(Un)intended side-effects? How the EURecovery and Resilience Facility and New Economic Governance trigger centralisation of macro-economic governance in Belgium.

The new performance driven financing system of the RFF was designed to improve member states’ reforms by enhancing national ownership and thereby also its effectiveness and legitimacy. The practical implementation of the RFF (since 2021) in terms of development and timing of national Recovery and Resilience plans and the new economic governance (NEG, since 2024) with the drafting of national Medium-Term Fiscal Structural Plans has substantial impact on member states’ governance structures. This paper examines the centralisation effect of the RFF and the NEG in the federal system of Belgium. It analyses how the RFF and NEG requirements lead to reinforcement of the federal level despite the regional levels’ competences in the policy areas, in particular with respect to the domestic stages of the European Semester. The paper also discusses the wider implications for Belgian domestic power balances as the RFF mode may be a model for future EU policies, such as the MFF and the impact of a reformed European Semester.