Fiscal federalism may not always work well in a monetary union if fiscal policymakers don't cooperate. Comparing a federalism scheme to intergovernmental cooperation, it's hard to say which is better. Having an extra tool and a policymaker with union-wide goals might not make up for having a player who doesn't cooperate. This holds true even with an active monetary policy or when the economy faces shocks. The best option depends on how policies affect other countries, what policymakers aim for, and how much shocks vary.