Belgium’s Budget Impasse: VAT Hikes Loom as Government Faces Collapse
Brussels, Belgium – February 25, 2026 – Belgium’s five-party coalition government is teetering on the brink of collapse as negotiations over the 2026 budget remain deadlocked. A key point of contention is a proposed increase to the Value Added Tax (VAT), fiercely opposed by the French-speaking liberal Reformist Movement (MR), led by Georges-Louis Bouchez. The impasse has prompted Prime Minister Bart De Wever to consider tendering his resignation to King Filip, potentially triggering early elections.
Budget Cuts and the VAT Debate
Prime Minister De Wever, representing the Flemish nationalist N-VA party, is pushing for €10 billion in savings through a combination of spending cuts and tax increases. However, Bouchez is vehemently resisting any moves to raise VAT, a tax that impacts consumers directly. The MR leader aims to prevent price increases in supermarkets, according to reports from February 16, 2026 Brussels Times.
Russian Asset Dispute Adds to Tensions
The budget crisis unfolds against a backdrop of broader political tensions. De Wever has taken a firm stance against a European Union plan to utilize frozen Russian assets to provide financial aid to Ukraine. He demands guarantees that Belgium, home to Euroclear – the financial clearinghouse holding the majority of the immobilized Russian central bank assets – will not be held liable for the €140 billion should a future court ruling or peace settlement necessitate its return to Russia. This position has garnered support from within his coalition, with Bouchez echoing De Wever’s concerns Euractiv.
Potential Government Resignation
Negotiations have become increasingly strained, with sources describing the atmosphere as “well below freezing” VRT NWS. If a budget agreement is not reached by the deadline, De Wever is prepared to submit his resignation to the King. The monarch then has the discretion to either accept the resignation or attempt to broker a renewed round of negotiations.
Previous Warnings and Opposition to Tax Hikes
The current crisis builds on warnings issued in November 2025, when the government threatened to resign if a budget wasn’t finalized by Christmas Brussels Signal. The MR has consistently opposed a VAT hike, along with increased taxes on wealthier citizens.
Looking Ahead
The coming days are critical for the stability of the Belgian government. The outcome of the budget negotiations will determine whether the coalition can remain intact or if the country will face a period of political uncertainty and potentially early elections. The dispute over VAT and the handling of Russian assets highlight the deep divisions within the coalition and the challenges facing Prime Minister De Wever.