Belgium has requested an extension from the European Commission for submitting its budget plans as part of the European Union’s excessive deficit procedure, as the country awaits an agreement to form a new federal government.

As part of the excessive deficit procedure launched last July, Belgian officials were scheduled to submit the country’s budget plans by 20th September.

However, amidst stalled negotiations regarding the next federal government – with major disagreements over budget proposals – the chances of reaching a coalition government and a budget agreement in less than 10 days appear slim.

Belgium is not the only country seeking more time, as France also requested an extension from the European executive body last Sunday.

Six countries are currently under scrutiny from the European Commission due to excessive deficits, including Hungary, Italy, Malta, Poland, Romania, and Slovakia, with formal procedures initiated against them.

Several experts have expressed concerns about Belgium’s finances, with the country’s 2025 deficit estimated at €29.4 billion, primarily due to increased military and pension spending.

The general government deficit is expected to reach 4.6 percent of GDP in 2024, following a 4.4 percent deficit in 2023.

The EU mandates that deficits must not exceed 3 percent of GDP, and any country exceeding this threshold will be subject to the excessive deficit procedure.

Similarly, actions may be taken regarding Belgium’s high public debt, which stands at 105.2 percent of GDP, while under EU criteria, it should not exceed 60 percent.

The European Commission has provided countries under the policy development programme with a country-specific “reference trajectory” to guide them in preparing their plans. If these align with EU priorities, the adjustment period (i.e. the timeframe within which, through a combination of fiscal adjustments, reforms and investments, a Member State's debt level is put on a sustainable downward path) can be extended from four to up to seven years.

The next deadline is expected to be 17th October.