This Wednesday, the Walloon Parliament adopted the 2025 budget, marking a key step in the management of the Region's public finances. The Walloon Government continues its efforts to control spending while supporting economic recovery and public investment. As announced by the negotiators, there are no new taxes, providing a reassuring signal to citizens and businesses, while maintaining the goal of financial stability.
Contextual elements to acknowledge
Peak in debt repayment
On average, annual debt repayment in recent years amounted to around 800 million EUR.
Debt repayment in 2025 reaches a historic peak of nearly 1.4 billion EUR. This is notably due to a significant loan taken out during the Covid crisis in 2020, which matures in 2025.
This repayment amount and the funding ceiling set by the Regional Treasury Council, namely a maximum of 3.3 billion EUR in financing on the financial markets, constituted two major constraints in drawing up the initial 2025 budget.
The Walloon Government respected the set limits by achieving a gross balance to be financed (difference between revenue and expenditure) of - 2.906 billion EUR at the end of the conclave.
Recovery plan
The Government is giving itself until the end of 2024 to decide on the future of the Recovery Plan projects.
Until then, the rational use of regional resources will guide the Government's choices while respecting the irrevocable commitments already made.
For 2025, given that the Plan is largely committed, 1.204 million EUR is allocated in liquidation credits.
The Government has also decided to continue financing projects that are economically promising for Wallonia and will have a positive impact on citizens.
Compensation to local authorities for the abolition of local taxes on industry
Several decisions were made during this conclave on budget-sensitive issues that had too often been postponed. This is particularly the case for the regional intervention to compensate for the reduction in tax revenue of Municipalities and Provinces relating to exemptions from surcharges on property tax, as well as, for municipalities, exemptions from the compensatory industrial tax and the tax on motive power.
As part of the adjustment of the 2024 budget, the Government decided to allocate the additional 160.7 million EUR needed to close this matter for the years 2023 and 2024. Given the growing burden of these provisions on the regional budget, a reform of the mechanism will be prepared by the responsible Minister from early 2025.
This example reflects the Walloon executive's determination to take responsibility as quickly as possible in order to restore the budgetary situation.
Refinancing of the Société wallonne du crédit social (SWCS)
Also among the measures decided for the adjustment of the 2024 budget, 63.7 million EUR will be reinjected into the SWCS. This contribution was absolutely necessary to avoid the bankruptcy of the SWCS, which is responsible for granting financing for the acquisition and renovation of housing and whose financial situation showed a serious imbalance between liabilities and assets (liquidity risk). The SWCS management contract and its model will be adjusted to solve these problems. 10 million EUR has also been granted for 2025.
Reception of Ukrainian refugees
Given the evolution of the war in Ukraine, the Walloon Government has decided to set aside resources to fund the reception of Ukrainian refugees. These resources can be adjusted during 2025 according to new needs.
Bluetongue disease crisis
The Government has released 17.5 million EUR to support farmers affected by bluetongue disease. This much-awaited amount is included in the adjusted 2024 budget to enable the fastest possible intervention. The Minister of Agriculture continues her efforts with the federal government on prevention, and a request for intervention from the European crisis reserve fund has also been submitted.
Structural savings
The efforts to achieve the savings desired by the Walloon Government will be borne across the entire public sector. The goal is not to eliminate policies or services but rather to change working methods by changing habits and, above all, to evaluate the results of our public policies. Everyone will need to accept this change and work to propose new working methods to increase spending efficiency. However, certain essential sectors will be preserved: the goal is to minimise the impact on citizens, associations and the health sector.
As a reminder, the method introduced by the Minister of Budget, in effect since 2022, is that of a cumulative structural effort to reduce the deficit to 1% of revenue.
For 2025, the effort achieved is unprecedented: 268 million EUR. This will notably enable the financing of new policies and their impact on 2025.
| Years | Savings |
| 2022 | 150 million |
| 2023 | 250 million |
| 2024 | 100 million |
| Subtotal | 500 million |
| 2025 | 268 million |
|
Total |
768 million
|
These structural efforts, together with compliance with the financing ceiling on the financial markets, are intended to demonstrate the efforts made to ensure the sustainability of regional finances and thus maintain investor confidence, reflected in the Moody's rating. It should nevertheless be recalled that the Walloon Region is influenced by the rating of the federal entity, which was recently revised from “Aa3 with stable outlook” to “Aa3 with negative outlook”.
