Coordination in the public sector among interdependent policies is considered crucial for their effectiveness. However, while coordination has been studied for decades, conceptual approaches to understand the functional and temporal dimensions of policy coordination are lacking. This paper attempts to address these gaps by integrating governance functions and action situations into the analysis of the policy cycle, thereby introducing the notion of holistic coordination. We argue that this approach is useful to get a more differentiated understanding of where and why coordination across the policy cycle breaks down, and to capture the political economy of policy-making. Empirically, we undertake an illustrative case study of the European Union (EU) Water Framework Directive (WFD) implementation in the Guadalquivir river basin, Spain, focusing on measures to reduce agricultural water consumption. We find that the failure to reach agreed policy objectives of reduction of water consumption can be traced back to the way governance functions were addressed and coordinated within action situations and across the overall policy cycle. Furthermore, the analysis shows that the lack of holistic coordination can be seen as an outcome of deliberate decisions by public actors involved in the policy, taken already at the beginning of the policy cycle. Thereby, expected benefits that agricultural water users associated with the policy have been deliberately increased, while their related expected costs have been decreased. Ultimately, this made the policy objective to reduce agricultural water consumption less credible and the policy more acceptable to water users and a powerful agricultural lobby.