Matthias Diependaele reacts to reduced Flemish credit …

Credit rating agency Moody’s has lowered the creditworthiness of Flanders. Minister of Finance and Budget Matthias Diependaele (N-VA) says he is “proud of the backing that we have provided to our entrepreneurs from Flanders”, and is working on a proposal to tackle the Flemish debt ratio.

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The rating agency Moody’s lowered the creditworthiness of Flanders from Aa2 to Aa3. The rating of Wallonia and the French Community was also cut. Moody’s refers to the significant negative pressure from the coronavirus pandemic and the likely permanent impact the crisis will have on the deficits and debts of the affected regions.

• Walloon government debt will not disappear by itself

In a response, Flemish minister Diependaele says that the Flemish government has taken its responsibility during the corona crisis and has made the necessary expenditure to support the economy and society. ‘This tastes bittersweet. We can be proud of the backing that we have provided to our entrepreneurs from Flanders. In doing so, we kept our economy on track and we also receive recognition for this. But these additional expenses inevitably brought extra debt with him. As a result, our rating is being adjusted’.

Diependaele is now working on a proposal to tackle this debt ratio. He will join the government this week or the week after. ‘Healthy public finances remain a priority for me.’

In normal times, the Flemish government aims for a debt ratio of around 65 percent of receipts. But without adjusted policy, that debt ratio threatens to flirt with the 100 percent limit by 2026. Diependaele therefore wants to slow down the rising trend and eventually reverse it again towards 65 percent.

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