The Brussels Times and De Tijd have spent recent months examining the finances of the Brussels Region — one of three Regions in Belgium and home to its capital. Our investigation draws on annual accounts, budget documents, and audit reports, as well as interviews with officials with intimate knowledge of the Region’s finances.
Their accounts paint a picture of a debt burden that seems larger, and harder to sustain, than the Region acknowledges publicly. To be clear, this investigation does not suggest that the Brussels Region has acted illegally. But the conflicting debt figures are more than an abstract budgetary concern. After consecutive downgrades of Brussels’s credit rating by Standard & Poor’s, investors and creditors are paying closer attention — hesitating to lend and demanding higher interest rates. The next S&P rating is due on Friday October 10.
Trust in the Brussels government and its financial products is crucial — first to reassure creditors, but ultimately to maintain the confidence of citizens that their leaders are speaking the truth. Once that trust erodes, both markets and the public risk bearing the consequences of financial deterioration.
In the end, it all comes back to citizens. For people in Brussels, it means the ability to finance public services such as public transport, social housing, unemployment activation, or green spaces at a reasonable cost. For ordinary people across Europe, it matters too: their savings, pooled through banks and pension funds, are invested in Brussels’s debt — and could be exposed as the Region’s finances deteriorate and its credit rating falls. And for fellow Belgians outside the capital, there is something at stake too: if Brussels were to turn to the federal government for financial support in the event of further strain, it would ultimately be taxpayers nationwide who would help shoulder the cost.
Brussels’s debt has more than doubled over the past five years, from €6,4 billion in 2019 to €15,6 billion in 2024. The surge is driven by a chronic budget deficit: each year, the Region spends roughly 25% more than it collects in tax revenues, forcing it to borrow the difference on financial markets and adding to the debt pile. In 2025, the Region is expected to borrow close to €2 billion to finance its deficit and roll over maturing debt, while interest costs alone are expected to approach €500 million.
All this is unfolding without a fully functioning government in place. For 486 days since the regional elections of June 2024, the newly elected Brussels parliament has failed to form a qualified majority coalition, needed to appoint a new government. It has also failed to pass an annual budget for 2025 — the first time in Belgian federal history that a parliament at any level of government has abandoned this basic duty.
Instead, the Brussels parliament has been forced by law to roll over last year’s budget month by month, with the outgoing government on track to outspend it — driving a deficit that keeps increasing. Until the 2024 elections, the Brussels government still promised a balanced budget for 2025. By June of this year, that had shifted to a projected €1.2 billion deficit; last month that estimate climbed to €1.6 billion. The final figure will likely only be known early next year.
At the same time, budget documents and audit reports show that the Brussels Debt Agency, which manages borrowing for the Region, has relied on accounting practices that present its finances in a more favourable light. These include applying its own interpretations to official statistics, leaving certain loans off the balance sheet, and presenting undrawn metro loans as available liquidity to pay off old debt.
The cabinet of outgoing finance minister Sven Gatz has consistently defended the Debt Agency and rejected criticism of these practices. Over the past several months, The Brussels Times and De Tijd have submitted detailed questions in writing to the cabinet concerning all of the findings reported in this investigation. Follow-up questions were also sent, and the cabinet was given a full ‘right of reply’, to which they are entitled, in advance of publication. The cabinet’s responses are included in this article.
All official communication passed through the minister’s cabinet, and access was never given to technical experts within the Brussels finance ministry. As a result, the written replies were highly technical and at times difficult to interpret.
Meanwhile, some senior officials within the Brussels finance ministry and within the broader public finance institutions of the Belgian state have begun to voice dissent, questioning the cabinet’s answers and whether the public accounts reflect the Region’s true financial position.
“There is an issue of basic transparency,” said Xavier Debrun, Head of the Economics and Research Department at the National Bank of Belgium, which is responsible for studying and evaluating public debt at all levels of government, including the Brussels Region.
