A review of the latest developments in the fiscal policy of such leading West European countries as Germany, France, Great Britain, Italy, Sweden. Analysis of the problems related to the development of the EU financial system in the context of further integration and expansion of the EU. Particular attention is given to the budget and taxation reforms of 1998-2003, as well as to the problem of interaction between the fiscal and monetary policy pursued by the governments of individual countries and the common, supranational fiscal policy implemented within the framework of the Economic and Currency Union.