Never before has a Walloon Government had such an ambitious budgetary trajectory, thanks to its bold regional policy statement. The Government has drawn up a budget that fits within the consolidation path set out in the government agreement. During the negotiations, the Government dealt with both the adjusted 2024 budget and the initial 2025 budget in order to ensure full consistency of decisions.
As announced by the negotiators, there are no new taxes.
Contextual factors to take into account
Peak in debt repayment
On average, annual debt repayment in recent years has amounted to around 800 million EUR.
Debt repayment in 2025 reaches a historic peak of nearly 1.4 billion EUR. This is mainly due to a significant loan taken out during the Covid crisis in 2020, which matures in 2025.
This repayment amount, together with the financing ceiling set by the Regional Treasury Council (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 has respected these limits, achieving a gross financing balance (the difference between revenue and expenditure) of -2.906 billion EUR at the end of the conclave.
Recovery plan
The Government has given itself until the end of 2024 to decide on the future of the Recovery Plan's projects.
To this end, and 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 earmarked in payment appropriations.
The Government has also decided to continue funding economically promising projects for Wallonia that will have a positive impact on citizens.
Compensation for local authorities for the abolition of local industrial taxes
Several decisions were taken during this conclave on budget-sensitive issues that had too often been postponed. This is notably the case for the regional intervention compensating municipalities and provinces for the decline in tax revenue resulting from exemptions from surcharges on property tax, as well as, for municipalities, exemptions from the compensatory industrial tax and the motive power tax.
As part of the adjustment to the 2024 budget, the Government has decided to allocate the additional 160.7 million EUR needed to close this file for 2023 and 2024. Given the growing burden of these provisions on the regional budget, the responsible Minister will prepare a reform of the scheme from the beginning of 2025.
This example reflects the Walloon executive's determination to take responsibility as quickly as possible, in order to restore the budgetary situation.
Recapitalisation of the Walloon Social Credit Company (SWCS)
Also among the measures decided for the 2024 budget adjustment, 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 purchase and renovation of housing and whose financial situation showed a serious imbalance between liabilities and assets (liquidity risk). The SWCS's management contract and model will be revised to resolve these problems. 10 million EUR has also been allocated 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 may be adjusted during 2025 according to new needs.
Bluetongue crisis
The Government has allocated an amount of 17.5 million EUR to support livestock farmers affected by the “bluetongue” disease. This much-awaited amount is included in the adjusted 2024 budget to allow for as swift an intervention as possible. The Minister for 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 needed to achieve the savings sought by the Walloon Government will be shared across the entire public sector. The aim is not to eliminate policies or services, but rather to change working methods by shifting habits and, above all, to assess the results of our public policies. Everyone will have to accept this change and work to propose new ways of operating to increase spending efficiency. However, certain essential sectors will be protected: the aim is to minimise the impact on citizens, associations and the health sector.
As a reminder, the method put in place by the Minister for Budget, in force since 2022, consists of a cumulative structural effort to reduce the deficit to 1% of revenue.
For 2025, the effort made is unprecedented: 268 million EUR. This will notably fund 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, should demonstrate the efforts made to ensure the sustainability of regional public finances and thus maintain investor confidence, as reflected in the Moody's rating. It should nevertheless be noted that the Walloon Region is influenced by the rating of the federal entity, which was recently revised from “Aa3 with a stable outlook” to “Aa3 with a negative outlook”.
Table of structural savings
| Type | Measure | Effort in thousand EUR |
| Revenue | Better monitoring and control of the granting of subsidies and the recovery of overpayments | 5.000 |
| Expenditure | Effort by the Walloon Parliament | 380 |
| Expenditure | Maintaining the indexation of the Municipal Fund without the additional 1% increase | 15.646 |
| Revenue | SOFICO own revenue | 2.000 |
| Expenditure | Reduction in economic aid | 15.000 |
| Expenditure | PKM support measures | 3.800 |
| Expenditure | Reduction in funds annually granted for loans and equity investments (OCPP) to WE | 45.000 |
| Expenditure | Freeze on APE indexation for local authorities and the market sector | 13.531 |
| Expenditure | Combating social abuse in the Service Vouchers scheme | 1.000 |
| Expenditure | Mutualisation and synergies between CISP, MIRE, ALE and MDE | 5.500 |
| Revenue | Valuation of FN Herstal dividends | 15.000 |
| Expenditure | Moratorium on subsidies to waste intermunicipal associations | 8.000 |
| Expenditure | Making Les Marronniers and Le Chêne aux Haies autonomous | 300 |
| Expenditure | Rationalisation and good governance in the civil service | 11.600 |
| Expenditure | Support for the Wallonia Racecourse in seeking a private buyer - Abolition of the regional subsidy | 950 |
| Expenditure | Reduction in discretionary subsidies | 60.000 |
| Expenditure | Effort on the SPW's operating costs | 11.796 |
| Expenditure | Effort on the operating costs of the UAPs | 53.579 |
| Total | 268.082 |
Second cycle of Spending Review
Three new themes have been defined:
- The accommodation of adults with disabilities and the individual follow-up of persons identified as priority cases. The aim is to improve the efficiency of the spending incurred.
