Rigorous regionalisation
Belgium is moving towards a thorough regionalisation and is transferring all powers to the federated entities. What remains federal are overarching elements such as public debt, membership of supranational institutions and the guarantee arrangements for old and new debts incurred or to be incurred by the regions.
Taxation passes entirely to the Länder, which jointly and severally guarantee the commitments of the federal level. The regions also declare by law their willingness to remit a large part of their revenues in VAT and excise duties to the federal level, which will use these resources pro rata the number of inhabitants per region for debt servicing of the Belgian national debt, the EU contribution and defence spending. The decision in this lies with the federal parliament on the recommendation of the federal government. Federal debts remain at the Belgian federal level and are refinanced there over a long period of time until they are still a relatively small percentage of GDP.
The federal parliament will be composed of elected members of the regional electorates. Thus, there will be no more elections to the federal parliament. The federal government consists of the members of the regional governments and the post of prime minister may be a rotation between the prime ministers of the states.
Finally, the principle applies: driving for 'own account'. And so austerity will be the order of the day. This can be done by reducing the number of governments, parliaments and MPs and abolishing the Senate. Those cuts compensate for any diseconomies of scale that would result from transferring powers to the states. Efficiency is paramount.
The democratic deficit, as it currently exists, automatically disappears as the federal states fill in their own powers. The matters dealt with in the federal parliament will mainly concern European developments and Europe's initiatives, defence issues under NATO and other supranational institutions such as the UN.
Each region organises and finances its own social security. For Flanders and Brussels this is not a problem. Wallonia does face a problem, but gets a transitional period of about 3 years during which Flanders and Brussels contribute in solidarity and then gradually reduce that funding to the point where Wallonia can take care of this itself.