Most economists, many politicians and citizens interested in EU affairs expected an attempt toward a fiscal union in the EU as a device for coordinated national policies. What we received in March 2012 is the Fiscal Compact, which has been signed by 25 of 27 EU governments. This compact is going the wrong way of asymmetric fiscal adjustments together with the threat of sanctions against individual countries, regardless how deficits arose, which consequences a reduction would have for the country, and which spillover a reduction would have to other countries. A simple calculation of fiscal adjustments following the compact’s rules illustrates that the entire EU will enter the path to economic stagnation for the next 20 years. More, the room for fiscal maneuvers in times of a strong crisis like in 2009/2010 will disappear. All governments will be forced to implement measures t hat deteriorate a crisis. According to the fiscal positions, one may expect a decline in economic activity in 2013 also in some core countries of the monetary union with high public debt. During the next 20 years, the divergence between core countries and periphery will increase and may jeopardize economic and social cohesion [...]