Belgium Turns to Banks, Nuclear Power Producers to Tame Deficit
Belgium will introduce levies on banks, life insurers and nuclear power producers next year as Prime Minister Herman Van Rompuy seeks to start taming a swelling debt burden without hampering an economic recovery.
Belgium will seek 670 million euros ($991 million) from banks and life insurers in 2011 to protect their depositors and policy holders from default, Finance Minister Didier Reynders said. Power producers GDF Suez SA and SPE NV will have to pay as much as 245 million euros annually for keeping the country’s three oldest atomic reactors in operation an additional 10 years, according to Energy Minister Paul Magnette.
Van Rompuy’s government is seeking additional revenue from energy producers and financial companies, some of which received government funds last year, to fund a stimulus package of value- added-tax discounts, pinning its hopes on consumers to lead the recovery. The Belgian government projects the nation’s economy will expand 0.4 percent next year.
Van Rompuy, whose term ends in 2011, will address the parliament in Brussels at 2:30 p.m. local time. The government will outline the budget details at a briefing that starts at 4 p.m.
Belgium faces a budget shortfall widening to 5 bad credit pay day loans.9 percent of gross domestic product this year and government debt will start exceeding one year worth of national output as of 2010 again, according to European Commission forecasts.
Government Debt
Belgium had trimmed government debt to as little as 84 percent of GDP in 2007, before bailouts of Fortis, Dexia SA, KBC Group NV and mutual insurer Ethias Group increased the nation’s borrowing costs and inflated the debt ratio to 89.6 percent at the end of last year.
Deposit banks and life insurers selling policies with a guaranteed return will have to pay a combined 130 million euros both in 2010 and 2011 to gain mandatory entry in the guarantee fund. As of 2011, an annual premium amounting to 0.15 percentage points of guaranteed deposit holdings and policies sold will bring in an estimated 540 million euros, according to the Finance Ministry.
Energy Minister Magnette said he plans to complete talks with owners of nuclear power-generating capacity in the coming months.
Filed under: management by Wolf