* Belgium aims for budget deficit of 2.15 percent in 2013
* Slower growth means additional savings need to be found
* Economist says government needs to focus on structural
By Robert-Jan Bartunek
BRUSSELS, March 8 Belgium is facing budget cuts
some 80 percent greater than planned if it is to reach its
deficit target this year, a committee advising the government
The committee of high-ranking civil servants said an
additional 2.8 billion euros ($3.66 billion) in savings had to
be found if Belgium was to end 2013 with a deficit of 2.15
percent of gross domestic product.
That is on top of the 3.4 billion euros in cuts already
pledged by the government.
Weakening economic growth is the reason.
The budget is currently based on a growth estimate of 0.7
percent for the year, but the state forecasting agency cut its
growth outlook last month to 0.2 percent for
The 2.15 percent target is below that demanded by the
European Union and by no means problematic compared with some
countries. Spain, for example, is struggling to get its deficit
to GDP down to 4.5 percent, although this is expected to rise.
The Belgian government estimates its deficit last year was
2.96 percent of GDP.
Budget minister Olivier Chastel said in a radio interview
last week the deficit target still stands, though some within
the ruling coalition have called for it to be eased.
Some Belgian economists argue that too much focus on cutting
the deficit could stifle economic growth while doing little to
improve the underlying economy.
"Rather than wasting time with an arbitrary deficit target
we should focus on long-term structural reform," Petercam
economist Bart Van Craeynest said.
Reforming Belgium's pension system to address early
retirement and abandoning the automatic adjustment of wages for
inflation could be two such measures, he said.
The official retirement age in Belgium is 65, but Belgian
men on average retire shortly before the age of 60 and women at
the age of 59, some of the lowest levels in industrialised
Negotiations between the government coalition partners over
where the budget cuts will be made start on Friday but there is
no deadline yet for agreement, a spokesman for the budget
In 2012 Belgium met European deficit rules, which mandate a
maximum deficit of 3 percent of annual output, after making
spending cuts of 14.5 billion euros.
The coming negotiations are the first for newly appointed
finance minister Koen Geens, who was sworn in on Tuesday when
Steven Vanackere stepped down in a dispute over bank loans to a
labour union linked to his political party.