BELGIUM: BART DE WEVER’S FAILURE IS ALSO THE FAILURE OF AN ECONOMIC STRATEGY
TOMORROW AT 10:30 A.M., WILL BELGIUM HAVE TO START ALL OVER AGAIN?
By Kadir Duran — Bruxelles Korner
Political, Economic and Geopolitical Editorial — November 5, 2026
A GOVERNMENT THAT ACKNOWLEDGES ITS FAILURE, WHILE BELGIUM CONTINUES TO PAY THE PRICE
“The government has seriously failed.”
These words, spoken by Bart De Wever before the Belgian House of Representatives on Thursday, November 5, 2026, carry considerable political weight.
For the first time since submitting his resignation to King Philippe on Monday, November 2, the Belgian Prime Minister publicly acknowledged his coalition’s inability to agree on a credible multiannual budget.
The Arizona coalition, comprising the N-VA, MR, Les Engagés, CD&V and Vooruit, failed to reach an agreement on a fiscal consolidation effort of approximately €10 billion by 2029.
The King has held the resignation in abeyance. He is scheduled to receive Bart De Wever again on Friday, November 6, at 10:30 a.m.
Meanwhile, the Prime Minister has acknowledged that Belgium will have to resort to provisional twelfths, a mechanism allowing public expenditure to continue in the absence of an approved budget.
Yet behind this government crisis lies a much deeper question.
What if the failure of the Arizona coalition was not merely the result of five political parties being unable to reach an agreement, but rather the consequence of an economic strategy whose contradictions existed from the outset?
This is the question I wish to explore.
1. THE ARIZONA PARADOX: SEEKING FISCAL CONSOLIDATION WITHOUT GENERATING SUFFICIENT NEW REVENUE
Since taking office, the Arizona government has placed fiscal consolidation at the centre of its political agenda.
Reforming unemployment benefits, revising pensions, modifying social protection mechanisms, strengthening measures against abuse and reducing structural expenditure were intended to progressively restore Belgium's budgetary balance.
On paper, this approach appeared coherent.
However, a fundamental difficulty remains: the Belgian state must not only finance existing expenditure. It must also meet new economic, military, European and social commitments.
A government cannot indefinitely demand billions in savings while simultaneously accepting billions in additional expenditure without developing a credible financing strategy.
Fiscal consolidation cannot rely exclusively on spending cuts. It must also be supported by wealth creation, economic growth, employment and a sustainable expansion of tax revenue.
In my view, this is one of the main weaknesses of the Arizona strategy.
There has been extensive discussion about savings, but considerably less about how Belgium intends to generate sufficient additional wealth to finance its growing obligations.
2. CAPITAL GAINS TAXATION: A REFORM THAT SHAKES INVESTOR CONFIDENCE
The introduction of capital gains taxation on financial assets in 2026 represents a significant transformation of Belgium's fiscal landscape.
The law of April 6, 2026 introduced a general 10% tax on certain realised capital gains, with an annual exemption of €10,000 and specific provisions for substantial shareholdings.
The reform covers listed shares, holdings in unlisted companies, bonds, investment funds, exchange-traded funds and certain investment-linked insurance contracts, including products classified under branches 21, 23 and 44.
Belgian government bonds must be examined according to their specific tax treatment, particularly by distinguishing interest income from any capital gains realised through their sale.
The issue is not limited to expected tax revenue.
It is also a matter of confidence.
For decades, Belgium benefited from a relatively favourable environment for certain forms of private wealth investment.
Individual investors placed their savings in banking products, investment funds, insurance contracts and equities. Entrepreneurs built companies with the understanding that their ownership stakes represented assets that could eventually finance retirement, family succession or further investment.
By changing the taxation of these assets, the state also changes the economic assumptions underlying many investment decisions.
It would be excessive to claim that this tax alone caused a collapse in financial markets. Such a conclusion would require precise data on capital flows, trading volumes and asset valuations.
