13 October was supposed to be the big date of the new political season. That day, Prime Minister Bart De Wever was due to deliver his traditional State of the Union address to the Chamber. Two weeks later, the lectern is still waiting: with no agreement within the Arizona coalition (N-VA, MR, Les Engagés, Vooruit and CD&V), the speech has been postponed indefinitely.
€10 billion to find by 2029
The stakes are well known: to find around €10 billion in budgetary effort by 2029. The coalition agreement sets the rules of the game, with one ninth of the effort from new revenue and eight ninths from spending cuts. Bart De Wever immediately ruled out the option of provisional twelfths, arguing that the seriousness of the budget situation and developments on the financial markets do not allow it.
The markets, in fact, are weighing in on the discussion. On Monday, the Belgian state raised funds at an average rate of 4.06% on linear bonds maturing in 2033 and 4.74% on securities running until 2040. And the upcoming review by rating agency Standard & Poor’s adds to the pressure.
VAT: first round to the MR
The first stumbling block came from the French-speaking liberals. Georges-Louis Bouchez flatly opposed a general VAT increase from 21% to 22%, and the idea was taken off the table. More targeted increases are still being mentioned, however, according to Het Laatste Nieuws: flowers, plants, fertiliser, firewood, and even concert and show tickets.
Healthcare, round two
Last Wednesday, it was Vooruit’s turn to say no. Deputy Prime Minister Frank Vandenbroucke refuses to rush into an agreement he considers unbalanced. In his sights: the planned savings in healthcare, such as a higher patient contribution for GP visits, fewer people entitled to increased reimbursement, a brake on the growth norm for the health budget or a further tightening for the long-term sick. An earlier version of the note provided for more than €4 billion in savings in this sector.
The kern meeting ended at around 10.30 p.m. with an open disagreement, publicly acknowledged by MR Deputy Prime Minister David Clarinval. The Flemish socialists, backed in substance by Les Engagés and to a lesser extent by CD&V, are demanding a more visible effort from “the broadest shoulders”. On the table: tighter rules for certain management companies, measures on private foundations and higher taxes on owners of multiple properties, with an estimated yield of around one billion. Too little for the centre-left, already the limit for N-VA and MR.
De Wever raises the stakes
On Thursday in the Chamber, the Prime Minister defended a proposal he considers solid, using a medical image: a wound that is becoming infected and must be disinfected as quickly as possible, even if it stings, or else face amputation.
What now?
Talks are continuing at cabinet level during the parliamentary recess, before a return to the kern. The real deadline is the end of October: beyond that, it would become very difficult to get a budget voted before 1 January. Behind the scenes, a measured optimism persists. At this stage, no one seems to have an interest in triggering a crisis.
Sources : RTBF, 21News, 21News, RTBF, La Libre / Belga
Photo: Michel wal / CC BY-SA 3.0, via Wikimedia Commons
