Banks are refusing to finance cash-strapped towns in Belgium’s French-speaking south as avowed Marxists take power in local government.
ING, Belfius, BNP Paribas Fortis and CBC have declined to participate, either partially or completely, in funding rounds for seven towns — Liege, Charleroi, Mons, Ath, Namur, La Louvière and Verviers — according to local press.
The southern, francophone Walloon region has struggled to raise €356 million for towns over the course of this year, financial newspaper L’Echo reported. ING agreed to provide a €82 million loan while insisting that it maintained no exposure to the seven above-mentioned towns.
State-owned Belfius was called in by the region to “fill the holes” but it too has had cold feet, according to the report: while around €30 million will be provided to keep Ath, Namur, La Louvière and Verviers afloat, Belfius has refused to put up any money for Liege, Charleroi and Mons, which together need around €200 million.
The dire financial straits of Liege and Charleroi, which have for decades suffered post-industrial decline linked to the collapse of traditional coal and steel industries, were said to be behind this decision.
As for Mons, a town near the French border, the reason is political. According to an unnamed source quoted by the newspaper, Belfius justified its refusal to support Mons by the fact that the Belgian Workers’ Party (PTB), which is inspired by the writings of Karl Marx, has entered into the local government in a coalition with Belgium’s francophone Socialist party and the Greens following elections gains in October. “This was an exclusive condition of Belfius, no funding for Mons with the arrival of the PTB in the new municipal majority”, the source is quoted as saying. “It is understandable that a bank like Belfius does not trust a college composed of the PTB,” said another.
Belfius is reported to be heavily exposed to Mons already.
“We cannot comment on individual or specific cases,” Belfius spokeswoman Ulrike Pommee told Brussels Signal.
“However,” she continued, “it is important to emphasise that all credit applications are always evaluated according to the same objective financial, economic, and exposure criteria, based on a rigorous risk framework that serves as a reference for each decision.”
This is not the first time that Belgium’s financial sector has taken fright at the rise of the Workers’ Party. In 2022 there were concerns that the Workers’ Party would become Wallonia’s largest, thereby entering the regional government, an eventuality that banks said would damage the sustainability of the region’s already sky-high debts.
The PTB did well in the October elections, scoring above 20 per cent in towns in Wallonia, Brussels and Flanders. It is one of Belgium’s only national, bilingual parties, and while its traditional base is in the south, it is also progressing in the Dutch-speaking north, in particular in the industrial city of Antwerp.
The party, which has also joined ruling coalitions in at least two local Brussels governments, explains on its homepage that it focuses on “people first, not profits”.
It describes itself as a “flexible, worker-oriented party, grounded in Marxist principles and aiming for socialism”.
