Unintended Side-Effects? How the EU’s Recovery and Resilience Facility and the New Economic Governance Trigger Centralisation of Macro-Economic Governance in Federal Belgium.

The new performance driven financing system of the Recovery and Resilience Facility (RFF) and the New Economic Governance (NEG) are designed to improve member states’ reforms by enhancing national ownership and thereby also its effectiveness and legitimacy. However, the practical implementation of the RFF (since 2021) and NEG (since 2024) in terms of development and timing of national Recovery and Resilience plans and national Medium-Term Fiscal Structural Plans has had 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 affected policy areas. The paper discusses the wider implications for Belgian domestic power balances but has also broader relevance as the RFF /NEG mode is expected to become a model for future EU policies, such as the MFF and the impact of a reformed European Semester.