Belgian government recall seen as way out of crisis

King Albert was trying to revive the collapsed Belgian government yesterday to tackle urgent economic problems, local media said, but one paper said Prime Minister Yves Leterme was likely to lose his job.

He offered his government's resignation on Friday after the Supreme Court said there were strong signs of political meddling in a court case over the controversial rescue of the financial group Fortis at the height of the financial crisis. The king, who has held consultations with leading politicians, has yet to decide whether to let the government quit.

Belgium, host of Nato and the European Union, is expected to slide into recession this quarter and urgently needs a government to push through a two-billion-euro ($2.8 billion) stimulus package and a deal on wages, and find a solution to the Fortis debacle. Fortis investors, whose shares have dropped to around 1 euro from almost €30 in April last year, have successfully challenged the group's break-up and asset sale to France's BNP Paribas.

The two key political questions are who will lead a revived government and whether it will last a full term until 2011 or end in June 2009, when parliamentary elections could be held on the same day as regional and EU votes.

"Based on the king's first consultation rounds and what is happening with the majority parties, it appears that the government will be quickly restarted," newspaper De Standaard's wrote on its website.

"But most of the ruling parties do not envisage Mr Leterme coming back on board after a fourth resignation."

Finance Minister Didier Reynders said Mr Leterme's return would be "very difficult". The President of the lower house of Parliament, Herman Van Rompuy, 61, has often been named as a possible short-term successor.

Mr Leterme offered to resign in July, though the king made him stay on, after failing to broker a deal between Dutch-speaking parties which want more powers for Flanders and French speakers who fear such a move would pull Belgium apart.

The Prime Minister struggled for nine months to form the government, giving up twice, a saga that sparked media speculation that the 178-year-old nation could break in two. The devolution issue, which analysts say explains a lack of trust within the current coalition, has failed to go away.

Some Flemish parties were again insisting on Sunday that a new government, in whatever form, should tackle the issue, though French speakers argued it was not a priority now.