Abstract
This article analyses the intergovernmental Fiscal Compact, which represents the latest layer in the emerging new governance framework European Union (EU) governments have adopted in response to the sovereign debt crisis in the eurozone. The crisis has initiated a new wave of selective functionalist spillover towards noticeably different levels of policy coordination between the eurozone-18 core and the remaining EU member states, who are divided into a semi-periphery and an outer periphery group. As an intergovernmental contract with currently 25 EU member states the Fiscal Compact signifies the decline of the traditional community method of universal supranational integration in favour of a more differentiated form of intergovernmental policy coordination between groups of member states.