Peeters’ statements came after statements by his budget minister, Philippe Muyters, that Flanders “has paid enough” and was not prepared to contribute any further to helping the federal government out of its budgetary difficulties.

“They seem to think we’re sitting here with our pockets full of money,” Muyters said in an interview with De Standaard. “The reality is that we’ve had to tighten our belts for the last four years to achieve a balanced budget, despite reduced growth, higher inflation and a smaller federal grant. Do they expect us now to scrap our plans for extra school capacity? To invest less in child care? Or to let the Flemish roads waste away?”

Peeters, meanwhile, said that his major concern at present is the achievement of a competition pact with the federal government, the communities and the other two regions, which would reduce the wage costs that create a serious competitive disadvantage for Belgium. Peeters has on prior occasions expressed an unwillingness to bail out the federal government, but this time around, diplomacy won the day.

“We first have to see, together with the federal government and the other regions, which measures we can take to improve our competitive power,” Peeters said. “Only then will be see who has to pay what.”

Tense week

The federal budget agreement, reached after a tense weekend of constant negotiations, succeeded in finding €750 million in savings and new income, €200 million more than the budget monitoring committee said was required. It also found €2.4 billion of the €3.5 billion required for the 2014 budget.

Among the measures agreed to were an increase in the duties on alcohol and cigarettes, which will increase by 8 cents a pack. An increase on the excise duty on diesel, sought by some, did not make the final cut.

The new budget also introduces a “fairness tax” – a minimum to be paid by all businesses not based in Belgium, as well as by inter-municipal enterprises active on the private sector market. At the same time, savings will be made within the administration, VAT could be imposed on lawyers’ fees, and school premiums – the annual payment made in September to parents of school-going children – will be cut by 15% this year and another 15% next year.

“This is a good and balanced agreement, a combination of achievable savings, justifiable new income and support for small businesses,” prime minister Elio Di Rupo said at the conclusion of talks. “This budget cost us blood, sweat and a lot of coffee.”

Federal finance minister Koen Geens said that “everyone has had to give up something. A few sacred cows had to disappear, but there will be no unjustified taxes.”