Belgium is making a pre-emptive strike on what it sees as a possible forthcoming contraction in its economy: it has boosted austerity cuts as well as measures to raise funds.
Reuters reported Sunday that the actions were taken after a full week of talks. Not only is Belgium deepening cuts already promised to combat its growing deficit, it is increasing taxes and postponing actions that were already planned for a total of 1.82 billion euros ($2.39 billion) in additional savings.
The country has committed to reduce its public sector deficit to 2.8% of GDP in 2012, from its 2011 level of 3.8%. If it fails to cut its deficit to a level of a maximum of 3%, it could face fines imposed by the European Union.
Some of the cost-cutting measures Belgium will impose, on top of the 11.3 billion euro package of measures it agreed to when the current administration took office at the end of 2011, include a 650 million euro freeze on spending that will require postponement of an army helicopter delivery; the promotion of generic medicines; and a cut to aid. It will also boost taxes on tobacco and investment products.