The article explores how Fiscal Federalism theory applies to the European Union and its countries. It looks at different fiscal systems in Europe and how they impact EU policies like Cohesion Policy and the Stability and Growth Pact. The study compares German Unification to the 2004 European Enlargement and analyzes national fiscal settings. It shows the connection between budget decisions and the EU integration process. The research suggests that Europe needs to clarify its fiscal goals to move forward with integration.