Belgian Cabinet Meets on Budget After Difficult Talks
Belgium’s federal core cabinet met on Saturday to negotiate the country’s budget, a day after a difficult session that exposed fresh tensions within the governing coalition. Prime Minister Bart De Wever and his deputy prime ministers are searching for roughly EUR 10 billion in savings to bring the budget toward compliance with European Union fiscal rules by the end of the legislature, according to VRT NWS.
Context
The talks come at a delicate moment for the so-called “Arizona” coalition, which brings together N-VA, MR, Vooruit, CD&V and Les Engagés. The government, formed after protracted negotiations in 2024 and 2025, has faced recurring budget battles throughout its term.
The fiscal challenge is substantial. Budget Minister Vincent Van Peteghem (CD&V) has warned that the deficit stands at around 5.1% of GDP and, under unchanged policy, would climb to 6.2% by 2031. National debt, currently about 110% of GDP, is projected to reach 122% by 2031, placing Belgium among the weaker fiscal positions in the eurozone.
Van Peteghem has framed the stakes bluntly. “The challenge we face is exceptionally large,” he said, warning that a collapse of the government would be “totally irresponsible” and noting that financial markets are unsettled by political instability. Prime Minister De Wever struck a similar tone earlier, telling Bel RTL that he sleeps badly over the measures, but that he believes “the population is mature and ready for it.”
A Coalition Tested
The budget negotiations are being complicated by a separate and sensitive dispute. On Friday, the core cabinet failed to reach unanimity on admitting 13 Palestinian students and researchers who hold scholarships to study or conduct research at a Belgian university but require a government-approved evacuation from Gaza. Foreign Affairs Minister Maxime Prévot (Les Engagés) leads the dossier, but evacuation decisions require unanimous government support — which, per VRT NWS, was not forthcoming, with N-VA and MR opposed.
The disagreement spilled into open criticism. The dispute loomed over Saturday’s budget session, reinforcing the tense atmosphere around the negotiating table.
The coalition’s fiscal math remains contested. The government aims to reduce the deficit toward 4.5% of GDP, requiring a consolidation round of roughly EUR 10 billion on top of savings already agreed. Yet coalition partners disagree on how to find the money. MR leader Georges-Louis Bouchez has ruled out tax increases, while Budget Minister Van Peteghem has floated measures such as VAT reform and changes to company-car and management-company taxation. Knack has examined whether De Wever can keep Vooruit on board for such a package, underscoring the balancing act required.
According to Business AM, the federal government needs at least EUR 10 billion, a figure confirmed by Employment and Economy Minister David Clarinval (MR), who has argued that roughly EUR 4 billion could come from executing earlier agreements correctly and EUR 1.5 billion from stronger economic growth.
A Parallel Flemish Exercise
The federal effort is unfolding alongside a parallel budget exercise in Flanders. Flemish Finance and Budget Minister Ben Weyts (N-VA) said the regional government is preparing what he called “the largest budget exercise we have ever had to do,” with an effort heading toward EUR 2 billion after EUR 1.5 billion last year.
“The bigger the budget effort, the less room for vetoes, red lines and all kinds of demands,” Weyts warned his coalition colleagues. He added that Flanders’ subsidy stream “has gone overboard” and that he has several measures in mind to rein it in.
Analysis
The simultaneous federal and Flemish negotiations reflect a broader fiscal squeeze across Belgian governance. With debt service costs rising — Van Peteghem has noted that Belgium pays about 1.9% of GDP in interest, projected to reach 3% by 2031 — the room for maneuver is narrowing.
The Gaza dispute illustrates a deeper dynamic: the coalition’s narrow arithmetic leaves little space for disagreement, yet its member parties hold distinct priorities on migration, taxation and social spending. Each contentious dossier risks bleeding into the next.
What’s Next
The core cabinet’s continued deliberations will determine whether the coalition can present a credible consolidation plan to EU partners. Key questions remain unanswered: how much of the effort will come from spending cuts versus new revenue, and whether Vooruit and MR can bridge their divergent positions on taxation. With both the federal and Flemish governments under pressure, the coming weeks will test whether the Arizona coalition can hold its course — or whether its fiscal fault lines widen further.