In what must be Europe’s most charming sovereign debt crisis, Belgium, divided and government-less for four months, is continuing its progress towards dissolution (via Naked Capitalism).
The two portions of the country, Flanders and Wallonia, have been moving towards break-up for some time. The Flemish separatist party would make up 30% of the parliament if another election was to be held today, according to Le Monde.
The head of the Wallonian Socialists is suggesting that if Belgium breaks up, Wallonia will merge with the European capital of Brussels to form a new Belgium.
But, in what is certainly the most worrying portion of this whole debacle for investors, the Flemish now say that if Wallonia wants to keep the Belgium “brand” it’s going to have to take the sovereign debt of the whole country with it.
Quick reminder, the southern portion of Belgium, Wallonia, is French speaking and is a net beneficiary of state aid.