The design and operation of fiscal policy is the major unresolved issue in the new monetary union in Europe. This collection provides the first comprehensive survey of fiscal policy under the restrictions of a single monetary policy and the Stability Pact. Presenting original theoretical and empirical research by leading experts in an accessible style, it will be vital reading for policy makers, researchers and graduate students in disciplines including economics of European integration, international economics, financial economics, macroeconomics, and politics.