Politics

Court of Audit and European Commission each with serious reservations about the Belgian budget

Today experts from the European Commission will examine the budget in the House. The Court of Audit will follow tomorrow, but their report is already out, just like that of the EU, today. Both read as critical pieces of work for a Belgian budget that is tied together with spit and packing rope. That is not entirely illogical: the corona crisis is pushing the economy deeper and forcing the system deep into the red. But the budget figures themselves should therefore contain a bit more realism, the opposition warns.

In the news: NV Belgium comes up with figures that make no one happy. But it is the external investigators who are critical today.

The details: Two voluminous reports, one from the Court of Audit and one from the European Commission, hit the plates of the financial experts who monitor the budget this morning.

  • Today the experts from Europe will visit the Chamber. Tomorrow it will be the turn of the Court of Audit, followed by a debate in the House on Friday, during which State Secretary for Budget Eva De Bleeker (Open Vld) will defend her policy. By the way, De Bleeker is well acquainted with the Commission: she herself worked on issues such as European trade agreements, before she was called to the government benches by Egbert Lachaert (Open Vld).
  • Last week, the European Commission already provided an overview of all budgets in the eurozone, and Belgium scored poorly. The shortage has gone up drastically, after Spain, this country has the largest deficit in the entire euro area.
  • And worse, in its assessment, the Commission manifestly categorized Belgium among the so-called “Club Med” countries, Southern European countries with very high public debt, inefficient government and question marks about the stability of tax revenues.
  • So today there is a detailed report from the Commission, which analyzes the Belgian budget in a more refined way than last week. It doesn’t read like a fluently written novel, it is officials who reprimand other officials. But everything shows that the Commission nevertheless looks at the Belgian work with quite a critical eye.
  • To begin with, they reiterate the economic scenario that the De Croo government is working with too optimistic is.
    • This is how the Commission sees growth in 2021 limited to 4.5 percent, while the government and State Secretary De Bleeker have put a figure of 6.5 percent in their tables.
    • The same with private consumption: Belgium says “again 9 percent positive growth”, the EU says “only 5.3 percent growth“.
    • The unemployment figures are also more negative for the Commission: 5.4 percent says the government for 2020 and 6.6 percent for 2021. The Commission assumes a unemployment rate of 5.9 percent this year and to 7 percent in 2021.
  • This is not really surprising: the European Commission keeps track of its figures more into account with a second major corona wave, while the government forwarded the budget in mid-October, and was less ahead of it. But the pessimism, or rather realism of the Commission, of course has consequences: while Belgium actually registered a debt reduction in 2021, because the economy is picking up sharply again, the Commission sees the debt only increasing, due to slower growth.
  • In other words: the Belgian government needs to be more realistic in its estimates, says the Commission.
  • They say the same about the income. After all, the federal government wants to raise 1 billion euros extra through an “increased fight against tax and social fraud”, but the Commission is critical about this: “The estimated revenues of some measures are lower, because insufficient details are given about the implementation. This is about the fight against tax and social fraud. ”

Noted: The Court of Audit goes into more detail, both about income and expenditure, but the conclusion is the same: one must be careful not to count yourself rich.

  • The Court of Audit resolves a lengthy report with 72 pages, which is a bit more careful than the Commission. Although they say the same thing a little more politely: “Due to the great uncertainty about the course of the pandemic, the outlook may sooner be outdated by the facts. Recent developments will however, are likely to have a downward impact on economic activity and are causing further deterioration in public finances ”.
  • In more detail, the Court of Audit points to a number of “points of attention“, Of which it is uncertain that they will be achieved:
    • The structural savings on personnel and operations from the federal government must reach 600 million euros by 2024.
    • There has to be a ‘digital service tax “ for 100 million per year, which should be agreed internationally, and if this does not happen, Belgium will have to do it itself.
    • The same for a “minimum tax for multinationals“For EUR 300 million extra income per year: the OECD must agree on that.
  • The same income from the fight against social and fiscal fraud, the deliberate 1 billion euros, is also discussed at the Court of Audit. In the government statement, Prime Minister Alexander De Croo (Open Vld) and Theo Francken (N-VA) clashed vehemently about those figures. “Is that a nursery garden here?“, The prime minister lashed out at Francken, who did not consider the figures realistic. As a result, Francken took another gram on Twitter this morning. “I pointed out the unrealistic assessment, the Court of Audit thinks the same in its advice.”
  • “The Court of Audit can fail to assess whether the estimates of yield are accurate and realistic because there is no detailed calculation to support the estimate. Several measures have to be translated into legal texts and will only become fully effective in the medium term. ”

The big picture: The budget is less important now, because of the crisis. But what sowing is done during this period, the harvest will take place in the coming years.

