Belgian king rejects coalition broker resignation

AP News
Posted: Nov 23, 2011 3:57 PM
Belgian king rejects coalition broker resignation

King Albert II on Wednesday rejected a resignation offer by the negotiator seeking to end Belgium's world-record government stalemate and urged all six parties seeking a coalition to speed up work to conclude talks.

Early this week, Elio Di Rupo's request to resign had plunged talks between the nation's Dutch and French speakers to new depths.

A statement from the Royal Palace said that before committing to an extension of his job, Francophone socialist Di Rupo had "asked a short time of reflection to consider the possibilities of a new accord."

On Wednesday, King Albert II insisted on renewed efforts to agree on a 2012 budget, an unexpected stumbling bloc which has focused financial markets on Belgium.

Belgium's major parties have been trying to form a government since the June 13, 2010 election _ but fears are growing that the 528-day-long impasse needs to end soon to keep financial markets at bay.

King Albert has become increasingly vocal about the need for haste.

"The King asks with insistence that each of the parties make the additional efforts to conclude budgetary and social economic negotiations and form a government as quickly as possible," the statement said.

The country's yields on long-term bonds have risen like many other eurozone countries, but at around 5.5 percent Belgium is quickly getting into the financial danger zone which pushes borrowing rates to unsustainable levels.

"Our country is facing an extra piece of mistrust," said caretaker Prime Minister Yves Leterme, adding he would prepare work on a budget in case the negotiations continue to stall.

"It is important we get a budget," he told VRT network. The negotiators need to find some euro11 billion ($14.8 billion) more in austerity measures.

Belgium is facing increasing pressure from the markets to come up with more spending cuts, and without a government investors are worried that long-term reforms will not be enacted.

Leterme has committed himself to getting the budget deficit down to 2.8 percent of GDP in 2012, but the EU is far from convinced, forecasting a wider shortfall of 4.6 percent for the country. It is also forecasting that Belgium's debt to GDP ratio will break through the 100 percent barrier in 2013 without big budget reforms.