Belgian PM resigns as divided country thrown into fresh crisis

Belgian Prime Minister Yves Leterme has offered his resignation to the divided country's king following failure to reach agreement between the governing parties on a reform of the state.

The Christian Democrat Mr Leterme had set himself a deadline of 15 July to reach an agreement between the five French and Flemish-speaking parties in his fractious coalition on a devolution of powers to the regions.

"Despite all efforts and perseverance, the prime minister believes the foreseen deadline for a governmental accord has not been respected. It has turned out that the opposing visions between the communities for the necessary creation of a new equilibrium in how our state is constructed are today irreconcilable," Mr Leterme said in a statement.

"This reveals that the consultation model at an exclusively federal level has reached its limits," the statement continued, "Yet a reform of the state remains an essential element of any government accord."

The prime minister's audience with the king late on Monday evening lasted more than four hours. At 3:30 in the morning, the palace issued a communique signalling that the monarch would "reserve its response" as to whether he would accept Mr Leterme's resignation.

The fragile coalition has barely held itself together since the government was sworn in following an unprecedented nine months of negotiations after the general election.

Agreement on a skeleton of economic and social measures had been agreed amongst the French and Flemish centre and right wing governing parties, but an impasse was reached when it came to the more contentious issues of a new division of powers and finances between the federal government and the provinces.

Wealthier, Dutch-speaking Flanders in the north has long desired that a range of responsibilities over taxation and social security be devolved to the provinces from the federal level. French-speaking Wallonia, whose manufacturing base has crumbled since the 1970s, fears the reduction in financial support this would deliver and believes devolution to be a stepping stone to a break-up of the country.

A reorganisation of electoral boundaries on the bilingual outskirts of majority-French Brussels - which, complicating matters, lies in the heart for Flanders - also hit the buffers.

Euobserver