Belgium Prime Minister Bart De Wever offered King Philippe his resignation last Monday after budget talks collapsed in the early hours. The palace rejected it on Friday with an order to resume negotiations immediately. The Flemish conservative leads a five-party coalition that still lacks a 2027 spending plan and needs €10 billion in savings by 2029.
Belgium runs a deficit of 5.2% of gross domestic product, the highest in the eurozone. Debt is heading above 110% of GDP this year. The National Bank of Belgium and the Debt Agency warned in October of an interest-driven debt snowball from 2028 or 2029.
The royal refusal buys time, but the gap grew from design flaws older than any one cabinet.
What Inflated the Deficit
The roots of the gap lie in spending commitments that ageing and sluggish growth have hardened into permanent liabilities. Sickness benefits climbed by more than 50% in five years and topped €14 billion two years ago. About 600,000 Belgians draw long-term sickness pay, a larger group than the unemployed.
Ageing adds healthcare and pension outlays, and the pension reform that halves long-term ageing bills by 2070 barely dents today’s gap. Lenders have noticed. The federal government recently borrowed €1.3 billion in ten-year bonds at an average yield of 4.41%, the highest on such debt since 2011.
Defence demands add a further squeeze. The National Bank of Belgium estimates that stabilising the debt ratio takes a deficit near 3%, and the European Commission expects about 5.4% of GDP next year. Last year’s savings only slowed the rise in debt. Each driver grows on autopilot, so every year without decisions enlarges the bill.
Why Five Parties Cannot Agree
Autopilot spending meets a coalition whose members guard separate constituencies. The partners are De Wever’s New Flemish Alliance, the francophone liberal Reformist Movement and the Flemish socialists of Vooruit. Two Christian democratic parties from either side of the language border complete the team. Each answers to voters who want somebody else to pay.
The Reformist Movement rejected a value added tax increase outright. De Wever’s October proposal of about €4 billion in 2027 adjustments dropped the levy without winning agreement, since replacement revenue split the partners.
Vooruit’s Frank Vandenbroucke disputed cuts he judged insufficiently equitable, and coalition sources describe relations as badly soured.
The Federal Planning Bureau drew up 250 possible measures, including higher healthcare copayments and public-sector hiring freezes, and the partners still could not choose among them. Flanders, Brussels and the French Community have settled their 2027 budgets, which leaves the federal government as the last holdout.
The System Builds In Delay
Last year’s budget deal came only at the end of November. Belgium therefore spent three months of 2026 on an emergency budget that caps monthly spending at one-twelfth of the previous year.
Less than a month ago, De Wever called “a scenario involving provisional twelfths” unacceptable. Parliament needs six to eight weeks to approve a budget, which makes provisional twelfths hard to avoid.
Institutions reinforce the habit. Regions and language communities hold their own budgets and powers, and De Wever has said a 1989 law bars the federal government from intervening in the capital’s finances. The Brussels region spent more than 600 days in caretaker mode after the June 2024 elections, since its government needs a majority in each language group.
Economist Philippe Legrain judged the debt drift “not yet pressing enough to prompt decisive corrective action”.
In neighbouring France, two prime ministers fell over budget disputes and Brussels turned its fiscal attention on Paris. Belgium so far avoids such a fate, but delay-bought stability is fragile.
The Royal Refusal Buys Little
De Wever reports back to the king next Monday, and the five leaders have promised concessions.
A deal of some kind is likely. A full budget before the year ends looks improbable, so Belgium heads for a third consecutive late budget with the deficit above 5%.
Last year’s budget deal projected a deficit of 4% to 4.5% of GDP by 2029, still above the 3% ceiling, and that assumed every promised measure delivers.
ING economist Philippe Ledent has warned that further action will be necessary to stabilise the debt ratio, and the conclusion leaves little room for stopgaps.
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