While Belgium's federal government is still stuck in stalled talks, the country's regional governments have all reached agreements on their 2027 budgets.
The European Union enforces a maximum deficit of 3% of a country's GDP, with debt being limited to 60% of its GDP. Last year, however, Belgium's deficit was 5.2% of its GDP and its national debt stood at 107.9%.
The National Bank predicts an increase to 5.7% by 2028, when the national debt is predicted to increase to 114.8%.
While the regional governments manage their own budgets, the EU regards their deficits and debts as part of Belgium's federal budget.
Now, with the rise of long-term interest rates and the snowball of compounding interest looming ever closer, Prime Minister Bart De Wever (N-VA) is under pressure from the EU and is increasingly looking at the regional governments to fix their books.
Brussels: Cutting costs without raising taxes
The Minister-President Region Boris Dilliès (MR) announced that this government had reached a budget agreement for the Brussels-Capital Region in the early hours of 5 October. According to Dilliès, his government managed to halve the deficit without raising linear tax for people living in Brussels.
Brussels has been able to lower its deficit to €719 million, down from €1.3 billion the year before.
The region has set out the target of reaching a balanced budget by 2029. To achieve this, it is making drastic cuts in government expenditure: it implemented a hiring freeze for public servants, lowered its operational budget, and will sell the residence for the Minister-President.
To generate new revenue, it will introduce a road toll for cars and vans and index public transport tickets annually.
Wallonia: Invest today, save tomorrow
In 2024, with a deficit of around €2 billion, Walloon Minister-President Adrien Dolimont (MR) set the target of having a balanced budget in 2029. Initially, the government aimed to lower the deficit to €1.2 billion in 2027, but it has since diverted from these plans.
Instead, Dolimont announced a budget for next year with a deficit of around €1.35 billion.
While his government is making sizeable cuts in the budgets of local governments and the wider government apparatus, the agreement included several measures to boost the economy in Wallonia.
Similar to Flanders, it will introduce a job bonus for lower salaries, lower road taxes, and adjust inheritance tax.
The goal is still to have a balanced budget in 2029, but Dolimont has opted to push the hardest cuts to the next years.
Flanders: Balance before all
When he was still Finance Minister in the previous Flemish government in 2023, now-Flemish Minister-President Matthias Diependaele (N-VA) had set an ambitious target: Flanders should have a balanced budget by 2027.
Since taking office as leader of the Flemish government in 2024, he has whittled away at the region's deficit of €4 billion. With success, as he was able to present a balanced budget for 2027 on 30 September.
It has to be noted that the road to the budget agreement was rocky. A minister became unwell during late-night negotiations that ran into the early morning, coalition partners reversed course due to calculation errors, and deadlines had to be extended before Diependaele could finally close a deal.
Flanders made the most drastic cuts of the Belgian regions, with Prime Minister De Wever describing the budget proposed by his fellow party member as "self-flagellation."
Wallonia-Brussels Federation: No balance expected
The Wallonia-Brussels Federation (FWB), or the government of the Francophone community in Belgium, reached an agreement on 9 October.
While its deficit for 2027 is set to decrease from the previously estimated €1.7 billion to €1.27 billion, this is primarily due to a correction of the federal financing of the region.
The Federation has put a limit on the number of public servants it can hire, will close several offices abroad of the international representation, and the public broadcaster RTBF saw its budget lowered by €20 million.
As the Federation does not raise income via taxes, it relies entirely on federal dotations.
Unlike the other regions, it does not have a target year to balance its budget, instead aiming to stabilise its current deficit by 2029.
Ostbelgien: Best student of the class
The German-speaking community in Belgium announced its budget agreement on 8 October, with the government of Oliver Paasch (ProDG) finding a small budget surplus for 2027.
Despite a considerable investment package for healthcare and education, the Ostbelgien government will have a surplus of €28 million.
While the government has limited responsibilities, only having a total of three ministries, Paasch announced the ambition of structurally lowering the debt of the region from 2030 onwards.
