Belgium has managed to break into the so-called “Club Med” – Mediterranean countries with higher government debt to GDP ratios – and has surpassed Portugal in such terms.
Wouter Vermeersch, a financial specialist with the right-wing Vlaams Belang party, told Brussels Signal: “Despite repeated calls from Europe to rein in expenditures, our nation now faces the possibility of being placed on the ‘European penalty bench’ during the European Presidency.
“When the spotlight shines on Belgium, all of Europe will witness Prime Minister [Alexander] De Croo, in essence, as an emperor with no clothes,” he said.
In the European Union, there was an overall slight drop in such government debt, down from 90.3 per cent at the end of the second quarter of 2023 to 89.9 per cent at the end of the third quarter of the year, Eurostat reported on January 22.
Compared with the third quarter of 2022, the EU government debt to GDP ratio decreased even more in the Eurozone, coming down from 92.2 per cent. In the entire EU, the debt is at 82.6 per cent of GDP.
There are notable differences across Member States. Countries such as Belgium and Latvia added about 2 per cent to their government debt, while Cyprus, Luxembourg and Portugal recorded a reduction of 5.6 per cent, 2.6 per cent and 2.5 per cent, respectively.
The change in fortunes for Portugal and Belgium means the latter joins Club Med countries – those with historically “high” government debt.
Greece leads the negative field with a government debt to GDP ratio of 165.5 per cent, followed by Italy at 140.6 per cent, France on 111.9 per cent, Spain coming in at 109.8 per cent – and now Belgium on 108 per cent.
Portugal is rated a little better than that, at 107.5 per cent.
Countries with the lowest debt in Europe are Estonia with 18.2 per cent, Bulgaria on 21 per cent and Luxembourg at 25.7 per cent.
They are followed by Sweden, which recorded 29.7 per cent and Denmark with 30.1 per cent.
The average rate in EU countries is just over 80 per cent. The official debt to GDP target in the bloc is 60 per cent of GDP.
— EU_Eurostat (@EU_Eurostat) January 22, 2024
Wouter Beke, MP for Belgium’s Christian Democratic (CD&V) party, which is part of the governing majority and soon-to-be its list leader in the European elections, told Brussels Signal: “The figures in the Eurostats report teach us nothing new: the Belgian budget has been sick for years.
“The proposal I already made in the federal Parliament is that we also make binding budgetary agreements at the Belgian level, among the various entities in our country, the regions and the federal Government.
“We will otherwise fail to achieve what we promised to Europe. Belgium needs to reform in several areas: in the labour market, pensions and taxation,” Beke concluded.
Sander Loones, a budget specialist in the Belgian Parliament for the centre-right N-VA party, told Brussels Signal that, with the opposition, reactions are more harsh: “It has come to a sorry state. Even the lax Club Med countries are outperforming Belgium,” he said.
“Greece has a better budget than Belgium, as confirmed by the European Commission. The funding of pensions is more securely arranged in France than in our country, as indicated by the Planning Bureau.
“And now, Belgium appears to be overtaking even Portugal in national debts,” he lamented.
“The De Croo Government poses a direct threat to our prosperity. While the national debt is decreasing in all high-debt countries, it continues to rise even further in Belgium.
“And who will have to foot the bill once again? Exactly, the Flemish people today and the Flemish people of tomorrow,” he continued.
“De Croo seems solely focused on his personal career planning, and that evidently comes at a cost …”
Vermeesch went on to say: “Despite the Prime Minister’s declaration, stating that we were ‘on course towards meeting the Maastricht criteria’, the reality is quite the opposite: our country is set to surpass double the Maastricht criteria.
“The national debt is teetering on the brink of further escalation, potentially spiralling into an uncontrollable snowball effect regarding the interest, something the Court of Audit already warned for in the Wallonia region.
“The legacy of this Government is poised to be one of hardship for future administrations and generations. Our deficits and debts have reached an unsustainable level,” he said.
“Under this Government, both taxes and governmental expenditures have continued their upward trajectory.
“Regrettably, the only achievement of De Croo seems to be proving that Belgium has become impossible to reform. Comprehensive reforms in the labour market, pension system and fiscal policies are imperative to steer our nation back on course.
“Yet, implementing meaningful reforms has become impossible. A testament to the lamentable state of affairs in Belgium,” Vermeersch said.