Belgium Slides Into Recession

Belgium's economy fell back into recession at the end of 2011, reversing the strong growth it had seen in the first half of the year as the country became the latest to fall victim to the euro zone's twin fiscal and banking crises, The Wall Street Journal reported. Preliminary data released by the central bank on Wednesday showed the economy contracted on a quarterly basis for the second straight quarter in the final three months of 2011. The flagging economy presents a challenge to the still young government of Prime Minister Elio di Rupo just as parliament is expected to ratify the 2012 budget bill. Mr. Di Rupo's painstakingly negotiated six-party coalition fought for weeks over how to find savings in the 2012 budget late last year in the leadup to the government formally taking office. Weaker growth than expected could force them to add significantly to the €11.3 billion they had penciled in for this year. The deterioration in the economic situation has been rapid in Belgium, which as late as June was thought by authorities to be headed for up to 3% growth in 2011, lifted in part by reviving German export demand. The economy grew 0.9% in the first quarter although its expansion slipped to 0.3% between April and June on a quarterly basis. Read more. (Subscription required.)