|
Introduction
In view of the absence of a government with a
full mandate, the caretaker government wanted to seek the opinion of the
High Council of Finance (HCF) in order to prepare the new consolidation
path for Belgium’s public finances. The HCF issued an opinion to the
federal government on 16 March 2011.
This being a caretaker government, the new path
proposed in this stability programme by the Belgian government is based
on the recommendations which the High Council of Finance - a body in
which the federated entities have equal representation – set out in its
latest opinion.
Since then, it is true that new information has
become available, in particular the actual figures for public finances
in 2010. The path proposed can therefore be considered prudent. The next
fully mandated government will be able to update it.
Medium-term path of Belgian public finances in accordance with the European
recommendations
Under the January 2010 stability programme,
Belgium was to satisfy the conditions for ending the excessive deficit
procedure in 2012. The Belgian government also undertook to restore
Belgium’s public finances to balance in 2015.
Meanwhile, the macroeconomic outlook has improved
considerably in the short term, so that the 2010 deficit has contracted
significantly, as already stated.
In that context, the Belgian government decided
to update the budget path originally planned in order to speed up the
reduction of the public deficit.
This new fiscal consolidation path for Belgian
public finances in the short and medium term is still anchored around
two key dates:
· in 2012, Belgium aims to secure release
from the excessive deficit procedure, by setting a target of -2.8 %
of GDP, compared to -3.0 % of GDP in the January 2010 stability
programme;
· in 2015, the Belgian government now aims to
form a surplus of 0.2 % (structural balance) to move towards the
medium-term objective (MTO).
|
TABLE 15
Target financing
balance of general government |
|
In % of GDP |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
|
2009-2012 stability programme
(January 2010) |
-6,0 |
-4,8 |
-4,1 |
-3,0 |
-2,0 |
-1,0 |
|
2011-2014 stability programme
(April 2011) |
-5,9 |
-4,1 |
-3,6 |
-2,8 |
-1,8 |
-0,8 |
|
Difference |
0,1 |
0,7 |
0,5 |
0,2 |
0,2 |
0,2 |
The new targets defined by the Belgian government
thus provide for an improvement in the general government primary
balance of +1.0 % of GDP in 2012, +0.9 % of GDP in 2013, and +1.0 % in
2014, i.e. a cumulative improvement of 2.9 % over the period 2012-2014
(see table 28).
In view of its caretaker status and the
establishment of the Monitoring Committee, the federal government is
expecting the latter to keep a close eye on Entity I’s revenue and
expenditure. The federated entities conduct budget audits at regular
intervals in order to ensure that their respective budget targets are
actually achieved.
The Belgian government is committed to speeding
up the deficit reduction in the event of more favourable developments in
the macroeconomic environment. Moreover, if the government were to see
early redemption of its stakes in the financial sector before 2015, with
possible capital gains, the whole of those amounts would be allocated to
quicker debt reduction.
The government considers that this path
corresponds to the recommendations of the European Council in that it
provides for Belgian public finances to return to conformity with the
Stability and Growth Pact by no later than 2012, and the efforts are
spread evenly over the whole period.
|