  • In recent years, the political relationships around the budget portfolio have shifted. Where that post in the 90s and early 2000s was an absolute key department, with Johan Vande Lanotte (Vooruit) as deputy prime minister and budget minister as exponent, the post of the last legislatures has decreased in value more and more.
  • In the Swedish period, under Prime Minister Charles Michel (MR), hardly anyone had heard of Sophie Wilmès (MR). It was mainly Minister of Finance Johan Van Overtveldt (N-VA) who all positive and negative attention was drawn to the figures of the government. For example, the Finance portfolio increased in weight.
  • This line is continued under Prime Minister De Croo and his Vivaldi coalition: a State Secretary from the same party as the Prime Minister must now manage the figures. But the real discussion, politically then, is elsewhere: more than probably between the Prime Minister and his Deputy Prime Ministers of Finance, Vincent Van Peteghem (CD&V), and that of Work and Social Affairs, Pierre-Yves Dermagne (PS).
  • Among the Christian Democrats they look with suspicion at the way in which the socialists in the government are currently opening the tap. “The premium to the hospital staff, which Frank Vandenbroucke (Vooruit) was allowed to give, they didn’t even ask for that, did they. They want structural solutions, not gifts. But it is classic socialism, being able to “give” something to their supporters“Says an orange government source.
  • For the time being, internal tensions about each financial file are very limited: the corona crisis is the mantle of love that covers almost everything, financially that is. However, the recovery policy will soon be set in motion, and all the figures are what are being continued today immediately important to develop policy with a potentially major impact.
  • Then comes the discussion about the credibility of the figures, but also the ideological choices regarding expenditure and income, no doubt back up. This budget includes a section of 4 billion in “savings and various measures”, including the already infamous 1 billion due to the fight against tax and social fraud. But in addition, 3 billion euros in similar measures will be planned again, with yet another piece of income against the same fraud. The question is where all this will come from.
  • The N-VA opposition is ready to attack especially the Open Vld, their rival on the right: “This budget is a bubble which will be pierced by the Commission. Especially for you, Mrs. De Bleeker, I think this is a shame, because Purple-Green expects you to link your solid name and reputation to these inflated figures, which you inherited from negotiations you did not conduct, ”warned Sander Loones (N-VA ) last week. That message will be no different today.

As expected: The Flemish government is increasing wages in the residential care sector.

  • It was a file that has been brewing for months, much to the dissatisfaction of the Flemish white sector: the wages that were too low, and the work pressure caused by corona, and the loss of staff, kept increasing.
  • That at the same time certainly Flemish Minister of Welfare Wouter Beke (CD&V) was systematically under fire, from the left-wing opposition, but also from the sector itself, made the pressure untenable. Especially since the federal government awarded a 6 percent wage increase to hospital staff as early as the summer, the gap became too wide.
  • The Flemish government now provides an additional 577 million euros to increase wages and reduce the workload. More than 400 million is for higher wages, the rest for more hires.
  • We open our hearts and our walletsPrime Minister Jan Jambon (N-VA) stated at the press conference this morning. According to them, it is an “unprecedented social agreement”. “It was also necessary,” said Beke.
  • In any case, it was necessary to further limit the political damage to the Flemish government. Beke’s performance in the crisis, in which he never succeeded in countering the criticism in a good, empathetic way, led to the crumbling of the credibility of the Flemish team. “We can summarize it simply: it has been a disaster so far”, says a high source within CD&V about this.

Corona update: Stop saying “the barometer”, but “the on and off button”.

  • The Consultation Committee will meet on Friday to review the measures again, especially with the end of the year approaching an important symbolic moment. Including the retailers are pushing for a relaxation, with shopping by appointment. If that does not happen, Belgium would be the only country in all of Europe where shopping is not possible for the Christmas period. Belgians are already flocking to neighboring countries to shop. The French-speaking liberals are already pushing. Minister of the Self-Employed David Clarinval (MR) wants to seriously bring the reopening of the shops and even the catering industry to the Consultation Committee. Wait and see what that will be.
  • In addition, the famous “barometer” on the table. This is intended to lay down a different, previously agreed approach in different phases. But it will not come now: it has now been removed before it is ever decided.
  • In its place will be a “switch”, several newspapers reported. So that is earlier a binary instrument, once a threshold of the number of infections is exceeded, stricter measures come into effect.
  • The 3,600 infections per day are a significant decrease, but still not of the order to really think about easing, it has meanwhile been heard in government circles. And celebrating the Christmas party in a wider circle also remains a difficult point: Annelies Verlinden (CD&V), among others, proposed this weekend to make something possible, but Prime Minister Alexander De Croo (Open Vld) himself closed the door about this again.
  • Now the question is of course from when that switch will “on”, from what threshold. The “hardline” virologists, such as Marc Van Ranst, would think of 50 infections per day, De Tijd knows. That is very low: the lockdown can still take a very long time. Others want to work with higher figures: about 500 infections per day seems more the workable figure.

The pacification of the states: “Cooperation federalism” is hard to find when Brussels wants to buy agricultural land in Flanders and Wallonia.

  • The proposal of Ecolo and its Brussels Environment Minister Alain Maron (Ecolo) continues to stir. Yesterday, he launched the idea of ​​purchasing agricultural land with the Brussels Region in Flemish and Walloon Brabant, in order to “preserve biodiversity”, and above all “promote local agriculture in order to feed a part of the Brussels population”. The aim is to “produce” one third of the fruit and vegetables in Brussels by 2035.
  • But that goes completely wrong with the Walloon and Flemish Region: Maron has not exactly bothered to consult with his fellow agriculture ministers in those states.
  • Willy Borsus, MR heavyweight in the Walloon government and Minister of Agriculture, is devastating. “The Brussels government is launching itself like a hair in the soup, of an agricultural policy that is structured, deliberated and outlined in the long term,” Borsus says. “I fell off my chair when I heard those statements from Maron. The cost of agricultural land is already very high and purchase very difficult in Wallonia. It is unacceptable that another region will suddenly increase that pressure without any consultation. ” Note: Ecolo is also in the Walloon government, with Borsus.
  • Flemish Minister of Agriculture Hilde Crevits (CD&V) has the same critical voice: “Why should Brussels actively compete with our farmers? And how does the purchase of land contribute to biodiversity? “
  • This file is therefore on its way at great speed for yet another… a Consultation Committee. It’s a matter of it To maintain “constructive federalism”.

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