- The Washington Times - Wednesday, November 30, 2011

BRUSSELS — In the end, the markets made them do it.

After 535 days marked by months of bickering and debate, Belgian politicians possibly have found a way to form a federal government, setting the record for going without an elected national administration.

Officials say they are working to create a governing coalition by this weekend, after the major political parties last weekend finally agreed on a budget. It had been the key stumbling block to forming a government.

The reason for the urgency? On Friday, the Standard & Poor’s ratings agency downgraded the country’s credit rating from AA+ to AA, blaming the political impasse for the downtick.

Belgium hasn’t had a government for so long, and in a county as decentralized as Belgium, there’s a need to form a federal government,” said Simon Tilford, chief economist of the London-based Center for European Reform.

“At some point or other, the [political] parties were going to have come to an agreement. But while it is an improvement, it’s not going to change anything fundamental.”

Analysts say Belgium’s banking sector, which has “enormous exposure” to bad debt, dragged the country into the wider eurozone financial crisis, making it likely the government would end up bailing out the banks.

“The fact that Belgium’s cost of borrowing has risen so high relative to Germany has increased pressure on the Belgian authorities [to form a government],” Mr. Tilford said. “There are parallels between Belgium and Ireland, but the budget deficit in Belgium is not that bad.”

Ironically, Belgium’s record-setting streak without a government has seen the leaderless country experiencing more growth in the past year than most of its Northern European neighbors.

Divided among Dutch-speaking Flemings in the north, French-speaking Walloons in the south and a smattering of German speakers in the east, Belgium hardly is ungovernable in the sense of a failed state.

But by Western standards, there was no lack of red faces in Europe about the fact that Belgium has had no elected national government since the last one collapsed in April 2010.

After all, Iraq’s fledgling democracy — with its sectarian animosities, insurgency worries and rampant corruption — was able to form a government last year after a record-setting impasse of eight months. That was 384 days ago.

Belgium’s crisis began when Prime Minister Yves Leterme, leader of the Christian Democratic and Flemish party, resigned after the loss of support of his coalition partners, the Open Flemish Liberals and Democrats.

If the deal for forming a government is sealed this weekend, socialist leader Elio Di Rupo, 60, will become the country’s first French-speaking prime minister in 30 years.

“The pain threshold for this spectacle we call forming a government [has long been surpassed] at this point,” said Flemish Green party member Saraswati Matthieu, who blamed the Flemish liberal party, the Open Flemish Liberals and Democrats, for the impasse.

Laurence Masclet, a 24-year-old graduate student at the University of Namur in the southern region of Wallonia, said fears that the country could split are overstated.

“Belgian people don’t seem to react,” Ms. Masclet said. “Any other population would have reacted to the lack of government, but Belgians seem to be very passive.

Belgium is known as a surrealistic country, and I think we just know that the crisis was always [going to be] resolved at some point, and that Belgium would still be [here].”

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