The economic guarantees that the Flemish government provides for companies reached a record high of 1.785 billion euros in 2022. This emerged on Thursday from research by Flemish Member of Parliament Maurits Vande Reyde (Open VLD), who argues for a ceiling on the total outstanding guarantees. For the first time, the Flemish government threatens to make a loss on the system, it sounds.
In addition to subsidies, providing economic guarantees is an ever-growing measure to support companies and entrepreneurs. These guarantees can help companies obtain a loan from the bank. The system has been expanded considerably in recent years, partly due to the corona crisis, as a result of which the total amount for guarantees between 2015 and 2022 has risen from 776 million to 1.785 billion euros.
Last year’s strong increase is mainly due to the granting of a record guarantee to chemical company Ineos, which received a guarantee of 500 million euros in November for investments in an ethane cracker in the port of Antwerp, according to the Open VLD member of parliament. He predicts “an even grim picture” for 2023 and fears that the government will make a loss on the guarantee system for the first time.
“Too easy allocation”
Vande Reyde acknowledges that guarantees were originally a better system than subsidies, but “the current increase and the too easy allocation” worry him. After all, when a company goes bankrupt, the government must pay the guarantee in part or in full. He therefore argues for a ceiling on the total outstanding guarantees. “The system is applied too casually. It is not the task of the government to take over the role of bank and lender. The system has evolved into an alternative channel for subsidies. That was not the original intention,” he said.