Brussels (Brussels Morning Newspaper) – The European Commission set another deadline for Belgium to present its budget plan for 2025. It is now set until the end of April.
The Belgian government was supposed to submit its budget months ago, but it sought two extensions from the EU. In September, the government requested for the deadline to be delayed until the end of 2024, which the EU Commission consented to at the end of November. The country’s new permanent representative to the European Union, Peter Moors, then dispatched another letter on 26 December aiming for a further extension.
As reported by De Tijd, the government has now been granted a rescue from submitting its budget plan to the European Union. The European Commission will send a note this week authorizing it. The latest stringent deadline has been fixed for the end of April, by which point the country must present the plan.
What are the key reasons behind Belgium’s fiscal challenges?
Belgium is facing acute budgetary strain, which comprises a rising deficit, high public debt, and political instability. The European Commission issued alerts on the country’s fiscal health, while it is expecting a budget deficit of 4.7 percent of GDP under present policies up to the end of 2025.
Belgium is going to be at par for its 2024 budget at 4.4% of GDP, and this is predicted to rise further to 4.7 percent of GDP as it approaches 2025. This position is expected to become so because structurally, increasing expenditures are recorded, especially the pension outlays and interest in government debt.
Country public debt as a percentage of GDP is to decline by 0.2 percentage points between 2023 and 2024, 105.2% to 105.0% of GDP, but rising deficits are bound to send it further up to 106.7% of GDP in 2025. It is because of this reason that Belgium is far above the Maastricht criteria. It gives the rule that EU member states should be below 3% of deficit and debt below 60% of GDP. This means that the federal budget decisions that were to be crucial for forming the new government are delayed, as Belgium requested the European Commission for an extension to submit its budget plans, thus complicating its efforts in handling fiscal challenges effectively.
