The Brussels Government has agreed to provide €30 million in credit to the capital's nineteen municipalities, in a move which will offer welcome relief to local authorities struggling under the burden of wage indexations and historically high energy prices.
In a press release on Monday, Brussels Minister for Local Authorities Bernard Clerfayt (DéFI) pointed out that municipalities' expenses had increased by 9% from 2022 to 2023, while revenues had stagnated or in some cases even declined over the same period.
The Minister acknowledged that the financial predicament of local authorities has been exacerbated by the rising cost of pensions due to an ageing population. Meanwhile, increasing interest rates are making it much harder for municipalities to pay their accumulating debts.
Bernard Clerfayt. Credit: Belga
"The local authorities must face this difficult context while continuing to meet the many challenges that await them: energy transition, pension financing, etc," Clerfayt said. "We have already put in place exceptional aid but the financial situation of the municipalities remains tense."
The Minister emphasised that the government aid (to be dispensed over the next two years) would only be provided on the condition that municipalities commit to stringent fiscal reforms.
"This measure is always part of a desire for good governance. We are helping the municipalities, but in return, they will have to commit to taking measures to improve their budgetary and financial situation: cleaning up bad debts, making provisions, and limiting costs."
