The paper studies the fiscal policy and the ways of its management and maintenance, as well as its main goal and instruments in the case of the European Union. Fiscal policy includes two important terms – fiscal decentralization and fiscal federalism, and understanding both terms is necessary to get a clearer picture of the meaning of fiscal policy. In addition to the aforementioned policy, the EU budget plays a major role in the work. The concept of the budget and its meaning and importance for the financial situation of the EU are treated in detail. The budget is also based on certain principles and functions according to the rules determined within those principles. The paper also describes the process of adopting the budget for the EU and indicates who all participates in that process and what role each of the participants plays. The budgeting process includes revenues and expenses that are actually its constituent parts, and it is explained in detail how they are collected and spent and what they are for. The concept of the European Semester and its role in the budget were also discussed. Also, the fact that Croatia is the first country that, when preparing to enter the EU, had to face the obstacles brought by the European Semester was highlighted. The last and key term elaborated in the paper is the multi-year financial framework, and the periods in which the mentioned term covers 2014-2020 and 2021-2027. Differences in the areas to which the expenditures refer for each of the two periods are defined, and certain conclusions are drawn based on this.