Belgian Government Secures Multi-Year Budget Deal Aiming for €9.2 Billion Deficit Reduction by 2029

Historic Agreement Reached After Marathon Talks

The Belgian federal government, a five-party coalition led by Prime Minister Bart De Wever, announced on Monday, November 24, 2025, that it has successfully concluded a long-delayed multi-year budget agreement. The breakthrough came after more than 20 hours of intensive negotiations, stretching into the early hours of Monday morning. This crucial deal aims to reduce the federal deficit by an ambitious €9.2 billion by 2029, utilizing a blend of spending cuts and new revenue-generating measures.

Prime Minister De Wever described the discussions as 'a tough exercise' but emphasized its necessity for stabilizing Belgium's public finances. He also stated that the agreement and other reforms are expected to improve Belgium's debt situation by €32 billion. The agreement was reached ahead of a self-imposed Christmas deadline and is intended to ensure Belgium's compliance with the European Union's Stability and Growth Pact, which mandates member states to maintain deficits below 3% of GDP and debt levels under 60% of GDP. Belgium's current budget deficit is projected at approximately 4.5% of GDP for 2025, with public debt exceeding 104% of GDP, significantly above EU thresholds.

Key Revenue-Generating Measures

The budget package introduces several targeted tax adjustments designed to bolster government revenue without a general increase in Value Added Tax (VAT). Key measures include:

• Higher levies on financial transactions, share purchases, airplane tickets, and natural gas.
• A new levy on banks.
• An increase in VAT to 12% for specific sectors such as takeaway meals, hotel stays, campsites, and certain sport and leisure activities.
• Increased excise duties on gas, while excise duties on electricity will be reduced.
• A €2 tax on small parcels originating from non-EU online retailers.
• The securities tax (financial assets tax) will be doubled.
• The tax on management companies will increase from 15% to 18%.

Spending Cuts and Structural Reforms

Alongside tax adjustments, the agreement outlines significant spending cuts and structural reforms aimed at long-term fiscal health:

• Some personal income tax cuts, specifically reductions of €772 million in 2028 and approximately €3 billion in 2029, will be implemented one year earlier than initially planned. However, other plans for a full labor income tax reduction have been postponed from 2029 to 2030.
• Changes to the wage indexation system will see most workers continue to receive full indexation, but higher salaries (above €4,000 gross per month) will transition to a capped, fixed-amount increase. The salaries of Members of Parliament and ministers will remain unchanged for the duration of the legislative period.
• The minimum wage is set to increase by €50 from April 1.
• In the healthcare sector, patients will face higher co-payments for doctor visits, and the sector's growth limit will be reduced from 3% to 2.5%, though an additional €3.7 billion in investment is planned.
• A key objective is to reintegrate 100,000 long-term sick individuals into the labor market by 2029, projected to generate €2 billion in savings.
• The agreement also finalizes reforms from the 'summer agreement,' including measures for labor market flexibilization, a capital gains tax, and pension reform.
• A financial prosecutor's office will be established, with plans to hire 370 agents.

Public Reaction and Outlook

Despite the government's success in reaching an agreement, the deal has not averted public discontent. A three-day nationwide strike, organized by major trade unions, commenced on Monday, November 24, 2025, impacting public transport, schools, and other public services. Unions have criticized the package as a continuation of austerity measures. The government, however, maintains that these measures are essential to stabilize Belgium's public finances and uphold investor confidence.