The general budget of Belgium consists of:
- ordinary budget, including ordinary income (taxes, customs, state property, etc.) and ordinary expenses (public debt, state administrations, etc.);
- Extraordinary budget, including extraordinary income (sale of state assets, income for repairs) and extraordinary expenses (capital expenditures and expenses as a result of the war, including food allowances);
- budget of public enterprises: railways (since 1926, however, passed to private management), marinas, post offices, telegraphs, telephones and aeronautics.
After a long period of deficit, 1927 and the forecasts for 1928 indicate a surplus of income over expenditure due to the reorganization carried out by the Belgian government in 1926; the slight deficit foreseen for 1929 can be considered occasional.
According to searchforpublicschools, the end of the war left Belgium devastated and impoverished, with a public debt of around 10 billion plus the need to immediately repay the banknotes that the Germans had forced the Belgians to accept during the occupation for a total amount of 7 billion. and a half billion francs. To meet this reimbursement, the state asked the National Bank for an exceptional issue of banknotes for 5,800 million francs, while the remainder of the banknotes was reimbursed in treasury bills. And it was this first debt of the state to the bank that was the main cause of the poisoning of the financial and monetary situation of Belgium in the post-war period, a situation that got worse and worse until May 1926. At this date the state had a total debt of 6 and a half billion to the National Bank, which for its treasury needs had to continually resort to issuing notes; an internal floating debt of 6 billion repayable at various maturities by 1926 and an external floating debt of approximately 2 billion; the budget was severely unbalanced, the franc was devalued day by day, government bonds fell.
It was then that the government decided on a series of measures that led to the stabilization of the franc and the consolidation of Belgian finances:
- creation of a completely autonomous public debt amortization fund, with the aim of reabsorbing the debt to the National Bank and subsequently gradually reducing the public debt;
- creation of new exceptional taxes (one and a half billion for 4 years) to feed, together with other income, the depreciation fund;
- creation of the national company of Belgian railways which was granted the management of the state railway network (which equaled approximately 94% of the entire railway network in Belgium), against remittance to the state of shares of the company itself for 11 billion, of which 10 billion of preference shares were passed to the disposal of the amortization fund and a billion of ordinary shares left at the disposal of the treasury;
- internal floating debt consolidation by converting treasury bills into preferred shares of the railway company or, by option, into new 5% bonds that can be drawn as and when the accumulated depreciation allows it;
- progressive reduction of the floating foreign debt from 54 million dollars in May 1926 to 24 million in November of the same year.
Confidence was restored, capital flowed to Belgium, exchange rates improved and a hunger for stabilization became favorable. On 5 October 1926 the National Bank signed an agreement with the main foreign issuing banks which undertook to support the Belgian monetary reform by means of credit lines; and thus the stabilization on the basis of gr. 0.041842, fine gold per franc and together with the creation of the new monetary unit, the Belgian (worth 5 Belgian francs), which represents a weight of fine gold of gr. 0.209211 corresponding to the course of fr. 35.96 per dollar or to that of Fr. 175 per pound sterling.
The total amount of notes in circulation at the end of 1929 was 14,175 million francs and the reserves of 5,876 million francs in gold plus foreign exchange for 3,066 million francs.
The amount of public debt at the end of 1928 was 55 billion Belgian francs, of which 22 billion of long-term internal debt, 4 of short-term internal debt and 29 of consolidated external debt.
