The CERPE, Center for Research in Regional Economy and Economic Policy from the University of Namur, regularly analyzes the finances of the federated entities. The latest study quantifies the prospects of the Wallonia-Brussels Federation: by 2027, the situation is deteriorating to the point of weighing on its future.
The scenario studied
When the researchers try to see what the situation could be in 5 years, they do a floor simulation. In other words, they assume that, excluding inflation, no expenditure or revenue will be modified, no decision will be taken one way or the other. But this is rarely the case: new charges arise more often than additional income.
Abyssal Debt
Or, d’ici 2027, according to the authors of the study, in this low scenario, the debt of the Wallonia-Brussels Federation will peak at nearly 18.8 billion. This is the result of revenues increasing (by 1.4%) while expenses are increasing more (by 1.9%).
Untangling knot
It is therefore a trajectory which continues to deteriorate and which seems difficult to interrupt: the Federation which does not have its own fiscal resources borrows on a market where interest rates are beginning to rise. And moreover, it supports charges that are mostly incompressible and consist mainly of salaries.
New state reform
At this rate, the CERPE expects that, in 2027, the amount of debt will represent 1.5 times the amount of revenue. This finding calls for an obvious conclusion. This is an untenable situation that we only see leading to two scenarios: either the institution is emptied of its substance, or its future is linked to the next institutional negotiations which we expect.