Belgian Budget Deadlock: Tensions Rise as Coalition Partners Clash Over VAT and Leadership

Federal budget negotiations in Belgium remain deadlocked, with coalition partners still needing to find 10 billion euros to meet European spending norms by 2029. Prime Minister Bart De Wever faces deepening political friction, particularly after public attacks directed at MR president Georges-Louis Bouchez by Les Engagés vice-Premier minister Maxime Prévot ahead of a crucial Tuesday deadline.

Maxime Prévot Directs Personal Attacks at Georges-Louis Bouchez

The vice-Premier minister of Les Engagés criticized liberals for wanting to start the match “with a 2-0 lead” before pointing directly at MR president Georges-Louis Bouchez. “The biggest problem is not BDW or BTW, but perhaps GLB,” Prévot stated, playing on the initials of Bart De Wever, the Dutch abbreviation for VAT (BTW), and Georges-Louis Bouchez (GLB). This followed comments made by the MR leader on VTM.

Behind the scenes, criticism of Georges-Louis Bouchez intensified. The MR countered that it should not shoulder the blame alone, pointing out that conditions set by Vooruit also complicate the search for a compromise.

Georges-Louis Bouchez Defends Resistance to Value-Added Tax Increases

The MR leader stated that his party has refused to increase the VAT for two years, arguing that raising it would strip more than 2 billion euros from purchasing power, particularly harming middle- and lower-income classes. He also warned that higher VAT would accelerate inflation, which stands at 3.6 percent on an annual basis with projections reaching 5 percent next year due to energy prices.

“Insulting me, attacking me, pointing the finger at me will not change the reality of our world,” he wrote, maintaining that all parties around the table maintain strict red lines.

Bart De Wever Pursues Bilateral Talks While Debt Spirals Loom

Prime Minister Bart De Wever held bilateral discussions with coalition partners to find a way forward, but no plenary meeting of the restricted ministerial committee (kern) has been scheduled, according to RTL Info. De Wever warned the Chamber that failing to implement clear consolidation measures risks triggering a snowball effect on debt interest as early as 2029, or even sooner, forcing much more painful interventions later.

RTL Info noted that the National Bank of Belgium and the Debt Agency issued similar warnings to key ministers. Discussions remain stalled over proposed changes to VAT rates—such as shifting brackets from 6 to 9 percent and 21 to 22 percent—which the MR calls socially unjust and inflationary. Other contested ideas include reducing the growth norm for healthcare spending.

Economists Warn of Structural Deficits and Fiscal Fatigue

Economic analysts questioned the sufficiency of the current 10-billion-euro target given the broader structural imbalance of public finances. Delcuve pointed out a severe tax fatigue in Belgium, where public debt reaches 130 percent of GDP.

Economists such as Philippe Defeyt, Magali Verdonck, Julien Vandernoot, Jean Hindriks, and Paul De Grauwe suggested broadening the fiscal base by reviewing tax niches, taxing capital gains and real estate rents progressively, and addressing healthcare expenditures, which account for 19.5 percent of federal spending.

Tuesday Deadline Approaches Without a Core Agreement

Bart De Wever is scheduled to deliver his general policy declaration in the Chamber on Tuesday, yet hopes for a formal coalition agreement before then remain limited, according to RTL Info. With bilateral consultations continuing and no unified text adopted by the cabinet, the government struggles to bridge opposing stances on taxation, healthcare limits, and structural reforms.