Table of structural savings
| Type | Measure | Effort in thousand EUR |
| Revenue | Better monitoring and control of the granting of subsidies and recovery of overpayments | 5.000 |
| Expenditure | Walloon Parliament effort | 380 |
| Expenditure | Maintenance of the indexation of the Municipal Fund without the additional 1% increase | 15.646 |
| Revenue | SOFICO's own revenue | 2.000 |
| Expenditure | Reduction in economic aid | 15.000 |
| Expenditure | PKM accompanying measures | 3.800 |
| Expenditure | Reduction in the annual funds allocated for credit granting and equity investments (OCPP) to WE | 45.000 |
| Expenditure | Freezing of the APE indexation for local authorities and the market sector | 13.531 |
| Expenditure | Combating social abuse in Service Vouchers | 1.000 |
| Expenditure | Pooling and synergies between CISP, MIRE, ALE and MDE | 5.500 |
| Revenue | Valorisation of FN Herstal dividends | 15.000 |
| Expenditure | Moratorium on the subsidy to waste management intermunicipal companies | 8.000 |
| Expenditure | Autonomisation of Les Marronniers and Le Chêne aux Haies | 300 |
| Expenditure | Rationalisation and good governance in the civil service | 11.600 |
| Expenditure | Support for the Walloon racecourse in finding a private buyer - Abolition of the regional subsidy | 950 |
| Expenditure | Reduction in discretionary subsidies | 60.000 |
| Expenditure | Effort on SPW operating costs | 11.796 |
| Expenditure | Effort on UAP operating costs | 53.579 |
| Total | 268.082 |
Second Spending Review cycle
Three new themes have been defined:
- Accommodation for adults with disabilities and named follow-up of individuals declared priority. The aim is to improve the efficiency of the expenditure incurred.
- The centralisation of funding for UAPs within Wallonia's consolidation scope. The aim is to consider potential savings.
- The effectiveness and efficiency of premium and loan schemes for renovation works and improving the energy performance of homes. The aim is to improve the efficiency of the expenditure incurred.
Details by competence: savings and new policies
Adrien Dolimont
- Reduction of around 6 million EUR in the budgets of the offices and services of the two Governments (Walloon Region and Wallonia-Brussels Federation)
- Reduction of registration duties to 3%: €250 million already included in the 2025 budget. This reform will be self-financing within 5 years due to the abolition of the housing tax credit (for new entrants, no change for those already benefiting before 1 January 2025).
François Desquesnes
Local authorities
- 2024 adjustment - Payment of the promised “Plan Marshall” tax compensations: the Government will pay municipalities and provinces the 160.7 million EUR that has not been paid for two years.
- Maintenance of the indexation of the Municipal Fund: Wallonia will continue to index the Municipal Fund, but the additional 1% increase will be abolished.
- Increased funding for emergency services zones by the provinces: The Provinces will increase their contribution to the funding of emergency services zones, thereby automatically easing the “firefighters' grant” borne by towns and municipalities.
Spatial planning
- Support for municipalities for the Municipal Development Scheme (SDC): Specific support will be maintained to help municipalities define their centres, in order to limit urban sprawl and reduce soil sealing.
Mobility/infrastructure
- New investment plan for engineering structures: In addition to the Infrastructure and Mobility for All Plan (PIMPT), an additional 184 million EUR is planned from 2025 to 2029, including a first instalment of 15 million EUR in the very first year.
- Optimisation of the services of the Walloon Transport Operator (OTW) in 2025: The resources allocated to the OTW increase overall by 45 million EUR compared to 2024 (excluding the recovery plan). 2025 will be a transition year for TEC, which will focus on efficiency gains.
Pierre-Yves Jeholet
Rationalisation of economic aid
- The Government intends to assess the impact of aid, hold economic actors accountable and put an end to windfall effects, so regional aid will be more targeted.
- On the one hand, the Government is reducing economic aid by 15 million EUR in the interest of rationalisation and more efficient resource management, by focusing support on projects and initiatives with the greatest impact.
- And on the other hand, it is ending the accompanying measures (3,800,000 EUR) that benefited companies active in road freight transport following the introduction of the kilometre charge in 2016, after a transitional period which must now be considered sufficient.
- Finally, the Minister for the Economy proposed reducing by 45 million EUR the funds annually allocated to Wallonie Entreprendre for credit granting and equity investments. There is no need to feed the WE group every year to pursue a policy of business support. WE's own activity allows returns on investment to be reinjected without constantly increasing budget allocations.
Non-indexation of the APE budget for local authorities and the market sector
- In order to control the evolution of the budget for the employment promotion aid policy and hold beneficiaries accountable in a spirit of shared effort, the Walloon Government has decided to freeze the indexation of APE subsidies except for the non-profit sector. The partial freeze of indexations represents a saving of 13.5 million EUR.