“Call it ‘benign neglect’ — or ‘not so benign neglect’ — of basic fiscal reporting,” Mr. Debrun said of the outgoing Brussels government.
“If you don’t want to be held accountable, the first thing you do is hide what you’re doing. There is a lack of sérieux.”
Brussels seems to chronically under-report its own official debt figures
The Brussels Region reported a ‘gross consolidated debt’ of €15,02 billion at the end of 2024, according to its debt agency, using the Maastricht standard (European System of Accounts 2010).
The National Bank of Belgium (NBB), however — which tracks debt across all levels of government — put the figure at €15,65 billion, or roughly half a billion higher, using the same methodology and the same data.
Unlike the Region, the NBB reports its figures directly to the European Commission and the European Central Bank, where they are vetted and approved twice a year by Eurostat, the EU’s statistics agency. The Brussels Region’s accounts, by contrast, are reviewed by the Belgian Court of Auditors — which has refused to approve them for eight consecutive years. In the past four years, it has not even issued an opinion, citing “insufficient and unreliable data.”
The Brussels government itself is a complex structure: a central administration supplemented by 22 semi-autonomous agencies covering urban development, mobility, environment, finance, and employment. On top of that, it relies on hundreds of non-profits and dozens of state-backed companies to carry out its essential public tasks. Remarkably — and apparently uniquely in Belgium — there are no rules limiting how much these quasi-public entities can borrow.
This tangled web makes it harder to calculate the Region’s true debt load and to decide which entities and loans should be included. In Germany, for example, as in many EU countries, the main borrower is the federal government, and states and municipalities are only allowed to borrow under very strict constitutional and legal limits.
A review of the so-called “debt perimeter” — the list of entities included in calculating the Region’s consolidated debt — obtained from both the NBB and anonymous sources within the Brussels finance ministry, as the cabinet of finance minister Gatz declined to share its own list, reveals at least fifteen disputed bodies. Some are included by the NBB but excluded by the Region, and vice versa, helping to explain part of the discrepancy between their figures.
According to its list, the NBB, for instance, counts KANAL, Brussels’s new contemporary art museum, housed in the former Citroën garage, within the perimeter, with debt of €18,4 million at the end of 2024. According to the list we obtained from an anonymous official within the Brussels administration, the Region, by contrast, still lists the ‘Fonds pour le financement de la politique de l’eau’ in its accounts, which is typically cash-rich — even though the fund was formally abolished by law in 2022. The cabinet of finance minister Gatz did not reply to a request for comment on these specific discrepancies.
In response to questions about the gap between the two debt figures, the cabinet of the Brussels finance minister did not explain why both measures of ‘gross consolidated debt’ diverged. Instead, the cabinet described how the Debt Agency uses its own “interpretation” of this statistic to calculate a figure that more closely resembles ‘net consolidated debt’, by taking gross debt and subtracting cash and cash-like instruments. Those cash reserves amounted to about €530 million at the end of 2024, which is almost the difference between the Region’s number and the NBB’s. The rest of the gap – about €100 million – the cabinet stated, comes from differences in which entities are included in the NBB’s consolidation perimeter.
That answer, however, is not consistent with the official definition of ‘gross consolidated debt’ under the European Standards of Accounts 2010: all outstanding debt instruments must be counted, without subtracting cash. In practice, Brussels has therefore been presenting investors and rating agencies with a lower figure closer to net debt, rather than the official statistic reported by the NBB to Eurostat.
In a later reply to a follow-up question, the cabinet claimed that its list of included entities was identical to the NBB’s and could be found on the NBB’s website.
Administration officials seemed more candid than the minister’s cabinet. Inside the Brussels finance ministry, a senior civil servant who has been closely involved with calculating the Region’s self-reported debt statistics for years reacted with astonishment when confronted with the discrepancy: “This is the first I’ve heard of it! How can that be? Both figures can’t be right — one must be wrong!” the official said, speaking on condition of anonymity.
