The Fitch rating agency reduced the notation of the Belgian sovereign debt on Friday, moving from “AA-” A “A+”, supplying from a stable perspective, which means that it does not foresee a new degradation in the medium term.
This is the worst note attributed so far to the Belgian sovereign debt.
The US agency justified this movement by deteriorating the public finances of the kingdom, already confronted with a high level of public debt, which reached 104% of its GDP at the end of 2024.
Fitch is also concerned about the aging of the Belgian population, a phenomenon that is observed throughout Europe, as well as the increase in defense spending, in a context of an increase in geopolitical tensions in the continent, from the trigger for the invasion of Ukraine by Russia in 2022.
In more general terms, it also emphasizes, among the aggravating factors, the chronic political instability of the kingdom and the decline of the solidity of its institutions during the last decade, according to the world bank’s governance indicators.
Chronic political instability
However, the agency recalls that the Belgian economy remains “rich and diversified” and has a positive vision of government labor market reforms to bring the employability rate to 78%.
It also highlights the high level of productivity of Belgian employees, which has slowed down and is now under the average of the European Union.
The government led by Bart of Wever is trying to carry out a series of reforms that arouse a frank opposition from the political class and unions, which denounce a “social breakage.”
The reforms include the abolition of special retirement plans and align the retirement age of public officials with that of the private sector.
Belgium is the subject of an excessive deficit procedure by the European Commission, in the same way as eight other member states, including France, Italy, Poland or Austria.
Wever Flamenco Bart curator became Prime Minister in early February, approximately eight months after the legislative elections, supported by a coalition that brings together, among other things, his N-VA party and the French-speaking liberal party (MR), which has become the first political force in Wallonia.
The European Commission hopes to see the Belgian public deficit ascending to 5.4% this year, compared to 4.6% in 2024, and even 5.6% in 2026.
But Wever Bart is committed to achieving 20 billion euros in savings to return to European nails.
Source: BFM TV
