Belgium, financially struggling, government collapse... Prime Minister announces resignation over budget collapse

The Belgian government, suffering from massive national debt and fiscal deficit, is on the verge of collapse as next year's budget negotiations have become difficult.

According to foreign media outlets such as Reuters, Belgian Prime Minister Bart Derbever submitted his intention to resign to the King of Belgium on the 2nd (local time) after failing to reach a compromise in all-night coalition government negotiations over budget cuts.

The Belgian royal family announced that Prime Minister DeVever submitted his resignation after meeting with King Philippe for 90 minutes that day, and that the King will review whether to accept the Prime Minister's resignation and will discuss the matter with leaders of other political parties in the coalition starting on the 3rd.

“At a time of great geopolitical uncertainty and serious economic difficulties, Belgium cannot afford a long-term political crisis,” the royal family said, adding that the king would meet Prime Minister DeWever again on the 6th.

Over the past few months, Prime Minister Dervevar has been pushing for discussions on measures such as budget cuts and tax increases worth 10 billion euros (about 15 trillion won) to stabilize the country's finances, but was unable to narrow the differences of opinion within the coalition government. The right-wing nationalist New Flemish Alliance (N-VA), led by Prime Minister DeWever, and the liberal Reform Movement Party (MR) have been pushing for large cuts in government spending, including in the health sector, to consolidate finances, while their socialist and centrist coalition partners have been at odds, demanding increased taxes on the wealthy to secure financial resources.

Prime Minister Dervevar has warned that if budget cuts are not implemented, Belgium could fall into an 'interest snowball' situation where new debt must be taken out to repay the interest on existing debt.

Deputy Prime Minister Maxime Prevot of the centrist party Rezangaje, a member of the coalition government, called again for a tax increase for the wealthy immediately after the meeting between Prime Minister Dervevar and the king and urged the coalition parties to return to the negotiating table and resume budget discussions. Opposition parties, labor unions, and economic groups also said in unison that negotiations should be resumed to avoid a budget crisis.

If Prime Minister DeVever's resignation is ultimately accepted, King Philippe can request other political parties to form a new coalition or declare an early general election.

Belgium currently has the highest national debt and fiscal deficit among the eurozone (21 countries that use the euro). Belgium's public debt currently amounts to 720 billion euros (about 164 trillion won), the fourth highest in the European Union (EU) after Greece, Italy, and France. The debt-to-GDP ratio is about 110%, which is much higher than the EU average of 82.9%, and the fiscal deficit is 5.3% of GDP, the highest level in the euro zone, well above the EU's recommendation of 3%.

Meanwhile, the yield on 10-year government bonds also soared to the highest level in 15 years, hovering around 4.4%. In addition, as opposition from all walks of life intensifies against the announcement of harsh austerity measures, social unrest is growing, with signs of workers and students' protests erupting like in neighboring France.