Belgian federal budget talks collapse as coalition parties clash over taxes and spending

Belgium’s federal budget negotiations have collapsed after the Arizona coalition failed to agree on how to close a 10-billion-euro gap before the end-of-year deadline. Prime Minister Bart De Wever met his deputy premiers individually over the weekend before convening the inner cabinet on Sunday evening at 21:00.

The talks broke down after the government abandoned a plan to raise VAT from 21 percent to 22 percent following opposition from the liberal MR party. Vooruit, the Flemish socialist party, then rejected additional savings measures intended to compensate for the lost revenue.

“Refusing to examine honestly the question of revenues is not credible.”

Les Engagés also voiced reservations about proposals on the table, particularly in healthcare, and submitted their own counter-proposals. Those counter-proposals in turn provoked a negative reaction from the MR and possibly the N-VA.

Vice-Prime Minister Maxime Prévot of Les Engagés said reforms must be balanced and must not treat the most vulnerable with contempt. He argued that the proposed effort consisted mainly of spending cuts rather than new taxes, and warned that refusing to examine revenue issues honestly was not credible.

Vice-Prime Minister David Clarinval of the MR countered that the volume of new taxes in the last proposal remained too high, and that coalition partners had refused certain savings.

De Wever presented his resignation to the King on Monday, and the monarch has kept it in suspense while consultations with majority party presidents are scheduled for Tuesday. To avoid provisional twelfths at the start of 2027, an agreement is needed by Tuesday morning at the latest so the budget can be presented to MPs on Tuesday afternoon.

The National Bank has warned that public revenues are falling, adding pressure to reach a deal quickly.