The chairman of the Liège PS, Frédéric Daerden, sounds the alarm. The French Community – or the Wallonia-Brussels Federation, as the French-speakers say – is teetering on the brink of financial abyss. The seventh state reform will be about the pennies more than ever.
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The corona crisis was blinding. Suddenly, deficit spending was the right thing to do. Budget deficits and debts no longer mattered. But that was an optical illusion. The IMF is urging our country to put its budgetary order back in order. An ideological clash will arise in the De Croo government about this in the autumn. The socialists also want to continue the expenditure policy in post-corona times, while the liberals believe that the consumption should gradually be brought back to the bargain.
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The essence
- According to Budget Minister Frédéric Daerden, the financial situation of the French Community is not sustainable.
- Deficits and debts are rising rapidly throughout French-speaking Belgium. The expenditure is matched by insufficient receipts. Transfers from Flanders are also decreasing.
- As a result, the PS has become a requesting party for a seventh state reform, but apparently the French-speaking socialists first want to refuel at Vivaldi at the federal level.
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The seventh state reform, which the six parliaments in our country are dealing with in the Senate, will also be about the money. During the corona crisis, the fragmentation of health policy was exposed like an open nerve, but the situation is also becoming untenable financially. The bills are no longer correct.
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unsustainable
Frédéric Daerden (PS) made this clear as Minister of the Budget in the French Community government. “As it is today, the situation of the Wallonia-Brussels Federation is not sustainable,” he said during a parliamentary debate on the 2021 budget, which mainly revolves around French-speaking education in Wallonia and Brussels.
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As it is today, the situation of the Wallonia-Brussels Federation is untenable.
Frédéric Daerden
Minister of the Budget in the French Community Government
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“The situation is not good and it is not improving,” said the PS leader without batting an eyelid. After the historical deficit of 1.9 billion euros in 2020, the French Community is again looking at a deficit of one billion euros this year, he said.
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According to Daerden, this budget slippage will repeat itself year after year, causing the debt of the French Community to rise to 15 billion euros by 2024, which amounts to a doubling in this term of office. Add to that the debts of Wallonia and Brussels, and it is clear that French-speaking Belgium is in financial distress.
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Increasing debt
According to figures from the National Bank, Walloon debts have already risen to 27.7 billion euros in 2020, which is one billion more than in Flanders. This concerns no less than 191.2 percent of the Walloon income, while the Flemish debt amounts to 51.3 percent of the receipts. The debts of the Brussels-Capital Region also amount to 8.8 billion euros, which corresponds to 180 percent of the receipts.
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Flemish debts will also almost double by the end of the legislature to EUR 53.2 billion. That corresponds to 88.7 percent of the receipts and remains somewhat manageable. For French-speaking Belgium, the financial situation has become untenable.
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In the coming years, the debts in French-speaking Belgium will only increase, while the transfers from Flanders to Wallonia and Brussels will decrease due to the revision of the financing law.
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In the coming years, the debts will only increase, while the transfers from Flanders to Wallonia and Brussels will decrease due to the revision of the financing law, which regulates the money flows in Belgium. That is why PS leader Elio Di Rupo, who contributed to the revision of the financing law himself during the sixth state reform, already made it clear before the corona crisis that that law must be revised again.
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Requesting party
The Parti Socialiste is therefore no longer a ‘demandeur de rien’ in the community debate, but a requesting party for a seventh state reform, because otherwise they would no longer be able to make it financially. And the PS is willing to pay a high price. During the government negotiations, N-VA chairman Bart De Wever and his PS counterpart Paul Magnette already had far-reaching talks about dismantling Belgium, as is once again apparent from the reconstruction by Business AM journalist Wouter Verschelden in the book ‘De doodgravers van België ‘.
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The institutional model that Magnette puts forward is that of a Belgium with four federated states: Flanders, Wallonia, Brussels and the German speakers. But behind that model hides the duality of Belgium, with Flanders and Wallo-Bruxelles as the pillars of support. After the estate division you get Flanders and Wallo-Bruxelles, just call it ‘little Belgium’, because Magnette would have claimed the name Belgium in the negotiations with De Wever. ‘Bart, on pourrait garder le nom Belgique?’, Magnette is said to have said.
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Bart, could we keep the name Belgium?
Paul Magnette
Chairman PS
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Daerden also thinks that new institutional steps are inevitable. In doing so, he believes it would be a mistake to cut the link between Wallonia and impoverished Brussels, which is and remains a thorny issue in French-speaking Belgium. But Daerden seems to want to push things out for a while.
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Federal refuel
“We could say that the solution is to revise the financing law, but I don’t think it fits the spirit of the times,” it sounded somewhat mysterious in La Libre Belgique. A revision of the financing law also does not immediately offer solace for the French Community, because the money tap remains open. Daerden urges that the French speakers in Vivaldi first refuel at the federal level before opening the debate on a seventh state reform. ‘It is legitimate to request additional resources from the federal level,’ says Daerden.
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But the federal government can hardly get the bills right either, because there is a huge skew in the bill for the aging population. That burden still almost entirely falls on the shoulders of the federal government, so it remains to be seen whether the De Croo government can put its financial affairs in order.
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