Belgium Budget 2012
Belgium’s credit rating has been brought down to AA by Standard & Poor’s. The ratings agency has said that it will be difficult for the European country to reduce its debts because of its slow economic growth and absence of any common fiscal policy. This is the first time in 13 years that Belgium has seen its credit ratings fall. At present it is on par with countries like Czech Republic, Chile and Kuwait.
The European Union has already put sanctions on Belgium for its inability to improve its overall financial condition. The Economic and Monetary Affairs Commissioner of the European Union, Olli Rehn, has stated that Belgium needs to take proper steps to achieve its financial goals. The governments of various EU member countries have been asked to take steps necessary to ensure that the financial organizations are confident about investing in them and Belgium is one of these countries as well.
It is expected that once the necessary steps are taken by the national administration the central bank of Belgium and the European Central Bank will implement measures to make sure that government bonds start functioning again.
The present administration is supposed to generate 11.3 billion euros or 15.09 billion dollars so that it can restrict the deficit to 2.8 percent of the GDP according to the rules of the European Union.
Belgium Budget 2012 – Highlights :
- The 2012 budget is expected to meet the multiyear commitments made to the European Union by Belgium.
- The budgetary deficit for 2012 has been pegged at 2.8% of the GDP before a zero deficit budget is achieved by 2015.
- 11.3 billion euros have been earmarked in the budget for new taxes and savings.
- In 2011 Belgium is estimated to see a budgetary deficit of approximately 3.6 percent of the GDP. This is significantly lesser than 2010 when the deficit was 4.1%. Its public debt for 2011 is expected to go up to 97 percent of the GDP from 96.1% in 2010. This happened after the national government decided to shell out 4 billion euros for buying the Dexia Bank Belgium NV.
Belgium Budget 2012 – Political Reception:Alexander De Croo, a member of the Flemish Liberal Party, has stated the 2012 budget is a brilliant one and will satisfy the European Union authorities. But Laurette Onkelinx, a legislator from the Socialist party has stated that it is a compromise budget and lamented the fact that a proper agreement could not be reached on a budget that will be approved by all.
Belgium Economy:In the last couple of months, the debts of Belgium have reached the maximum level since 1998 when Fitch Ratings lowered its credit ranking. Other European countries whose credit ratings have gone down of late are: