Belgium’s gonna Belgium: Budget row threatens to blow up coalition talks

Belgian politics is inching toward a new crisis — again.
After June elections opened a pathway to the quick formation of a new five-party national government, negotiations became bogged down this month over who ought to shoulder the burden for shrinking the country’s budgetary hole.
So far, so Belgian. This is a country, after all, where it once took 541 days to form a coalition government — still a world record.
Thursday is crunch time, however: The lead coalition negotiator, who’s been leading tortured late-night talks, is to deliver a progress report to the Belgian king, who will gauge the viability of the potential coalition.
But let’s rewind for a moment. If you’ve been sunning yourself in the Mediterranean or hiking in the Alps with no phone signal, we’re here to catch you up on what you’ve missed in Belgium’s eternally interesting, at times mind-boggling politics.
Remind me: When did Belgium vote again?
You can’t be blamed for missing (or forgetting) the elections since they took place on the same day as the European election results landed: June 9. Belgians elected a new federal parliament, regional parliaments and members of the European Parliament all on the same day.
Who won?
The big early summer surprise in Belgium was that the far right didn’t win. After flying high in the polls, the Dutch-speaking far-right Vlaams Belang party finished in second place behind the right-wing New Flemish Alliance (N-VA).
Although both parties favor breaking up Belgium and making Flanders independent, N-VA ruled out talks with the far-right Vlaams Belang because of its more radical, extremist positions. In the Francophone south of Belgium, the center-right liberal Reformist Movement (MR) was the big winner. This all paved the way for a governing center-right cabinet.
Should be easy then, right?
Yes and no. This is Belgium after all.
Two things complicated the road to a center-right cabinet. First, the Flemish liberals — outgoing Prime Minister Alexander De Croo’s party — scored poorly on June 9 and ruled themselves out. Secondly, the Flemish socialist Forward party was among the big vote-getters.
Leaders kicked off talks to form a government of five parties of which some aren’t the most natural partners: the N-VA (right-wing), the MR (center-right), Forward (center-left), the Flemish Christian democrats (centrist) and the Walloon Committed Ones party (centrist).
N-VA boss Bart De Wever is in charge of leading the negotiations.
Wait a second, I’ve heard of Bart De Wever.
You have indeed.
De Wever has been the party leader of N-VA since 2004 and he’s the mayor of Antwerp, Belgium’s second-biggest city and one of the country’s economic powerhouses thanks to its massive port.
More pertinently, he’s the guy who’s always wanted to break up Belgium.
The N-VA says in Article 1 of its party statutes that it wants an “independent republic of Flanders” (so, without the Francophone south and no king).
De Wever has triggered Wallonia’s fury many times in the past — once trolling the Walloons by driving vans down south filled with fake cash to complain about what he sees as Wallonia sponging off the wealthier northern region.
What does the king think about all this?
Belgium’s King Philippe actively oversees the talks, as is tradition. He invited party leaders right after the elections and was the one who formally appointed De Wever to explore and then form a coalition. He received De Wever on Monday and will do so again on Thursday for an update on proceedings.
The king and De Wever have pretty much buried the hatchet over their positions on the country and monarchy. Antwerp’s political firebrand has moderated some of his positions, too. Instead of an independent Flanders he now wants Belgium’s regions to decide which competencies they still want to share at the federal level, while transferring all the others to the regional level.
The king’s position as, err, the king is also not being contested at this time. For now, at least.
So what’s really holding up an agreement?
The budget is a major stumbling block, along with the question of how to boost the country’s employment rate.
The five parties have been mulling a draft package of major reforms compiled by De Wever. It’s a mix of labor, fiscal and pension reforms seeking to fix Belgium’s dire budgetary situation. The country’s deficit reached 4.4 percent of GDP in 2023 — far above the mandated 3 percent EU threshold.
Those talks have opened up a prickly left-right divide.
The Flemish center-left Forward party has always claimed that the extra wealthy — like big enterprises and investors — should do their part to plug the budgetary hole, preferably through taxes. This is a hard sell, though, for the Francophone center-right MR party. A potential capital gains tax has become the main battlefield in the talks.
Who are the main characters?
The ones to watch around the negotiating table are Conner Rousseau, party leader of the Forward party, and Georges-Louis Bouchez, his counterpart at the MR.
Rousseau made clear ahead of the elections that raising more taxes with the wealthy is a must for him to enter into government, while Bouchez is desperate to avoid being seen as a tax man.
Rousseau is a controversial character. He’s big on Instagram, where he addresses his audience as “matekes” (a Flemish slang word for “buddies”). He briefly resigned as chair late last year after making racist remarks during a drunk night out. He bounced back from that by laying low for a couple of months and scoring strongly in the elections.
His big advantage right now, though, is that he’s known to have a good relationship with De Wever.
Bouchez, for his part, can easily match Rousseau’s colorful persona. He doesn’t hold back in his public comments, has multiple tattoos, is president of a local football club and likes to post on X — where he recently slammed EU internal market chief Thierry Breton’s letter to X owner Elon Musk.
Things looked bright on Sunday when Rousseau publicly declared he had a “good and constructive talk with De Wever.” But negotiations soured Sunday night, according to local media reports, over Bouchez’s opposition to a capital gains tax.
Sidebar: Who wants the top job?
De Wever made clear ahead of the elections that he wants to be prime minister and, up until now, nobody has challenged him. But if he fails to deliver coalition progress in the next couple of days, his momentum could peter out.
Will the talks collapse?
Some say the current stalemate is mere posturing; others think it could be the start of a crisis.
“Perhaps it is not illogical that an anti-tax party shows it does not favor an extra tax on assets. The question is whether this crisis is fundamental or whether it serves to show its supporters it’s doing its utmost,” Nicolas Bouteca, professor in political sciences at the University of Ghent, posted on X.
Is there a deadline?
Several.
De Wever meets Belgium’s King Philippe on Thursday evening, at which point he should be able to show some progress toward a resolution.
Negotiators must also settle on a name to nominate for EU commissioner by the end of August.
Most importantly, Belgium must submit a plan to reduce its deficit of around €25 billion to the European Commission by September 20. The country is on the EU’s radar over its excessive deficit and debt. That deadline can be extended to October 15, though.
What if the stalemate continues?
It’s unclear whether De Wever will throw in the towel anytime soon — but if the clocks starts to run out, pressure could grow to entertain other options.
Those won’t be straightforward either. As ever, Belgium’s gonna Belgium.