The Brussels region’s new budget minister Dirk De Smedt has warned that a full shutdown of public services is a real threat as the region is struggling to find money.
Due to the bad financial situation, some banks have already stopped offering credit, fearing they might not get their money back.
With it, Brussels lost hundreds of millions of euros much needed for expenses.
On top of the budgetary issues, there is also a political conundrum, with parties having been unable to form a government since the elections in June 2024.
“We need to provide clarity to the financial markets in the very short term in order to boost our credibility again,” De Smedt said on Radio 1’s De Ochtend programme yesterday.
“But we also need to make some systemic changes to avoid a shutdown.”
He warned that not everyone realised “the sense of urgency” regarding the situation.
“When I took office as minister three weeks ago, I got the distinct impression that everyone was operating in a business-as-usual mode,” De Smedt said.
“A number of basic principles of restraint, ongoing affairs, focus on good governance and efficiency and less on politics: I felt that people were not sufficiently aware of these.”
For the upcoming budget of the caretaker government, which he is part of, De Smedt said he wants to lower the deficit compared to last year. Despite the lack of power as caretaker, he said he felt operating more efficiently would improve the situation somewhat.
“I think, in all honesty, that in Brussels we too often finance structures and not enough the people themselves. Current affairs offer a huge opportunity in this regard to put things in order,” he told the public broadcaster.
De Smedt noted that the organisation responsible for taking care of homeless people received €68 million but was hobbled by regulations.
“Aren’t the measures relating to compliance and administrative burdens a little disproportionate?,” he asked.
“Samusocial [the organisation for homeless people in Brussels] has to devote more resources to complying with the many rules and regulations, which means it can invest less in providing assistance in the field,” he noted.
Of the 19 municipalities in Brussels, 11 are under “financial guardianship”.
Today its total debt is believed to be around €10 billion.
If the government does not drastically change course, Brussels is headed towards a total debt of €17 billion, or 286 per cent of its yearly income, experts predict.
Further ahead, on current estimates, that will hit 300 per cent, meaning Brussels will owe three times what it takes in over a full year.
The Brussels-Capital Region risks being mired in enormous debt, according to a recent study. https://t.co/ddrUieGxn8
— Brussels Signal (@brusselssignal) July 7, 2023