However, it would be equally unwise to assume that such a significant change in capital taxation has no influence on investor behaviour.
Investors do not assess investments solely on gross returns. They consider after-tax returns, risk and the stability of the fiscal environment.
When a reform changes these parameters, it can influence decisions to sell, retain, transfer or reinvest assets.
For shareholders in unlisted companies, the potential consequences are particularly sensitive.
An entrepreneur who has spent twenty or thirty years building a business may reconsider the timing or structure of its sale or succession.
A fairer taxation of financial gains can be defended as a political objective. Nevertheless, tax fairness must also be reconciled with legal certainty, competitiveness and productive investment.
Taxing capital is a fiscal decision. Maintaining the conditions that encourage capital to support the real economy is an economic responsibility.
3. MORE THAN €20 BILLION IN PROJECTED BUDGET DETERIORATION: PAUL MAGNETTE'S WARNINGS
Belgium's deteriorating fiscal outlook had already triggered strong criticism in Parliament.
Paul Magnette, President of the Socialist Party, notably criticised the worsening budget projections and the government's additional financial commitments before the House of Representatives.
A distinction must be made between the €20 billion in additional military expenditure that he referred to during parliamentary interventions and the projected deterioration of the federal budget deficit.
Budget projections discussed in 2026 suggested that the federal deficit could exceed €38 billion by 2029, compared with approximately €17.3 billion recorded in 2024.
The difference therefore exceeds €20 billion.
However, this represents a comparison between a past recorded deficit and a future projection, not an additional €20 billion loss already incurred.
This distinction is essential.
Nevertheless, the political question remains.
How can a government that presents fiscal consolidation as its overriding priority face projections showing such a substantial deficit?
There is, of course, a difference between reducing a deficit relative to a scenario without reforms and actually achieving a balanced budget.
For ordinary citizens, however, the result remains difficult to understand.
They are told to accept restrictions, reforms, new obligations and structural savings.
At the same time, projections continue to show rising public debt.
This does not mean that every fiscal consolidation measure is ineffective.
It means that the measures introduced are insufficient, on their own, to resolve the broader fiscal imbalance.
4. UNEMPLOYMENT, PENSIONS AND LONG-TERM SICKNESS: WHEN FISCAL CONSOLIDATION BECOMES A SOURCE OF SOCIAL ANXIETY
The reform of unemployment benefits is one of the most significant changes introduced by the Arizona government.
Limiting the duration of unemployment benefits fundamentally changes the protection available to jobseekers.
The government justifies this approach by referring to individual responsibility, labour market participation and long-term fiscal sustainability.
But what happens when someone loses unemployment benefits without finding a job?
In some cases, that person turns to a local Public Centre for Social Welfare, known in Belgium as a CPAS or OCMW.
Expenditure may then decrease in federal social security accounts while increasing in local social assistance budgets.
A saving at federal level is not automatically a saving for society as a whole.
Pension reforms raise comparable concerns.
Workers want to understand how many years they will need to contribute, how long they will be expected to work and what income they can reasonably expect during retirement.
For people experiencing long-term sickness or incapacity for work, proposals to strengthen monitoring and professional reintegration must reflect medical realities and genuine employment opportunities.
Returning to work is a legitimate objective when it is medically possible and professionally realistic.
However, treating illness primarily as a budgetary issue would be a mistake.
A person does not automatically regain the capacity to work simply because administrative eligibility conditions have changed.
The government cannot reduce social policy to a line in a financial spreadsheet.
It must establish whether its reforms genuinely create more employment, generate additional social security contributions and increase tax revenue.
Otherwise, announced savings may simply become transfers of expenditure between public institutions.
5. MILITARY EXPENDITURE AND NATO TARGETS: A NEW MULTIBILLION-EURO BILL
This is perhaps one of the most visible contradictions from the citizen's perspective.
