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Belgian Political Impasse Persists as Flemish Proposal Rebuffed

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Oct. 19 (Bloomberg) -- Belgium’s political stalemate persisted after a Flemish nationalist proposal met with concerns among French-speaking parties that it undermined solidarity, putting the initiative for reconciliation back into the king’s hands.

N-VA party leader Bart De Wever, the top vote-getter in the June 13 election, reported to King Albert II at the end of his 10-day “clarification” mission, the royal palace in Brussels said yesterday. The monarch will start a new round of consultations today, Belga news agency reported, citing people in the palace it didn’t name.

All three francophone parties involved in government talks said they were prepared to resume negotiations with the N-VA after rejecting De Wever’s proposition to give Belgian regional governments control over almost half of personal income taxes. Both De Wever and Elio Di Rupo, the leader of the French-speaking socialists, rejected calling new elections.

“We don’t want to radicalize and we have to carry on,” Di Rupo, told reporters at a briefing before De Wever, 39, met with the king. De Wever’s proposal “would have disastrous consequences for the federal state, for social security and for the people of Wallonia and Brussels,” said Di Rupo, 59, who called for mediation.

The stalemate leaves Belgium with a caretaker government four months after inconclusive elections. In a note prepared by his office last week, Prime Minister Yves Leterme explored a possible expansion of powers for his caretaker cabinet that included drawing up a 2011 budget, De Morgen reported on Oct. 16.

Nine Months

Three years ago, King Albert asked caretaker Prime Minister Guy Verhofstadt to form an interim government after six months of fruitless coalition talks following the 2007 election. It took his successor, Leterme, nine months to pull together his five-party coalition.

The extra yield investors demand to hold Belgian 10-year bonds instead of German securities of similar maturity was at 82 basis points last yesterday in Brussels, unchanged from Oct. 15. The so-called spread, a measure of the risk of investing in Belgium, compares with 138 basis points for Italy and 39 basis points for France.

To contact the reporter on this story: John Martens in Brussels at jmartens1@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net