Confronted with the cabinet’s answer in writing, the senior official recognised a pattern: “They’re cycling around your questions.”
Beyond its books, Brussels is on the hook for more debt
But even beyond its official accounts – in the real world – the Region is either directly or indirectly responsible for far more debt than its books show. Much of it is officially, and often correctly under the narrowest reading of the rules, kept off the balance sheet.
At the end of 2021, the Brussels Region reported around €3 billion in future financial obligations and €715 million in future pension obligations — the most recent figures available. Although these are not loans or outstanding debt instruments, they represent debt-like commitments: contractual claims on the Region’s finances that constitute a direct obligation.
The Region also carries indirect future commitments in the form of debt guarantees. By its own estimate, Brussels had issued about €3.5 billion in explicit guarantees at the end of 2024 — liabilities not recorded on its balance sheet but representing potential debt should any of those guarantees be called. Taken together, these bring the Region’s explicitly acknowledged contingent debt to roughly €23 billion today.
Some investors, however, go further. They look beyond the official balance sheet, and even beyond what the Region explicitly guarantees, to debt they consider “implicitly” backed. On paper it isn’t, but in practice, Brussels is seen as being on the hook.
Belfius Bank, by far the largest holder of Brussels debt in all its forms, illustrates this well. When assessing its exposure to the Brussels Region in internal documents seen by The Brussels Times and De Tijd/l’Echo, Belfius doesn’t stop at the ESA 2010 perimeter. It also counts the debt of Brussels’s 19 communes, which rely heavily on transfers from the Region to balance their budgets. Their debt repayment capacity is thus effectively tied to the Region’s own finances.
But the exposure doesn’t stop with the communes. The bigger danger lies beyond, in the vast web of public utility companies technically owned by the communes. These entities — from energy distributors to water utilities — have grown so large and accumulated such heavy debts that no commune could ever bail them out. Letting them collapse, on the other hand, is unthinkable. Markets therefore assume, in practice if not formally required under ESA rules, that it is the Region that stands behind them.
The best example is Vivaqua, the public utility that provides drinking water across Brussels. Owned by the communes, it has built up a debt load of around €1.2 billion. Last year, when it struggled to service its debt and risked default, the Region quietly stepped in with an extraordinary disbursement of €19 million to cover interest payments. Explicitly, the Region guarantees only about €150 million of Vivaqua’s debt, tied to an EIB loan. In reality, however, the bailout showed that when push comes to shove the Region will cover costs related to the whole debt — exactly what Belfius already priced in.
A similar logic applies to the non-profit sector. Many non-profit organizations have little revenue of their own and depend almost entirely on the Region to fund their quasi-public activities. The largest among them are the hospitals. Brussels counts five public hospitals (St. Pierre, Brugmann, Iris Sud, Queen Fabiola Children’s Hospital, and Jules Bordet) alongside three private ones (St. Jean, Clinique de l’Europe, and Chirec). Together, these hospitals have accumulated an estimated €500 million in debt in recent years, mostly for infrastructure projects. The Brussels Region reimburses about 60% of those loans over 30 years through direct subsidies.
According to an expert within the Brussels government on hospital financing, these hospitals are increasingly running deficits and struggling to meet their debt payments. The communes that founded them are, on paper, responsible for covering their deficits. In practice, however, they lack the means and depend on regional budget transfers to do so.
Lending banks, including Belfius, therefore treat these hospital loans as de facto regionally guaranteed debt, whether or not they carry an explicit guarantee.
“Once you go beyond what is required by international accounting rules for including public debt, the question becomes how far you should go,” the hospital-financing official said, speaking anonymously. “But the day things go wrong — when a debt crisis hits — all these institutions come knocking on your door, and their debt ends up on your books in no time.”
