Fiscal integration in a currency union is generally understood as a transfer from fiscally strong to fiscally weak countries. I show that this changes when common debt is paired with a non-defaultable common tax, even if national debt remains defaultable. The risky country gains from intertemporal trade: it receives a grant financed by a perpetual obligation it discounts more heavily than lenders do. The cost to the safe member is second-order and the tax removes it by insuring imperfectly correlated cycles rather than transferring resources in expectation. The calibration delivers a narrow Pareto-improving region: the tax that eliminates the risky country’s perverse incentive to default is negligible, while the tax that compensates the safe country is an order of magnitude larger. Joint spending on a public good expands the region and reverses that ordering: the safe country gains even before the common budget balances.
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