• ECB
• European public goods
• eurozone
• fiscal discipline
• fiscal policy
• monetary unions
• risk sharing
• sovreing debt

The past decades have been characterized by increasing economic uncertainty. The European Monetary Union’s architecture has been challenged by large and unprecedented economic shocks that unveiled the intrinsic fragilities of its constitutional set-up. Their origins have to be researched from its mere conception, and their fallacies in its successive development. The fiscal regulatory framework failed in the achievement of an economic convergence process between the Eurozone’s Members, while binding the national governments in their fiscal response capacity. A revision of the current European fiscal framework is urgent. After a detailed discussion on the motives that lead to such incomplete architecture, this works intends to present and compare some selected EMU’s revisional proposals, as well as to investigate the optimal level of European fiscal integration under moral hazard. The thesis shows how a certain degree of vertical fiscal coordination and the establishment of an European budget for the provision of spending in public goods are beneficial to the whole Union, since their risk sharing mitigation effects behave as macroeconomic stabilizers against negative shocks. Finally, we discuss how the optimal policy-mix between the risk sharing measure is dependent on the country’s endogenous and exogenous components.