Belgium has joined the list of countries labeled by the European financial community as trouble spots.
The country, without any real government since April, is financing a national debt which stands at 100% of annual national income, The Guardian reports, putting it on the list of nations that includes Spain, Portugal and Italy that are headed for a crisis.
The cost of insuring Belgium's debt is soaring to record levels, which is worrying those in the financial community.
"Belgium is having to pay a political risk premium, because it still doesn't have a government in place to make decisions over how to curb its spending and its debts," an analyst tells The Guardian.
Belgium has been stuck in a political headlock between its two different populations, Flemings and Walloons, over voting issues, which resulted in the April collapse of former Prime Minister Yves Leterme's administration.
Today, the country is further split among political organizations that want austerity measures and those that are against spending cuts.
Yet some observers are still optimistic, arguing that healthy private savings and economic growth may shield Belgium from its debt woes.
"We are net savers. So our government does not need to refinance its debts in the same way as the U.K., which has borrowed more internationally," says a spokesman from the caretaker government.
Political problems, however, can prevent anyone running the government from taking tough measures to help the country, and that scenario erodes trust overseas.
"If we do not solve the political crisis quickly, then a financial crisis appears almost unavoidable," Paul De Grauwe, professor at the Catholic University of Leuven, wrote in the newspaper De Standaard.
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