Flanders and Wallonia refuse to accept additional budgetary efforts

12th December 2012, Comments 0 comments

When the eight parties that support the sixth state reform joined around the negotiation table to deliberate about sensitive issues such as the reform of the financing act and the transfer of the budgets linked to the regions’ new powers, another thorny issue made its appearance: the financial contribution of the regions to absorb the 2015 budget deficit. The federal government is looking towards the regions for help as the federal budget will need additional income if the economy continues on its downward slope. The notion of demanding contributions from the regions and municipalities is the result of a recommendation made by the High Council for Finance, in which the regions are represented after all. The 2012-2015 stability programme, which the federal government passed on to the European Commission before summer, states: “In order to achieve a balanced distribution of budgetary recovery efforts, the High Council indicates that the transfer between the entities until 2015 can run up to a maximum financial contribution of up to 1% of the GDP.” This basically implies that the regions will have to cough up an additional 4 billion euros before 2015. Europe wants all governments of the country to make its contribution and federal budget minister Olivier Chastel MR has confirmed this by saying: “We will have to demand this budget from the regions, ed.. There is no reason why the federal government should be responsible for all budgetary efforts. It doesn’t work that way.” The announcement has been met with protest from the budget ministers for Wallonia and Flanders, who insist that they refuse to cooperate. In defence they pretend that they didn’t approve the Stability Programme. The Walloon budget minister André Antoine cdH believes the federal government is unfair: “We did see the programme, but we definitely did not approve it. We have already made so many budgetary efforts that this request seems like a bad joke.” Flemish budget minister Philippe Muyters N-VA agrees, saying: “We have our own budget and it is balanced. We refuse to make an additional effort for the federal level. They can take it to Europe if they like, it makes no difference. We will stick to our decision.” The response from the Brussels region has been somewhat different and according to Guy Vanhengel Open VLD, everybody should work together to secure a balanced budget. “Next year is bound to be an annus horibilis for the budget, with the election campaign in full swing. It could easily degenerate into a nightmare,” seems to be the sentiment within the federal coalition.  

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