Fiscal policy in the EU has been largely pro-cyclical. We propose an approach that supports more informed decision making aimed at stabilising output. Rather than relying on notoriously uncertain point estimates of the cycle, our approach is built around the management of risks: (i) launching discretionary measures to support or dampen aggregate demand when, in hindsight, no measures would have been required, versus (ii) remaining inactive when, in hindsight, a stabilisation measure would have been warranted. A rational policymaker can manage these risks by using information on past forecast errors and take stabilisation measures only when real-time estimates of the cycle exceed an optimal threshold. We show that the observed tendency to run pro-cyclical fiscal policies can reflect two complementary factors: a preference for activism combined with the desire to avert downside risks to growth, while putting a blind eye on upside risks.