Talks on forming new Belgian government suspended

BRUSSELS, Aug 17 (Reuters) Talks on forming a new Belgian government were suspended today after more than two months of fruitless coalition talks between Flemish and French-speaking parties.

The Royal Palace made the announcement after Christian Democrat leader Yves Leterme, who was appointed to form a new government after June elections, met King Albert II to give a progress report.

The Palace said there would now be a period of consultations.

''During this period, the negotiations... will be suspended,'' it said in a statement.

Talks came to a standstill late yesterday with Flemish and French-speaking parties at loggerheads over whether certain powers should be transfered to the regions.

Leterme's task of forging a consensus in the linguistically divided country was made more difficult last month when he irked Belgium's French speakers by saying they were too stupid or unwilling to learn Flemish, and could not remember his country's anthem on National Day.

Leterme is a former prime minister of the Flemish-speaking regional government.

He won in the June elections partly due to a pledge to devolve more powers from the federal level to the regions, notably Flanders.

The Flemish parties want to have more control over finances for their relatively rich region of Flanders while Francophone parties from economically weak Wallonia fear that this will result in less money for their region.

REUTERS ARB RAI1842