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Ministers meet today to discuss soaring energy prices

Budget minister Vincent Van Peteghem. © Belga

The main ministers of the federal government will start a third day of talks today in an attempt to solve the problem of how to react to the explosion in energy prices.

The subject has already been the subject of talks on Friday and Saturday, as the higher prices are expected to have a serious social impact on people on low incomes, as well as other sections of the population.

The coalition parties have used the occasion to propose solutions of their own. One would involve extending the social tariff paid by those on the lowest incomes; a lowering of excise duties, which would bring down the bill for everyone; and an energy cheque for every household for them to use to pay their bills.

According to reports, the latter proposal, presented by socialist party PS, has met with little welcome from other parties.

One idea that does seem to have some traction, however, is the idea of handing back some VAT to the consumer. If the gas and electricity bill is higher, then the consumer pays more VAT, which is a percentage of the price. That is essentially unearned income for the government, and could be handed back in normal circumstances without representing a real increase in spending.

The trouble with that is – and with all of the proposals on the table – is that the federal government is desperate to make at least €2 billion in budget savings, to make up for the huge cost of measures introduced during the worst of the pandemic.

Any one or more of the proposed measures would make savings harder to achieve.

We are very well aware of the fact that we have to do something about energy prices and that we as a government have to make efforts there,” said budget minister Vincent Van Peteghem (CD&V) yesterday afternoon, before the start of the second day of negotiations.

“We have the idea on the table to return the additional income we have from VAT to the families.” He was unable or unwilling to say exactly how much money is involved.

If the ministers can solve the issue of the energy prices, they will move straight on to budget talks, where time is available, and will almost certainly be required.

Prime minister Alexander De Croo is due to present his government’s police plans for the coming year to parliament on 12 October. Three days later is the deadline for the budget to be presented for approval by the European Commission.

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