Deal eases Belgian political woes

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Senior Belgian politicians have brokered a deal seen as a first step towards ending months of deadlock between Dutch- and French-speakers.

The plan is to transfer some minor powers to the regions - though the devolution is less than the Dutch-speaking parties were demanding.

"We finally have an agreement," said Elio de Rupo, a French-speaking Socialist, after the overnight talks.

There have been fears that Belgium could split along linguistic lines.

Budget

Belgium's Flemish Christian Democrats, led by Yves Leterme, came top in elections last June, but were unable to form a government amid bickering between the Dutch- and French-speaking parties.

No single party bridges the linguistic and geographic gulf between Dutch-speaking Flanders and French-speaking Wallonia.

An interim government took charge in December, led by caretaker Prime Minister Guy Verhofstadt, who headed the outgoing coalition.

Monday's deal paves the way for him to hand over to Mr Leterme towards the end of March and for a 2008 budget to be finalised.

Mr Verhofstadt was among the eight elder statesmen who thrashed out the deal.

Some powers over industrial policy and housing are to be transferred from federal institutions to the regions, and talks on more significant devolution will continue.

Belgium's King Albert II had asked Mr Verhofstadt to form an interim government in December.