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In this paper the Balassa steps of economic integration are first reviewed, andthen extended to cover curernt integration configurations. Pre-conditions foreach stage of integration are detailed using a backward-looking economicconditionality approach, and then both economic and political spillover effects areanalysed within a forward-looking approach so as to evaluate the sequencing ofsteps of integration. The European Union (EU) is currently the most advancedfrom of regional integration, so the template is then applied to the EU. The mainfindings are that fiscal union does not need to occur directly after Economic andMonetary Union (EMU), but rather a dynamic that attains political union first andthen attains fiscal union might be preferable, dependent on whether EMU formsan optimal currency area or not.JEL classifications: F10, F15, F30, F42