Belgium’s federal government must cut €10 billion from its budget by October 13 to reduce its deficit from 5.2% to 4% of GDP. The target has prompted urgent negotiations among coalition parties over healthcare spending and tax adjustments.
Rising debt costs tighten the timeline
The deadline comes as higher long-term interest rates increase the cost of servicing Belgium’s public debt, limiting available funds. The deficit currently reaches €38.2 billion, and officials insist the reduction is essential to meet the fiscal target. Prime Minister Bart De Wever returned from a family trip to Japan this week, marking the end of the summer break and the beginning of intense budget discussions. Bilateral meetings with deputy prime ministers will start soon, though the most difficult negotiations are expected in mid-September. These talks will conclude with a closed-door summit modeled after the lengthy sessions that originally formed the government.
A layered budget process with regional hurdles
De Wever described the budget process as a “lasagna,” requiring each coalition party—N-VA, MR, Vooruit, cd&v, and des Engagés—to accept a combination of acceptable and difficult measures. The challenge grows due to Belgium’s federal structure, where regional governments hold most administrative authority.
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Among the proposals is adjusting the growth norm for healthcare spending, which currently reflects rising costs linked to an aging population. The government may also increase patient contributions for doctor and physiotherapy visits while revisiting the system of “increased allowances,” which lowers out-of-pocket expenses for millions.
A key dispute involves a planned tax cut that would provide households an average of €823 annually. Parties like N-VA, MR, and cd&v argue the relief must remain, but delaying it could cover a large portion of the required savings. Other options, such as raising consumption taxes or wealth levies, face strong opposition. MR rejects VAT increases, while Vooruit supports higher taxes on assets.
The coalition has until October 13 to finalize the cuts. Afterward, the measures will be outlined in the annual state of the union address.
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