The Belgian government, currently operating without full executive powers, is facing pressing deadlines as it prepares to submit its "plan budgétaire et structurel à moyen terme" covering the years 2025 to 2029. Initially due on September 20, 2023, the submission of this budgetary plan has already been extended multiple times, with the latest deadline set for mid-March 2024 by the European Commission.
According to Balazs Ujvari, spokesperson for the Commission, the extension allows for some flexibility: "A limited additional delay in the presentation of the plan will not harm the quality of macroeconomic surveillance and budgetary discipline". This flexibility is particularly significant as Belgium navigates serious challenges including its budget deficit, which exceeds the 3% threshold of GDP mandated by EU rules.
The absence of a functioning government has complicated Belgium’s ability to formulate and present its budgetary plan. This year, the country requested another extension on December 26, following initial delays stemming from political gridlock. The new deadline set by the Commission grants Belgium six weeks to finalize its plan, allowing time for review until the end of April 2024.
Included within the budgetary framework are requirements to address the country’s excessive fiscal deficit. The EU had previously indicated the need for Belgium to adhere to corrective measures over four years, projecting a required reduction of the deficit to 3% by 2027 and below 3% by 2028. This adds urgency as the government of Bart De Wever must outline specific measures to eliminate the excess deficit.
On November 7, 2023, the Commission recommended to Belgium a four-year corrective path, setting the expectation for how the government should approach its fiscal strategy. A structural budgetary plan is necessary, as it will not only inform Belgium's approach to fiscal reform but also regulate its standing within the larger European community.
Belgium has struggled with its budgetary management and has been criticized for lagging behind its European counterparts. With the pressure of adhering to EU budgetary governance, the government must now show credible evidence of reform initiatives and investments aimed at sustainable public finances over the coming years.
According to estimates from the monitoring committee, Belgium’s total efforts to rectify its fiscal imbalance could reach as high as 28 billion euros. A proposal for extending the adjustment period from four to seven years—if justified by the budgetary plan—could ease the fiscal burden on the country and demonstrate Belgium's commitment to rectifying its public sector finances.
The Commission's involvement and flexibility hint at potential pathways to avoid severe consequences, but these must be underpinned by effective, credible strategies from Belgium's government. The coming weeks will be pivotal as they not only shape Belgium’s immediate fiscal health but also its long-term standing within the European Union.
With the mid-March deadline looming, all eyes are on Belgium as it strives to construct and present a compliant, strategic budgetary plan. Failure to do so may see the country subjected to increased scrutiny from EU institutions, making it imperative for policymakers to act swiftly and effectively.
The residents of Belgium await the government's next steps with anticipation—how the administration will tackle not just the numbers but the broader economic health of the nation. This deadline is consequential not just for the government, but for the economic well-being of Belgian citizens moving forward.