Belgian Socialists urge political fix to fend off markets

26th November 2010, Comments 0 comments

Belgium's French-speaking Socialists urged the country's feuding politicians Friday to bridge a months-long schism to prevent financial markets pulling Belgium into the euro debt crisis.

"We mustn't let ongoing political uncertainty weaken our country," said leader Elio Di Rupo's party after reports cited traders suggesting Belgium was moving into a group of countries led by Portugal and Spain seen as next to need financial aid.

The tensions emerged after fiscal crises in Greece and Ireland, whose international bailout is set to be fixed by Sunday.

"Belgium has no objective reason to be drawn in," the party said, with the statement underlining that Di Rupo "believes it is urgent to reach an agreement" between Belgium's French-speaking Walloons and Dutch-speaking Flemish parties enabling a federal government to be formed.

It is now more than five months since Belgium went to the polls, with the parallel victory of Flemish nationalists leaving the Belgian state in deadlock with only a caretaker government handling day-to-day affairs.

Finance Minister Didier Reynders was quoted in Belgian media on Friday as saying the country's debt, back around the level of an entire 12 month's output in the national economy, is "lower" than it was anticipated to be at the start of this year.

There was no significant movement in the spread between Belgian and benchmark German bond yields on Friday, the Belgian 10-year rate sitting at around 3.65 percent at 5:00 pm (1600 GMT).

© 2010 AFP

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