Belgium now borrows for ten years at almost exactly the same rate as Greece. The market’s attention is on France, and rightly so: the French 10-year now yields more than Italy’s. But Belgium shares France’s problems and is following the same path. It just does so in the shadows.
The numbers: only France has slipped faster
On 13 October the Belgian 10-year yield closed near 4.33%, against 4.36% for Greece and 3.46% for Germany. Over the past year, Belgium’s spread over Germany widened by about 33 basis points. Only France widened more. Italy and Greece, the old problem children, widened less.
| Country | 10Y yield, 13 Oct | Spread vs Bund | Yield change, 12 months | Spread change, 12 months |
|---|---|---|---|---|
| France | 4.84% | 137 bp | +1.44 pt | +59 bp |
| Belgium | 4.33% | 87 bp | +1.18 pt | +33 bp |
| Italy | 4.56% | 109 bp | +1.14 pt | +29 bp |
| Greece | 4.36% | 90 bp | +1.07 pt | +22 bp |
| Spain | 4.09% | 63 bp | +0.96 pt | +11 bp |
| Germany | 3.46% | – | +0.85 pt | – |
Closing yields from Trading Economics, 13 October 2026. Spreads and spread changes are my own calculation from those figures.
Commerzbank strategists flagged the same pattern on 2 October: the widening that started in France was spreading to other high-debt countries, naming Italy, Belgium and Greece.
Why Belgium tracks France
Belgium shares France’s three weaknesses: a large deficit, rising debt, and politics that make cuts slow.
The deficit. Belgium’s general government deficit reached 5.2% of GDP in 2025, the highest in the eurozone, against a euro-area average of 3.3%. The European Commission sees 5.2% again in 2026 and 5.4% in 2027; only France is projected higher, at 5.7%.
The debt. Gross debt was 107.9% of GDP at the end of 2025 and is forecast at 110.5% this year and 112.8% in 2027. In the eurozone, only France, Italy and Greece carry more.
Savings that don’t stick. The five-party “Arizona” coalition adopted about €18 billion in net savings to 2029. Yet according to an analysis by the union FGTB and the ULB, the March 2026 projections still show a deficit of 4.9% of GDP in 2029. Belgium has been in the EU’s excessive deficit procedure since 2024.
The ratings drift. S&P cut Belgium to AA- in April 2026, and DBRS moved its AA rating to a negative outlook in July.
Inflation is back. Belgian inflation rose to 4.69% in September, the highest since 2023. Belgium indexes wages and benefits automatically, so higher prices feed straight into public spending.
The real trap: no room on either side
The deficit numbers are modest next to the real problem. Like France, Belgium has already used up both of the usual exits: it cannot tax much more, and it struggles to spend less.
| Belgium | France | Euro area | |
|---|---|---|---|
| Taxes and social contributions, % of GDP (2024) | 45.1 | 45.3 | 40.9 |
| Government spending, % of GDP (2025) | 54.2 | 57.2 | 49.8 |
Taxes are at the ceiling. Only Denmark and France collect a larger share of GDP in taxes. A government that already takes 45% of the economy has little room to raise more without hurting growth.
Spending is defended in the street. Belgium’s three big unions, ABVV, ACV and ACLVB, have held national demonstrations against the Arizona coalition’s reforms on 14 October 2025, 12 March 2026 and 12 May 2026, each drawing tens of thousands. Their targets are exactly the measures that save money: the pension bonus-malus and any limit on automatic wage indexation. Their counter-proposal is more tax, on large fortunes.
The services are part of the deal. High taxes buy extensive public services, generous pensions and full indexation. Voters see these as earned, not optional. That makes every cut a political fight, and every fight slows the savings.
And the politics are fragile. The federal government is a five-party coalition spanning the language border: the Flemish N-VA (nationalists), Vooruit (socialists) and CD&V (Christian democrats) on one side, the francophone MR and Les Engagés on the other. Every saving has to pass five party headquarters with different voters. Disagreement within the coalition already delayed the 2026 budget. And Belgium holds the record for government formation: 541 days without a full government in 2010–2011. If this coalition falls, the next one could take a year or more to form, with no new savings in the meantime.
