Talks over Belgium's budget collapsed early on Tuesday, forcing Belgian Prime Minister Charles Michel to postpone his planned annual address before parliament and straining his center-right coalition.




The talks failed when one of four parties in Michel's government, the Flemish Christian Democrats which have significant union backing, demanded the introduction of a capital gains tax which the three other parties in the government opposed.



Belgium's federal government, which has for years been trying to produce a balanced budget, is expected to run a deficit of about 2.8 percent this year, just below the European Commission's upper limit of 3 percent.



While worries about Belgium's high sovereign debt, above its annual economic output, has in the past sent its bond yields soaring, the low interest rate environment has allowed the country to receive, rather than pay, interest on bonds of up to eight years.