The European Commission warned Belgium about its public finances this Wednesday, particularly the high level of its debt, which has not been significantly reduced.
However, an excessive deficit procedure will not be imposed on the country. The Commission feels that Belgium’s case is “too borderline” to draw conclusions with any certainty, commented Economic and Financial Affairs Minister Pierre Moscovici.
The next federal and regional governments will need to take into consideration a number of recommendations by the EU executive when putting together their future budgets.
Under the European stability and growth pact, EU member States are required to show proof of healthy public finances and to meet two criteria: their budget deficits must not exceed 3% of gross domestic product (GDP) and the combined debt of the State and public agencies must not be higher than 60% of GDP.
When the public debt exceeds the 60% mark, they need to commit to gradually reducing it.
A State that fails to comply with these rules may face an excessive deficit procedure, launched by the European Council based on the recommendations of the Commission. The procedure requires the country concerned to submit a plan of envisaged corrective measures and policies, accompanied by a timeline for implementing them.
Euro-zone countries that do not follow the recommendations formulated are liable to a fine.