Covid-19, floods, rising energy prices… As a budgetary conclave opens next week in Wallonia, what financial state are the municipalities in the south of the country in?
“In recent years, the financial health of our municipalities has deteriorated, often with exogenous elements: the transfer of charges from the federal government. In particular the cost of police zones and emergency zones, pensions and tax reforms. The tax shift is expensive for cities and municipalities. We are aware that they are in difficulty, some more than others”observes Christophe Collignon.
So what can Wallonia do to help them? What means can be implemented, while the Walloon debt is very high? “We helped them, with a partial resumption of allocations in the relief areas. The provinces helped them. We also put 3 billion on the table for an Oxygen plan“, states the minister. A “one shot” plan which will not be extended, he specifies however. On the other hand, “in the future, it will be necessary to proceed by reforms“, assures the socialist. “Make sure to encourage municipalities to merge, which is the case between Bastogne and Bertogne. Promote supramunicipality to achieve economies of scale. But that won’t be enough.”.
To go further, the Walloon government has contacted the Consultation Committee, so that the federal government takes towns and municipalities into account when making a decision. “to ensure financial neutrality”, says Christophe Collignon. “It will take both reforms from cities and towns and the federal government must also do its part”he presses.
The Walloon debt will however amount to 24 billion euros by 2024 with unchanged policy. How to overcome it? “All this is provided for in the recovery plan. Cities and towns are the first levels of democracy, on the other hand they are 50% of the principals in matters of investment. So it’s important for the revival of Wallonia.”
150 million euros in savings to be made
“All the Walloon entities are at a turning point, all are in a bit of trouble“, continues the minister. In terms of Covid and floods, “Wallonia had to untie the purse strings“He saida public entity is like a household, it borrows and after a while the bank tells it: ‘be careful with the next loan’. We are in this situation and therefore we have to do work for future generations, which is not insurmountable. But you have to take your responsibilities and make a recurring effort which has been calculated at 150 million euros per financial year. Wallonia is a budget of 18 billion. So we can find those margins.”
“But we voluntarily got into debt to face the difficulties, to support our businesses and our territory”justifies Christophe Collignon.
In concrete terms, how can these savings be achieved? “We have a red line at the PS, do not touch the funds of the communes“, he says. Dn the other hand, you have to do a job of responsibility, that is to say a job to find new revenue: I’m not talking about taxes, but about yields from the different taxes. In the expenses there are obsolete devices that will have to be reviewed.
The war in Ukraine, a new variable
In La Libre this Wednesday morning, the Committed, via the former budget minister André Antoine, want to go further in the Walloon economies. “It is the role of the opposition to be catastrophic, but I believe that this is not the state of mind that should be taken. By the way André Antoine was budget minister, he has a whole little bit contributed to this debt. But 150 million, it is not insurmountable”, retorts Christophe Collignon.
Moreover, the war in Ukraine has direct consequences on the purchasing power of Belgians and the finances of the municipalities. How can the Walloon government help municipalities at this level? “This war is a humanitarian disaster,” begins the minister. “There is a significant impact, an energy crisis that affects everyone. We are in a period when, in the recovery plan, we had increased the means for cities and towns to make investments, especially for roads. Obviously the municipalities will have more, but the materials will cost more. So we will do less than planned, but we will do as much as we did in previous years. The budgets are not expandable at will, but we will no doubt allow the municipalities may have unbalanced budgets”