The king of Belgium on Sunday is considering which steps to take in order to break a political deadlock that threatens the nation's economic health.
King Albert has the difficult task of determining action that might lead to a means of imposing budget cuts to fight the nation's growing debt, according to a Reuters report.
National elections held seven months ago failed to create a government that was prepared to take steps believed necessary to save the economy, and on Thursday any hope of pushing the Dutch-speaking and French-speaking factions to find common ground was dashed when the mediator tasked with the job handed in his resignation.
Borrowing costs for Brussels are on the rise, particularly after the news of the mediator's resignation. While Belgium's economy is far more competitive than those of Greece, Portugal, and Spain, its debt is on the rise without extra actions taken to curb it. The nation has till the end of 2012 to drop its budget deficit to below 3% of GDP; its target for 2011 is 4.8% of GDP.
Everett Brown, European bond strategist at IDEAglobal, said in the Reuters report, "Belgium is one of the countries that's on the radar, it certainly has problems on both the political front and the debt front. It probably should be categorized just after Italy as a country that is potentially at risk."
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