Many observers argue that the European monetary union will not survive unless it is complemented by a ‘fiscal union’. In this context, the introduction of a fiscal capacity at the euro area level as proposed by Herman van Rompuy, President of the European Council, is seen as a necessary step to complete the integration process. The research project "Perspectives of a European Fiscal Union" examines various proposals that have been made to strengthen fiscal integration in Europe with regard to their stabilizing and redistributive effects. Examples are fiscal transfer mechanisms and elements of a common tax and transfer systems.