The Belgian government has reached an agreement on a new budget, after months of consultations that made the coalition’s survival uncertain. On Monday morning, after twenty hours of meetings, the Flemish nationalist conservative-liberals (N-VA), Christian Democrats (CD&V), socialists (Vooruit), French-speaking liberals (MR) and center party Les Engagés were out. writes The Standard. Prime Minister Bart De Wever calls it “a second coalition agreement”.
The Belgian government has a budget deficit of 25.5 billion euros – 5.5 percent of gross domestic product (GDP) – the largest budget gap in the eurozone. According to EU rules, member states may not allow their deficit to exceed 3 percent of GDP. To comply with that rule, Belgium had to cut at least 9.2 billion euros before 2030.
But the five coalition parties could not agree on the cost items that needed to be cut: earlier this month, De Wever visited King Philip to request a postponement until Christmas. For example, the Liberals were against a VAT increase and wanted to save almost 10 billion euros entirely on social security.
There will be no general VAT increase, writes The Standard, but there will be a VAT increase on certain products, including hotel stays, campsites and pesticides. There will be a ‘parcel tax’ for small packages from non-European web shops such as Shein. Furthermore, an agreement has been made to get 100,000 long-term sick people back to work, which should yield 1.9 billion.
What is partly disappearing is the automatic indexation of wages and benefits with inflation – Belgium is one of the few European countries that still has such a measure. In Monday’s budget agreement, it was decided that wages from 4,000 euros gross will no longer be indexed, but that those incomes will receive a fixed amount in 2026 and 2028. Salaries in politics, for parliamentarians and ministers, are also no longer indexed.
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