Belgian bond costs soar after government talks fail
The latest collapse in talks to form a government in Belgium has sent investors running, amid fears the core eurozone country could face similar problems to Greece.
The country’s cost of borrowing money soared over five percent on Tuesday (22 November) to an almost-10-year high, after would-be prime minister Elio Di Rupo handed in his resignation on Monday, marking a preliminary end to a-year-and-a-half-long attempts to reach a deal.
Belgian EU trade commissioner Karel De Gucht warned earlier this month that his country might be “next” on the markets’ radars if it did not manage to agree and draw up a budget for 2012. Belgium’s debt is almost at 100 percent of GDP – the third-highest in the eurozone.
The European Commission expects to receive the new budget by mid-December. Next year’s spending programme will have to see cuts of more than €11bn to stay below the EU-imposed deficit ceiling of three percent.