Bouchez Blocks VAT Rise as Belgian Budget Talks Stall
Belgium’s federal budget negotiations have collapsed into an open political crisis, after MR party chairman Georges-Louis Bouchez refused to negotiate on any proposal that raises value-added tax. The standoff has derailed Prime Minister Bart De Wever’s plan to present a budget alongside his State of the Union address to Parliament, now expected to be postponed for a second consecutive year.
At the centre of the dispute is a proposed increase to Belgium’s standard VAT rate from 21 percent to 22 percent, combined with a restructuring of the reduced 6 and 12 percent rates. De Wever’s coalition is hunting for roughly €10 billion in savings and new revenue by 2029 to bring the budget in line with European spending rules. VRT NWS reported that the refined proposal still contained the VAT increase when top ministers met on Saturday afternoon.
A Red Line Two Years Old
Bouchez has framed his refusal as a matter of principle, not tactics. In a social media post cited by VRT NWS, he said the MR has categorically rejected VAT increases for two years, for four reasons: such a move would harm purchasing power, further fuel inflation, hinder economic growth, and damage the competitiveness of wholesalers.
“In short, I am — and I admit it — a problem for those who want to practise old politics and always want to tax more,” Bouchez wrote. He argued the opposite is needed: savings on government itself and tax cuts. He added that VAT “is far from the only stumbling block. So we must keep working.”
The MR’s position is more specific than a flat “no” to taxation. The party argues that at most one-ninth of the fiscal effort — around €1 billion — may come from new revenues, with the remaining €9 billion drawn from savings and reforms. Other coalition parties counter that the one-ninth rule applies specifically to taxation of the wealthy, leaving room for revenue of other kinds within the remaining eight-ninths.
A Coalition Split Down the Middle
When De Wever asked parties whether his proposal could serve as a basis for detailed negotiations, he received a telling spread of answers. VRT NWS reported that N-VA, CD&V and Les Engagés gave a qualified “yes, but,” Vooruit gave a “no, unless,” and the MR delivered a flat “no.”
The resistance is not confined to the francophone liberals. Vooruit and Les Engagés have argued that the wealthiest should contribute more, pushing for a millionaire’s contribution and action against abuses of management companies. P-magazine captured the dynamic bluntly: everyone wants to find €10 billion, “as long as the money is sought in someone else’s pocket.”
For De Wever, the arithmetic is unforgiving. Business AM reported that the premier sought to accelerate planned tax cuts to 2027 in order to secure agreement on a broader VAT overhaul — an attempt to pair a bitter revenue measure with a sweetener. The MR, however, remained unmoved.
The €10 Billion Clock
The budget challenge is not abstract. Belgium must submit budget plans to the EU, with mid-October widely cited as the deadline. De Wever’s larger worry, however, is domestic: if the talks drag much further, the parliamentary process — six to eight weeks to scrutinise and approve a budget — will not finish in time, forcing the government to run on “provisional twelfths,” a rolling emergency budget based on the previous year’s spending.
VRT NWS political journalist Bart Verhulst explained the stakes. “He absolutely does not want to have to resort to an emergency budget for next year,” Verhulst said. “Starting 2027 with an emergency budget, just like in 2026, and that for a government with full powers — the prime minister wants to avoid that at all costs.”
That prospect would be a particular embarrassment for De Wever’s N-VA, which campaigned on restoring fiscal order. It would mark the second year running that Belgium entered a new year without an approved budget.
The pressure is being applied from the financial markets as well. Belgium’s ten-year bond yield has approached roughly 4.4 percent — its highest level in about fifteen years — while France’s ten-year yield neared 5 percent. National Bank governor Pierre Wunsch and Debt Agency director Jean Deboutte briefed ministers this week on the danger of a “debt snowball,” in which the state borrows simply to service the interest on its existing debt. According to VRT NWS, that snowball could begin rolling by 2029 rather than 2031, and possibly as early as 2028 if rates keep climbing.
One datapoint offered brief relief: rating agency Moody’s decided on Friday not to downgrade Belgium’s credit rating, according to P-magazine. But analysts cautioned the reprieve was temporary.
Bouchez as ‘Shadow Prime Minister’
The deadlock has also exposed a deeper power struggle inside the five-party “Arizona” coalition, pitting the liberal-right N-VA and MR against the socialist and centrist Vooruit and Les Engagés. Political journalist Alain Gerlache told VRT NWS that Bouchez is deliberately positioning himself as a champion of purchasing power — a theme that resonates strongly in Wallonia — and increasingly as a rival centre of authority.
“We have ended up in a situation where you have two prime ministers: an official one and a shadow one,” Gerlache said. “Georges-Louis Bouchez increasingly presents himself as shadow prime minister.”
Foreign Minister Maxime Prévot of Les Engagés was more cutting. “The biggest problem in this country is certainly not BDW [Bart De Wever], nor VAT, but perhaps GLB [Georges-Louis Bouchez],” he said. P-magazine reported that De Wever is, according to several sources, trying to isolate the MR in the talks — a manoeuvre that, if successful, would reframe the narrative from “a government that cannot agree” to “one party blocking an agreement.”
De Wever has repeatedly warned of the cost of inaction. “We are close to a point where draconian measures will be imposed on us,” he told Parliament, adding that “in Belgium reforms are possible, but often late and after a ridiculous crisis.”
What to Watch
The immediate question is whether De Wever can salvage an agreement before the window closes. He is continuing individual talks with coalition partners, with party chairmen not yet brought to the table. Verhulst described the position starkly: “The deadlock is complete, a political crisis is a fact.”
Yet no party appears ready to let the government fall, and some observers privately hope a sharp crisis moment might finally force movement. The unresolved questions are whether Bouchez will bend if the political cost of intransigence rises, and whether the coalition can locate its missing billions anywhere other than VAT.
With the European deadline looming and the parliamentary clock ticking, Belgium faces a familiar choice, framed by its own prime minister: act now and shore up the welfare state, or have the bill for past inaction presented — on terms far less favourable.