After a long night of negotiations, the federal inner cabinet reached agreement of the budget on Thursday afternoon. The deadline set by the Federal Prime Minister Alexander De Croo (Flemish liberal, photo above) to reach an agreement before the Easter holidays has been met. The government intends to reduce the budget deficit by 1.75 billion euro. This is slightly less than target initially set by Mr De Croo.
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Federal Government reaches agreement on budget
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The talks on the budget between the key ministers in Belgium’s Federal Government had been ongoing for past few weeks. Differences of opinion between the various parties that make up the federal coalition on how and where savings could and should be made meant that reaching an agreement was anything but easy.
However, a breakthrough finally came after a long night of negotiations. Just a day ahead of the deadline set by Mr De Croo the budget measures were announced on Thursday afternoon.
One bone of contention had been Mr De Croo’s stated aim of reducing the budget deficit by 1.8 billion. This figure relates to the total budget deficit of all tiers of government (federal, regional, language communities).
Currently, this stands at 27 billion euro. In order to achieve his stated aim of reducing the budget deficit by 1.8 billion euro, Mr De Croo proposed foregoing the final phases of the planned increase to the minimum pension. However, this proposal met with fierce opposition from the socialists and greens in the federal coalition.
Concessions
However, there has now been some give and take on both sides. VRT News’ political editor Johnny Vansevenant says “The government will reduce the budget deficit by 1.75 euro billion. The last phase of the increase in the minimum pension remains largely unchanged, which indicates a compromise from both sides. Only the final tranche for those on the lowest incomes was scrapped.”
Johnny Vansevenant reports that there are around 70 measures that will be taken to reduce the deficit. “A total 200 euro million in unused reserves are to be taken from the healthcare sector. Multinationals will be taxed at a minimum 15%, bringing in just over 300 million euro and there will be another increase in excise duty on tobacco products.”
Measures also include stricter checks on the unemployment. Anyone who does not accept a job that is suitable for them once they have retrained will lose their allowances. The so-called “sickness pension” for people who fall ill and are declared unfit to work at young age will also be scrapped.