Rate cut triggers Belgium consensus

BRUSSELS - Agence France-Presse

Benoit Lutgen, head of Belgium’s Francophone Christian Democrat party, responds to questions from reporters after a meeting on Nov 26 in Brussels. REUTERS photo

Belgium fell in behind Italy and Greece on Saturday, its feuding politicians ending 19 months of deadlock with an 11th-hour budget deal that met EU strictures hours after a ratings downgrade.

“There is an agreement,” French-speaking Socialist premier-to-be Elio Di Rupo’s spokeswoman Ermeline Gosselin said, as exhausted but elated politicians closed more than 500 days of struggling to craft a workable government.

The budget will see Belgium’s public deficit fall to 2.8 percent of gross domestic product (GDP) in 2012 if respected - enough to avoid the ignominy of punishment leading to a possible hefty fine from EU Commissioner Olli Rehn.

In the end, though, it was a lashing from credit rating agency Standard & Poor’s that led squabbling Flemish and French-speaking parties to find a middle ground that could accomodate spending cuts and tax increases.

A palace statement said that King Albert II of the Belgians “is delighted that an agreement has been reached. As a result, he invites (Di Rupo) to finalise a government as quickly as possible.”

Breaking Iraq’s record

Negotiators for the six parties involved said the deal “meets Belgium’s commitments to the European Union.”

The deal will “sail through” the EU test, said Flemish liberal Alexander De Croo, whose decision to pull the rug from under the last fixed government lay at the root of an existential crisis that brought unwelcome global attention, beating Iraq’s previous record wait to form a government