Belgium is told that social expenditure must be restrained and public finances brought under control.
At the same time, the country must increase defence spending.
At the NATO summit held in The Hague in 2025, Allied countries committed to investing 5% of GDP in defence and broader security by 2035.
This target includes at least 3.5% for core military requirements and up to 1.5% for security-related expenditure, infrastructure and resilience.
It therefore does not consist exclusively of weapons purchases.
Nevertheless, Belgium must adapt its national expenditure trajectory to these commitments within an already highly constrained fiscal environment.
The need to strengthen European defence can be understood in light of the changing international security environment.
But one question remains.
How can a pensioner, an unemployed person or a worker be told that social entitlements must be reconsidered in the name of fiscal discipline while the state prepares to allocate substantial additional resources to military commitments?
Military security matters.
Economic, health and social security matter as well.
A country may become better equipped militarily while simultaneously becoming more socially vulnerable.
The real responsibility of government is therefore to establish a sustainable balance between these requirements rather than treating each financial obligation in isolation.
6. UKRAINE, EUROPEAN COMMITMENTS AND THE FINANCIAL LEGACY OF COVID-19
Belgium's international commitments create further financial pressures.
The country participates in European policies supporting Ukraine through financial instruments, economic assistance and military cooperation.
Not every amount mobilised at European level is directly charged to Belgium's federal budget.
National contributions, European financial mechanisms, loans, guarantees and direct assistance must be distinguished.
Nevertheless, public debate concerning the financing of these commitments is legitimate.
How should available resources be divided between domestic priorities and international obligations?
How can new commitments be financed without further destabilising public finances?
Belgium also continues to bear the burden of public debt increased by the extraordinary support measures introduced during the COVID-19 pandemic.
Those measures were necessary to prevent an even deeper economic and social crisis.
However, together with other deficits, they contributed to higher government borrowing requirements.
Today, interest payments themselves represent substantial public expenditure.
According to figures presented by Bart De Wever before the House of Representatives, interest payments on public debt across Belgium's various levels of government could amount to approximately €16 billion in 2026.
He also referred to a scenario in which these costs could reach €50 billion by 2035 if unfavourable conditions persist.
The latter figure is a conditional projection, not a certainty.
Nevertheless, it illustrates the fiscal cycle in which Belgium risks becoming trapped.
The more the state borrows, the greater the share of revenue it may need to devote to servicing its debt.
And as interest payments increase, fewer resources remain available to finance other public priorities.
7. AN ECONOMY CANNOT INDEFINITELY TIGHTEN ITS BELT WHILE BEING EXPECTED TO INVEST MORE
This is the central argument of my analysis.
The Arizona government appears to have built much of its strategy around the assumption that reducing public expenditure would gradually restore fiscal balance.
But economic reality is considerably more complex.
Pensions must be financed.
Healthcare must be financed.
Infrastructure must be maintained.
The energy transition requires investment.
Security must be strengthened.
Industry, technology, research and artificial intelligence require substantial resources.
And defence expenditure must now increase.
All these sectors require billions of euros.
How can a country simultaneously reduce expenditure, maintain essential public services, finance additional commitments and restore its public finances without sufficient growth in revenue?
A company seeking to restore profitability cannot indefinitely reduce expenditure at the expense of its productive capacity.
It must also increase revenue, invest intelligently and develop new markets.
The state is not a company: it has public service obligations and must protect fundamental rights.
Yet the underlying economic principle remains relevant.
Sustainable financial recovery cannot rely exclusively on expenditure reductions.
Belgium must create more added value, attract productive investment, strengthen its businesses, support employment and improve administrative efficiency.
Public revenue must increasingly come from a more dynamic economy rather than relying exclusively on the taxation and redistribution of existing wealth.
8. BELGIAN FEDERALISM MAKES THE EQUATION EVEN MORE COMPLEX
Belgium operates within a particularly complex institutional structure.
