European Commission rejects Belgium budget

The European Commission has rejected Belgium's 2012 budget as over-optimistic and is now demanding further cuts.

European Commissioner for Economic and Financial Affairs Olli Rehn has told the Belgian Finance Minister that spending needs to be reduced by a further €1.2-2bn.

The Commission told the new Belgian government that it wants a response to its request by Monday at the latest.

New rules agreed in December give the Commission added powers to enforce budgetary discipline with fines and penalties for infringement.