Recent empirical evidence shows that countercyclical fiscal policies are increasingly utilized to manage business cycles across the EU, despite the stringencies of the Stability and Growth Pact.  This paper will analyze the effects of such policies on unemployment rates in the EU nations.  The paper is empirical, with data from the OECD.  The paper will distinguish between attempts at fiscal stimulus during downturns and fiscal contraction during expansions.  My expectations: (1) that fiscal stimulus will contribute to greater resource utilization and thus lower rates of unemployment, but that the response will be weaker in those countries with less flexible labor markets; and (2) that fiscal contraction will tend to raise unemployment rates, contributing to higher long run rates of unemployment.  The Stability and Growth Pact may force nations to contract too strongly and too quickly following a period of stimulus, thus not allowing the full benefits of the stimulus to be transmitted to the labor market.