Belgian coalition talks collapse over budget dispute

You guessed it. Belgium’s government coalition talks have fallen apart.
Bart De Wever, the Flemish-nationalist negotiator leading talks to form a new Belgian federal government, told political leaders on Thursday he’s throwing in the towel, local media reported, after an ultimately fruitless summer effort to stitch together a governing five-party coalition.
The attempt by the New Flemish Alliance (N-VA, right-wing), the Reformist Movement (MR, center-right), Forward (center-left), the Flemish Christian democrats (centrist) and the Walloon Committed Ones party (centrist) to create a center-right government was finally scuppered by divisions over the budget and taxes.
De Wever, the mayor of Antwerp and wannabe prime minister, will hand in his resignation to Belgium’s King Philippe Thursday evening, just after 8 p.m.
Talks began to fracture in earnest on Sunday evening. The main dispute centered around a proposed capital gains tax to help plug Belgium’s massive budget deficit, which was 4.4 percent of GDP in 2023 — far above the mandated 3 percent EU threshold.
The capital gains tax was a bid to win over the only center-left party in the proposed coalition, the Flemish socialist Forward party, which demanded the wealthy would help plug the budget hole. But it wasn’t acceptable for the Francophone center-right liberals of the MR, who wanted to avoid being seen as tax collecters.
The collapse is a blow for arch Flemish nationalist De Wever, who emerged as the winner of the June election. If he had become prime minister, it would have been the first time that a Flemish separatist governed Belgium.
Belgium’s King Filip, who returned back from a holiday break in France, now has control over the process. He could consult other party leaders across the political spectrum before deciding which step to take next to try and bring about a viable ruling coalition. When talks collapsed in previous negotiations, the king usually appointed a “scout” or an “explorer” to get talks moving again.
The clock is ticking for political parties to find a way out of the crisis. Belgium faces several deadlines, the first being that it must nominate an EU commissioner by the end of August.
Most importantly, Belgium is tasked to 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 could be extended but only to October 15.