BRUSSELS (Reuters) - Belgium overcame a political deadlock over its budget late on Friday, Prime Minister Charles Michel said, after talks collapsed earlier this week straining his center-right coalition.
"Agreement," Michel tweeted near midnight in Brussels on Friday in a statement confirmed by his spokesman. Michel had to postpone his planned annual address before parliament due to the lack of a deal earlier.
The talks had failed when one of four parties in Michel's government, the Flemish Christian Democrats, demanded the introduction of a capital gains tax which the three other parties in the government opposed.
The federal government had penciled in budget savings in excess of 3 billion euros ($3.36 billion) mainly by cutting back on pension and healthcare spending.
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.
($1 = 0.8928 euros)
(Reporting by Alastair Macdonald; Writing by Alissa de Carbonnel)