Belgian Poll Victory Puts De Wever in Search of Allies

Belgian voters handed an election victory to the Flemish nationalists, giving Antwerp Mayor Bart De Wever the initiative for coalition talks even as Prime Minister Elio Di Rupo’s six-party government retains a majority.

De Wever’s New-Flemish Alliance, or N-VA, may get 33 of the 150 legislative seats in yesterday’s election, a gain of six, according to projections by the Interior Ministry, based on more than 99 percent of votes counted. Di Rupo’s Socialist Party would get 24 seats, a loss of two. Projected at 19 seats, the French-speaking Liberals would gain three and the Flemish Christian Democrats would advance one to 18.

With a strong mandate from voters in the northern Dutch-speaking region, the Flemish nationalists may struggle to find allies in the French-speaking south for a program of spending cuts and a stated goal of gradually disassembling the country. De Wever, 43, may seek to increase his clout in federal talks by pulling together a Flemish regional government first. Four years ago, it took Di Rupo 13 months to drive a wedge between N-VA and Flemish Christian Democrats, laying the foundations for his six-party government.

“All in all, the results are more favorable than the federal elections of 2010,” Steven Vanneste, an economist at BNP Paribas Fortis SA in Brussels, wrote in a note today. “The choice is between a continuation of an economic policy that takes into account conflicting interests or one that is more geared towards business and market-friendly reforms.”

National Assembly

Di Rupo’s six-party government won 97 of the 150 seats in the federal parliament, including a majority among Dutch speakers in the national assembly as well as majorities in the Flemish and Walloon regional parliaments, according to the projections. De Wever’s favored coalition with Liberals and Christian Democrats on both sides of the linguistic divide would get 93 seats, the projections showed.

Belgium’s splintered political scene makes unwieldy coalitions the norm. The country, cobbled together as a buffer state in 1830, has no federal constituency, no national parties and no national media.

The balloting will also be a first test for King Philippe, who succeeded his father, Albert, 10 months ago as titular head of state. Belgium’s monarch began meeting with party leaders today and will continue tomorrow. After completing his consultations, the king traditionally appoints a special envoy to investigate possible coalitions.

Political Stalemate

De Wever claimed the initiative for federal talks at a gathering with party supporters in Brussels, adding that his party doesn’t want a lasting political crisis in a reminder of the record 541-day political stalemate after the June 2010 election.

Di Rupo, 62, responded by saying that the alliance of Dutch- and French-speaking Socialist parties remains the “biggest political family” in parliament, also pointing out that the parties who took up responsibility in his coalition were rewarded by voters in yesterday’s election.

Kris Peeters, the Christian Democratic leader of the outgoing Flemish regional government, said yesterday that his party will accept any invitation for coalition talks, both on the regional and the federal level.

With Belgium sporting the highest hourly labor costs in the 18-nation euro area, national debt at 101.5 percent of gross domestic product and public spending equaling 54.6 percent of economic output, De Wever has focused his campaign on economic themes with attacks directed at the Di Rupo-led “tax government” and at unemployment benefits for life. He also pleaded for suspending automatic wage indexation, a taboo for Di Rupo’s Socialist Party.

Budget Deficit

Di Rupo, who came to power in December 2011 after Standard & Poor’s downgraded Belgium’s credit rating, reduced the nation’s budget deficit from 13.6 billion euros ($18.5 billion), or 3.8 percent of GDP, in 2010 to 9.9 billion euros, or 2.6 percent, in 2013, steering the country clear of turmoil in financial markets.

The extra yield investors demand to buy Belgian 10-year government bonds rather than German debt of similar maturity has fallen to less than 0.6 percentage points from as much as 3.6 percentage points in November 2011.

“We still find the extra yield on Belgian government bonds too tight,” Koen Van de Maele, global head of Investment Engineering at Candriam in Brussels, wrote in a note last week. “Yields are insufficient to offset the risk of a renewed institutional standstill.”

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