The 1980 state reform is unsatisfactory for two main reasons. It remained unfinished on crucial points, e.g. the definitive settlement for the Brussels region and the transformation of the senate into a chamber for regions and communities. As the preparations for a revision of the constitution, necessary for such a change in the senate's assignment, have not even started, the independance of regions and communities has remained a dead letter. Secondly, the laws which should have executed the state reform concerning the competence-division between central, regional and communal government, remain obscure on many instances. No homogeneous policy-packages have been transfered to the communities or to the regions; moreover in the transfered policies certain parts were reserved for the central government and finally the limits between the several fields of competence are far from clear-cut. The result is policy-dispersion, endless competence-conflicts and immobility. The fundamental question remains whether the equivalence of central laws and regional and communal laws is a correct decision, or whether one should return to a hierarchy between the different policy-levels.

The financial arrangements are the cornerstone of any lasting federal organization of the state. A delicate balance has to be struck between financial responsibility, solidarity, and the constraints imposed by theeconomie and monetary union. On the average member states in existing federal countries rely for two thirds on autonomous sources of finance, and for one third on solidarity. In the Belgian devolution act of 1980 the financial provisions run counter to the financial orthodoxy for a cooperative federalism. Nevertheless, provided certain adjustments are made in financial techniques, in debtand credit financing, the financial arrangements of 1980 may serve as a second best solution towards further devolution.

The Belgian conflict can be compared with a game theoretical model with two groups (Flemish and Walloons) and a negative sum-game. Within each of the groups there is hierarchisation, role playing and formation ofcoalitions. On the Flemish side the main actor is the CVP, on the Walloon side it is the PS. The main objectives of the communities in the economie field are: temporary boarding employment in depressed industries and, simultaneously, the creation of high tech industries. Policy instruments to attain those goals are: general economie measures (such as wage level, interest-rate and exchange rate); selective-protective measures (with respect to depressed industries); selective-innovative measures (with respect to high techindustries). Why is the sum-game negative or at least suboptimal?1. Mentioned policy instruments are spread over an incoherent set of institutions on the national and regional level, with rules that are partly centralist, partly federalist, partly confederalist. This leads to a complicated, unstable set of game rules in which the financial implications of decisions are shifted from the regional to the national level and vice versa. 2. Selective-protective measures are of such large size that they offset and erode the beneficial effects of general policy measures regarding wages, taxes and exchange rate. Federalism or confederalism would and should establish a new set of rules between the two regions and between regional and (con) federal state. Since a return to the ancien régime is politically unfeasible, this is the only logical way out of the present chaotic decision making process. Federalism would, inter alia, shift the financial responsibility of decisions in the field of industrial policy, education, health and public works towards the regions. This political reform requires a new constitution and therefore an agreement between the two communities. The chances for a new «talk» are presently not very high. Among the many reasons, one in particular strikes the eye: the major partner on the Flemish side, namely the Christian Democrats, have a multi-dimensional utility function, which not only is «concealed» for the others, but also undefined and unclear for the party itself.

The rapid evolution that has taken place since the state reform of 1980 has made the need felt that some options of this state reform must be adjusted. In spite of this need, the core question is whether or not one should, in the first place, adapt the structures of the national government so it can carry out its national tasks. The clear establishment of communities and regions, the structuring of the political parties on the basis of these entities, the socio-economic substratum that is based on the duality, of the country, are indexes that show that the regions have numerous policy supporting structures while they are virtually absent on the national level. The political decision making on the national level is very restricted in this perspective. The state reform of 1980 has established three levels of equal standing between which the division is total. However, the probem immediately arises of a common parliament and a socio-economic substratum on which a national parliament and a national government should be able to rest if the Belgian state is to survive with its substructures. The solution here is twofold: either the substructures will have to create organs of the central state or the organs of the central state will have to be assembled on the basis of a national political election free of the substructures.

The factors that determine the decision-making mechanisms on the regional level are twofold in nature: internal and external. We may distinguish three internal factors: 1° the councils of the regions are composed of members of the national parliament; 2° on the national level, the regional problem is not dealt with by representatives of the regions; 3° the conventional system controls the relationship between the executives and the councils of the regions. The external factors may be reduced to five: 1° the regions do not have jurisdiction for their entire territory; 2° the financing of the regions is done via a system that implies no financial responsibility and onesidedly favors the southern regions; 3° the financial burden of some decisions of the nation is imposed on the regions; 4° the distribution of authority disregards federal practice; 5° conflicts of authority are not resolved by a purely jurisdictional organ. Finally, we stress the contiguous existences·of regions and communities as substructures white the latter are the true components of the Belgian nation.

By the law of the 8 August 1980 concerning the institutional reform of the state, the Belgian political system is becoming a federalistic country. Nevertheless, after three years of implementation, most of political scientists state that these constitutional reform is incomplete and inadequate to solve functionally the economical, political and cultural complexities of the relationships between Flanders, W allonia and Brussels. A confederation based on three components equally autonomous by preserving economic integration and monetary unity could be a better framework to establish equitable relationships between the three regional components of the belgian political structure. These proposal of creating a Belgian confederation presents specific adaptations in allocation tasks, functions and competences that are the results of historical factorsand cultural caracteristics of the Belgian community.

The distribution of competences between the national state, the communities and the regions is subject to criticism. The state reform laws f 1980 have admittedly led to many confiicts, due to a lack of clearnessof the terms of the law and to the incomplete character of the reform. A clear option is to be made between a federal regime as such, a regionalised state and separatism; so far this option has only been postponed, which leaves the actual state structure rather confused and hardly workable. A series of conditions both of a politica! and a legal nature have to be fulfilled in order to clear the situations.

The 1980 State Reform has been criticized a lot and yet it is to be carried out at full. Back in 1980 this reform proved not only to be the ultimate answer to the political needs of those days but it was also closely connected with the 1963 and 1970 reforms. The only criticism to take into consideration for a possible reform in 1990 is an economie one: separate financial possibilities and responsibilities of federal organizations are a must in the future. In the meantime «1980», rich in possibilities, must be offered fair chances. Maintenance of a central administration that is well defined and strengthened by an important arbitration task is not wished for. The idea of creating regions with an independance to such an extent that failures are no langer accepted is irrational. The motto «Flanders can do it better» should not be fostered.

Separatism in Belgium does not impose itself, on the conditions that the Belgian Economic and Monetary Union does not force on Flanders toa large a cost, that Wallonia accepts the political prerequisites for thefunctioning of that Union and that federalism really is carried out. Actually these conditions are not fulfilled. Therefore the hypothesis of separatism has to be investigated. For Flanders, separatism economically offers more advantages than disadvantages. The budget equilibrium, the rates of interest, the social conditions and political stability would be improved, without the international solvability seriously affected.