Belgian government to resume budget talks in effort to avoid collapse

Belgium's government will resume budget negotiations in an ‌effort to resolve the political crisis that threatened to collapse the coalition this week, King Philippe's office said after he met with Prime Minister Bart De Wever on Friday.

The king's office said talks would resume immediately as coalition partners seek to ‌bridge remaining differences and reach an agreement to avert the prospect of early elections. De Wever offered to ‌resign on Monday following months of talks that failed to yield an agreement on €10 billion ($11.2 billion) in spending cuts and tax increases that he says are needed to stabilise Belgium's finances.

The Royal Palace said that in conversations with the king this week all five parties in ⁠the government ​coalition had shown a willingness ⁠to compromise. The king therefore tasked the prime minister with starting a new round of negotiations and with reporting back to the king ⁠on November 16. De Wever did not speak to the press waiting outside the palace before and after his meeting with ​the king.

In a parliamentary session on Thursday, he hinted that he was more inclined to stay on ⁠than go, saying he still hoped to secure a budget that could bring financial stability for the coming years. The political impasse in Belgium coincides ⁠with ​heightened stress on financial markets, where interest rates have risen sharply on the government bonds of Belgium, France and other European countries that investors see as having weak fiscal positions.

The European Commission forecast in May that Belgium's debt-to-GDP ⁠ratio would be 110.5% this year, behind only Greece, Italy and France among euro zone countries, with a projected general ⁠government deficit of 5.2% ⁠of gross domestic product. Belgium's 10-year benchmark bonds were trading at a yield of 4.25% on Friday, against 4.80% for France and 3.24% for Germany. Four months ago, Belgian ‌10-year yields were at ‌3.50%.

($1 = 0.8930 euros)