Various measures
- The Government intends to fight more effectively against social abuse in the Service Vouchers sector and sanction offending companies. This effort is expected to bring in 1 million EUR.
- The Minister for Employment will also propose a pooling of certain costs as well as better synergies between CISP, MIRE, ALE and MDE, in order to achieve efficiency gains as well as a reduction in operating costs of 5.5 million EUR annually.
Yves Coppieters
- The budgets allocated to AVIQ's health prevention and promotion plan have been doubled, from 40 to 80 million EUR. This strategic investment is essential to anticipate the costs linked to healthcare.
- The preservation of the indexation of family allowances also represents a major step forward, providing crucial support to families. In terms of social action, the resources of reception facilities for vulnerable people will be guaranteed in 2025. As a reminder, the Government released the funds planned for 2024 under the Walloon recovery plan at the start of the conclave.
- Financial support will be granted for the care of citizens affected by the PFAS crisis, through the Environmental Protection Fund, for which resources have been allocated.
- Regarding the savings efforts, AVIQ is asked to maintain subsidies directly linked to health and disability policies. Other discretionary subsidies, less linked to these policies, will be reduced by 10 million EUR.
- Finally, a moratorium is being placed on the planned funding for the infrastructure plan of the waste management intermunicipal companies (8 million EUR).
Jacqueline Galant
- The rationalisation of human and financial resources in the civil service and better governance thereof is a necessity. The budget conclave provides for no dismissal of civil servants.
- On the other hand, the end of automatic replacement of retirements and the non-renewal of certain fixed-term contracts will temporarily have to become the norm. New recruitments will need to be judged essential to the proper functioning of services. Internal mobility within the SPW will be encouraged to strengthen essential or high value-added services.
- These efforts in terms of prudent human resources management will make it possible to better assess real staffing needs and ensure that future recruitment matches the strategic priorities of the Walloon Region and the SPW's actual staffing needs. The efforts are shared by everyone. In addition, the administration's departments will need to encourage and structure teamwork more systematically in order to increase the related exemptions from payment of the withholding tax on earned income.
- The efforts undertaken have one objective: to streamline in order to achieve not less public service, but better public service. It is about spending less in order to spend better.
Valérie Lescrenier
Renovation of childcare facilities
- Early childhood care is a crucial issue for this legislature. Sustaining existing places, authorising additional places and promoting quality care are complementary objectives. The quality and safety of childcare are at the heart of the priorities of the Walloon Government and the Wallonia-Brussels Federation Government. With this in mind, in Wallonia an additional 7 million EUR will be devoted to renovating childcare facilities.
Tourism and heritage
- Economies of scale will be achieved by strengthening synergies and pooling between the tourism and heritage portfolios, their operators and the competent administrations.
- Administrations and operators will be made even more efficient thanks to the resources made available for digitalisation and administrative simplification, which will contribute to entrepreneurial momentum and support for the sector.
- Budgetary resources will be devoted to supporting the development of new offerings
Cécile Neven
- The budgets allocated to Energy, Climate, Housing and Airports policies have been preserved, despite a demanding budgetary context. Essential services for citizens will be maintained.
- Furthermore, a significant effort of 63 million EUR in 2024 and 10 million EUR in 2025 is being made by the Government in favour of the SWCS, in order to avoid its bankruptcy and protect its beneficiaries.
- In a spirit of more efficient management, several evaluations will also be launched, notably through the “Spending Review”. These will mainly focus on the energy renovation premium scheme, a key instrument for helping households with their energy renovation and home modernisation projects, as well as in achieving climate targets. The aim is to make these premiums clearer and more effective for citizens, and sustainable for Wallonia.
- Finally, regarding the reception of Ukrainian refugees, overall funding has already been secured for 2025. These resources may be adjusted depending on new needs and the follow-up given to the current reception scheme, which is due to expire at the end of the first quarter.
Anne-Catherine Dalcq
- The Government has released 17.5 million EUR to support livestock farmers affected by “bluetongue” disease. This scheme aims to prevent the disappearance of certain farms and guarantee the continuity of the activities of the farmers concerned.
- Specifically, a specific payment per dead animal and compensation for herd morbidity will be provided. The total amount of aid will be capped at 15,000 EUR to comply with the de minimis aid ceiling of 20,000 EUR over a period of three tax years.
- By precisely targeting needs, this aid plan responds to the urgency of the situation while ensuring rigorous management and effective governance.
- The practical arrangements for activating the aid request will be set out in the legal basis currently being finalised. The principle will be similar to that applied for coupled support. This aid scheme is designed to be simple, so that it can reach farms quickly.