The American rating Bureau Standard and Poor’s has modified its rating of the Brussels capital region from A+ to A with a negative outlook. The lowering of the rating had been expected. In March of last year, the rating was already reduced from AA- to A+. Standard and Poor’s rating scale goes from AAA to D.
When the Brussels-Capital Region’s rating was modified downwards last March, the regional government had promised to reduce the region’s debt ratio to below 210% and in time to reduce the structural deficit from 1.5 billion euro to zero.
However, In the absence of a fully-fledged government, a caretaker government (the outgoing government) is in charge in Brussels. However, this doesn’t have full powers and is unable to draft a new budget. Instead, it has to work with so-called “provisional 12ths”, monthly sums that are the equivalent of 1/12 of last least budget. In 2024 the Brussels-Capital Region’s budget deficit rose from 1.3 billion to 1.5 billion euro. A budget deficit of 1.6 billion euro is expected this year.
It’s unclear if the rating downgrade will restore urgency to the formation of a new regional government in Brussels. Some experts have suggested that this could be the case, others fear that the political stalemate is so great that even Standard & Poor’s will not be able to get Brussels coalition talks back on track.