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By Philip Blenkinsop
BRUSSELS (Reuters) - Flemish Christian Democrat Yves Leterme was named Belgium's prime minister on Wednesday to guide the country through what is expected to be a period of political instability in the linguistically divided country.
King Albert nominated Leterme, 49, to replace Herman Van Rompuy, who was appointed president of the European Union last week. He and his cabinet will be sworn in later on Wednesday and parliament is expected to give its approval this week.
Belgian media were sceptical about the chances of Leterme's second term in office being more stable than his first.
"Can he do better?" was the headline of French language La Libre Belgique newspaper on Wednesday. A poll by top-selling Flemish newspaper Het Laatste Nieuws showed a majority of its readers believed Leterme would not succeed.
Leterme was the clear winner of the 2007 federal election on a platform of devolving more powers to the regions, but failed to win over French-speaking parties, which fear such change would be a step towards the break-up of the country.
He struggled for nine months to form a government, which then lurched for another nine months from one crisis to another.
He resigned last December over alleged political meddling in the break-up of Belgo-Dutch financial services group Fortis. He has since been absolved and has been Belgium's foreign minister since July.
By contrast, Van Rompuy's 11 months in charge have seen no sign of the internal tensions that had prompted media speculation the country might split.
ECONOMIC POLICY IS A PRIORITY
At the height of the government crisis in 2007, central bank governor Guy Quaden said it risked increasing Belgium's budget deficit and investors attached a risk premium to the country's debt.
Leterme will inherit a government that has already set a budget for 2010 and 2011, but the fragile recovery means Belgium can ill afford a political stalemate.
"We are just pulling out of recession, so economic policy is clearly needed," said ING economist Philippe Ledent.
Leterme will also need to find a consensus on redrawing the political boundaries around Brussels and on further powers that can be devolved to the regions, which already have a wealth of control over areas such as agriculture and foreign trade.
On Tuesday, the king charged another former prime minister, Jean-Luc Dehaene, with proposing ways to resolve these issues.
The move does not resolve disputes between Dutch-speaking Flemish parties and their French-speaking counterparts, but gives Leterme a better chance of success at his second attempt.
"These matters are kept away from the government, allowing it to function," said Kris Deschouwer, political analyst at Brussels' Free University. "I think there is also a real readiness finally to resolve this tiresome matter."
The government will hope to find a solution before July, when Belgium takes over the six-month EU presidency, an organisational role held by each member state in turn.

Reuters