BRUSSELS (Reuters) – The government of Prime Minister of Belgium, Yves Leterme, collapsed on Thursday after the Open VLD Flemish Liberal Party withdrew its support to a coalition formed pentapartita only five months ago, causing a crisis that could undermine its fragile economy.
Leterme, 49, handed his resignation to King Albert II after an emergency meeting of the Executive, but the monarch did not decide immediately whether to accept.
“The King and the Prime Minister jointly stressed that under current circumstances would be inappropriate political crisis and seriously undermine both the economic and social welfare of citizens and the role of Belgium in Europe,” Palacio said in a statement.
Political analysts said that Leterme could be persuaded to stay in office. Otherwise, the Parliament must be dissolved and an election would have to make in 40 days.
Subsequently, the king consulted the chairmen of both houses of Parliament and was expected to meet with the presidents of the major political parties in Belgium.
Hearings of the House, which on Thursday was to vote on a bill to prohibit the use of burqas in public, were suspended until next week.
Without the support of the Open VLD”s center, the other four parties in power would still have 76 of the 150 seats in the Lower House of Parliament, but the present coalition difficult to govern with a majority so tight.
Open VLD said he had lost confidence in the Government, which includes center-left parties and center, because it has failed to resolve a dispute between Flemish and Walloon parties on electoral boundaries of the capital, Brussels.
“We have not reached agreement on a negotiated solution and, therefore, Open VLD has no confidence in the Government” said party chairman, Alexander De Croo.
Economists have expressed concern that the political paralysis in the country of 10.6 million inhabitants, divided between Flemish speakers and speakers French, could damage the prospects for reducing the budget deficit.
The government has forecast a deficit of 4.8 percent of GDP in 2010 and is expected to exceed the Belgian debt 100 percent of GDP this year.
Leterme became prime minister for the second time in November, when Herman Van Rompuy left office to serve as president of the European Union. Political and economic analysts expressed doubts that would be more stable than its first term of nine months in office in 2008, when Belgium was one crisis to another.
Country must assume on July 1 the rotating presidency of the European Council, currently occupied by Spain.
(Additional reporting by Luke Baker and Ben Deighton, writing by Philip Blenkinsop, editing by Gabriela Spanish Donoso)