Belgium Needs Deeper Budget Cuts to Stabilize Debt, OECD Says

Belgium’s budget plans don’t cut spending enough to put the country on firm fiscal footing, the OECD warned.

The Paris-based club of developed economies said Belgium will have to find more savings to stabilize its high debt — even if the current government avoids collapse and reaches a deal to slash €10 billion from the deficit by 2029.

Belgium’s efforts “should be front-loaded and go beyond government plans,” the Organisation for Economic Co-operation and Development said in a report published Tuesday. “Despite existing consolidation plans, high public debt and a high deficit are projected to continue rising, highlighting the urgent need to strengthen fiscal sustainability.”

Belgium’s governing coalition could fall as soon as this week over the ongoing budget disputes. On Monday, Prime Minister Bart De Wever offered his resignation to the country’s king, who has delayed acting on the offer while meeting with coalition party leaders.

King Philippe is set to meet again with De Wever on Friday. The prime minister isn’t holding further official budget talks in parallel with the king’s meetings, according to a person familiar with his plans.

The OECD said Belgium’s plan to find savings equivalent to 1.5% of gross domestic product by 2029 is insufficient. The country needs additional cuts equal to 3.5% of GDP by 2035 to stabilize its debt at roughly 110% of GDP, the organization argued.

Belgium is facing a challenging economic picture, with the highest euro-area deficit in 2025, at 5.2%. The OECD said that figure will lower slightly to 5.1% in 2027, according to a preliminary update of its projections. The country has also faced two ratings downgrades this year after two last year.

“Rising interest costs and growing spending pressures from ageing, defense and the climate transition further weigh on fiscal sustainability,” the OECD said.

Belgium’s five-party government has blown through a number of deadlines in the budget talks, with entrenched opposition on one side to additional tax revenues and on the other to social spending cuts.

Deputy prime ministers from both sides held firm in their positions even as De Wever met the king. Budget Minister Vincent Van Peteghem of the center-right CD&V urged his partners to abandon “extremist positions” in an interview on VRT radio.

The OECD report recommends focusing on cutting government spending, given Belgium’s high tax levels, though it also calls for reforms to tax labor less and remove exemptions to broaden the tax base. It highlights competitiveness challenges in the industrial sector, including the need for a more flexible wage-setting mechanism and the problems of high energy prices.

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