Belgium's nod for extra austerity measures to cap budget deficit
March 12, 2012, Monday
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THE Belgian government has approved an additional 2.5 billion euros (US$3.3 billion) in austerity measures this year to bring the budget deficit within the European Union limit as economic growth slows.
At a meeting that ended early yesterday, ministers agreed to save 1.82 billion euros and create a budget reserve of 650 million euros, Premier Elio Di Rupo said in a statement. The extra austerity goes above the 2 billion euros recommended by the country's budget-monitoring panel as the government took into account a "possibly worse" economic situation, he said.
"The government wants to protect people and companies against speculation and the worsening of living conditions," Di Rupo said. "We have also chosen to be cautious."
The measures will enable Belgium to reach a deficit goal of 2.8 percent of gross domestic product in 2012, below the EU limit of 3 percent, he said.
Belgium's budget for 2012 was drafted on the assumption that the economy would grow 0.8 percent this year. The panel, which assumed annual growth of 0.1 percent, suggested earlier this year savings of 1.5 billion euros and a buffer of 500 million euros.
The central bank in mid-February forecast an economic contraction in 2012 of 0.1 percent.
"The difference between plus 0.1 and minus 0.1 percent has an impact of 350 million euros in the fiscal balance," Di Rupo said.
At a meeting that ended early yesterday, ministers agreed to save 1.82 billion euros and create a budget reserve of 650 million euros, Premier Elio Di Rupo said in a statement. The extra austerity goes above the 2 billion euros recommended by the country's budget-monitoring panel as the government took into account a "possibly worse" economic situation, he said.
"The government wants to protect people and companies against speculation and the worsening of living conditions," Di Rupo said. "We have also chosen to be cautious."
The measures will enable Belgium to reach a deficit goal of 2.8 percent of gross domestic product in 2012, below the EU limit of 3 percent, he said.
Belgium's budget for 2012 was drafted on the assumption that the economy would grow 0.8 percent this year. The panel, which assumed annual growth of 0.1 percent, suggested earlier this year savings of 1.5 billion euros and a buffer of 500 million euros.
The central bank in mid-February forecast an economic contraction in 2012 of 0.1 percent.
"The difference between plus 0.1 and minus 0.1 percent has an impact of 350 million euros in the fiscal balance," Di Rupo said.
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