The rating agency Moody’s has downgraded Flanders’ creditworthiness. Finance and Budget Minister Matthias Diependaele (N-VA) says he is “proud of the support we have given our Flemish entrepreneurs” and is working on a proposal to combat the Flemish debt ratio.
The rating agency Moody’s has lowered the creditworthiness of Flanders from Aa2 to Aa3. Wallonia and the French Community have also had their ratings lowered. Moody’s draws attention to the considerable negative pressure caused by the coronavirus pandemic and the likely lasting effects of the crisis on the deficits and debts of the affected regions.
In an answer, the Flemish Minister Diependaele says that the Flemish government has taken its responsibility during the Corona crisis and made the necessary expenditures to support the economy and society. “It tastes bittersweet. We can be proud of the support we have given to our Flemish entrepreneurs. We have thus kept our economy on course and we have received recognition for it. But these additional expenses inevitably brought additional debt with him. Therefore our rating will be adjusted ”.
Diependaele is now working on a proposal to address this debt ratio. He will join the government this week or next. “Healthy public finances remain a priority for me.”
In normal times, the Flemish government aims for a debt ratio of around 65 percent of revenue. But without an adapted policy, this debt ratio threatens to flirt with the 100 percent limit by 2026. Diependaele therefore wants to slow down the upward trend and finally reverse it again towards 65 percent.