Belgium must cut its budget by a staggering €2.7 billion next year to comply with EU fiscal rules, a recent analysis by the European Trade Union Confederation (ETUC) has shown.
The study found that the required spending reduction is equivalent to the amount needed to employ 37,888 full-time nurses or 82,500 teachers. It also noted that EU budgetary strictures demand similarly drastic cuts in neighbouring France of up to €13.2 billion.
Echoing comments made earlier this year, ETUC General Secretary Esther Lynch lambasted the EU's fiscal regulations and suggested that their implementation would inevitably trigger "austerity 2.0" – a reference to the deep budget cuts introduced by many Member States following the eurozone crisis a decade ago.
"European leaders need to learn the lessons of the past: we already know from painful experience that austerity means fewer jobs, lower wages and underfunded public services," Lynch said.
She added that the mandated spending reductions come amid soaring corporate profits as well as an unprecedented cost-of-living crisis across much of Europe. "Politicians can't tell the poorest to turn out their pockets again while the richest are popping the champagne corks," she said.
Belgium: An incorrigible rule-breaker?
Under the bloc's current rules, Member States are required to maintain budget deficits under 3% of annual GDP – a limit enshrined in the EU's Maastricht Treaty in the 1990s. This threshold was temporarily suspended during the Covid-19 pandemic; the suspension was later extended until 2024 following Russia's full-scale invasion of Ukraine.
Furthermore, under new rules proposed earlier this year by the European Commission, Member States which run deficits greater than 3% of GDP will be forced to trim their budgets by 0.5% per year until they fall below the 3% threshold.
Commission Executive Vice-President Valdis Dombrovskis has also explicitly warned that the new scheme would not permit any "heel-dragging [or] backloading" by Member States.
"Member States will not be allowed to push back fiscal adjustments to a later date," he said. "This also applies to carrying out required reforms and investments."
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Last year, 11 EU countries ran deficits greater than 3% of GDP, including Belgium (3.9%). Worryingly, it is also highly unlikely that recent budget cuts announced by Belgium's Federal and Regional Governments will bring net spending down to anywhere close to that demanded by the EU.
In particular, the Federal Government plans to reduce spending by just €1.2 billion next year, while the savings announced by the Brussels and Walloon Governments amount to just €200 million and €165 million respectively. The exact scale of the Flemish Government's budget cuts has not yet been revealed.
Indeed, last week Prime Minister Alexander De Croo effectively conceded that Belgium's public spending will contravene EU rules in 2024. "Step by step, we are moving towards the Maastricht standards," he said.
