The European Union is facing significant challenges with progressing monetary and economic integration, EU enlargement and increasing integration of the world economy. Against this background, the project analyses the future fiscal constitution of the European Union in terms of allocation of tax and fiscal competences between the EU, the national and the regional level of government of the member countries. First, taking an institutional-comparative approach the development of the fiscal constitutions of both the European Union and the member countries since the foundation of the EEC is investigated in order to find out to what extent in the course of time fiscal competences have been transferred from the national governments both to the European Union and to subnational levels of government. In a second step, then, an empirical analysis for a panel of EU and other OECD countries is carried out. The topic of investigation are the factors determining in general the vertical government structure according to the fiscal federalism theory. For this purpose an indicator for the degree of fiscal centralization is constructed. Apart from this, the analysis focuses on the possible influence of economic and political integration in the European Union on the vertical government structure of the EU member countries. It adresses the question whether European integration has contributed to the observed decentralization trend in most EU countries. Based on the empirical results normative considerations concerning the future development of the fiscal constitutions of the European Union and the member countries are discussed.