Belgium needs to save to ease EUR 3.5b deficit
The government needs to take urgent matters as the federal budget heads towards a deficit of EUR 3.5 billion, says vice-governor of the National Bank of Belgium.2 September 2008
BELGIUM -- According to vice-governor of the National Bank of Belgium Luc Coene, the federal budget is heading towards a deficit of EUR 3.5 billion.
In June, the Belgian National bank estimated a federal budget deficit of about EUR 2.8 billion, or 0.8 percent of the Gross National Product.
However as prospects look more sombre, the National Bank now expects a budget deficit of 1 percent of the GNP or EUR 3.5 billion.
Luc Coene warns time is of essence and that the government needs to take urgent measures.
"Politicians are embroiled in the communal discussions and are forgetting about the social-economic issues. The government must intervene however, urgently, or we will slide back into the problems we had in the 1970s," says the vice-governor.
An increase in tax burden to generate more income for the government is not an option.
According to Coene, only one thing can be done: save. The government must limit its expenditures otherwise there will not be any money to boost purchasing power, nor to improve Belgium’s competitive position.
In late September, the government will draw up the 2009 budget. Foreign Minister Karel De Gucht on Monday said that it promises to be a difficult task.
[flandersnews.be / Expatica]