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Belgian PM proposes resignation Belgian PM proposes resignation
(about 1 hour later)
Belgium's Prime Minister Yves Leterme has proposed that his government resigns amid a row over the break-up of the stricken Fortis bank. Belgian Prime Minister Yves Leterme has offered his government's resignation amid a growing row over the break-up and sale of the stricken bank, Fortis.
The cabinet has held an emergency session and backed Mr Leterme's move. King Albert II has deferred the decision on whether to accept it, and has begun talks on how best to proceed.
He must now present the proposal to King Albert II, but correspondents say the monarch may not accept it. Earlier, Justice Minister Jo Vandeurzen quit after a judge said there were signs the government had tried to stop a court freezing the sale of Fortis.
Earlier, Justice Minister Jo Vandeurzen quit after Belgium's highest court said the government had tried to influence a court ruling on the Fortis case. The appeals court ruled shareholders had not been properly consulted.
Judges last week blocked the government's bail-out and sale of its stake in Fortis to French bank BNP. Fortis has been among the European banks hardest-hit by the current financial turmoil, which left it desperately short of cash.
They said shareholders in the company had to be allowed a say in the deal. 'Suspending response'
Decision awaited Mr Leterme's spokesman, Peter Poulussen, confirmed the government's decision to resign had been approved by the cabinet at an emergency session on Friday.
Mr Leterme's spokesman, Peter Poulussen, confirmed the decision had been approved by the cabinet. "The cabinet has decided to tender the resignation of the entire government to the king," he said.
"The cabinet has decided to tender the resignation of the entire government to the king," Mr Poulussen said.The government is embroiled in a row over the sale of its stake in Fortis The government is embroiled in a row over the sale of its stake in Fortis
Under Belgium's constitution the king must decide whether to accept the resignation. Under Belgium's constitution, the king must now decide whether to accept the resignation. However, he has said he will defer the decision.
"The king is suspending his response and is immediately beginning consultations," the palace said in a statement.
Mr Leterme only took office in March, nine months after a general election had resulted in political deadlock founded in tensions between Flemish and French-speaking groups.Mr Leterme only took office in March, nine months after a general election had resulted in political deadlock founded in tensions between Flemish and French-speaking groups.
He offered to resign in June after he failed to push through plans to devolve more power to the regions, but the king rejected his resignation. He tendered his resignation in June after he failed to push through plans to devolve more power to the regions, but the king rejected it.
Mr Poulussen declined to say when the prime minister would go to the king this time around. Correspondents say the king could refuse the resignation again on the grounds that being without an administration would be dangerous during the current financial crisis.
Court reportCourt report
In its judgement earlier on Friday, Belgium's Supreme Court concluded that there were "undoubtedly significant indications" pointing in the direction of interference with the judiciary over the Fortis case. The BBC's Europe business reporter, Ben Shore, says the root of the government's crisis can be traced to New York in the middle of September and the bankruptcy of Lehman Brothers.
The Brussels appeal court last week ruled in favour of 2,200 shareholders who wanted more say in the future of Fortis. After that, bankers almost completely stopped lending to one another and Fortis could not refinance its debts, forcing the Belgian government to take over and sell almost all the company's assets, our correspondent says.
That ruling froze the sale of most of Fortis to France's BNP Paribas, which was supposed to have been finalised this week. Hundreds of thousands of investors were left with virtually nothing and so began a successful legal action effectively preventing the asset sale.
Shareholders had been left with practically worthless stakes after the governments of Belgium, the Netherlands and Luxembourg stepped in to rescue Fortis. Last week, the Brussels appeal court ruled in favour of the shareholders and froze the sale of most of Fortis to France's BNP Paribas, which was supposed to have been finalised this week.
Fortis has been among the banks worst-hit by the credit crunch, which left it desperately short of cash and needing help from the three governments. Then, in a judgement earlier on Friday, Belgium's Supreme Court concluded that there were "undoubtedly significant indications" that members of the Belgian government had attempted to influence the outcome of the court case.