If governments were angels, we would not need rules. However, in an imperfect world even rules cannot be perfect. In this policy brief, we will deliver a first-hand assessment of the European economic governance reform as presented by the European Council on December 20, 2023. In the first part, we will highlight what we deem to be a conceptual flaw, consisting in the new governance framework’s exclusive focus on national fiscal policies. In the second part, we will describe how the new framework works, highlighting its two main components (coordination and safeguard clauses). Finally, we will look at the potential contradiction between the two components when the reform exits the transitory period. Focusing on the case of Italy’s fiscal adjustment efforts, we stress the role of the Recovery and Resilience funds in alleviating Italy’s pursuit of the fiscal targets prescribed by the new governance, making the targets easily achievable in the first years. However, we notice a contradiction in the successive years, and we share the interpretation according to which the adjustment efforts commanded by the new governance are so severe for Italy as to endanger people’s consensus for Europe.

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