Belgium sees 2011 budget deficit at 3.6%

17th March 2011, Comments 0 comments

Belgium's caretaker government said Thursday it had agreed the major lines of a 2011 budget which sets the deficit at 3.6 percent, better than the 4.1 percent target in its stability programme.

Belgium suffered a budget deficit equal to 4.6 percent of Gross Domestic Product (GDP) last year, slightly better than the 4.8 percent contained in an economic stability programme approved by the European Union.

Belgium has been without an elected government since June 2010 after inconclusive elections but the caretaker Prime Minister Yves Leterme said in December he would compile a 2011 budget beating the stability targets.

"All the elements are on the table for a 2011 budget based on a deficit of 3.6 percent of GDP," Leterme said after a ministerial meeting, according to a Belga news agency report.

To cut the deficit without increasing tax revenue, the government expects higher dividend payments from the banks which it bailed out at the height of the global financial crisis in 2008 and from public companies such as Belgacom.

Finance Minister Didier Reynders told RTBF radio that a 3.6 percent deficit would mean an end to the steady increase in the total public debt.

Belgium has come under pressure on the markets in recent months as investors have demanded higher rates of return to buy its bonds although its position is much stronger than other eurozone members whose debt problems have tainted the bloc as a whole.

© 2011 AFP

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