Belfius cuts off credit to Brussels region

Belfius is closing its €500 million credit line for Brussels, meaning the region will become completely dependent on its second lender, ING, for any quick cash injections after next year.

If ING also withdraws, Bruzz reports, cash shortages for current expenditure cannot be ruled out.

Belfius did not provide a reason for terminating the credit line, but experts say it seems clear that the bank wants to limit its overall risk exposure to the region's finances. ING said it would not comment on the matter "out of respect for the confidentiality of our client".

The decision from Belfius is already setting off alarm bells at the top of the Brussels civil service.

“Such loans are intended to cover temporary liquidity needs,” said outgoing budget minister Sven Gatz (Open VLD), who resigned this week citing health reasons.

“In the past, these credit lines were rarely used by the Brussels government. In the long term, however, this poses a major risk because temporary deficits caused by an imbalance between income and expenditure will become increasingly difficult to bridge.”

Gatz’ remarks come after the latest rating by credit rating agency Standard & Poor’s, which did not downgrade Brussels’ A rating but did give it a negative outlook.

“The negative outlook reflects the continuing pressure on the budget from rising expenditure. A credible future perspective requires a fully-fledged new government with structural reforms and a realistic path to a balanced budget,” Gatz said.

“The financial markets still have confidence in the region's ability to meet its obligations, but the budgetary situation remains worrying.

"The warning light on the dashboard remains on, and we must take action now to prevent things from getting worse.

"The ambition of the six negotiating parties to deliver €1 billion in efforts, including at least €800 million in recurrent savings, must be strictly realised."

Other experts warn that no one knows Brussels’ accounts better than Belfius, and the fact that the region's largest lender is pulling out is a serious signal.

“A sound credit policy will force ING to follow Belfius’ example and there are no other credit lines,” Edwin De Boeck, chief economist at N-VA and previously at KBC, wrote on social media.

“Soon, the Brussels emperor will be completely naked.”

According to experts, a cash credit line of €300 to €500 million is the minimum required to enter 2026 with peace of mind.

If ING were to pull, all options would be exhausted except for turning to the federal government. Doing so would mean that the Brussels region would be placed under the supervision of the federal level, which could then impose its own conditions.

Faced with this financial precarity, the Brussels region is abolishing end-of-year gift vouchers for its 10,000 civil servants.

“This year, given the difficult budgetary context, the institutions concerned must opt not to grant gift vouchers or any other (end-of-year) gifts, whatever their form or nature,” reads an internal message signed by Gatz.

The holiday gift has been cancelled off and on since 2013, and none has been given in the last three years in a row.

“It's a €30 gift voucher that you could spend in a hi-fi or electrical appliance shop,” one civil servant told RTBF.

“It's true that we had to spend it at certain stores, but it was nice to have that money to buy a Christmas present for a family member or to treat ourselves.”

In total, about 10,000 regional officials across numerous departments were eligible for the voucher.

“There is no regulation that obliges employers to grant gift vouchers or any other (end-of-year) gifts each year,” Gatz’ memo said.

Alissia Claeys, permanent secretary of the CSC public services union for the Brussels region, said that while many employees understand the need for budgeting, workers are nonetheless disheartened that such a small gift was scrapped in the face of other budget-cutting measures.

“We oppose the abolition of gift vouchers because the reason given is to achieve budgetary savings, but these are penny-pinching savings because, given the amount of the gift voucher, it is quite minimal compared to the debt,” said Claeys.

“Moreover, the region is facing a moratorium. Budgets for the coming years are not guaranteed. Internal mobility is suspended. Only one person is being replaced for every three departures.

"It’s therefore all the more unfortunate to do away with these gift vouchers because, for the staff who are still there and are faced with an additional workload, it was a significant reward, especially for those in more precarious situations or with children. It was an added bonus."

The CSC, which already called for the return of gift vouchers back in 2013, regrets the lack of political dialogue due to the absence of a fully functioning government.