Belgium Takes New Step to Resolve Political Crisis

Belgian political parties trying to end a crisis that has left the country without a government for a world-record 468 days agreed Saturday on greater autonomy for the feuding regions during marathon talks.

"It's a giant step in the right direction," Charles Michel, head of the French-speaking Reformist Movement, said after the 18-hour meeting of the eight Flemish and francophone parties.

Socialist Laurette Onkelinx, another francophone, said it pointed to a new "federal Belgium."

Devolving more power to the regions was a key demand in Dutch-speaking Flanders, which is wealthier and more populated than its southern French-speaking neighbor Wallonia.

Under the accord the regions, which are at present funded by Brussels, will be able to raise their own income tax up to a limit of 10.7 billion euros a year.

The arrangement will be limited so as to not cause too great a competition between the regions, as the French-speakers wanted.

The Brussels region, which has the greatest financial problems, will receive extra funding of 134 million euros in 2012, rising to 461 million from 2015.

Saturday's accord came after French-speaking Socialist leader Elio Di Rupo, the mediator in the talks and a possible future prime minister, announced a "first decisive step" out of the crisis on September 15.

The negotiators said then they had reached a compromise on the sensitive issue of bilingual Brussels and its Flemish-speaking suburbs, which was a source of deep divisions.

The talks had appeared near collapse just a few hours earlier, when Di Rupo warned that they were heading towards another breakdown.

It still remains for the negotiators to determine what other powers might be devolved to the regions and work out a program for the new government.

The talks have also excluded the largest party in Flanders, the separatist New Flemish Alliance (N-VA).

Resolving the crisis is a matter of urgency for Belgium, a member of the debt-stricken Eurozone. Ratings agencies have warned that its credit score could be downgraded if it remains without a government for too long.

The country was left in the hands of a caretaker cabinet after June 10, 2010, elections failed to produce a workable governing coalition.

Divisions between northern Dutch-speaking separatists and southern French-speakers seemed to be insurmountable.

The long impasse underlined the widening gulf between the wealthier 6.2 million people of Flanders and the 4.5 million French-speakers of struggling Wallonia.