Could the European Union (EU) be more like other federations where monetary integration works together with fiscal federalism? Assuming that Economic and Monetary Union (EMU) strongly reinforces economic integration, and since national governments were deprived of adjustment mechanisms to accommodate economic shocks, the question seems plausible. Is the Euro-zone economy, and national economies in particular, still shielded against these shocks? The dissertation's purpose is to provide a political-economic answer to these questions, addressing the feasibility of conventional fiscal federalism in the EU. 'Conventional fiscal federalism' refers to systemic aspects of federations, where a constitutional division of powers between different tiers of government is organised as far as fiscal powers are concerned. This division of powers involves a centralisation bias. Recognising that monetarism shadows EMU everywhere, important consequences are found when the prospect of 'conventional fiscal federalism' is at stake. The monetarist influence reflects the prominence devoted to supranational monetary policy for stabilisation purposes. It is implied that fiscal policy has a minor role in providing stabilisation for the Euro-zone. At best, fiscal policy is valuable for each member state adjusting domestic economies to specific developments, as an expression of the diversity that characterises the EU. The discussion about 'conventional fiscal federalism' and the EU brings out the important question of equity being at the mercy of centralisation, to emulate other federations' picture. Nonetheless I find important evidence that centralisation of the redistribution function is not feasible in the EU context. National governments' lack of political willingness to significantly increase EU budget resources, and the clearly absent solidarity among EU member states both prevent the implementation of such centralisation impetus. The dissertation concludes ruling out the feasibility of 'conventional fiscal federalism' in the EU. However this is not the same as rejecting fiscal federalism at all. Considering the existence of different tiers of government endowed with fiscal competences, and a clear assignment of powers between them, this is sufficient to conclude that a different, decentralised, low profile modality of fiscal federalism already exists in the EU