Eurostat figures published in April. The public debt has climbed to 107.9% of GDP, with projections reaching 122.6% by 2031, while interest charges on the debt cost approximately €10 billion in 2025 and are projected to exceed €18 billion by 2029.

Spending Cuts and Tax Increases

Verougstraete rejected the framing of the budget debate as a choice between spending cuts and tax increases, arguing that both are necessary. “It doesn’t make sense to oppose these two teams,” he said.

The Les Engagés leader called for structural spending reductions, but also defended targeted tax increases. “Not for the pleasure of increasing taxes,” he clarified, “but to absorb the deficit and avoid paying interest to banks, and to enable a fiscal shift toward a taxation that is fairer, more equitable, and more efficient.”

This position has put Les Engagés at odds with their liberal coalition partner, the MR, which opposes any new taxes. The tension came to a head in June when the MR released a satirical video mocking Verougstraete’s proposal for a wealth tax on financial assets above €500,000. The proposal, which would target the top 5% of financial wealth holders with rates up to 0.60%, drew sharp criticism from MR president Georges-Louis Bouchez and prompted Odoo founder Fabien Pinckaers to threaten to leave Belgium.

”The Zero Level of Argumentation”

Verougstraete did not mince words when asked about the MR’s “Tax the rich” song, which portrayed him as a “chameleon.” “It’s above all the zero level of argumentation,” he said. “When you resort to making songs rather than arguing on substance, I think that’s the zero level of politics.”

He added, with characteristic bluntness: “I’m over 50, I’ve passed the age of being offended by nonsense like that.”

The exchange reflects a deeper rivalry between the two center-right parties, which polls show are now neck-and-neck as they compete for the same electorate. According to reports from 21news.be, Les Engagés’ executive bureau has discussed the “lack of respect” from their coalition partner, with one member calling the personal attack on their president a “red line crossed.”

The September Conclave

The budget conclave, scheduled for late September, represents a critical test for Prime Minister Bart De Wever’s five-party coalition. The government agreed on July 10 to make a supplementary budget effort of €10 billion by 2029, two years ahead of the European spending norm deadline. The Monitoring Committee has estimated that €7.7 billion is needed by 2029 just to keep the deficit under control.

The deadline for a budget agreement is mid-October, when De Wever delivers his State of the Union address to the Chamber. The MR opposes new taxes and any VAT increase, while Les Engagés and Vooruit support some tax increases, and N-VA favors spending cuts. De Wever has floated a VAT reform that would raise the normal rate from 21% to 22%.

What’s Next

As the coalition navigates these competing pressures, Verougstraete’s message is clear: the government must survive, and the budget must be agreed. He also linked climate inaction to future tax burdens, calling climate skeptics “the tax rage” and warning that failing to act on climate would generate “astronomical” costs for citizens.

The coming weeks will test whether the Arizona coalition can bridge its internal divisions and deliver the fiscal consolidation Belgium needs. With the conclave looming and the State of the Union deadline approaching, the stakes could not be higher for the federal government.