In its annual budget review, the Social-Economic Council of Flanders (SERV), in which the trade unions and employers have a seat, warns against the rapidly rising Flemish debts. In 2019, the debt amounted to 20 billion euros. By 2027, the pit will grow to 49 billion, or a debt ratio of 78.5 percent – the debt ratio expresses the debt in relation to the income of the Flemish budget.
This year, the debt ratio has already reached 69 percent, which means that the Flemish government has failed to meet its own target that debt should not exceed 65 percent of income.
Flemish Budget Minister Matthias Diependaele (N-VA) acknowledges that the rising debts are a concern, but also points to extenuating circumstances. The deficits are mainly due to expenditure due to two crises in quick succession, corona and the energy crisis. Moreover, he points out that Flanders takes the concerns seriously: in a previous review, the SERV forecast that Flanders would reach a debt ratio of 96 percent in 2027.
Oosterweel
The report does not only bring out the red ballpoint pen. The SERV emphasizes that the Flemish government is well on its way to presenting a balanced budget by 2026.
If policy remains unchanged, the budget deficit will fall from 3.12 billion this year to 1.93 billion in 2024. Two years later, the budget is expected to be close to balance, with a deficit of 57 million.
There is an important caveat to this: Flanders excludes the enormous costs for the Oosterweel wharf and the Flemish Resilience recovery program from these budget targets. In the case of Oosterweel, the government has always defended that decision by stating that it is an important investment that will yield a lot of money in the future.
The fact that the budget is gradually getting out of the red does not mean that the portfolio can suddenly be completely opened during the budget talks in September, says Diependaele. “I will strongly argue in September for further control of our expenditure,” says the N-VA member.
This immediately sets the tone for the conversations about the crisis in childcare. N-VA wants to keep its finger on the purse strings, but Welfare Minister Hilde Crevits (CD&V) will probably ask several hundred million to help the sector – CD&V chairman Sammy Mahdi even wants more than an extra billion euros to go to go to childcare.
