Belgian Prime Minister Alexander De Croo has denounced the European Commission's proposal to raise the EU budget by tens of billions of euros, arguing that such an increase would have "too great" an effect on Belgium's already soaring budget deficit.
Speaking on the eve of the European Summit in Brussels on 26-27 October, De Croo also accused the Commission of hypocrisy for demanding that Belgium reduce its deficit whilst simultaneously requesting that it contribute additional funds to the EU.
"Belgium cannot support the proposal of the European Commission which is currently on the table," De Croo said. "The impact on our country is too great."
He added: "We are receiving the message from the Commission that we must put our budget in order and set priorities. The Commission should then also reorganise its budget itself."
A fiscal fiasco
The EU is expected to request a budget hike of €66 billion, roughly €50 billion of which is earmarked for Ukraine and the ongoing war with Russia.
De Croo's "Vivaldi" coalition government is reported to have no issue with the increased aid to Kyiv. Instead, it objects to the additional €16 billion reserved for other purposes, which include increased EU staffing and migration-related expenditures.
De Tijd calculates that, depending upon how much of the financial assistance granted to Kyiv comes in the form of direct aid rather than loans, Belgium could end up having to contribute an additional €600 to €800 million to the EU budget next year: an amount corresponding to roughly 0.10-0.15% of annual GDP.
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This would represent a sizeable increase on Belgium's budget deficit, which some analysts expect will reach 4.6% next year, up from 3.9% in 2022.
Ironically, Belgium's adherence to the EU's budgetary demands only makes it more likely that it will soon violate the bloc's fiscal strictures, according to which Member States must maintain deficits no greater than 3% of annual GDP. (The 3% limit was temporarily suspended during the Covid-19 pandemic; the suspension was later extended to 2024 following Russia's invasion of Ukraine.)
Belgium's budgetary worries have also been exacerbated by additional fiscal rules proposed earlier this year by the European Commission, which require that countries that run deficits greater than 3% of annual GDP must trim their budgets by 0.5% per year until they fall below the 3% threshold.
According to a recent analysis by the European Trade Union Confederation (ETUC), such a rule, if enforced, would require Belgium to cut its budget by €2.7 billion next year: equivalent to the amount needed to employ 37,888 full-time nurses or 82,500 teachers.
