Belgium's potential government partners agreed on Friday that there was scope for starting formal coalition, the first sign of a break in the deadlock since coalition negotiations were broken off last September, according to Reuters. Elio Di Rupo, a French-speaking Socialist charged by the king with forming a new government, said in a statement that eight party leaders had met and outlined steps that could lead to a deal. Di Rupo last week tendered his resignation to King Albert. The palace said on Friday the king had asked Di Rupo to stay on. Talks will not start immediately. The first step will involve checks on the legal basis of proposals for constitutional change. "The king proposes a pause in negotiations until the middle of August," the palace said in a statement. The break in the deadlock is due to Dutch- and French-speaking parties' willingness to negotiate without the N-VA, the Flemish separatist party that won the most parliamentary seats in elections in June last year. Without them, it may be easier to find a compromise between wealthier, Dutch-speaking Flanders' demand for greater autonomy and French speakers' reluctance to change the status quo. Belgium, with 13 months of haggling, has spent longer trying to form a government than any other modern-day state, helping push up its borrowing costs. The premium investors demand to hold 10-year Belgian debt over equivalent German bunds was around 1.3 percentage points on Friday, well above levels before the global financial crisis. Belgium came under fire in financial markets late last year when Standard & Poor's warned it might cut the country's AA+ credit rating, a negative outlook matched by Fitch in May. -- SPA
