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This article investigates the early signs of the impact of the financial crisis on fiscal convergence within the EU. Over the 2004–2012 period, we offer a comprehensive picture of the convergence pattern by considering the key fiscal aggregates and the main economic and functional components of total government expenditure. Indeed, the effects of the crisis have been transmitted differently on the fiscal frame in the EU, signalling an overall tendency to diverge of the Periphery EU countries from the Core. In particular, it emerges a greater persistence in the Periphery countries of the backlash of the crisis on government budgets and disarranging effects on government spending, with crowding out of productive components of public expenditure
