"We'll have to save 2 billion extra"

Royal Mediator Johan Vande Lanotte is today chairing a joint meeting of the leaders of the Flemish parties involved in the political talks for the first time since he issued his proposals on the future funding of the regions and on the transfer of new powers to the devolved authorities. The presidents of the Flemish nationalists, Christian democrats, socialists and greens are all taking part.

On Thursday the former Belgian Deputy Premier met with the leaders of their Francophone counterparts. Among the many matters raised they requested further clarification of Mr Vande Lanotte's proposals for a new finance law.

There have been many reactions since the outlines of the Royal Mediator's proposals became clear. Most players have adopted a "wait and see" approach seeking further clarification and asking for certain changes.

The reaction from Flemish Prime Minister Kris Peeters (Christian democrat) has been the most vehement. In an interview with the daily De Standaard the Flemish leader warned that the mediator's proposals would have ill effects on Flanders. Mr Peeters told the daily that the finance bill that Mr Vande Lanotte was proposing could confront the regions with new budgetary challenges.

The Flemish Premier warned that his administration would have to introduce further savings measures that could total 2 billion euros as a result of the introduction of the new law. Mr Peeters suggests that the federal authorities will get the regional authorities to pay for making the federal finances sound.

"Only 90% of the funding for the new powers is being transferred. This means that the effort we made between 2009 and now will have to be repeated. In addition there are also tasks that the regional authorities today fulfil, but which are paid for from the federal coffers. This cash will disappear and we will have to pay a further 0.4 to 1 billion euros. If this goes ahead, we will have to consider the budgetary leeway that we thought we had in 2011."

"It's not on that we make deep cuts and that the federal authorities do not have the same ambition: to post a balanced budget as soon as possible. It's unacceptable that the deficit is sorted by confronting the regions with new budgetary challenges."

Mr Peeters repeated his administration's demand for major state reforms and added: "Everybody wants a solution and I don't want to increase the pressure unnecessarily, but as Flemish PM I am also responsible for the budget and I cannot keep my peace. I am worried."

"It's only one billion"

Responding to Mr Peeters Royal Mediator Johan Vande Lanotte says that he thinks it’s normal that the devolved authorities economise in new fields in which they are given jurisdiction. He denies that the figure is 2 billion. It’s only 1 billion, Mr Vande Lanotte says.

Party leaders cross their t's

In the course of Friday the four Flemish party leaders taking part  in the talks issued a remarkable communiqué in which they stressed that they were negotiating with Royal Mediator Johan Vande Lanotte without a hidden agenda. They also agree that under the mediator's proposals Flanders will only have to make extra savings worth one billion euros and not the two billion suggested by Flemish PM Kris Peeters.