In his two pivotal works: For an European Economic Federation (1943) and The Economic Problems of the European Federation, (1944) written just before and during his Swiss exile, Luigi Einaudi listed the mandatory tasks of the European Federation. This would only be a start, for as he warned, only later experience would show whether or not the list should be extended. Einaudi does not mention any specific criteria to be used to select tasks for the European Federation. Using the principles of subsidiarity and fiscal federalism, this paper first analyses Einaudi's allocation of competences to the European Federation. Comparisons are also drawn to his 1944 conclusions and other works on European Union (EU) competencies published nearly sixty years later. The second part of the paper deals with Einaudi's recommendations on taxes to be levied by the Federation. He was skeptical of the system of transfers from member states to the Federation, but supported a system with its own autonomous resources. Today, this is a topical problem for financing the EU's budget. The third part deals with Einaudi's view on public deficits. Thanks to his work as member of the Italian Constituent Assembly, a principle advocating balance between spending and resources was introduced into the Constitution. As President, he interpreted this article as implying the equilibrium between income and expenses. Einaudi therefore anticipated the fiscal discipline introduced at the EU level with the Maastricht treaty in the nineties, and lately in several member state national constitutions. The fourth part assesses the results of EU's fiscal discipline. Success in reducing the deficit and stabilizing the public debt before the crisis is undeniable. However, a balanced budget was achieved more by tax increases than through the reduction of expenditures. This occurred because of the " missing criterion" of Maastricht. In conclusion, the paper presents and discusses this criterion.