Brussels-Capital Region’s Credit Rating Held at A Amid Financial Struggles
Standard & Poor’s has decided to keep the Brussels-Capital Region’s credit rating unchanged at A with a negative outlook, despite its continuing financial troubles and political deadlock, reports 24brussels.
The decision comes after an annual review, relieving Brussels of the immediate threat of a downgrade following a previous reduction from A+ to A in June, which is considered the sixth-highest investment grade. The ongoing political uncertainty and worsening debt levels had prompted concerns that a further downgrade could be imminent.
A downgrade could have imposed significant financial burdens on the region, leading to higher interest rates on new borrowing. Currently, Brussels faces an annual interest obligation of 415 million euros within a total budget of approximately 7 billion euros.
Despite maintaining its current rating, the negative outlook suggests that a downgrade remains a possibility. Brussels is grappling with substantial fiscal challenges, including a budget deficit of 1.5 billion euros, the most significant shortfall among all Belgian regions. Investigations by De Tijd and The Brussels Times have indicated that the city’s financial documentation has been presented in an overly optimistic manner in recent years.
In the meantime, David Leisterh (MR), the region’s coalition formateur, is actively working on laying the groundwork for Brussels’ upcoming budget.
Illustration shows Brussels region flag with Belgian and European flags © BELGA PHOTO NICOLAS MAETERLINCK
