Belgium's Prime Minister Bart De Wever (N-VA) has kicked off the negotiations for the budget of 2027 and is tasked with finding €10 billion, as the Federal Government fears being hit with a snowball of compounding interest in 2030.
The Belgian deficit sits at 5.2% of GDP, the highest in the eurozone, with the debt rising to over 110% of GDP this year. Across the eurozone, only France (116%), Italy (137%) and Greece (146%) have a higher relative debt than Belgium.
As things stand now, Belgium will be hit by a so-called "snowball of compounding interest" in 2030, as the country will have to borrow money to pay interest on its debt.
As the economy and employment rates have stagnated, De Wever has to either find new revenue or make drastic cuts in the current budget.
The Federal Planning Bureau has prepared a list of 250 possible measures in anticipation of the talks between the coalition parties. The list contains clear ways to increase tax income; a simplification of the VAT system could net the government an additional €7 billion, and a wealth tax could bring in between €5.5 billion and €11 billion, depending on the chosen rates.
The government could also cut its spending by increasing the copayment amount for doctor visits to €500 per year, which would save an estimated €4,7 billion, or limiting salary increases and hiring within governmental departments, worth another €1,6 billion.
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The first day of talks showed that fixing the deficit is not as easy as counting to ten.
As De Wever kicked off his talks with Flemish Christian-Democrats (CD&V) and Francophone centrists (Les Engagés), CD&V party leader Sammy Mahdi warned against limiting the company car scheme, a sacred cow for his party.
He told VTM Nieuws he would "swallow a lightbulb whole if the corporate car scheme [was] cancelled."
A gradual decrease of the difference in tax treatment between company cars and ordinary wages would generate significant revenue for the Federal Government, according to the Planning Bureau's report.
The annual budgetary costs for company cars could fall by €2.8 billion by 2030. For fuel and charging cards, the savings amount to €700 million. Together, that totals €3.5 billion, not including any accompanying measures to make the savings more palatable.
Mahdi's unusual proverb showed that the talks will be a game of political chess, more so than a fiscal discussion. De Wever has said that the eventual solution will be a "budget lasagna", with a layer to every party's liking.
The Federal Government has set a deadline of 13 October 2026 to present its finished plans to parliament. Two days later, it has to present them to the Europe Commission for approval.