The federal government, Regions, Communities, provinces and municipalities exercise different responsibilities through interdependent financing mechanisms.
Within this system, a saving achieved by the federal government can generate additional expenditure for another public authority.
Unemployment reform provides a potential example when people losing benefits subsequently turn to local social welfare centres.
Likewise, decisions concerning taxation, employment and economic policy can produce different consequences depending on regional circumstances.
Brussels, Wallonia and Flanders do not share identical economic structures, social needs or fiscal capacities.
A consolidation policy that ignores these differences risks relocating problems rather than resolving them.
This raises a broader question about Belgian federalism.
Can a state with multiple levels of decision-making pursue a coherent economic strategy without sufficiently effective fiscal coordination?
This does not necessarily mean abolishing regional autonomy.
It means establishing clearer financial responsibility and better coordination between the different levels of government.
Belgium needs to examine its institutional functioning alongside its fiscal consolidation strategy.
9. BART DE WEVER: ACKNOWLEDGING FAILURE IS ONE THING; ACCEPTING ITS FULL CONSEQUENCES IS ANOTHER
Bart De Wever has publicly acknowledged the failure of the budget negotiations.
But a Prime Minister cannot simply be the person who identifies problems.
He must also be able to construct solutions.
When he agreed to lead the government, he knew that the five parties within the Arizona coalition had different approaches to taxation, social protection and public spending.
He was also aware of the constraints imposed by public debt and European commitments.
The difficulty of governing therefore could hardly have come as a surprise.
The immediate political problem lies in the absence of a sufficiently robust compromise capable of reconciling these competing objectives.
The MR opposes what it considers excessive increases in taxation.
Vooruit and Les Engagés seek a greater degree of fairness in the distribution of fiscal efforts.
The N-VA prioritises structural reform of public expenditure.
The CD&V seeks a balance between budgetary discipline and social compromise.
These differences existed from the coalition's inception.
On paper, the Arizona agreement already depended on a fragile balance between announced savings, expected revenue and financial obligations.
Economic reality has proved even more painful than the theoretical compromises contained in the coalition agreement.
This is why the current crisis should not be understood simply as an unexpected political accident.
It also reflects the difficulties of a budgetary framework with insufficient room to absorb additional financial pressures.
10. TOMORROW AT 10:30 A.M.: WILL BELGIUM HAVE TO PULL THE POLITICAL PIN?
Tomorrow, Friday, November 6, 2026, at 10:30 a.m., King Philippe is scheduled to receive Bart De Wever at the Royal Palace.
This meeting could become an important moment in Belgium's recent political history.
The King may continue to hold the resignation in abeyance, allowing coalition partners another opportunity to negotiate.
He may also accept the government's resignation, opening a new political and institutional phase.
Acceptance of a resignation would not automatically result in early elections. The formation of another parliamentary majority remains constitutionally possible.
But the fundamental question goes beyond the identity of the next Prime Minister.
What purpose would be served by prolonging the Arizona coalition if the economic contradictions behind the crisis remain unresolved?
What would be achieved by replacing a few ministers while leaving the underlying fiscal strategy unchanged?
And what would be gained from new elections if political leaders remain unable to explain how Belgium's long-term commitments will be financed?
Belgium cannot continue constructing budget agreements that appear balanced when signed but become increasingly difficult to implement.
It may now be necessary to reconsider national priorities, expenditure, revenue, institutional arrangements and economic objectives.
Political leaders must accept that some promises are incompatible with the financial resources available.
Above all, they must stop treating economic growth as an automatic consequence of spending cuts.
Tomorrow at 10:30 a.m., Belgium may have to pull the political pin and rethink everything from scratch.
Not to provoke another crisis.
But to recognise that artificially prolonging an economically inconsistent strategy may ultimately cost more than undertaking a fundamental reassessment.
