18 november 2020
20:58
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Europe is accepting, albeit with some concern, the derailed budget and the debt in Club Med Belgium. The Commission is attaching very strict conditions to the 557 million euros of recovery cents that will be ready for our country in 2021.
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The Belgian budget deficit of 11.2 percent this year is the worst figure in the European Union after Spain. In 2021, the deficit will drop to 7.1 percent. Government debt will rise to 118 percent of GDP this year and next. The figures from the European Commission are not only worse than the government proposes in its budget plan for 2021, they prove that Belgium is stuck in Club Med’s group of problem countries.
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The European Commission gave the draft budget for 2021 the green light on Wednesday. The reason is not far off: the corona crisis has suspended strict European fiscal rules until the end of 2021. But Belgium, along with France, Greece, Italy, Portugal and Spain, is being urged ‘to guarantee the sustainability of public finances in the medium term. is in providing support to the economy ”.
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Thanks to the corona crisis Belgium escaped the European penalty bench this spring. In the opinion on the Belgian draft budget for 2021, EU Finance Commissioner Paolo Gentiloni literally writes that ‘the increasing deficit in 2019 is not in line with the European criteria of budget and debt’.
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For 2021, half of the temporary expenditure in the context of the corona crisis is more of a permanent nature: pay rises for care workers, raising minimum pensions and additional expenditure on education. On the revenue side, the Commission lacks adequate data on the fight against tax and benefit fraud, taxation of e-commerce and efficiency gains in the administration.
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Manufacturing funds
The good news for Belgium is that EUR 557 million of EU subsidies from the European repair facility – the main pot from the European recovery fund of EUR 750 billion – are ready for 2021. This European pre-financing has no impact on the budget balance, but those resources are linked to submit a Belgian recovery plan by the end of April 2021 at the latest.
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That recovery plan is a much more problematic exercise than the existing stability and reform programs. Belgium must submit one plan and therefore have all the wishes and projects of the regions and the federal level in one report. The regions are already claiming a multiple of the total subsidy flow which will flow to Belgium from the recovery fund, the EU budget or the Brexit fund.
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Reforms and investment in the recovery plan must be in line with the political priorities of the Union and the challenges identified in the context of the European Semester.
Paolo Gentiloni
EU Finance Commissioner
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Moreover, the European consultation and supervision of those plans is very tight. “Reforms and investment in the recovery plan must be in line with the political priorities of the Union and the challenges identified in the framework of the European Semester,” emphasizes Gentiloni. In concrete terms, Europe will oblige Belgium to use the tackle real pain points. For years, Europe has been pushing for better budgetary work, investments in digital infrastructure, in the renovation of houses, and on the greening of taxation and a better activation of the unemployed.
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A new EU report confirms the inequality at school and in the labor market in our country for people with a migrant background. Europe also demanded in May this year more coordination of care within this country. There will be no country-specific recommendations in May. What Europe wants must have already been ‘agreed’ in the recovery plans.
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