On 3 July 2026, the Council of the European Union adopted a Recommendation setting out economic, social, employment, structural and budgetary policy guidance for Belgium. The recommendation requires Belgium to adhere to maximum net expenditure growth rates of 2.5% in 2026, 2.5% in 2027, 2.1% in 2028, and 2.1% in 2029, with cumulative growth from the 2024 base year reaching 13.4% by 2029. The excessive deficit procedure for Belgium is held in abeyance as of 3 June 2026, and Belgium may deviate from the recommended net expenditure growth rates during 2025-2028 under the activated national escape clause to increase defence spending.
The recommendation comes as Belgium's general government deficit stood at 5.2% of GDP in 2025, projected to remain at 5.2% in 2026 and rise to 5.4% in 2027. General government debt was 107.9% of GDP at end-2025, projected to reach 110.5% by end-2026 and 112.8% by end-2027. Defence expenditure was 1.4% of GDP in 2025, projected at 1.6% of GDP in 2026. Belgium faces high fiscal sustainability risks in the medium and long term, with ageing-related spending projected to increase by around 5 percentage points of GDP by 2070.
The Council notes that the pension reform was adopted by Parliament on 28 May 2026, tax reforms due Q1-2026 are partly implemented with remaining parts expected by July 2026, and two reforms to improve budgetary coordination between government levels, due Q4-2025, are expected to be legislated by end-2026. The Commission found Belgium's implementation of key reform and investment steps due by 30 April 2026 broadly on track.
Policy orientations and trade-offs The recommendation balances fiscal consolidation with flexibility for defence spending. The net expenditure limits aim to reduce the deficit and debt, but the escape clause for defence allows Belgium to increase military spending without breaching the rules. This trade-off reflects the EU's push for higher defence expenditure amid geopolitical tensions, while maintaining pressure on Belgium to address its structural fiscal imbalances.
Impact on stakeholders - Belgian federal and regional governments: Must comply with strict expenditure ceilings and implement delayed reforms, requiring difficult budgetary choices and coordination between government levels. - Belgian taxpayers: May face higher taxes or reduced public services as the government seeks to meet deficit targets, though defence spending increases could create jobs in the defence sector. - EU institutions: The recommendation reinforces the credibility of the reformed Stability and Growth Pact, with the Commission monitoring compliance and the Council holding the excessive deficit procedure in abeyance. - Defence industry: Benefits from the escape clause allowing higher defence spending, potentially boosting investment and procurement.
Institutional follow-up The Council's recommendation is part of the European Semester cycle. Belgium is expected to report on implementation in its next National Reform Programme and Stability Programme. The Commission will assess progress in its autumn 2026 country report. The Council may review the recommendation if economic conditions change significantly.