Flanders to adjust its 2012 budget

21st December 2011, Comments 0 comments

Flanders is set to adjust its 2012 budget in Februray next year, based on new figures and parameters. Growth this year was hugely disappointing and inflation cost the government more than expected, lamented the Finance and Budget Minister of the government of Flanders Philippe Muyters N-VA during the annual budget debate yesterday. Like Minister-President Kris Peeters CD&V, he nevertheless stuck to his guns about balancing the budget this year and in 2012. This ambitious plan comes at quite a cost, however, as the dragging economy will force Peeters’ team to seek additional savings of 500 million euros. It is not yet clear which minister will face the most cuts, but as usual the biggest loser will probably be Minister Joke Schauvliege CD&V and her department of culture. The fact that the Flemish budget does not balance comes as no surprise to the opposition, which yesterday referred to a “bubble budget or one which is balanced on paper, but has actually derailed”. Vlaams Belang, Open VLD, LDD and Groen! mentioned the government’s “overly optimistic expectation” of 1.6% economic growth instead of the actual 0.5%. Something else that mystifies the minority parties is Flanders’ refusal to provide financial buffers against “unexpected setbacks” such as the recent liquidation of bank insurer Dexia’s biggest shareholder, the Municipal Holding, which left the Flemish administration with a loss of 265 million euros 225 million in the form of a guarantee and 40 million euros in short-term loans. Muyters denied that possible setbacks have not been anticipated, saying: “Flanders has made provisions for almost 300 million euros, which have been spread to cover various expenses. Does this safeguard us completely? No. Which is why we plan to review the budget in February.”

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