Belgian Prime Minister Yves Leterme offered King Albert II the resignation of his government on July 14 after it failed to finalise constitutional reforms designed to grant more self-rule to Belgium's Dutch- and French-speaking communities.
Vice-premier Didier Reynders said he 'regretted that the (resignation) put at risk economic policies', including steps to generate moderate budget surpluses in the years ahead to offset higher social and other costs resulting from the ageing of the population.
Customarily, the Belgian monarch asks outgoing governments to remain in a caretaker capacity until the political leaders can resolve a crisis, a new government can be formed or new elections are held. The King has not made a decision yet.
Leterme's government — an uneasy coalition of Christian Democrats, Socialists, Liberals and nationalist hard-liners from both sides of Belgium's linguistic divide — took office on March 20 after more than six months of political deadlock.
Leterme sought to defuse tensions between Dutch- and French-speaking parties that have loomed over this country of 6.5 million Dutch-speakers and 4 million Francophones since the June 2007 elections. Talks on such reform have been deadlocked for months.
Flemish parties want the prosperous Dutch-speaking north of Belgium to be more autonomous by transferring tax-raising powers and some social security spending from the federal to the regional level. They also want more self-rule in transport, health, labour market and justice areas.
Francophone parties say enough powers have been devolved since the mid-1980s and accuse Dutch-speakers of trying to cut loose Wallonia, where unemployment runs at 15 per cent, three times that of Flanders.