This chapter traces the emergence of the fiscal regulation paradigm in Economic and Monetary Union (EMU). Established in 1992 with the Maastricht Treaty, EMU worked through the combination of monetary policy centralisation and fiscal policy decentralisation. Under the pressure of Germany, the fiscal regulation paradigm became the main feature of EMU. It constrains member states’ freedom to determine their fiscal policy and consists of a set of rules governing the maximum permitted deficit and debt-to-GDP ratios, the monitoring of public finances, and the correction (including potential sanctions) of excessive spending. Economic ideas of ordoliberalism shaped EU fiscal regulation. Ordoliberalism, a German school of thought developed in the 1930s, argued for rules governing the functioning of the economy, price stability and responsibility for the consequences of economic decisions. These principles became enshrined in EMU. Germany had the most to lose from entering EMU, especially its powerful national currency. Its political elite (the government and the national central bank) converged on the need for fiscal regulation. As a result, when negotiating EMU, Germany could appear as a particularly cohesive actor and advance its position more strongly. In addition, France was no longer able to economically counterbalance the German power.