Belgian officials play down crisis, as caretaker PM opts to go

Talks to create a new coalition after a record-breaking 458 days with no government broke down again the same evening, creating an atmosphere of crisis.

The left wing francophone Belgian politician, Elio Di Rupo, in charge of the negotiations, said in a written statement there is a "profound blockage" on issues such as language rights in Brussels districts and financial autonomy for the rich, Flemish-speaking north of the country.

He called for a "final" attempt to overcome divisions at an emergency meeting on Wednesday. "This is about the future of our country," he said. The Belgian king also cut short his holidays in the south of France.

For their part, Leterme officials told this website the caretaker leader is unlikely to go until the end of the year and is currently at work on Belgium's 2012 budget with a view to finalising the spending package for the mid-October EU summit on joint economic governance.

"He's not abandoning the country - it would be wrong to say that. He simply has a fantastic opportunity at international level," his spokesman Jerome Hardy said. He noted that Leterme will at the OECD take care of socio-economic policy, such as healthcare and pensions. "You could see it as a kind of validation of Belgian policies, of our anti-crisis measures in these last few years," he added.

The Leterme team expects moderate GDP growth next year, a government spending deficit below the EU benchmark 3% level and a GDP-to-debt ratio below 100%.

Meanwhile, a royal decree authorising parliament and caretaker authorities to do whatever is necessary to safeguard the stability of the country means there is "never a vacuum" at the top in Belgium, another source in the caretaker government said.

The contact pointed to the fact Belgian MPs also on Tuesday ratified an EU deal on the second Greek bailout and a new-model crisis-relief fund, the EFSF, by a whopping majority as a sign that Belgium is fully functional despite the mess in the coalition talks.

"We are only the second eurozone country to do this after France," the source said. "Look at the markets - during the past several months the Belgian political situation has never been mentioned [by ratings agencies and analysts] as an issue. People talk about Spain, about Berlusconi. But according to the markets, we are a non-issue."