ABSTRACT
Introduction In the Belgian federation, consolidation took place within a particular setting consisting of two parallel processes that is only comparable to the Spanish case. On the one hand, Belgium is a federation-in-the-making. Both federalization and decentralization are ongoing processes that have fundamentally reshaped the Belgian state since the 1970s, although it is only since 1993 that the Belgian constitution has officially called Belgium a federal state. Therefore, fiscal federalism has undergone several reforms. Because the decentralization of expenditures preceded decentralization of fiscal powers, the largest share of general government budget deficits and public debt has remained at the federal level throughout the consolidation period. On the other hand, fiscal policy has had to comply with European fiscal rules such as the Maastricht Treaty, the Stability and Growth Pact (SGP) and, later on, the EU Fiscal Stability Treaty. The European Union, as an external enforcer, has increased the pressure for consolidation.
