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The federal budget is out of control: the deficit has increased by 3 billion in a few months

The federal budget is out of control: the deficit has increased by 3 billion in a few months

The Monitoring Committee expects the federal government’s budget deficit to rise to 23 billion euros next year. This is 3 billion euros more than was expected in July.

The Monitoring Committee – a group of senior civil servants – is once again confronting the De Croo government with the facts. From next week, discussions on next year’s budget and election year 2024 will begin. But there is not much margin for further easing energy pills for citizens and businesses in 2023.

If policy remains unchanged, the federal government will face a budget deficit of €23.14 billion, or 4 percent of GDP, next year. This is evident from the report published by the Monitoring Committee. This is 3 billion euros more than the figure that was still taken into account in July. The deficit for this year is estimated at 19.6 billion euros.

Expensive energy measures

The skyrocketing inflation and the extension of the energy package to March next year pushed the budget lower than expected in July. Due to high inflation, benefits and wages for civil servants will have to be adjusted in the coming year more than previously thought. While the watchdog previously assumed that high inflation would cost De Croo’s government an additional 597 million euros next year, it is now taking an amount of 1.7 billion euros into account.

How much energy discount do you get from the De Croo government?

What also adds to the bill is the extension of a number of energy measures, such as lowering the value-added tax rate on gas and electricity, lowering tax levies on gasoline and diesel, and expanding the social rate target group. . Extending these measures until the end of March alone would cost 1.48 billion euros.

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The energy discount of just under 400 euros that the de Croo government decided last week has also already been taken into account. Expenditures – around 1 billion euros – are still included in this year’s budget. But here and there it has already been suggested – certainly in the left corner – to implement measures in January and February. This immediately means additional spending on top of next year’s 23 billion deficit.

On the other hand, De Croo government depends on the contribution of surplus profits to offset part of the costs. Energy Minister Tine van der Straiten (Groen) is being considered to submit a proposal on the subject by the end of September.

23 billion euros is just the deficit of the federal government. To do that, Areas still deficit The local authorities are calculated to arrive at the total Belgian deficit. The Follow-up Committee did not provide a new figure on this subject. Rough figures from the Planning Office two weeks ago showed the global Belgian deficit at around €31.5 billion.

So Croo & co knows what to do in the coming weeks. The government agreed to put in an annual effort of 0.2 per cent of GDP – just under €1 billion. Moreover, additional effort can be made depending on economic growth. But no one expects this ideologically divided government to make another leap toward balance.

“Although setting the budget is difficult, we will have to do everything in our power to reduce the structural deficit,” Minister of State for Budget Eva de Bleecker (Open VLD) answers the report. Structurally – without taking into account non-recurring expenditures and economic fluctuations – the deficit remains 17.4 billion euros. Serious structural reforms are needed to reduce this, but pension reform has already proven that the de Croo government is having a hard time doing so. The heads of the ruling parties themselves described the reform as very meager.

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