Budget constraints amid rising fuel costs
Pierre Wunsch, governor of the National Bank of Belgium, said that the country has limited fiscal space to cushion the impact of rising fuel prices on households.
“We no longer have the means to act as we did in 2022, when we were able to soften the shock and support people during the Ukraine crisis or earlier during COVID-19. Targeted support for the most vulnerable cannot be ruled out, but we no longer have room for broad measures financed by public funds,” he said.
Shift from broad support to targeted measures
The remarks suggest a shift away from large-scale government interventions seen in previous crises, including the pandemic and the energy price surge following 2022.
Authorities may instead consider more limited, targeted assistance for vulnerable groups, reflecting tighter budget conditions.
Broader economic outlook
Pierre Wunsch also noted that the current situation presents additional uncertainty.
“This may be the first time in a long period that we are entering a crisis without knowing its duration or scale, and already with a deficit that is too high and unsustainable,” he said.
The comments highlight wider concerns in Europe about fiscal sustainability and the ability of governments to respond to new economic shocks.
