The paper explores how monetary and fiscal policies interact in a currency union with different effects on each country. When the central bank sets interest rates based on a Taylor rule, optimal fiscal policy can boost output without causing inflation. However, if the monetary policy deviates from the best approach, there can be a bias towards stabilization. This bias can be lessened by tighter monetary policy, but different countries may react differently to economic shocks. When there are uneven fiscal shocks, output gaps between countries can grow permanently, unless a unified fiscal strategy that considers national differences is implemented.