Vital urban projects could be in danger, says minister-president

Flanders’ minister-president, Geert Bourgeois, has warned that strict European Union budgetary rules could make it difficult for governments to carry out vital projects requiring long-term investments.

In an interview on Radio 1, Bourgeois (pictured) said new EU rules could represent “a serious problem” for large-scale projects such as the Oosterweel link in Antwerp. He was responding to the recent decision by the European statistical agency Eurostat to reject the public-private consortium set up to finance the transport infrastructure that will complete the Antwerp Ring.

“I don’t understand why the European Commission is doing this at just the same moment as the president of the commission has announced that there have to be large-scale investments,” he told Radio 1. “This makes it exceptionally difficult for governments and municipalities to make large investments.”

He criticised the EU for insisting that the entire budget for the Oosterweel link – €3.25 billion – had to be registered in the budget for a single year, while the payment was spread over several years. He added that this would inevitably push Flanders’ budget into the red. “This would obviously have an impact on every budget and lead to enormous problems,” he said.

The EU introduced strict rules on government budgets following the financial crisis in the eurozone that was widely seen as the result of reckless government borrowing. “I understand that the EU has to take firm action against countries that incur debts to plug a gap in their budget,” Bourgeois said. “But if you can show that you have a balanced budget, why can you not finance large-scale sustainable projects with loans that you record as expenditure over the period of repayment?”

Bourgeois compared the government to someone taking out a mortgage that would be repaid over 20 or 30 years. The Oosterweel project is due to be completed in 2022 at the earliest.

But Bourgeois insisted that the project would go ahead. “This investment has to happen,” he said. “The project is of vital importance in solving traffic congestion and is of vital importance to our economy.”