11. BELGIUM'S 2027 BUDGET: THE YEAR WILL BEGIN UNDER PROVISIONAL APPROPRIATIONS — A SYMBOL OF UNFINISHED FISCAL CONSOLIDATION
A further development has reinforced the seriousness of the government crisis.
On Thursday, November 5, 2026, Bart De Wever confirmed before the House of Representatives that Belgium would have to begin 2027 under the provisional twelfths system because no agreement had been reached on the federal budget.
Until then, this possibility had largely been presented as a risk that the government was seeking to avoid.
It has now been publicly acknowledged by the Prime Minister.
Under this mechanism, the federal state can continue operating through temporary expenditure authorisations generally based on the previously approved budget.
Federal administrations can therefore continue functioning, subject to the legal approval of the required provisional appropriations.
However, this mechanism does not constitute a new multiannual budget, nor does it provide a structural solution to Belgium's financial difficulties.
At this stage, the announcement does not establish that a 2027 provisional appropriations law has already been adopted.
The precise amounts, duration of authorisations and possible exceptions remain to be specified.
It would also be premature to attribute any quantified reduction in social benefits or public investment directly to the announcement.
What is clear, however, is that a government whose central mission was to restore fiscal discipline has acknowledged that it cannot begin 2027 with the budget it intended to adopt.
My assessment: can this still be called effective fiscal management?
In my view, this announcement illustrates the limitations of the Arizona economic strategy.
For months, the government has asked citizens to accept the necessity of sacrifices.
It has defended restrictions on unemployment benefits, pension reforms, measures concerning long-term sickness and a new capital gains tax.
At the same time, Belgium must finance additional military, European and international commitments.
Despite these reforms and announced savings, the country is approaching a new financial year without a definitive federal budget in place from January 1.
The use of provisional twelfths does not automatically increase the deficit.
It does, however, demonstrate that the necessary budgetary decisions have not been reached within the required timeframe.
This is the fundamental paradox.
Citizens are expected to plan their expenditure, control their borrowing, prepare for retirement and fulfil their tax obligations, while the state itself has been unable to agree on its own financial framework for the coming year.
Belgium cannot build its economic policy on a continuous succession of announced savings, anticipated revenues and postponed compromises.
It needs a strategy in which financial commitments correspond to realistic economic capacities.
Provisional appropriations will ensure administrative continuity.
They will not replace political decisions, coherent reforms or a genuine strategy for economic growth.
TOMORROW AT 10:30 A.M.: A DEADLINE THAT GOES BEYOND THE FUTURE OF ONE PRIME MINISTER
On Friday, November 6, 2026, at 10:30 a.m., Bart De Wever will be received by King Philippe.
The meeting will help determine the next stages of the political crisis.
But in my assessment, the stakes now extend beyond whether the Prime Minister remains in office.
Belgium must ask itself whether it can continue pursuing a budgetary strategy whose objectives, resources and financial commitments have become increasingly difficult to reconcile.
Tomorrow at 10:30 a.m., it may be time to pull the political pin and start again from scratch.
Not merely by changing the government or redistributing ministerial portfolios.
But by fundamentally reassessing economic priorities, taxation, public expenditure, social protection financing, international commitments and institutional structures.
The real danger would be to treat this crisis as a simple disagreement between political parties when it raises much deeper questions about Belgium's capacity to finance its economic and social model.
A country cannot achieve sustainable recovery simply by asking its people to spend less. It must also create the conditions for production, investment, employment and the generation of the revenue required for its future.
CONCLUSION — ARIZONA'S FAILURE IS NOT MERELY A BUDGETARY FAILURE
The government crisis of November 2026 highlights a fundamental reality: public finances cannot be restored through announcements of savings alone.
Tomorrow, Friday, November 6, 2026, at 10:30 a.m., Belgium may have to do more than decide Bart De Wever's political future.
It may have to ask whether the time has come to pull the political pin, reset the entire system and rebuild an economic strategy that reflects both the country's ambitions and its financial means.
