It was a statement by Theo Francken, N-VA deputy, this morning on La Première: “Next year, Belgium will have a deficit of 20 billion … We are becoming Greece”. So Déclic wanted to verify this assertion of the former Secretary of State.
Which proves Theo Francken right
If we delve into the figures, two elements can give the reason to Theo Francken in his Belgium-Greece comparison, the deficit and the growth of the debt.
For the deficit, Belgium’s expectations for 2022 are a little less good than those of Greece. The De Croo government expects a differential of -3.1% between its revenue and its expenditure, where Greece, in the IMF forecasts, is on the path of a deficit of -2.6%.
In terms of debt growth, the graphs are clear (video above): Belgian debt has grown much faster than Greek debt in recent years. Recall that Greece has been subjected to a forced austerity cure, since 2010, imposed by the European Union and the IMF.
What proves Theo Francken wrong
However, on other indicators, the differences are gigantic… And to the disadvantage of Greece. The Greek public debt is equivalent to 209% of its GDP, where this ratio is 114% for Belgium. If we compare the debt to the state’s revenue, the differential is even greater: the Belgian debt is equivalent to 228% of its annual revenue, for Greece it is 418%.
And then the fundamentals of the Belgian economy are very different from those of the Greek economy. Belgium still has a real industrial fabric in cutting-edge sectors (such as pharmaceuticals), where the Greek economy depends very heavily on its tourism. The Belgian employment rate is 70%, that of Greece (the worst student in Europe) is 61%. In research and development, Greece invests 2.5 times less than Belgium. And the comparisons can be multiplied: Belgium invests for example 28% of its GDP in the social, Greece only 24% (OECD figures).
For the economists consulted, the difference can also be seen above all in infrastructure, administrative capacity, organization of the labor market… On all these issues, there is no picture in the Belgium-Greece comparisons.
For rating agencies, the difference is clear
Even the rating agencies make a clear difference between our two countries, both of which are heavily indebted. Belgium’s Moody’s rating (AA3 – high quality) is 13 notches higher than Greece’s (B3 – highly speculative). This does not mean that Belgium does not have major challenges to meet (in terms of employment, debt, investment in the transition …) but in the opinion of all the economists consulted, comparing it to Greece doesn’t really make sense.