The EMU has been through a severe trial the past years and a lot of effort has been put in reforming European economic governance with the dual purpose of alleviating the immediate emergency and buffing EMU for future breakdowns. However, while the policy and politics substance of these reforms is widely debated, their polity consequences are only beginning to be understood. The lack of political and economic stability is damaging the EMU to the brink of collapse. This paper argues that in order to overcome these issues and provide the EMU with stability, some kind of central authority is needed to supervise compliance and punish where necessary. The paper assesses the literatures on hegemony and federalism to provide a clear framework for how stability is generated in a differentiated and MLG system as the EMU.