By Kadir Duran — Bruxelles Korner
Personal Opinion and Political Analysis — November 5, 2026
SOURCES AND REFERENCES — BRUXELLES KORNER
Political, Economic and Fiscal Dossier — November 5, 2026
1. Government Crisis and the 2027 Budget
Belgian Royal Palace — November 2, 2026
Official communication confirming that Bart De Wever submitted his resignation to King Philippe, that the King held it in abeyance and that consultations with the governing coalition followed.
BX1 / Belga — November 2, 2026
Reporting on the failure to reach a budget agreement, the approximately €10 billion fiscal adjustment sought by 2029 and the royal audience scheduled for November 6 at 10:30 a.m.
BX1 / Belga — October 17, 2026
Reporting on the potential use of provisional twelfths and the rejection of the proposed budget stability law.
Le Soir — Bernard Demonty, November 5, 2026, 4:10 p.m.
Article: “Bart De Wever: The Government Has Seriously Failed.”
The article reports the Prime Minister's statement before the House of Representatives and his confirmation that Belgium would need provisional appropriations for 2027.
2. Defence Expenditure and International Commitments
NATO — The Hague Summit Declaration, June 25, 2025
Official commitments concerning defence and security expenditure of 5% of GDP by 2035, including at least 3.5% for core military requirements and up to 1.5% for broader security-related expenditure.
3. Social Reforms and Budgetary Negotiations
La Libre Belgique / Belga — November 2, 2026
Reporting on political reactions to the failed budget negotiations, differences between the MR and Vooruit, healthcare financing and potential savings involving people on long-term sickness benefits.
BX1 / Belga — November 2, 2026
Reporting on disagreements over additional tax revenue, spending reductions and the positions adopted by Arizona coalition parties.
4. Capital Gains Taxation
Belgian Federal Public Service Finance
Official guidance on the taxation of investment income, savings products and financial assets.
Law of April 6, 2026
Legislation concerning the new taxation of financial capital gains, published in the Belgian Official Gazette.
Interest income, dividends and realised capital gains must be distinguished when applying the relevant tax provisions.
5. Public Deficits, Debt and Economic Outlook
Belgian Federal Planning Bureau — February 12, 2026
Economic outlook for 2026–2031, projecting a public deficit of 5.7% of GDP in 2029 and government debt reaching approximately 117% of GDP.
Belgian Federal Planning Bureau — June 12, 2026
Updated economic and budgetary projections, including lower growth forecasts for 2026 and a projected public deficit of 6.4% of GDP in 2031.
These forecasts concern general government finances and should not be directly equated with the federal government's deficit expressed in euros.
6. Unemployment Reform and Social Consequences
Belgian National Employment Office (ONEM/RVA) — March 2, 2026
Official information confirming the implementation of the new unemployment benefit system, including the general maximum duration of 24 months, subject to exceptions and transitional provisions.
ONEM/RVA — September 11, 2026
Official information on the consequences of the Constitutional Court ruling of September 10, 2026, concerning elements of the unemployment reform's transitional arrangements.
7. The Additional €20 Billion Deficit and Paul Magnette's Statements
Paul Magnette's parliamentary criticism of Belgium's budget trajectory should be read alongside the Monitoring Committee's official budget projections.
The projected deterioration of more than €20 billion represents a comparison between different fiscal periods and should not be presented as an additional debt loss already incurred.
The precise wording and numerical basis of Magnette's parliamentary interventions require confirmation from the corresponding official parliamentary transcripts.
Editorial note: The institutional announcements, legislative measures and economic projections referred to in this article are attributed to the sources listed above. The interpretations concerning capital taxation, fiscal consolidation, defence spending, social reforms and Belgium's long-term economic strategy represent the personal analysis and editorial opinion of Kadir Duran, published by Bruxelles Korner.
© Bruxelles Korner — Kadir Duran | November 5, 2026
Yorum Yazın