Pierre Wunsch, governor of the National Bank of Belgium (NBB) has been criticised for remarks made to a university newspaper in which he described the government of Wallonia as “closer to a communist regime than the neo-liberal regime some people describe”.
Wunsch made his remarks when discussing the fact that the region is likely to represent a public expense in 2021 and 2022 of the equivalent of 70% of its GDP. The remarks were described by Walloon minister-president Elio Di Rupo as “wrong in fact, and disturbing in that they come from a person exercising this function”.
“The Governor of the National Bank is at the service of his country, including the three Regions that make it up,” he went on.
Interviewed by the university of Louvain-la-Neuve magazine Louvains, Wunsch said, “Today, we have a problem of institutional tension and an economic structure in the south of the country which depends on transfers from Flanders. We are probably at 70% of public spending in Wallonia for 2021-2022. That means that we will be closer to a communist regime than to the neo-liberal regime that some people describe. That is not a unique situation, as it exists elsewhere, such as in France. But if we do not realise that the economic structure is not self-supporting, we will be missing a debate on the restructuring of the economy.”
The problem, he said, “is a significant financial issue. The NBB is forecasting a public deficit of 6% for the next two years, which he described as “not sustainable”.
Interviewed later by the RTBF, Wunsch rowed back somewhat.
“The Walloon economy is obviously not a communist economy,” he said, but pointed out that a large share of the region’s public spending is financed by debt or by financial transfers from Flanders.
“You have to be careful and realise that you have reached certain limits,” he said. “The level of public spending is quite comparable to other regions, but the capacity is insufficient. You cannot argue for more public spending without worrying about funding it.”