Analysis: Where now for Belgium?

By Dominic Hughes BBC News, Brussels

In office for less than four months, Belgium's government is once again teetering on collapse after Prime Minister Yves Leterme offered his resignation.

The country is split between the 6.5 million Dutch speakers in the Flemish north of the country, described as having a vibrant economy and low unemployment.

Prime Minister Yves Leterme views Belgium as an "accident of history"

The south is home to 4 million French speakers in Wallonia, caricatured (perhaps unfairly) as the Belgian rust-belt with sluggish growth, high unemployment and a general air of stagnation.

Brussels, meanwhile, is a largely francophone enclave in the Flemish region.

But beyond the economic indicators there is a real problem between the two communities (there is also a small German speaking minority, but they are largely forgotten in the sniping between the two larger groups).

They seem to exist side-by-side, but with little interaction.

Fractious hodge-podge

There are no national political parties or newspapers, radio or TV stations.

DIVIDED BELGIUM Three federal regions: Dutch-speaking Flanders in the north; French-speaking Wallonia in the south (which has a German-speaking minority); Brussels, the capital, officially bilingual Federal state has national responsibility for justice, defence, federal police, social security, nuclear energy, monetary policy Regional governments oversee education, employment, agriculture, transport, environment

Prime Minister Yves Leterme has said it is only the king, a love of beers and the football team that unites Belgians.

He views the country as "an accident of history".

This latest instalment in Belgium's political soap opera - full of twists and turns, heroes and villains - began over a year ago when elections were held midway through 2007.

The Flemish Christian Democrats of Yves Leterme were the clear winners - or as clear as anything ever is in Belgian politics.

It took more than 200 days for a workable coalition to emerge.

Even then it was a fractious hodge-podge of parties - Christian Democrats, Socialists, Liberals and nationalist hardliners from both sides of the linguistic divide.

And when the government finally took office on 12 March Mr Leterme set himself a deadline of 15 July to reach a deal on reform.

Those reforms centre on devolution of yet more powers to the regions in an already highly devolved state.

Flemish parties want greater powers over transport, health, jobs and justice, plus more regional control over tax and social security.

French speakers fear this will lead to a break up of the country.

And there is a further complication - a dispute over re-drawing electoral boundaries around Brussels that French speakers fear will leave them disenfranchised.

The 15 July deadline has now been reached with no agreement, so Mr Leterme took a late night trip to offer his resignation to King Albert II.

Where does this leave things?

Economic heart

A recent poll found almost half of Flemish voters want a separate state

The king could turn down Mr Leterme's resignation and ask him to carry on trying to find a way through the impasse.

Alternatively he could ask a new politician to have a go in an emergency administration and wait for fresh elections in 2009.

At the moment it looks like he is holding fire and consulting with elder statesmen on the way forward.

But what about the broader question - is Belgium heading for a split?

A recent poll of Flemish voters found more than 49% backed a separate Flemish state.

But there are several big factors that I think come into play, and the biggest of those is Brussels.

The largely francophone city, home to the main European institutions, is the economic heart of Belgium.

It is hard to see either side giving it up.

Not to mention how bad it would look if one of the EU's leading lights - dedicated to the end of nationalism and a strong advocate of a federal Europe - suddenly fractured.

When faced with this kind of problem in the past, Belgians have proved skilful at coming up with a compromise to save the day.

Many Belgian commentators still place their trust in the art of compromise - but this time round, it is proving tough to find exactly where that compromise might lie.

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