This chapter examines the process of making sure that the EU fiscal regulation paradigm remained central after the launch of Economic and Monetary Union (EMU). Germany turned commitment to this paradigm into the condition for its participation in EMU. To ensure that, once in the euro area, member states would continue to conduct prudent fiscal policies, the Stability and Growth Pact (SGP) was adopted in 1995 under pressure from Germany. The SGP comprised a preventive arm, with a deterrent function, and a corrective arm, with possible sanctions. When France and Germany breached the SGP rules in 2003, the entire mechanism suffered a loss of credibility. The SGP reform in 2005, however, further complicated the enforcement of the rules because the Council remained the ultimate decision-maker. Discretion and differentiation as important fiscal ideas to change the Pact emerged for the first time. While the 2007 Lisbon Treaty introduced significant changes to the EU integration process, it did not alter EMU. Data showed that, from 2000 to 2009, in many cases member states were unable or unwilling to comply with the  public deficit and debt criteria. The lack of rule enforcement will be one of the main causes of the European sovereigndebt crisis (2009–2013).