Euro-fragile Belgium heads for turmoil as PM quits

14th September 2011, Comments 0 comments

Belgium, already targeted by bond markets, headed into uncharted waters Wednesday after a surprise decision by its caretaker premier to resign amid deadlock in talks to end the country's longest political crisis.

Caretaker Prime Minister Yves Leterme set off a political storm with a late Tuesday announcement of a bid for a Paris-based post as deputy OECD chief just as language-divided Belgium appeared to plunge further into crisis.

King Albert II, who has played a lead role in 15 months of efforts to strike a deal between feuding Flemish and French-speaking politicians, was rushing back to his Brussels residence from southern France, a political source said.

Eurozone member Belgium, which has been without a government for 458 days, has been under notice from ratings agencies of a possible downgrade should it slip deeper into crisis.

The country has been run since April 2010 by a caretaker cabinet due to a deep split between northern Dutch-speaking separatists and southern French-speakers that has left the country without a government since June 10 elections last year failed to produce a workable coalition.

Premier Leterme said the head of the Organization for Economic Co-operation and Development, Angel Gurria, would propose him as deputy secretary general of the organisation on Friday.

Should he get the job, his resignation date "will be determined by taking into account his current responsibilities as caretaker prime minister," he said, adding he was ready to see out the remaining months of 2011.

Hours after the shock news came a pre-dawn warning that the latest four-month effort in a 15-month bid to find a government for Belgium was headed for breakdown.

Elio Di Rupo, leader of the Socialist party that won a majority in French-speaking Wallonia in 2010, issued a statement warning of "a deep blockage" in the talks and urged fellow-politicians to make "a last-ditch effort."

After months of trying negotiations, the move underlined the widening gulf between the wealthier 6.2 million Dutch-speakers in northern Flanders and the 4.5 million French-speakers of struggling Wallonia.

Di Rupo was asked by Albert II last July to draft an agreement to devolve more powers to the country's three language regions -- Dutch, French and German -- that could form the basis for a coalition government.

He called for "a last-chance" round-table later on Wednesday.

Eight parties are involved in the talks headed by Di Rupo but which do not include the largest party in northern Flanders, the separatist New Flemish Alliance (N-VA).

Albert II warned in July that the continuing deadlock, which has seen Belgium boast the dubious record of being the world's country longest without a government, threatens both the country's economic future and Europe as a whole.

"If this situation lasts much longer, it could negatively and concretely affect the economic and social well-being of every Belgian," said the sovereign, who ascended to the throne in 1993.

"Our current situation is a cause for concern among our partners and could damage our position in Europe, and even the momentum towards European integration which has already been undermined by populism and euroscepticism," he said in July.

A founding member of the European Union, Belgium was often considered an example of integration in Europe and plays host to pre-eminent global organisations NATO and the EU.

It now risks becoming a symbol of division.

© 2011 AFP

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