Belgium is on course to violate EU budgetary rules next year despite the Federal Government's announcement last night of highly controversial reforms to its labour market and healthcare sector.
The new budget, which aims to lower Belgium's fiscal deficit by up to €1.2 billion in 2024, will involve cuts of over €100 million to the country's healthcare industry as well as the expansion of the government's "flexi-job" scheme to 12 different economic sectors.
"We are doing again what we promised," Prime Minister Alexander De Croo stated on Monday night. "Every time we set out to make a certain effort, we have paid for it."
Under the terms of the EU's Maastricht Treaty, Member States are required to maintain budget deficits under 3% of annual GDP. This limit was temporarily suspended during the Covid-19 pandemic; the suspension was later extended to 2024 following Russia's full-scale invasion of Ukraine.
Although De Croo emphasised that the federal budget would remain below 3%, his choice of words also appeared to concede that Belgium's total public spending – which includes high regional deficits – will contravene EU rules in 2024. "Step by step, we are moving towards the Maastricht standards," he said.
Worryingly, Belgium's failure to comply with the EU's fiscal constraints could mean that the country will have to face even more severe budget cuts in 2025. 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.
Fiscal furore
The new budget was quickly – and often vehemently – denounced by many Belgian opposition parties outside of the ruling "Vivaldi" coalition government.
Catherine Fonck, a practising doctor and federal minister for the centrist French-speaking party Les Engagés, claimed it was "striking" that Vivaldi decided to impose additional costs in the healthcare sector "despite crucial needs still not [being] met."
Un peu de tout au #budget #begov. J’attends les tableaux. Mais ce qui frappe c’est une xème couche d’économies en #santé de 100 millions €, soit un total de + de 500 millions d’économies en 2023 et 2024 malgré des besoins cruciaux toujours pas rencontrés. 1/2
— Catherine Fonck (@catherinefonck) October 9, 2023
The budget was also heavily criticised by the Belgian Workers' Party chair Raoul Hedebouw, who suggested that the introduction of flexi-jobs will ultimately do little to alleviate citizens' severe financial worries.
"The achievement of this Vivaldi government is that the real wages of Belgians have fallen by more than 5% in the last three years," he said. "We need measures to ease the bills and raise wages. Not the expansion of poorly paid flexi-jobs."
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Hedebouw also denounced the Federal Government's decision to impose additional taxes on Belgian banks of up to €150 million as "pure symbolism", pointing to the fact that the country's financial institutions have earned record profits worth billions of euros over the past year.
"Once again a missed opportunity to ask the greatest ability in our country for a fair contribution," he said.
