Monetary union in Europe started in 1999. The fiscal policy implications are, in many ways, more complex than the monetary issues, yet very little has been written on them. This book contains eleven papers and three review essays, which analyse a spectrum of empirical, theoretical, institutional and political aspects of the design and impact of fiscal policy in EMU. The contributors are some of the most experienced analysts in the field. Topics covered include the need for and consequences of fiscal coordination, constraints on national deficits and debt levels (the Stability Pact), and the role of fiscal federalism and insurance. The importance of coordinating fiscal and monetary policies is also considered in depth. As long as these strategic and institutional aspects remain imperfectly understood, EMU will not be able to function to its full advantage and may suffer periods of instability or weakness.