Other kinds of local entities that officially fall under the authority of communes, but whose debt investors see as part of the broader debt burden implicitly backed by the Region, are Public Centres for Social Welfare (CPAS/OCMW), Police Zones, and municipal bodies managing buildings, utilities and infrastructures.
A conservative estimate of the Brussels Region’s total contingent debt — including liabilities that some of its largest investors regard as implicitly guaranteed — puts the figure at well over €25 billion.
‘Money has no smell’: EU metro loans to cover debt service costs
In its 2024 annual report (English version p. 24), the Brussels Debt Agency calculates the ‘debt service coverage ratio’.
This ratio, closely monitored by Standard & Poor’s and creditors, measures the Region’s ability to meet its debt payments over the next year. It is calculated by dividing available liquidity by the total debt service costs due within twelve months.
In its calculation of available liquidity (totaling €1,8 billion), the Agency includes €700 million in undrawn credit lines from the European Investment Bank (EIB) and €125 million from the Council of Europe Development Bank (CEB). These funds, however, are earmarked for metro expansion and public transport projects only, and are designed to be disbursed gradually over several years on a project-expenditure basis.
“Successive disbursements are conditional upon receiving progress reports with details on the project progress, expenditures and results,” a spokesperson for the CEB wrote in an email in reply to detailed questions about its funds.
The Brussels Region can draw down the EIB funds “provided that the contractual conditions for doing so have been met. The EIB adopts control mechanisms in its contracts, such as a duty of regular reporting, to ensure the project is carried out in the way the EIB and the client have agreed. The borrower needs to prove that the EIB funding is used for the intended purposes as outlined in the financial contract, and this is also verified ex-post upon implementation of the projects,” a spokesperson for the EIB wrote in an email.
Xavier Debrun, Head of the Economics and Research Department at the NBB, reviewed the relevant passages of the annual report, the replies from finance minister Gatz’s cabinet, and from the EIB and the CEB to specific questions about these funds, as well as official documents related to the loans.
“They include future tranches of loans, which they are not sure to get – only if certain conditions are met – as general liquidity,” he said, after reviewing the documents at his office in Brussels.
“Liquidity is cash you have in the drawer, if it’s cash in the pocket of your neighbour and you need to kindly ask, that's not liquidity. Liquidity is cash you have there, and you’re the one deciding,” Mr. Debrun explained.
“Whether this is legal or not is ultimately a question for specialised lawyers, and depends on the specific loan contracts,” Mr. Debrun noted. The cabinet of Brussels finance minister Gatz, along with the EIB and CEB, declined to share those contracts — even in redacted form — citing confidentiality.
Herman Matthijs, professor of public finance at both the Free University of Brussels (VUB) and Ghent University and a member of the High Council of Finance — which oversees the finances of all levels of government — warned of a second risk: that the earmarked EU loans might be used as the debt agency presented them, even temporarily, to service old debt.
“It’s like having a mortgage on your house, with monthly payments due. Suddenly you lose your job and next month’s salary. Out of fear you won’t be able to service the mortgage, you take out a new loan — to buy a new car. But instead of buying the car, you use the money to cover the mortgage. Then you’re lucky: the following month you find a new job, your salary resumes, you buy the car, and keep paying off both loans. All is well, right?”
“Now imagine you don’t find a job in time. You end up without a house, without a car, and without a job. It’s bad practice, horrible risk management — and frankly, these are the kinds of tricks you see just before a liquidity crisis.”
The concerns raised by Mr. Debrun and Prof. Matthijs are echoed within the Brussels administration itself. Several senior officials on the Committee for Financial Strategy — the body that advises the Brussels finance minister on overall financial policy — have expressed reservations, according to a senior official who sits on the Committee.
At the Committee’s final quarterly meeting of 2024, held in November, several members objected to treating the EIB and CEB credit lines as “general liquidity tools” for the following year, according to the senior official present.
That senior official called such use of the loans “improper,” arguing they should be drawn “purely on an expenditure basis, not for cash management.” Several members of the Committee then asked to review the EIB and CEB loan contracts, but the documents were not shared, the senior official said.
