Belgian government crisis looms as budget talks collapse, De Tijd reports

Belgian Budget Talks Collapse, Raising Risk of Government Crisis

Stalemate Over Budget Cuts and Tax Increases

AMSTERDAM, Nov 2 (Reuters) - The Belgian government early on Monday again failed to reach an agreement on next year's budget, triggering a possible government crisis as Prime Minister Bart De Wever is likely to offer his resignation, Belgian newspaper De Tijd reported.

The government has been arguing for months over €10 billion ($11.2 billion) in budget cuts and tax increases De Wever says are needed to keep state finances in check.

Key Developments in the Political Crisis

Prime Minister's Resignation Offer

• De Wever was set to meet Belgian King Philippe later on Monday to hand in the resignation of his government, sources told De Tijd

• The king would likely not immediately accept the resignation, the paper said

Coalition Disagreements

Healthcare Cuts vs. Wealth Taxes

• De Wever's Flemish nationalist N-VA and the liberal MR are seeking cuts in healthcare spending, but their socialist and centrist coalition partners have demanded higher wealth taxes

Economic Consequences

Rising Interest Rates and Debt Spiral Fears

• Interest rates on Belgian government bonds have risen sharply in recent months

• De Wever has warned that a looming debt and ​interest-cost spiral ⁠would force the government to borrow money only to pay the interest on existing loans($1 = 0.8948 euros)

(Reporting by Bart Meijer; Editing by Sonali Paul)