Budget Deal Raises Hopes for Ending Belgium Govt Impasse

World | November 26, 2011, Saturday // 16:58|  views

The politician tasked with forming a new Belgian government, Elio Di Rupo, offered to resign Monday from coalition talks following a deadlock over budget cuts. EPA/BGNES

Belgian politicians have moved closer to ending their country's prolonged political paralysis Saturday by agreeing on budget cuts for 2012.

The deal, which came just hours after credit rating agency Standard & Poors downgraded the country's sovereign debt, is expected to pave the way for the formation of a new government, DPA reported.

"The King has now asked the lead negotiator to form a new government as soon as possible," the Belgian Royal Palace said in a statement.

Premier-designate, Socialist, Elio di Rupo had led Saturday's six-party talks after threatening to resign.

The political crisis has left Belgium with a caretaker government for 17 months, or more than 500 days, a world record.

The slimmed-down 2012 budget calls for a 10% - or EUR 11.3 B reduction in spending.

The 2012 budget has been described as the last major obstacle before the formation of a government among the six Flemish and Francophone political parties, including Socialists, Christian-Democrats, and Flemish and Francophone liberals.

The Greens and the most popular party in Flanders, the Flemish nationalists from N-VA, will be left out of the future government.

The breakthrough has come over world financial market pressure, after on Friday Standard and Poor'sdowngraded Belgium's credit rating from AA+ to AA over concerns about the Belgian world-record political impasse, debt level and slowing growth.

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Tags: Yves Leterme, Standard & Poor's, Standard & Poor's, Standard and Poor's, credit rating, credit ratings, Flemish, Francophone, Elio Di Rupo, Didier Reynders, caretaker government, euro zone, Eurozone, debt crisis, debt crises


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