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The neighborhood politics are a mess. More than three months have passed since this country's elections and there is still no sign of a government. The political deadlock has lasted even longer next door, where a firebrand populist surged in the polls after attacking the beliefs of one of the country's leading religious minorities.

Predictable scenarios from a Middle East hotspot or Third World basket case? Think again.

This is the political reality in two of America's oldest NATO allies, both prosperous members of the European Union.

Belgium and the Netherlands both held general elections in June. Since then, both have limped on under caretaker governments as the emergence of radical new movements has upset the usual cozy coalition building among conservative, liberal and socialist parties.

In Belgium, the New Flemish Alliance emerged as the biggest party. It promotes the gradual severing of ties between the Dutch-speaking north and the Francophone south eventually leading to the creation of an independent Flemish republic.

The Netherlands, where platinum blond anti-Islam crusader Geert Wilders and his Party of Freedom surged to third place in the polls on a program of rolling back immigration, looks closer to breaking the political stalemate.

Mainstream parties have shunned Wilders in the past because of his views on Islam - he's denounced the Koran as a "Fascist book" and called for it to be banned. Now center-right leaders seem prepared to cut a deal with him that will enable them to form a government, despite concern over the impact on trade and diplomatic relations with Muslim countries.

Mark Rutte, the photogenic leader of the fiscal-conservative People's Party for Freedom and Democracy (VVD), which won the election, is expected to become prime minister in a minority government with the defeated Christian Democratic Appeal (CDA). Since the two center-right parties can't muster a majority, they will have to rely on support in parliament from Wilders. He is demanding a tough line on immigration in return.

Several senior center-right figures are loath to work with Wilders and have resisted the idea of a coalition dependent on his party, but the party leaderships are coming around to the idea.

Meanwhile, the Foreign Ministry has issued guidelines to Dutch embassies around the world to give assurances that the Netherlands is not on the verge of putting Wilders' program into practice.

"A ban on the Koran would be contrary to several fundamental rights which are enshrined in the Dutch Constitution," say the speaking notes to Dutch diplomats according to a leaked memo published by the NRC Handelsblad newspaper. They go on to say the same for the any ban on Islamic schools or new mosque building.

Nevertheless, there are concerns that a government reliant on Wilders could do serious harm to Dutch relations with Islamic nations as well as alienate Dutch Muslims, who make up about 5 percent of the population.

"This is going to reinforce the image that the Netherlands is turning into an Islamophobic country," said Shada Islam, an expert on Europe's relations with Islam at the European Policy Center think tank.

"This is not just going to impact on the Netherlands, but also more widely on Europe, where mainstream politicians are refusing to isolate the extremists and are adopting the extremist agenda," she added.

In Belgium, there is little common ground between the Flemish separatists and the Socialist Party, which came out top among French-speakers in the June 14 election.

"It's hard enough to form a government in the Netherlands, and that's a normal country," the Flemish nationalist leader Bart De Wever told Belgian television recently. "We're not a normal country. We're two very different countries."

After months of painstaking negotiations broke down in early September, senior Francophone politicians for the first time began to acknowledge that Belgians had to contemplate a breakup of the country.

Divorce, however, would not be easy. Both sides want custody of Brussels. The city is about80 percent French-speaking, but it's surrounded by Flemish territory and the nationalists claim it as the historic capital of Flanders.

King Albert II has asked politicians from the two main parties to resume talks, which are focusing on how to transfer more powers and tax revenues from the federal authorities to the language-based regions without the central government completely imploding.

At least politics are relatively serene in the third member of the BeNeLux region - apart from the fact that little Luxembourg (population 500,000) has gotten itself embroiled in a nasty diplomatic spat with neighboring France (population 65 million).

After the Luxembourgish member of the European Commission criticized Paris' policy of expelling foreign Roma, one leading member of President Nicolas Sarkozy's ruling party suggested last week that the Grand Duchy should have been divided up between France and Germany.

Thankfully for Luxembourg, Europe's longest serving prime minister, Jean-Claude Juncker (15 years in power), was able to elicit an apology from his French counterpart over Senator Philippe Marini's assertion that "it would have been preferable ... if Luxembourg did not exist."

Perhaps there's a lesson there for the Dutch and Belgians on the benefits of stable government if you want to punch above your weight in the world.