By Anne Jolis
BRUSSELS (Reuters) - Belgium's political parties clinched a deal on Tuesday to form a new government to be led by Flemish Christian Democrat Herman Van Rompuy, negotiators said.
Van Rompuy will replace his fellow party member Yves Leterme, who resigned on December 19 over allegations of political meddling in the bailout of stricken bank Fortis.
"We have an agreement. Nothing is simple in our country, but what is important is that we have a government to lead with seriousness, stability and serenity," Elio di Rupo, leader of the Francophone Socialist Party, told reporters.
The five parties that had made up Leterme's government renewed their coalition after a three-hour meeting. Van Rompuy was expected to carry on with his predecessor's plan to battle a looming recession caused by the global financial crisis.
Politicians said King Albert was likely to officially name Van Rompuy as prime minister later on Tuesday and a parliamentary vote of confidence could be held later this week.
"I think we have a good formula to have a government this year," said Didier Reynders, leader of the Francophone Liberal Party, who will stay on as finance minister.
Van Rompuy would be Belgium's third prime minister since general elections in June, 2007, in the linguistically divided country that is host to the main European Union institutions and to NATO.
He will have to handle the strained relations between Belgium's more populous and richer Dutch-speaking part and its Francophone component with sensitivity.
But, with Belgium expected to have slipped into recession in the fourth quarter as major banks received bail-outs, fighting the economic downturn will be his main challenge.
Van Rompuy, 61, has the reputation of being both an intellectual and a budgetary hardliner. He was budget minister between 1993-1999 and sharply reduced public debt in his first year in office.
His other task will be to fix the Fortis debacle after the bank's shareholders won an appeal court ruling this month, freezing the group's break-up by the Dutch, Luxembourg and Belgium and latter's sale of Fortis assets to BNP Paribas.
Leterme's government had planned a 2 billion euro (1.98 billion pounds) package of pro-growth measures, including tax cuts, lower energy costs and accelerated infrastructure projects.
Leterme's government collapsed after the Supreme Court said there were clear indications of political meddling in a court ruling over the bailout of Fortis.
Belgium's coalition is comprised of the Flemish Christian Democrat Party, Flemish Liberal Party, Francophone Liberal Party, Francophone Christian Democrats and Francophone Socialist Party.
(Writing by Marcin Grajewski; Editing by Richard Balmforth)
