Belgian government reaches budget agreement after months

Earlier this month, Prime Minister Bart De Wever gave his fractious five-coalition government a Christmas deadline to reach a deal. The parties could not agree on how to turn around the public finances.

Negotiations began on the morning of 23 November and did not end until the early hours of the next day.

According to the financial daily De Tijd, the agreement includes an increase in taxes on the purchase of shares, air tickets and natural gas, as well as a new tax on banks. Together with savings in public spending, these measures should reduce the government's budget deficit by €9.2 billion by 2029.

The budget deficit of the eurozone's sixth-largest economy is set to reach 4.5 percent of GDP this year, according to the central bank, while debt stands at 104.7 percent of GDP, well above the ceilings set by EU rules on budgetary discipline.

But the deal will not avert a three-day nationwide strike against previously announced reforms to the pension system starting on Monday.

(reuters, hal)