The EU is set to delay payment of €847 million in Covid-19 recovery funds to Belgium over the latter's failure to implement stringent pension reforms, l'Echo has reported.
The Belgian Federal Government, which received €770 million in pandemic recovery funds in 2021, was originally scheduled to formally submit a request to the EU for the additional instalment this Friday.
However, this deadline is unlikely to be met, following Prime Minister Alexander De Croo's (Open VLD) failure to push through the required reforms by the end of last year after being stymied by the Minister of Pensions Karine Lalieux (PS).
"We have nothing to say about pensions at the moment," the Prime Minister's office told l'Echo on Monday.
A blistering attack
Lalieux's refusal to back the measures was supported by other senior members of her centre-left party, including the French-speaking Socialist Party (PS) leader Paul Magnette. In an interview with Le Soir published in early December, Magnette vigorously denounced the EU's "blackmail on pension reform", and accused the EU of hypocrisy and overstepping its mandate.
"We are still waiting for the European Union to fulfil its own commitments, in terms of financial transaction tax, taxes on GAFAM [Google (Alphabet), Apple, Facebook (Meta), Amazon, and Microsoft], a minimum tax on multinationals, a carbon border tax, there are billions and billions of euros to go for," Magnette said. "So, let the European Union be a little less lecturing and a little more effective on its own skills, and that will help Belgium a lot, believe me."
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He added: "Very sincerely, I would rather do without the stimulus plan than make reforms that go against our convictions and our values. We're not going to force ourselves to make anti-social reforms for a few billion, that's not OK. Blackmail is not acceptable, we will not give in. Thanks for the recommendation, but we're not going to follow it."
Belgium's financial quarrel with the EU comes against the backdrop of a scandal which engulfed Belgium's political class at the end of last year, in which the Federal State Secretary for Budget and Consumer Affairs, Eva De Bleeker (Open VLD), was forced to resign after she was alleged to have intentionally presented an over-optimistic assessment of the state of Belgium's finances to the European Commission.
The dispute also comes at a particularly troubled time for Belgium, whose debt-to-GDP ratio and budget deficit are already amongst the highest in the EU. Indeed, in an almost unprecedented move, in recent months both the EU and the IMF have openly criticised the country's fiscal profligacy.
