Standard & Poor’s (S&P) has downgraded the credit rating of the Brussels Region due to political decisions, according to René Konings, director of Brussels business organisation Voka Metropolitan.
Konings stated that political deadlock and reluctance to engage in dialogue have long strained the “Brussels” brand among entrepreneurs, a perception now echoed internationally.
Voka Metropolitan warned that the downgrade would result in higher interest costs for the region. However, Konings cautioned that these financial burdens should not fall on businesses, as entrepreneurs in Brussels are already among the most heavily taxed in the country, causing them to question the wisdom of investing in the region.
The organisation noted that a year of political stagnation now has tangible costs. A lower credit rating means higher borrowing costs in the short term, but the longer-term damage is to Brussels’ reputation and fiscal stability.
Companies are delaying investments or choosing tax-friendlier locations in the suburbs of Brussels or other neighbouring countries due to ongoing political uncertainty.
Voka Metropolitan urged Brussels political parties to break the deadlock and promptly form a government. The organisation advocated for a multi-year budget plan to guide the region back towards a balanced budget in the long run.
