By Marc Chandler

NEW YORK ( BBH FX Strategy) -- Belgium's political crisis is deepening, and because this nation is part of the eurozone, the crisis is being reflected in the Belgian debt market.

The 10-year bond yield is up 10 basis points Thursday to more than 4%, and the 2-year yield is up 4 basis points.

Late Wednesday, the seven Belgian parties failed to resolve their differences and put in a new government. Recall that last month, Standard & Poor's put Belgium's double-A-plus rating on negative watch due in large part to the political stalemate, which prevents strong action to stabilize Belgium's debt, among the highest in the eurozone (as a percentage of GDP).

The election was in mid-June last year, and the Belgium premium then was almost 80 basis points. It now is more than 105 basis points.

Of course, the pressures on the eurozone are actually much larger than Belgium, but this is yet another example of a weak political situation preventing a nation from addressing financial challenges. Belgium may be dissolving, and although it is common to compare the U.S.'s problems with Europe's, there is nothing comparable in the U.S. to what's happening in Belgium.

--Written by Marc Chandler of BBH Forex Strategy.

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