Brussels, 06/01/2012 (Agence Europe) - On Friday 6 January, Belgian Finance Minister Steven Vanackere said that the Belgian government was determined to bring the country's deficit back below 3% of GDP this year. He said that the government would do everything in its power to convince the European Commission that Belgium is determined to have a budget deficit of 2.8% by the end of the year. Belgian Foreign Minister Didier Reynders said that extra public spending cuts would definitely be required.
In a letter to the Belgian government, EU Commissioner for the Euro Olli Rehn said that Belgium's budget forecasts were over-optimistic when it comes to growth and extra government income netted from clamping down on tax evasion. The European Commission's economic forecasts suggest that Belgium's budget deficit will hit 3.25% this year. Rehn is asking the country to introduce extra austerity measures to the tune of €1.2 to €2 billion. In his letter, published in De Tijd newspaper, Rehn says the best solution would be for the Belgian government to introduce structural reforms over the next few days amounting to at least 0.3% and 0.5% of GDP. On Wednesday the Commission will officially comment on Belgium's budget for 2012, after considering the Belgian government's response to Rehn's letter, a response requested for Monday.
Four other member states - Hungary, Cyprus, Poland and Malta - have pledged to bring their public deficits back below the 3% cut-off point. On Friday, a Commission spokesperson said the Commission was awaiting clarifications to ensure that the five countries were meeting their budget targets and that the Commission had not yet decided one way or the other, but would do so in the very near future. The Commission is assessing the income and expenditure of the 2012 budgets of the five countries in question and considering their credibility in the light of their own economic forecasts. The updated Stability and Growth Pact came into force in December 2011 and gives the Commission greater powers to intervene in the economic policies of eurozone nations. (MB/transl.fl)