Flemish budget 550 million in the red

The Flemish government has reached an accord on the budget review for 2015. The Flemish budget will not be balanced and will see a deficit of 550 million euros. The aim is to reach a balanced budget by 2017, one year sooner than demanded by the High Council for Finances. The budget deal had something in it for everyone, and included a measure to make real estate donations cheaper.
Geert Bourgeois (r) with Education Minister Hilde Crevits.

The Flemish PM Geert Bourgeois (N-VA, photo) had repeated on various accounts that he favours a balanced budget, but gave in after some setbacks made it almost impossible to avoid going in the red. A lot has happened since last September's budget deal.

The sluggish economic recovery and unusually low inflation rates left a gap of 512 million. Changes in the system of how tax payers' money is being divided between the federal and regional level also meant a 400 million euro setback. All this made it a mission impossible, taking into account that 1.15 billion euros had been proposed in spending cuts already.

Donate a house

The Flemish government introduced a couple of new measures to cut the deficit to 548 million coming from 880 million. A lower tax on real estate donations should yield 57 million euros, a suggestion made by the Flemish liberals of Open VLD.

The tax is at present so high that it deters people; a lower tax should make more donations possible and bring in more cash. However, the bonus is linked to a green effort: it will especially apply when the house that is being donated, is being renovated and properly insulated. There are also a couple of one-off measures, such as the sale of empty government buildings.

The Flemish nationalists of N-VA wanted to continue to invest in the economy, while the Christian democrats of CD&V did not want any cuts in the social security and education department. In the end, there was something in it for everyone.

The Flemish Education Minister Hilde Crevits (CD&V) called it a good budget deal that provides chances for the future. "In 2015 we will keep on investing in the people and in the economy."