After 500 days, Belgium still hunts for government.
Government broker Elio Di Rupo called Thursday on the six negotiating parties to agree a 2012 budget that should pave the way to the formation of a new government. Belgium is facing increasing pressure from the markets to come up with more taxes and expenditure cuts to prevent the country's public finances becoming a real cause for concern -- without a government, investors are worried that long-term reforms will not be enacted. On Thursday, Belgium's yields on government bonds closed in on 5 percent and up toward the levels that are causing Italy and Spain so many problems at the moment. "We continue working" said Wouter Beke, head of the Flemish Christian Democrats, at the end of another all-night session Thursday. French-speaking socialist Di Rupo called for another night session, which will likely run into early Friday, to deal with the outstanding budgetary issues. The European Union, increasingly acting as a financial watchdog as the euro crisis worsens, insisted again Thursday that Belgium should work harder to meet an EU Dec. 15 deadline for stringent reforms to keep spending in check. The current caretaker government has been committed to getting the budget deficit down to 2.8 percent of GDP in 2012, which is below the EU limit of 3 percent, but the EU's executive Commission is far from convinced, forecasting a wider shortfall of 4.6 percent. It's also forecasting that Belgium's debt to GDP ratio will break through the 100 percent barrier in 2013 without big budget reforms. That sort of debt burden rate is a real cause for concern. After all, Italy has got dragged into Europe's debt crisis mire because its debt load stands at around 120 percent. "The challenge here is not only of, strictly speaking, a budgetary nature but also of a structural nature," EU spokesman Amadeu Altafaj Tardio said Thursday. The budget talks between the Socialists, Liberals and Christian Democrats, each split into Dutch- and French-speaking parties, have dragged on for weeks even after a broad agreement last month on giving more powers to the regions at the expense of the central government. The expectation was that an overall agreement -- and a government -- would come soon. But in the fight over some e1/411 billion ($14.8 billion) in budgetary measures, the Socialists have fought with the Liberals over the extent of new taxes and budget cuts. The length of the negotiations has driven even King Albert II to exasperation. In a rare statement on the politics of the day, the royal palace said Wednesday that "the king underlines the urgency to reach agreement to form a government and assure the welfare of all citizens in the future." Even Archbishop Andre Joseph Leonard, surprisingly, mentioned the negotiators during a ceremony this week. "Deep in our heart we pray for the king and the politicians," he said. "We thank all those who, during this difficult moment in our history, commit themselves with perseverance, patience and courage." The record-long negotiations since the June 13, 2010, elections have been hobbled by fundamental differences over Belgium's future. Some pundits have predicted the split of the kingdom of 6.5 million Dutch-speakers in Flanders and 4.5 million French-speakers in Wallonia. Di Rupo's persistence, however, could lead to a decisive breakthrough this weekend. At the heart of the debate lies a desire for more autonomy -- and even independence -- in Dutch-speaking Flanders, Belgium's economically more powerful and populous northern half. A breakup of the country is a nightmare scenario in Wallonia, whose politicians compromised greatly by agreeing to another round of constitutional reform. So far, eleven politicians have tried to cobble together a coalition government. Until a new government is in place, the outgoing coalition of Christian Democrats, Liberals and Socialists will stay on as a caretaker.
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