The cabinet of finance minister Gatz, in a written reply, denied this: “No request for information was refused to any member of the Committee.”
In the end, the EIB and CEB loans were presented as “general liquidity tools”. As a result, the 2025 ‘debt service coverage ratio’ is presented at a comfortable 177%.
But according to Prof. Matthijs, that picture is distorted. He argued that the undrawn portions of the EIB and CEB facilities were wrongly presented as “general liquidity” and should be excluded from the numerator of the ratio.
On that basis, what remains is €1 billion from two revolving credit lines of €500 million each with Belfius Bank and ING Belgium. According to the Debt Agency’s 2024 annual report (English version p. 32), Belfius “made this extension conditional on the presence of supranational lines (EIB, CEB) as well as that of ING in 2025.”
According to Prof. Matthijs, the bank lines appear to have been granted on the misleading assumption that the earmarked EIB and CEB loans formed part of the same liquidity buffer, thereby reducing the banks’ risk.
In his reading, the ratio “should be 1%.”
The cabinet of finance minister Gatz agreed with Professor Matthijs’s understanding that Belfius and ING conditioned their €500 million credit lines on the presence of the EIB and CEB lines in the Region’s liquidity buffer — but not with the view that the undrawn EU funds were wrongfully presented as liquidity.
“The Minister supports the principle that the unused portion of the EU credit lines constitutes access to liquidity and can therefore strengthen the Region’s liquidity ratios,” the cabinet said in a written statement.
A spokesperson for Belfius Bank, which is owned by the federal government, declined to comment for this article on matters relating to the Brussels Region.
Before publication, The Brussels Times and De Tijd presented all findings in this investigation to the cabinet of outgoing finance minister Sven Gatz and invited them to comment. The cabinet was given full right of reply and responded in writing to detailed questions and follow-up requests for clarification. Those replies are included in this article.
In essence, the cabinet defends the Debt Agency’s accounting practices and liquidity reporting on three main points.
First, they maintain that the difference between the Region’s and the National Bank’s figures for ‘gross consolidated debt’ reflects technical variations, mainly due to cash reserves and a different consolidation perimeter.
Second, they reject the interpretation that undrawn EIB and CEB credit lines were wrongly presented as available liquidity, arguing that the unused portions of these loans constitute legitimate “access to liquidity” and can therefore be included in liquidity ratios.
Third, they deny that any information was withheld from members of the Committee for Financial Strategy. They say: "No request for information has ever been refused to any member of the Committee, and there has never been any debate regarding the use of EIB lines."
"Consolidation lines have always been agreed upon and have sometimes been increased and the suggestion of certain members. The Minister ultimately determines the strategies and volumes for consolidation."
For their part, the NBB said the following: "For the compilation of our figures administrations provide themselves direct information on their expenditure/revenue and debt, also for most of the entities included in our list. For some of the entities (mainly the corporations) we collect the data via the annual accounts declared at the national bank."
"Authorities can use debt figures different from our calculation, often is this linked to what is taken in the scope as government entities."
The view of a National Bank senior economist
Concluding his thoughts after three in-depth interviews on the subject of Brussels’s debt, in his office overlooking the Saint-Michel Cathedral, Xavier Debrun framed the bigger issue at stake across many heavily indebted Western countries:
“This is something people have forgotten. Essentially for too many years, accumulating debt carried no weight, because interest rates went down for decades, eventually they were zero and even briefly negative.”
Now the long-term trend is turning upward again, and that demands a sea change in how we think about sovereign debt and government spending, he said.
“What we have promised ourselves in the future may soon become more costly — or unsustainable altogether. Ignoring this new reality risks triggering a fresh wave of debt crises.”
“You’re sovereign only until you’re sovereign in a debt crisis. As is well known: ‘He who is in debt is not free.’”
