Van Overtveldt on rising interest rates: “Financial markets have confidence in De Wever’s reforms”

Belgium’s long-term interest rate reached its highest level in 14 years this week, a development that must be closely monitored. In De Ochtend, Johan Van Overtveldt, chair of the Budget Committee in the European Parliament, explains that tensions in the Middle East are creating uncertainty and volatility on financial markets. “This will almost certainly lead to rising Inflation The increase in the general price level. The original meaning (literally “to blow up”) is monetary inflation, which means that the amount of money increases. Today, inflation primarily refers to price inflation. This means an implicit monetary depreciation. This causes the purchasing power to drop. inflation , making it likely that central banks will further increase interest rates.”

Confidence in the De Wever government

Although rising interest rates make financing more difficult for businesses and will, over time, increase the interest burden on public debt, Van Overtveldt notes that Belgium is performing relatively well compared to other European countries. “While interest rates in France and Italy have risen sharply since the start of the conflict with Iran, Belgium occupies a middle position between core countries such as Germany and the Netherlands on the one hand, and Southern European countries on the other.”

According to Van Overtveldt, this signals that financial markets have confidence in the reforms of the De Wever government. “The impact of these reforms on the budgetary situation and public debt is often underestimated by public opinion, but it is essential to maintain market confidence.”

Continuing budgetary efforts

In light of the monitoring committee’s finding that billions of euros still need to be found by 2029, Van Overtveldt considers it evident that budgetary efforts must continue. He also defends the decision to discuss major reforms in depth during the summer. Based on his experience as Minister of Finance, he states that thorough technical and political preparation is necessary for a good outcome. “Rushed work often leads to disappointing results,” he concludes.