Why the market looks away, and what could make it look
Belgium escapes attention because it is small and quiet. France is a core EU country with a large, liquid bond market and loud politics; when investors want to express a view on European fiscal risk, they trade France. Belgium simply moves along with it.
The risk is the arithmetic of interest. Belgium’s National Bank and its Debt Agency now expect the state’s interest bill to reach €20.4 billion by 2029, up from €18.6 billion estimated in June. The reason: long-term borrowing costs rose about one percentage point since June.
That is how a debt snowball starts. Every rollover at a higher rate adds to the deficit, which adds to the debt, which pushes rates higher again. Belgium does not need a crisis of its own to get there. It only needs France to get worse. (France’s side of the story is in France and Switzerland: A Gap Wider Than the Euro Crisis; the mechanism is in The Sovereign Debt Loop.)
What it means for European savers and gold
For savers, the squeeze is already here. Belgian inflation runs at 4.69% while the policy rate stands at 2.65%, so cash on deposit loses purchasing power every month. Anyone holding longer government bonds bought a year ago has also seen their price fall as yields rose more than a full point.
Europe’s history adds a second worry. When states run out of room, the bill tends to land on savers: through inflation, through taxes on wealth, or, in the extreme cases of Greece in 2012 and Cyprus in 2013, through haircuts and bail-ins. We looked at that history in Could Europe Take Your Gold?
This is where gold earns its place in the conversation. Gold has no issuer, no coupon to cut and no budget to pass. Its value does not depend on whether Brussels or Paris finds its savings. That is why fiscal stress in the eurozone core supports demand for physical metal, independent of the dollar.
The counterweight is real yields. With the US 10-year near 5.2% and the ECB still talking tough, holding a non-yielding asset has a cost. Gold near $4,160 is caught between those two forces. Which one wins depends largely on whether the stress spreads from France to its quieter neighbours.
What to watch
Belgian 10-year above 4.35%. A close above the 29 September high would put Belgian yields at levels last seen in early 2012.
The Belgium–Bund spread at 100 bp. It stands near 87 bp now. A move through 100 bp would mean the market has started pricing Belgium on its own, not just as France’s follower.
The France–Bund spread versus its 149 bp peak of 2 October. If France breaks higher, Belgium is the most likely next in line.
The Commission’s autumn forecast. Watch whether the 2026 and 2027 deficit numbers for Belgium move up again.
Rating agency reviews. DBRS already has Belgium on negative outlook; a move from Moody’s or Fitch would turn a quiet story into a headline.
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Open the desk →Sources
- Trading Economics, bond yields by country; Belgium 10-year government bond yield; Belgium credit rating, 13 October 2026.
- European Commission, “Economic forecast for Belgium”, 21 May 2026.
- Eurostat, “Tax revenue statistics”; “Euro area government deficit at 2.9% and EU at 3.1% of GDP”, 22 April 2026.
- Belga News Agency, “EU warns Belgium will remain eurozone’s worst budget performer as deficit stays high”, 21 May 2026.
- The Brussels Times, “Belgium now two years closer to interest-driven debt snowball”; “National strike: Between 40,000 and 75,000 workers protest on streets of Brussels”; “EU estimates Belgian budget deficit could rise to 5.9% by 2027”.
- VRT News, “Fresh national trade union demo in Brussels on 12 May”, 8 April 2026.
- La Libre Belgique, “Un État fédéral qui doit racler les fonds de tiroir”, 1 October 2025.
- WageIndicator / ETUI, “Belgium – Union study challenges austerity measures”, 31 August 2026.
- RootData, “Bond market spreads widen to high-debt countries” (Commerzbank), 2 October 2026.
Figures are as reported at the time of writing and move quickly. Educational content to support your own research and decisions. Not financial advice.