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.