Belgium’s public finances have veered further off track, with official projections now pointing to a national debt load of 120 per cent of GDP by 2030 – a level unseen since the aftermath of the eurozone crisis.
Also known as the European sovereign debt crisis, that was a period of financial instability that gripped the EU from 2009 to 2018.
In its latest report, Belgium’s Federal Planning Bureau said the country was systematically missing its budget targets. Without new corrective measures, debt levels would continue to rise over the coming years.
“Debt is rising at every level of the country,” Belgian business newspaper L’Écho reported recently, warning that the mounting burden “could abruptly paralyse our welfare state”.
Currently, Belgium’s debt-to-GDP ratio stood at 104.7 per cent. That put the country fourth among eurozone members, behind only Greece (153.6 per cent), Italy (135.3 per cent) and France (113 per cent).
Spain came next, with 101.8 per cent, while all other countries in the currency bloc remained below 100 per cent. The average in the eurozone was 87.4 per cent, according to news outlet RTBF on June 10.
The trajectory was clearly upward. In 2022, the figure was 102.7 per cent. It rose to 103.2 per cent in 2023 and reached 104.7 per cent in 2024.
Recently, the Governor of the National Bank of Belgium, Pierre Wunsch, used unusually strong language to describe the situation. He said the worsening budget position made Belgium “vulnerable in the event of a new shock”.
The Belgian Federal Planning Bureau – the country’s debt agency, an independent but public fiscal institution – struck a less dramatic tone. Its spokesperson, Jean Deboutte, said that although public debt continued to rise, Belgium “still enjoys good conditions on the markets” and investors “continue to trust” the country.
But that trust may have limits, observers said.
“Our repeated deficits are becoming a structural problem,” L’Écho warned. The paper added that the public remained largely unaware of what the numbers meant, despite the issue’s growing importance.
Public debt was defined as the total amount the state has borrowed over time. It grows when governments spent more than they collected in taxes.
Every year, countries including Belgium ran a deficit. To cover that, they borrowed more money on financial markets.
Such borrowing was getting more expensive. For years, eurozone interest rates were close to zero, making debt seem cheap. That era was now over.
The interest Belgium now paid on its debt – known as the “debt charge” – has increased. According to RTBF, this was due both to rising borrowing needs and higher rates demanded by investors.
As L’Écho put it: “It’s not so much the debt that worries, but the cost of paying back our creditors.”
Belgium is far from alone. Even the US recently failed to place one of its debt issuances, after US President Donald Trump’s tax plans made investors wary.
L’Écho called it a “traffic jam on the financial markets” – a growing queue of governments trying to borrow from a limited pool of investors.
The National Bank of Belgium, in its Financial Stability Report, warned that rising debt costs could “quickly affect financing conditions for banks, households and companies”. In other words: If markets got nervous, borrowing became harder for everyone, not just the State.
Economists tended to agree that debt was not automatically bad. What mattered was whether it remained affordable.
Yet, as the interest countries paid kept rising, less money was left for things including pensions, healthcare and public investment.
