BEL-DEBT: On the sustainability of public finances in Belgium

Since the onset of the sovereign debt crisis in Europe in early 2010, developments in the public debt of Eurozone countries have been closely followed by financial markets. Belgium, one of the countries in Europe with the highest level of debt relative to GDP, has not been an exception. Even though Belgium managed to stay more or less off the radar screen of international investors thanks to its economic performance, the ongoing political crisis and the uncertainty surrounding the potential effects of future reforms have attracted, more recently, the attention of market participants as spreads on government bonds have been widening. This pushed the question of debt sustainability to the top of the agenda of Belgium’s policy-makers.

Against this background CEPS, jointly with the Katholieke Universiteit Leuven (KUL) and the Université de Liège (ULg) committed to develop an attentive exam of Belgium’s debt sustainability. The central objective of this research project will be to present an overall analysis of Belgium’s debt sustainability accounting for the factors of risk that could affect the cost of refinancing its debt in the future. For this purpose the analysis will focus on sources of uncertainty associated with long-term trends and relevant institutional reforms. In particular considerable attention will be devoted to i) the effects of an ageing population, ii) developments in current account and households’ savings and iii) the possible consequences of reforms aiming at fiscal federalism.

Beldebt Final Conference - Brussels 24 February 2014

The Sustainability of Public Finances in Belgium: Regional, National and EU perspectives

Presentation slides   [please click on the names below to download presentations]


First BEL-DEBT International Seminar, Brussels, 15 June 2011

The Sustainability of Public Finances in Belgium: Regional, National and EU perspectives - The state of the art

Fiscal Federalism: An overview - Presentation by Prof. Robin Bodway, Queen's University, Kingston, Canada;
Determinants of intra-euro area government bond spreads during the financial crisis - Presentation by Ralph Setzer, DG ECFIN, European Commission;
The new rules of the Stability and Growth Pact: Threats from heterogeneity and interdependence - Presentation by Prof. Roberto Tamborini, University of Trento, Italy.


Project deliverables:

Related working papers

A simple model of multiple equilibria and sovereign default - Daniel Gros
Self-Fulfilling Crises in the Eurozone: An Empirical Test - Paul De Grauwe, Yuemei Ji
Mispricing of Sovereign Risk and Multiple Equilibria in the Eurozone - Paul De Grauwe, Yuemei Ji

BelDebt Final Report