The stated aim of the Peeters government is a balanced budget, but that will require a deft handling of competing interests: The government spent most of last week discussing the issue. Faced with reduced growth in the coming year of only 0.7%, the achievement of a balanced budget – this will be the third in a row – is all the more difficult, Peeters admitted last week.

In addition, higher spending commitments and the new responsibilities of the regions arising out of state reforms means that ministers are looking at cuts of €500 million to €1 billion, according to analysts. This is the last full annual budget to be prepared by the present government – the next elections are due to take place in or before June 2014. “Through the choices we make today, we can turn the challenges of our time into the chance for new growth,” Peeters told members of the parliament.

The speech was notable for what it refused to cut. “This government has chosen to follow a strong social agenda,” said Peeters. “We will not be cutting back on welfare, health or family commitments. Child care, equal opportunities in education, support for people with a handicap, social housing, water and energy policy, attention for disadvantaged groups in the workforce, the fight against poverty…all remain at the top of our priority list.”

Ministers have made “difficult but necessary choices,” Peeters continued. “Working resources have been nominally frozen. Extensions of policy have been put on hold until the following budget round. But where we are confronted with a growth in demand – the growing number of children in primary education, the growing need to put disadvantaged groups to work, the growing need for child care and care for the handicapped – the means will be found to respond to that demand.”

One of the measures put on hold from the new budget is the long-awaited child premium, postponed again this year. The measure would provide a one-off payment of €150 to €200 for parents of children up to three years old. The same fate befell a means-tested maximum bill for home care of the sick and elderly, which also failed to materialise this year. Both measures were contained in the social protection decree approved by the government in July, but implementation has been postponed.

A full set of budget figures has still to be released, but one area where Peeters was clear to announce cuts was within the government itself: a 1% cut in the cost of civil servants, over and above the 6% cuts currently being implemented. “We are also asking for an effort from our own personnel to achieve this budget result,” he said.