The center-left Martens VIII cabinet, which had taken office in May 1988 following the longest political cricis in Belgian history, continued in 1989 implementation of its constitutional reform program. The European elections had no domestic impact, but during the campaign the focus was once again on the burning immigration issue. Meanwhile, abortion liberalization caused tension inside the majority. In foreign affairs, the focus was on normalization of relations with Zaire.

From the independence (1960), the relations between Zaïre and Belgium have known many difficulties. The most serious crisis took place from november 1988 to july 1989 (march 1990). A lot of questions were brought up: cooperation, debt, human rights... The agreement of Rabat provides for the future. Behind these events, it is possible to find some explanations of the crises: the past (relations colony-colonizing nation), the nature of power (differences between democracy and personal power) and the international surroundings.

The European internal market presents an enormous challenge for business firms in a small open economy. Major adjustments may be in order in certain business sectors, as the success of 1992 will in first instance depend upon the dynamism of the Belgian firms themselves. Whithin the federal context of a simultaneous devolution of powers towards the European level and towards lower-level jurisdictions in Belgium, the functions of governments have to be redefined. The process of translating European directives into national law and of further adapting the legal and economic framework, especially in the financial field, has just taken off in Belgium. However, a more continuous effort of modernising the institutional and economic environment will be in order for the years to come.

This paper aims to determine the major axes of the economic policy implemented by the Walloon Region since it acquired significant powers in january 1989. A brief summary of the mechanisms introduced by the Special Financing Law demonstrates how much federal entities suffer from financial constraints imposed by the budgetary sourcing from the National Government. As a result the resources made available are lower than 1988 expenditure on items which have since been 'federalized". The balance will have to be financed by Regional borrowing. We discuss several budgetary policies scenarios and their effects. The Walloon Region has chosen a middle way between two extremes. It has avoided an unchanged expenditure policy, which would have led to an undesirable increase in the debt of the Region, followed by a chronic budgetary shortage. neither has it introduced an excessively strict policy - obtaining a balanced budget by 1996 would have meant a 20% cut in current expenditures. The Walloon Region has opted for a policy of distributing growth between the present and the future by accepting a reasonable level of debt with borrowing limited to the financing of investments which increase the Region's earning assets. When it comes to the budgetary policy of the French Community, we confine ourselves to a brief presentation of the budget because of uncertainty about how it will be made up.

During recent years, the audiovisual landscape in Belgium has been going through a number of drastic changes. The monopoly of the public broadcasting system, standing for over 40 years, was breached. Several hundreds of private radio stations, two new commercial television stations and a number of private local television stations saw the light. The advent of all these newcomers has created a competitive media system. Therivalry between the public broadcasting companies and the commercial stations is very severe and unfortunately the PBS are imitating the commercial model: they sacrifice more time for fiction and entertainment. Moreover, the Belgian media policy is very permissive and favours commercialisation.