New "heavy" budget talks coming up

The federal government has to look for an additional 2 billion euros in spending cuts and austerity measures to keep the Belgian budget on track. This is mainly because the estimated revenues are much lower than expected.

Experts working for the Finance Department of federal minister Johan Van Overtveldt (N-VA) had calculated how much the government could expect in revenues, but these estimations turn out to be wrong. This 'mistake' has caused a gap of 1.4 billion.

On the one hand, VAT and labour tax revenues are 400 million below estimations. One the other, businesses have prepaid 1 billion less in taxes than what had been predicted by Mr Van Overtveldt's office. It turns out that companies are no longer motivated to pay taxes beforehand, as rent is at a historic low.

Johan Van Overtveldt blames the economy for one part, but will also look into why his department made these mistakes. "I will take measures if necessary."

"Heavy talks coming up"

The federal government also spent more cash than expected. Some 500 million euros extra will have to be transferred to the regions, and at the same time social security expenses ballooned, especially in the area of pensions and health insurance.

The Deputy PM Alexander De Croo (Flemish liberal) admitted that "there are heavy talks coming up" to keep the budget on track. This could trigger new tensions within the coalition government where every party has different interests.

Another Deputy PM, Didier Reynders of the Francophone liberals, told reporters this morning that "it will be hard to have a balanced budget by 2018 as planned. You also have to calculate extra expenses due to the refugee crisis and the battle against terror."