Brussels – After over seven months of negotiations, Belgium’s new federal government, led by Prime Minister Bart De Wever, is facing scrutiny over the implementation of its ambitious reform agenda. Dubbed the “Arizona coalition” – a reference to the colors of the participating parties – the government, sworn in on , is grappling with challenges in translating its broad intentions into concrete policy, according to economists and recent reports.
The coalition, comprised of the New Flemish Alliance (N-VA), the Reformist Movement (MR), Les Engagés, the Christian Democratic and Flemish Party (CD&V), and Vooruit, aims to address Belgium’s significant fiscal challenges, including a public deficit projected to exceed 6% of GDP by 2027 without intervention. However, the initial government agreement, spanning nearly 200 pages, lacked the precision needed for effective execution, leading to diverging interpretations and internal tensions, as noted by Philippe Ledent, an economist.
A key area of contention is the planned reform of the unemployment system. Approximately 190,000 individuals are expected to be excluded from benefits by July 2027. This impact will be unevenly distributed across the country, with roughly 88,000 affected in Wallonia and 41,000 in Brussels, compared to a significantly smaller number in Flanders. Ledent attributes this disparity to existing regional economic differences, highlighting the stronger economic performance of Flanders and a tighter labor market.
However, the economist emphasizes that the success of the reform hinges on the availability of robust support measures, particularly in regions with weaker employment prospects. The number of job vacancies remains insufficient to absorb those excluded from unemployment benefits in these areas. The lack of clarity surrounding these accompanying measures is a significant concern.
The implementation of the reforms has also been hampered by statistical discrepancies and public debate over figures related to the unemployment changes. Ledent expressed surprise at the disagreements between Minister Clarinval, Statbel (Belgium’s statistical office), and the public employment services, suggesting that independent expert analysis beforehand could have mitigated these controversies.
Beyond unemployment, other planned reforms, including increases to the Value Added Tax (VAT) on certain consumer goods, a tax on capital gains, and the “Make 2030” reindustrialization plan, remain vaguely defined. While announced in the government agreement, their specific details are still lacking, contributing to a sense of uncertainty and hindering coherent implementation.
The N-VA, led by De Wever, has also signaled a shift towards “confederalism,” advocating for greater autonomy for Flanders and a minimal federal state. This ambition adds another layer of complexity to the governance landscape, particularly given the ongoing political deadlock in Brussels, where the Francophone Socialist Party has opposed collaboration with the N-VA.
The formation of the “Arizona coalition” followed over seven months of negotiations, prompted by King Philippe’s threat of new elections if a deal wasn’t reached by the end of January 2025. The government’s austerity plans have already sparked significant public discontent, as evidenced by protests on , where an estimated 60,000 to 100,000 people demonstrated against planned cuts to social services and benefits. Protestors carried signs expressing frustration with the austerity measures, fearing an erosion of Belgium’s welfare state.
The government faces the challenge of forging a consensus that is both economically sound and politically viable. Ledent cautioned against repeating the experience of the previous Vivaldi government, characterized by overly complex and unproductive compromises. The success of the De Wever I government will depend on its ability to navigate these challenges and deliver tangible results while addressing the concerns of a populace wary of austerity and social reform.
The Council of Europe has also urged Belgium to address structural problems within its prison system, specifically concerning the prolonged detention of individuals in psychiatric wings without adequate care. This issue, highlighted in a resolution adopted on , underscores the broader challenges facing the Belgian state, extending beyond economic and social reforms to encompass issues of human rights and institutional effectiveness.
