Due to the ruling coalition failing to reach an agreement on a new budget, Belgian Prime Minister De Wever submitted his resignation to the King of Belgium on November 2nd local time. However, the King did not accept it immediately.
According to Bloomberg's report on November 2nd, the Belgian Royal Palace issued a statement on the same day stating that King Philippe postponed the decision to dismiss the Prime Minister and called for compromises from all parties in the ruling coalition during budget negotiations.
It is reported that Philip will hold talks with leaders of various parties starting from the 3rd, and will meet with DeWine again on November 6th to assess the current situation.
Previously, the Belgian government promised to implement fiscal consolidation measures worth approximately 10 billion euros by 2029. However, no agreement was reached regarding the specific details of these measures after that.
According to forecasts by the Belgian Central Bank, the country's fiscal deficit accounted for 5.2% of its Gross Domestic Product last year, and it is expected to further increase to 5.7% by 2028.
In recent months, the yield on Belgian government bonds has risen significantly, with this change partly due to the impact of the situation in France. As concerns about France’s fiscal and political challenges continue to grow, French government bonds have been sold off in large quantities. However, investors are also vigilant regarding Belgium’s own fragile public financial situation.
In budget negotiations, the liberal party 'Parti de l'Innovation' from the French-speaking region of Belgium opposes tax increases, especially reforms to the value-added tax system. Political parties with a centrist and left-wing stance oppose cuts in expenditures in areas such as healthcare and pensions.
Belgium is the headquarters of NATO and the European Union. Its political system has long been known for intense party strife and difficulties in forming government. After the 2010 elections, the country set a record by taking 541 days to form a new government.
