(Reuters) – The Flemish separatist N-VA was on course for victory in the Belgian parliamentary election on Sunday.
Economists have said that Belgium can ill afford drawn-out coalition talks given its high level of debt.
The following are comments by economists and political analysts.
ETIENNE DE CALLATAY, ECONOMIST AT BANK DEGROOF
“It would surprise me if bond spreads increase on Monday. It’s the confirmation of what we expected. But it could mean that they continue to rise a bit in relation to other European countries.
“The coalition will take a long time. It will take a long time to get an agreement.
“In Belgium it will be difficult to take austerity measures for several months which would mean that we could fall behind other countries in regard to structural reform.”
PHILIPPE LEDENT, ING ECONOMIST
“If the N-VA continues to be extremist in its position, then the game will be very different for other parties. Then it will take much more time to find a majority.
“The most important thing is not which majority we will have. The biggest thing is the question of time, how long do we have to wait before we have a new majority. This is the most important element.
“For the economic situation, it is important to have a new government as soon as possible.
“In this context, I would say finding a new government which is very important for the economy, will depend clearly on N-VA’s attitude.
“I will not characterize the situation as blocked.
“N-VA could have a constructive attitude. We could also have N-VA wanting to stay on its extreme situation, this could lead to a difficult situation for the Belgian economy.
“The most important element is find a majority as soon as possible.
“After September, the reaction of the financial markets would lead to difficult consequences for the Belgian economy.
“I think in the short run, I’m not sure (financial markets’) reaction will be too important. Everybody knew the N-VA would be the biggest party in Flanders, that it would be the biggest winner in the elections.”
“In the medium-term, when negotiations start, if it becomes clear that N-VA stays on its extremist position, then the impact can be more important.”
(Reporting by Ben Deighton and Foo Yun Chee)