Europe grants Belgium budget extension with strict conditions

Belgium has secured an extension from the European Commission to submit its overdue budget plan, but with tough stipulations, De Tijd reports. The new deadline is set for April, by which time the country must present a comprehensive plan, including key reforms, to avoid stricter austerity measures.

Belgium was initially required to submit its budget months ago but requested two extensions. The first, granted in September, moved the deadline to the end of 2024. When it became clear this was unachievable, an additional delay was requested on 26 December.

The Commission’s approval will be formalised this week in a letter from Maarten Verwey, head of the EU’s Economic and Financial Affairs department. The letter will stress that the April deadline is final. If Belgium fails to meet it, the country will be subjected to a rigid four-year austerity framework, in contrast to a more flexible seven-year plan that allows room for reforms and investments.

Negotiations under pressure

The Commission’s firm stance adds urgency to Belgium’s federal government negotiations. To meet the EU’s expectations, an agreement on credible reforms must be finalised by late March. Formateur Bart De Wever, tasked with forming a coalition government, recently had his mandate extended by King Philippe until 31 January. 

De Wever is expected to present a revised draft agreement in the coming days to advance talks for a federal government coalition, involving the right-wing N-VA, liberal MR, Christian democratic CD&V, Les Engagés and socialist Vooruit.

Belgium also risks penalties under the EU’s excessive deficit procedure. In May, the Commission will assess whether sufficient progress has been made. Failure to act decisively could result in fines, restrictions on investment credits from the European Investment Bank or the withholding of funds until the deficit is corrected.

^{King Philippe and formateur Bart De Wever © BELGA PHOTO ERIC LALMAND}