The tackling the coronavirus crisis has cost the authorities in Belgium 16 billion euro

The coronavirus crisis has forced public finances still further into the red. Figures released by the National Bank of Belgium show that last year the budget deficit rose to 9.4% of GDP.  

Measures to protect families and businesses from the economic consequences of lockdown and other coronavirus-related restrictions have come at a price. The direct measures such as the widespread use of the system of temporary unemployment, alone have set the public coffers back to the tune of an estimated 16 billion euro.

Twice a year (in April and October) Eurozone countries have to submit figures to the European Commission outlining their budget deficits and debt levels. Belgium has told the European Commission that it estimates that the budget deficit for last year is 9.4% of GDP. 

A combination of higher expenditure and lower revenue both of which are a consequence of the coronavirus crisis are to blame for the sharp rise in the country's budget deficit. While revenue was down by almost 10 billion euro, expenditure rose by 22 billion euro. 

The extra expenditure can for the most part be attributed to direct and indirect measures taken by the authorities to prevent the economy from contracting due to the coronavirus crisis. The direct measures alone are estimated to have cost “at least 16 billion euro”, the National Bank of Belgium says. 

There is some good news for the public finances though as interest rates have continued to fall with even negative interest rates on some 10-year-loans.

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