The European Commission has approved Belgium’s draft budget for this year in spite of the country's public spending growth exceeding recommendations due to relaxed rules for defence expenditure.
The Commission has closely monitored Belgian public finances since it initiated an excessive deficit procedure shortly after the June 2024 elections.
Two weeks ago, the government reached an agreement with the Commission on a multi-year trajectory to limit spending growth, aiming to reduce the deficit to less than 3% of GDP by 2029.
In this context, the draft budget for 2025, submitted by the Arizona coalition in late April, was reviewed. According to the Commission, it appears somewhat more negative than the multi-year plan submitted in March, largely due to rising defence spending, which is exempted for the coming years.
Belgium’s draft budget shows a deficit increase from 4.5% last year to 5.5% this year, while the Commission estimates it to be 5.4%. The focus, however, is on the growth of net public expenditure, expected to rise by 3.6% this year, although the Commission anticipates an increase of 5%, reflecting a 0.7% GDP deviation.
Belgium benefits from defence spending flexibility. The Commission considers the net expenditure growth in 2025, accounting for increased defence spending flexibility, as an appropriate first step towards implementing the national multi-year budgetary plan and correcting the excessive deficit.
In the coming years, the Commission will strictly monitor public spending, which, according to the multi-year trajectory, can increase by 2.5% in 2026 and 2027, and by 2.1% in 2028 and 2029.