- The centralisation of funding for UAPs within Wallonia's consolidation scope. The aim is to identify potential savings.
- The effectiveness and efficiency of premium and loan schemes for renovation work and improving the energy performance of homes. The aim is to improve the efficiency of the spending incurred.
Details by policy area: savings and new policies
Adrien Dolimont
- Reduction of around 6 million EUR in the budgets of the cabinets and departments of the two Governments (Walloon Region and Wallonia-Brussels Federation)
- Reduction of registration duties to 3%: EUR 250 million already included in the 2025 budget. This reform will become self-financing within 5 years thanks to the abolition of the housing cheque (for new entrants only, with no impact on those already benefiting from it before 1 January 2025).
Pierre-Yves Jeholet
Rationalisation of economic aid
The Government intends to assess the impact of aid, make economic players more accountable and put an end to windfall effects; regional aid will therefore be more targeted.
- On the one hand, the Government is reducing economic aid by 15 million EUR, in an effort to rationalise and manage resources more efficiently by concentrating support on the projects and initiatives with the greatest impact.
- On the other hand, it is ending the support 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 that must now be considered sufficient.
- Finally, the Minister for the Economy has proposed reducing by 45 million EUR the funds annually granted to Wallonie Entreprendre for loans and equity investments. There is no need to fund the WE group every year to pursue a business support policy. WE's own activity makes it possible to reinvest returns on investment without constantly increasing budget allocations.
No indexation of the APE envelope for local authorities and the market sector
- In order to keep control over the evolution of the budget for the Employment Promotion Aid scheme and to make beneficiaries more 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. This partial freeze on indexation represents a saving of 13.5 million EUR.
Miscellaneous measures
- The Government intends to step up the fight against social abuse in the Service Vouchers sector and to penalise offending companies. This effort should bring in 1 million EUR.
- The Minister for Employment will also propose pooling certain costs and improving synergies between CISP, MIRE, ALE and MDE, to achieve efficiency gains as well as a reduction in operating costs of 5.5 million EUR annually.
Jacqueline Galant
- The rationalisation of human and financial resources in the civil service, and better governance of these, 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 hires will have to be judged essential to the proper functioning of departments. Internal mobility within the SPW will be encouraged in order to strengthen essential or high-value-added services.
- These efforts in prudent human resources management will make it possible to better assess actual staffing needs and ensure that future recruitment matches the strategic priorities of the Walloon Region and the actual staffing needs of the SPW. These efforts are shared by everyone. In addition, administrative departments will need to more systematically encourage and structure teamwork in order to increase the related exemptions from payment of withholding tax.
- The efforts made have one goal: to rationalise in order to move not towards less public service, but towards better public service. The aim is to spend less in order to spend better.
Cécile Neven
- The budgets allocated to Energy, Climate, Housing and Airports policy have been preserved, despite a demanding budgetary context. Services essential to citizens will be maintained.
- The Government is also making a significant effort of 63 million EUR in 2024 and 10 million EUR in 2025 in favour of the SWCS, 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 concern the energy renovation premium scheme, a key mechanism helping households with their energy renovation projects and home modernisation, as well as in meeting climate targets. The aim is to make these premiums clearer and more effective for citizens, and sustainable for Wallonia.
- Finally, as regards the reception of Ukrainian refugees, overall funding has already been mobilised for 2025. These resources may be adjusted according to new needs and the follow-up given to the current reception scheme, which expires at the end of the first quarter.
Anne-Catherine Dalcq
- The Government has allocated an amount of 17.5 million EUR to support livestock farmers affected by “bluetongue” disease. This scheme aims to prevent the disappearance of certain farms and to guarantee the sustainability of the activities of the farmers concerned.
- In practical terms, a specific compensation per animal death will be provided, along with compensation for herd morbidity. The total amount of aid will be capped at 15,000 EUR, in order to comply with the de minimis ceiling set at 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.
Conclusion
Unprecedented efforts have been made in order to:
- Enable a genuine consolidation of Walloon public finances to begin, while taking clear positions on problematic issues that had gone unaddressed for years.
- Creating fiscal space to fund new policies and respond to crisis situations.
- Honouring the irrevocable commitments made under the Recovery Plan.
The Walloon Government went further than the quantitative targets set out in the negotiators' agreement.
ESA balance of the Region
| (in EUR billion) | Initial 2025 | Initial 2026 |
| Constant policy | -2,49 | -2,13 |
| Negotiators' trajectory | -2,36 | -2,01 |
| Outcome of the conclave | -2,29 |
Summary table
| Budget balances (EUR million) | 2024 Initial | 2025 Initial | Delta Ini 25 - Ini 24 |
| (1) REVENUES | 18.117 | 18.857 | 740 |
| (2) EXPENDITURE | 21.093 | 21.762 | 670 |
| (3) GROSS BALANCE TO BE FINANCED = (1)-(2) | -2.976 | -2.906 | 70 |
| (4) ESA CORRECTIONS | 767 | 619 | -148 |
| (5) ESA BALANCE = (3) + (4) | -2.209 | -2.287 | -78 |