Fisher points out that while the Excessive Deficit Procedure and the Stability and Growth Pact introduce a framework of numerical rules and surveillance procedures to be conducted at the supranational EU level, it is up to each Member State to ensure the necessary conditions allowing the fulfillment of its EU obligations. In compliance with the subsidiarity principle, the EU framework does not give any indication on the set-up of national budgetary institutions. The author provides a broad overview on the interactions between the EU framework and national budgetary institutions and assesses if and how they are adapting and what are the areas of “friction”. Fisher notes that while institutional change takes time and the Pact is still very young, nevertheless the demands from the EU setting are gradually feeding into national budgetary frameworks. The major developments are identified in the evolution of medium-term budgeting mechanisms and in improved co-ordination within the general government. Additional pressures for change are expected as the focus at EMU level shifts away from budgetary consolidation towards the quality and sustainability of public finances and towards the co-ordination of economic policies in the euro area.