BRUSSELS: The Belgian government will need to save a further 2 billion euros ($2.7 billion) for its budget deficit to satisfy the European Commission, a report by top civil servants says, according to broadcaster RTBF.
The government has committed to bring its deficit to below the EU ceiling of 3 percent of gross domestic product (GDP) or risk a fine from the Commission.
It says it wants the deficit to drop to 2.8 percent this year from some 3.8 percent in 2011.
The coalition of Prime Minister Elio Di Rupo has already unveiled plans to save 11.3 billion euros through a variety of measures including raising the effective retirement age from a current average of 59 years and hiking tax on company cars.
The monitoring committee, composed of top civil servants to advising on budgetary matters, says the government must find 1.5 billion euros of extra savings and also find a further 500 million euros as a safety buffer in case the economy contracts, RTBF said.
Core cabinet members are due to meet on Sunday for a first discussion of the revised budget. Budget talks are scheduled to conclude on March 4, although past experience suggests they will probably stretch on a few days beyond that deadline.
The Federal Plan Bureau, whose estimates are typically used to draft budgets, has forecast Belgium's economy, the sixth largest in the euro zone, will grew by just 0.1 percent this year from 1.9 percent in 2011.
Belgium's central bank has forecast a contraction of 0.1 percent in 2012.
Belgian politicians have put forward a variety of ways to plug the hole, including a rise in sales tax, a tax on capital, a minimum corporate tax rate or an adjustment of indexation, the linking of wages to inflation.
All have been shot down by at least one party in the six-party coalition.
The latest suggestion, an amnesty on undeclared income, such as in foreign bank accounts, was dismissed this week by the Flemish Christian Democrats.
Comments
Comments are closed for this article.