Facing its third crisis in the last two years, the Government of Wallonia has announced its latest budget for 2023, which has been received as a balancing act between responding to the energy crisis and keeping the region's debt under control.
The 2023 budget proved to be the third year in a row where an unforeseen crisis has put a dent in Wallonia's finances. After the pandemic as well as the economic aftermath of last summer's floods, the region now has to deal with the fallout of the war in Ukraine which has worsened inflation, but most alarmingly, the ensuing energy crisis.
This has, however, dealt a blow to Wallonia's public debt which sat at €30 billion in May. To that end, the Wallonia Regional Government now has a gross balance of €3 billion, down by a billion from last year's budget.
As a result, the government has been asked by experts to undertake structural efforts which would see them spend €250 million less a year, from 2023 onwards.
Among the money-saving measures taken in the latest budget was a 8% reduction of ministerial allowances, as well as reinvesting elsewhere unused funds from their successive recovery packages.
Combating the current crisis
What was on most people's minds when watching the budget announcement at 15:00 on Friday was what the Walloon Government had in plan to deal with the current energy crisis.
Accordingly, Elio Di Rupo the region's Minister-President announced the government's intention to earmark €3 billion in its fight against an all-encompassing crisis.
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Furthermore, €175 million of direct aids will be provided to businesses for the end of the year and the start of next year, but only under certain conditions.
Conditional help
Firstly, the exact amount will be calculated on the basis of the difference between a company's energy bills from 2021 and 2022. Secondly, the percentage of company costs covered by the government will be between 25 and 35%. Thirdly, businesses will have to justify their demand by detailing their loss of income suffered as a result of the crisis.
In addition, companies will not be able to restore economic unemployment in excess of 35% compared to last year and will not be able to pay dividends to shareholders in the year in which it receives the regional aid.
€98 million to help Walloons
An of amount €98 million has been set aside by the government to directly help relieve the burden of ever-increasing energy bills on everyday Walloons.
This will be accompanied by increased aids for energy improvement, such as pushing the energy investment premium up by 40%, as well as financing an additional 10,000 interest-free loans for energy works.
Furthermore, the government will also look to tax energy companies' excess profits, following in the Federal Government's steps, all while agreeing to freeze rent indexation, at least for buildings that use up a lot of energy.
