Budget Minister warns: cupboard is bare!

The Federal Budget Minister, Guy Vanhengel (Flemish liberal), believes that drafting the 2012 budget will be an extremely difficult undertaking because federal coffers are completely empty.

Mr Vanhengel was speaking in the weekly Knack.

It remains unclear who will get the arduous task of drafting next year's budget. Formateur Elio Di Rupo (Francophone socialist) has agreed with caretaker Prime Minister Yves Leterme (Flemish Christian democrat) that if the government formation talks don't lead to agreement on the Brussels Halle Vilvoorde issue before 10 September, Mr Leterme will get the job.

Mr Vanhengel paints the scale of the problem: "In 2008-2009 Belgium experienced negative economic growth. Revenue was down, but the federal authorities had to transfer considerable amounts on to the regions and communities and the social security system. It was common knowledge that the financial room to manoeuvre would be very small. The High Council for Finances earlier issued several warnings."

"In comparison with other countries, we've done a lot of work. We want to reduce the fiscal deficit to 3.6% of national output this year and to 2.8% in 2012. It's an ambitious goal. The caretaker administration has done its utmost to perform better than expected, but we now face a moment of truth."

The Budget Minister points to the consensus of limiting the budget to 2.8% next year, but insists that this will be a difficult exercise and that the debate on how this goal should be achieved, should start as soon as possible."

Mr Vanhengel believes that Belgium's devolved authorities, the regions and communities, should contribute towards this federal objective. In the past the Flemish Government has repeatedly made it clear it did not intend to follow this road.

Knack: Guy Vanhengel: ‘De kas is helemaal leeg’