The next period of nightlong European summits and standoffs between the European institutions and one of its member states is looming: Italy and the EU are at odds about its new budget proposal. This is a result of the setup of the Economic and Monetary Union, which will continue to produce such stalemates as long as dominant countries make common rules for their own sake and others try to circumvent them.

The EU Commission has, for the first time, rejected a budget plan of a member state. While the Italian government drums its chest and the markets get increasingly nervous, the situation remains deadly serious. It is moreover deeply symptomatic of the potential, limits and fundamental shortcomings of the current architecture of Eurozone fiscal governance.