Standard & Poor’s lowers Brussels Region rating and this has “dire consequences” in the medium term | read

A rating agency or credit rating agency is a company that assesses the creditworthiness of companies and governments based on their financial situation. The 3 best-known and/or most influential rating agencies are Standard & Poor’s, Moody’s and Fitch.

A rating is a score that reflects creditworthiness. The lower the score, the worse the financial condition of the assessed company or government. In practice, this usually means higher interest rates if money has to be borrowed.

Consequences “dire” in the medium term

The reduction in the Brussels Region could therefore lead to Brussels having to pay more interest when it borrows money. Brussels’ creditworthiness is declining because, according to Standard & Poor’s, the budget deficit will be higher than expected in the coming years and the debt ratio will rise further.

Brussels Budget Minister Sven Gatz (Open VLD) confirms that the lower rating by Standard & Poor’s is not good news. According to him, the short-term consequences are limited.

“We closed almost all of our loans on still favorable terms in the first months of the current year and we also spread our risks with two important loans from the European Investment Bank.”

In the medium term, however, the task will be “very difficult”, he admits. According to Gatz, additional savings must be made and strategic investments must be phased out more quickly.

“It is possible for the next government to draw up a new budget path, but then everyone will have to take responsibility,” the minister said.

Opposition is fierce

The opposition points an accusing finger at the Brussels government.

“For 5 years, Brussels budget policy consisted of piling up deficits, derailing the debt ratio and not adhering to budget rules,” says N-VA faction leader Cieltje Van Achter. “The fact that we are losing the confidence of the international markets today is the result of those choices.”

“After an alarming report from the Court of Audit, this is a new wake-up call for everyone who wants to develop the future of Brussels,” says MR faction leader David Leisterh.

“This is what this government’s irresponsible budgetary policy leads to,” says Christophe De Beukelaer of Les Engagés. “The downgrade of our rating will further increase the debt burden of citizens.”