How Belgium’s Socialists want to plug the EU’s spending gaps

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Good morning. Today, I’ve got a dispatch from the leader of Belgium’s Socialist party, who proposes a wealth tax to solve the EU’s spending woes. And my colleague in Dublin explains a spat between Ireland and the UK on immigration.

Have a good weekend.


As the EU debates how to fund its growing spending needs for defence and the green transition, the leader of Belgium’s Socialist party has a simple proposition: Let the wealthy pay for it.

Context: Several EU countries are in breach of the EU’s strict deficit rules, among them Belgium. At the same time, following the war in Ukraine countries are trying to ramp up defence spending, and the EU needs to invest vast sums to reach its climate targets.

“If we want to finance the climate transition, we need money. This money will come from the multinationals and the great fortunes. There really is no other solution,” Paul Magnette told the Financial Times. “I believe this is a demand that is very strong in the European population.”

Magnette called for “a worldwide tax of wealth, ideally, or at least at European level”, pointing out that “we have to invest 2 per cent of GDP per year; 1 per cent private [investments], 1 per cent public.”

Magnette’s Socialist party is part of Belgium’s governing seven-party coalition, and is leading the polls at 24 per cent in the French-speaking region of Wallonia ahead of federal elections in June.

His proposal of a European wealth tax echoes the manifesto of the Socialist group in the European parliament, which will be elected at the same time as Belgium’s new government. Most areas of tax policy are up to member states.

Magnette, who was a minister in several past federal governments, also called for defence spending to be exempt from budget constraints. “We need to take budget commitments on defence out of any budget balance, because they are investments,” he said.

“We have war at the gates of Europe, we have a situation in the Middle East which is extremely worrying . . . We have to be realistic, we will need the defence and that’s it,” Magnette said.

With their lead in Wallonia, the Socialists have a good chance of re-entering a future government. But Belgium’s federal system means that regional parties will have to come together to form a national government.

In Flanders, Belgium’s Flemish-speaking region, the far-right Vlaams Belang is leading polls with almost 27 per cent, followed by the right-wing N-VA.

Prepare for long coalition negotiations come July.

Chart du jour: Money tree

Column chart of Quarterly profit and tax due to Russian sanctions, Q2 2022 to Q1 2024 (€mn) showing Euroclear has made more than €5bn in extraordinary profits since the Russian invasion

The majority of Russian central bank assets frozen under western sanctions have been stuck in Belgium, home to central securities depository Euroclear. As G7 partners wrangle over what to do with the assets, Euroclear has made billions just by holding them.

Tent cities

Ireland’s Taoiseach Simon Harris won’t be able to avoid the issue of immigration when he meets political leaders in Belfast today, writes Jude Webber.

Context: The Irish government says up to 90 per cent of asylum seekers arriving in Ireland have crossed over the border from Northern Ireland, and insists the UK should take them back. But British Prime Minister Rishi Sunak has already made clear the UK won’t take them in.

It seems like not even a month into his premiership, Harris’ honeymoon is over. The diplomatic tensions over immigration have reopened old wounds caused by Brexit, as Ireland lobbied successfully to keep the border open when the UK left the EU.

The government this week swept away a tent city outside the International Protection Office in Dublin, transferring the male asylum seekers camping there to government-run sites, some still in tents, though with sanitation and proper facilities.

But there was not enough room: some 50 men were turned away, left to sleep rough farther away from the IPO, where barriers have been erected.

It seems the issue won’t be easily cleared away, either. Yesterday, a new queue of about 100 people formed outside the IPO office. They were told there was nowhere for them to go.

When Harris meets first minister Michelle O’Neill and deputy first minister Emma Little-Pengelly today, the issue is likely to be centre stage, but progress is unlikely — as it’s not possible to send people back to a country that won’t take them.

Meanwhile, far-right protesters have seized on the issue, ensuring that immigration will remain a headache for Harris, possibly all the way to Ireland’s general election due by next March.

What to watch today

  1. African and Nordic foreign ministers meet in Copenhagen.

  2. Italian Prime Minister Giorgia Meloni hosts Swiss President Viola Amherd in Rome.

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