Belgium’s De Wever Opens 10 Billion Euro Budget Talks
Belgium’s top federal ministers gathered in Brussels on Monday morning to begin decisive budget negotiations, with Prime Minister Bart De Wever’s five-party coalition seeking roughly 10 billion euros to rein in the eurozone’s largest deficit and avert a debt spiral. The “kern” of the so-called Arizona coalition met from 10:00 a.m. and broke up around 3:00 p.m. when Deputy Prime Minister Maxime Prevot departed for the United Nations General Assembly in New York, according to VRT NWS.
No substantive decisions were expected on the first day, and no minister spoke to the press on entering the meeting.
Why 10 Billion Euros
The urgency stems from Belgium’s fiscal position. The country carries the highest deficit in the eurozone at 5.2 percent of GDP, with total debt exceeding 110 percent of GDP, Business AM reported. Experts estimate that at least 7.7 billion euros in savings are needed to bring the budget under control; the government is targeting a round 10 billion euros for safety.
The overriding goal is to avoid a “rentesneeuwbal” — an interest snowball — a scenario in which the interest rate on the national debt stays higher than economic growth for an extended period, forcing the state to borrow simply to service interest payments. De Wever has warned that failing to act now would produce an outcome far worse for households and businesses than the current belt-tightening.
The deadline is tight. A definitive budget plan must reach the European Commission by 13 October, the same day De Wever is due to deliver his state of the union address in parliament. Missing that window risks a return to “voorlopige twaalfden” — provisional continuing resolutions — a fallback the government was forced into last year.
An Opening Note and an Uncertain Mood
On Sunday, De Wever delivered a “startnota” (opening note) to coalition partners after months of preparation. Speaking at an N-VA family day in Plopsaland, he set expectations for a difficult process.
“It is time to seek an agreement. This will be an extremely difficult exercise, I will not deny it,” he said, adding: “These will not be easy talks either, but we must move forward.” He also insisted the note contained “no surprises” and had already been calculated by the planning bureau, and he moved to quiet speculation by stating that institutional state reform would not be part of this budget round.
N-VA party chair Valerie Van Peel reinforced the message of urgency: “These are not times for vetoes and taboos,” she said, warning that “without a healthy budget everything collapses like a pudding.”
A Menu of Contested Measures
The opening note is built around a menu of numerically costed proposals, the contents of which remain officially known only to the governing parties, as VRT NWS detailed in its analysis of De Wever’s so-called white folder.
Among the revenue ideas are a corporate tax reform for the non-profit sector — taxing unions, charities, sports clubs and health insurance funds more like companies — which Finance Minister Jan Jambon’s cabinet estimates could raise over 100 million euros a year. A VAT overhaul is also on the table, either by lifting the top rate from 21 to 22 percent or by merging the 6 and 12 percent rates into a new 9 percent intermediate rate. That prospect is fiercely opposed by the Francophone liberals of MR.
Wealth taxes divide the coalition sharply. Les Engages proposes a 0.3 percent tax on the movable wealth of the richest 5 percent of Belgians, starting at 500,000 euros and excluding homes, while Vooruit targets financial wealth above 1 million euros. CD&V prefers strengthening the existing securities tax. MR and N-VA are the strongest opponents of any wealth levy.
On spending, proposals include limiting the growth norm for healthcare and doubling patient co-payments, tightening eligibility for increased reimbursement, and activating the long-term sick. There are also plans to save on government itself — abolishing provincial councils and the Senate, cutting the number of MPs and ministers, and reforming the civil service — a priority for MR chief Georges-Louis Bouchez.
CD&V chair Sammy Mahdi has floated an “index jump” for the unemployed only, arguing that not indexing benefits once would save more than 100 million euros a year. The proposal drew a sharp rebuke from Beweging.net, the civil-society network historically tied to CD&V, whose chair Julie Hendrickx Devos called targeting benefit recipients “not just” and urged breaking the taboo of looking at large fortunes.
The State Reform Fault Line
The budget round has also been shadowed by a renewed constitutional debate. On 16 September, De Wever told a parliamentary committee that the federal government can absorb only one more austerity round before an “institutional round” becomes necessary, according to VRT NWS.
“Everyone realises that this country will never get out of its problems without a thorough institutional reform,” he said, while conceding that reaching an agreement on a future state structure is “absolutely not an easy task.”
The remarks triggered a political storm. PS chair Paul Magnette said a new state reform round “will never happen,” arguing no two-thirds majority could be assembled. Les Engages minister Jean-Luc Crucke also came out against it, and Vlaams Belang’s Barbara Pas accused De Wever of manoeuvring for electoral advantage. On Sunday, De Wever sought to decouple the issue, saying he did not intend to bring the institutional question into this round, while Walloon Minister-President Adrien Dolimont said he was open to reform but preferred re-centralisation.
What to Watch
Beyond the federal track, the Flemish regional government is negotiating its own budget, aiming to close a roughly 2 billion euro gap before the September Declaration on 28 September.
Several measures are widely viewed as near-impossible. Cutting defence spending is a red line for N-VA given geopolitical pressure on NATO allies; scrapping the favourable tax regime for company cars is considered electorally unfeasible; and abandoning the announced payroll tax cut — worth more than 4 billion euros at cruising speed — is resisted by N-VA and CD&V even though Vooruit and parts of MR have suggested it.
With labour unions already announcing a national demonstration for 9 October, the coming weeks will test whether the Arizona coalition can bridge its ideological divides before the European Commission deadline — and whether it can avoid the provisional financing that humbled the government a year ago.