Nothing justifies Belgium's bond yield spread widening and the country will not to dip into the European Financial Stability Fund, Prime Minister Yves Leterme said in remarks published on Thursday.
Bond markets have been showing concern that political deadlock in the country will prevent it from tackling its debts, forcing King Albert this week to take the extraordinary measure of asking Leterme to draft a budget tighter than one already agreed with the European Union.
Nothing justifies the widening of the spreads, Leterme told La Tribune newspaper in an interview. Our growth and our budget policy is much better than the European average, he said.
Leterme added that there was no reason for markets to perceive Belgium with concern.
There is no reason for Belgium to be perceived as it is by certain market players, he said. Fundamentally, the capacity of the Belgian state to meet its commitments is intact.
When asked if his country would need to tap the European Financial Stability Fund (EFSF), Leterme said: No, I don't think so. In any case it would be on an irrational basis.
He said everything would be done to protect the euro, adding that if the EFSF needed to be doubled than that would be the case.
We (Belgium) are able and ready in an effort of solidarity to put money into the EFSF if need be, Leterme said. What is important is that all the Europeans are ready to show solidarity to convince the markets.
(Reporting by John Irish; editing by Tomasz Janowski)