Q+A-What happens after party's withdrawal from Belgian govt?

BRUSSELS, April 22 Thu Apr 22, 2010 6:46am EDT

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BRUSSELS, April 22 (Reuters) - Belgian Prime Minister Yves Leterme's five-month-old government was in danger of collapse on Thursday after one of its partners said it was pulling out of his five-party coalition.

The Flemish liberal party Open VLD said it had lost confidence in the government over a dispute between French- and Dutch-speaking parties over electoral boundaries around Brussels.

WHY SO MUCH FUSS ABOUT ELECTORAL BOUNDARIES?

Voters in the Brussels-Halle-Vilvoorde (BHV) area are able to elect either largely French-speaking parties in Brussels or Dutch-speaking parties in the Flemish region surrounding the capital. The Constitutional Court says this is unfair given that other Belgian voters can vote only for parties in one region.

One solution, backed by Flemish parties, is to split the area, separating Brussels and a few extra districts from the surrounding area, which would then become totally Flemish.

French-speaking parties are against this option because French-speakers in the Flemish area around Brussels would lose the right to vote for francophone parties in the capital -- the parties would lose these votes.

Flemish parties, representing 60 percent of Belgium's 10.6 million people, say Flanders should be Dutch-speaking and that the steady encroachment of French-speakers from the capital undermines their culture and identity.

WHAT HAPPENS NOW?

Leterme's government could carry on without the Flemish liberals, with 76 of the 150 seats in parliament. However, his position is in practice likely to be untenable.

Belgian governments are typically coalitions combining majorities in Flanders and in the French-speaking part of the country.

Leterme's Christian Democrats would be the only Flemish party in the governing coalition, with three francophone parties, and Flemish voters could punish such a "betrayal" at the polls.

Leterme could dissolve the government and call an election, but this is unlikely to bridge the linguistic divide, with the return of many of the same faces and fierce campaigning likely to bring in more Flemish separatists.

The crisis could lead to further speculation about 140-year-old Belgium splitting apart.

WHY BELGIUM CANNOT AFFORD POLITICAL PARALYSIS

Business and employee groups say Belgium cannot afford to be without a government just when it is recovering from the economic crisis.

During Leterme's first nine months in office in 2008, the country lurched from one crisis to another, increasing the risk premium investors demanded to hold government bonds.

The central bank governor, Guy Quaden, has also warned of an extra budget deficit from the stalemate.

Belgium, home to European Union institutions and NATO, will not want to let its domestic problems drag on because in July it takes over the six-month EU presidency, a largely organisational role held by each member state in turn.

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