Does federal budgetary derailment really come as "no surprise"?

14th December 2011, Comments 0 comments

For Johan Vande Lanotte SP.A, federal Minister of Economic Affairs and Steven Vanackere, federal Finance Minister, the gap in the 2011 budget is not a surprise. They each mean something different, however. Vande Lanotte states that in November he warned the government of current affairs on the basis of European figures, but that they ignored him as he did not have a seat in that government like Vanackere. Vande Lanotte believes steps should have been taken at that stage, but Vanackere maintains they lacked concrete figures. According to Vande Lanotte, the government should have blocked further spending at the end of the year, just like he did when he was Budget Minister during the Verhofstadt government 2003-2007. Guy Vanhengel Open VLD, Budget Minister in the government of current affairs, says the case is exaggerated. The figures released by the National Bank, reflecting a budget deficit of 4.2% of the GDP or 15.5 billion euros instead of the target of 3.6% deficit or 13.3 billion euros, are worst-case estimates, he believes. The actual figures will only be released in January. “In November it was simply expected that a slowdown in growth was imminent and that there would be consequences, but that was that. The impact of accelerated tax repayments was also known and boiled down to a fraction of a percentage point. “Theoretically we could have stopped payments as Vande Lanotte suggests, but what would have happened then? We  would simply have been saddled with it the following year, which would have made 2012 worse!” All politicians unanimously agree, though, that in 2012 the budget will need to be revised each quarter. The derailment of federal accounts in 2011 had no effect on the Flemish budget whatsoever and Flanders will end the year with balanced books,Budget Minister Philippe Muyters N-VA and Minister-President Kris Peeters CD&V of the government of Flanders confirm. Regional dotations to Flanders will remain unchanged, but due to an economic slowdown they will drop by 100 to 200 million euros in 2012, which will demand additional measures. It’s generally accepted in the government of Flanders that 2012 will be a difficult year, starting as early as the first few months when it will be faced with an increase of the index.

0 Comments To This Article