BRUSSELS, Belgium – The Belgian government agreed to extend austerity measures €1.820 million euros ($2.390 million) to keep its budget deficit in 2012 within the European Union.
After a week of talks, ministers from the coalition of six parties also decided to freeze another €650 million in expenses in the event that a weak economy means that more savings are needed, the government said in a statement.
Officials added they would provide more details in a press conference scheduled in the morning.
“Despite a difficult context, the public’s spending power is preserved and the competitiveness of enterprises, guaranteed,” the statement added.
The new savings are added to the package of measures agreed to €11.300 million when the government took office late last year.
These measures included extending the retirement age from the current average of 59 years and the increase of taxes on corporate cars.
Belgium has pledged to cut its public sector deficit to 2.8% of gross domestic product (GDP) this year from 3.8% in 2011. They risk a fine from the EU if their negative balance does not fall below 3% of their GDP.
The Federal Planning Bureau, whose estimates generally are used to outline the budget projects that the Belgian economy, the sixth largest in the euro zone will grow just 0.1% this year after expanding 1.9% in 2011.
Belgium’s central bank has forecast that the local economy will shrink 0.1% in 2012.