13 October 2008

BRUSSELS -- As the federal government struggles to find between EUR 2 and 2.5 billion to balance 2009's budget, the Flemish Prime Minister Kris Peeters says his government is prepared to take over some expenditure in order to help it balance the budget.

Meanwhile, the Brussels Prime Minister Yves Leterme has reassured Belgians that any measures taken to balance the budget won't have a detrimental effect on their purchasing power.

The government has already found EUR 4.5 billion of the between EUR 6.5 and 7 billion it needs to find to balance 2009's budget.

Finding the extra cash has been made more difficult due to the current financial crisis.

Nevertheless, Leterme says that any measures taken will not affect purchasing power.

"At a time when the economy is sluggish, you should, in contrast maybe to what always happened in the past, ensure that consumer confidence remains in tact and that companies are given support to help them maintain their competitiveness," Leterme told journalists.

However, ministers are remaining tight-lipped about what measures are to be taken.

An increase in the price of the so-called "service cheques" is believed to be one option under consideration by the federal government.

Service cheques can by used to pay for help with household chores such as cleaning and ironing.

The government is sticking by the Economic Planning Bureau's prediction of 1.2 percent economic growth over the next 12 months. However, growth could well turnout to be much lower.

Deputy Prime Minister and Interior Minister Patrick Dewael says that this means that the government will have to keep a closer eye than normal on its income and expenditure.

The government normally holds assessment meetings about the budget every six months. Dewael feels that this is too risky and suggests constant monitoring of the government's income and expenditure.

The budget talks were suspended for a few hours on Sunday afternoon to allow Leterme and Finance Minister Didier Reynders to attend an EU meeting about the financial crisis in Paris.

Regions can take over expenditure
The Flemish government now says that it is prepared to take over some expenditure from the federal government.

Speaking on the VRT's Sunday morning debate programme, De zevende dag, the Flemish Prime Minister Kris Peeters said that although he was not prepared to set aside EUR 500 million of Flemish cash to help balance the federal budget, he was prepared to take other measures to help out.

"The federal government currently offers a whole host of tax breaks to encourage energy efficiency. They cost a total of EUR 100 million per annum. Flanders has also put funding aside for energy grants.

"The question is simple. Can the regions afford to pay for the energy efficiency grants if the federal government scraps them?"

[flandersnews.be / Expatica]