Belgium faces budget crisis as deficit widens

Belgium is grappling with a significant budgetary crisis as the federal deficit reached 5.2% of GDP in 2025. The National Bank of Belgium has called for a binding national budgetary framework to ensure debt returns to a sustainable trajectory, noting that the deterioration is largely driven by declining revenues.

Prime Minister Bart De Wever is leading negotiations to secure 10 billion euros in savings. Following a veto from the MR party regarding a general VAT increase, the government is exploring targeted tax hikes on specific goods, such as firewood, flowers, and fertilizers, which could see rates rise from 6% to 12%.

Labor unions, including the FGTB and CSC, have criticized the government's approach. They argue that while savings are being sought, the burden is falling on workers and pensioners through pension cuts and wage indexation caps. The unions are demanding that the government target the 'broadest shoulders' to address the fiscal gap.