Order Code RS21757
Updated May 2, 2005
CRS Report for Congress
Received through the CRS Web
The European Union in 2005 and Beyond
Kristin Archick
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division
Summary
The European Union (EU) experienced significant changes in 2004 as it enlarged
from 15 to 25 members and continued work on a new constitutional treaty to institute
internal reforms and further EU political integration. In 2005, the EU is expected to
build on these efforts and seek to implement several recent foreign policy and defense
initiatives. This report describes the current status of the EU’s “constitution,” EU
enlargement, the EU’s evolving foreign and defense policies, and possible implications
for U.S.-EU relations. It will be updated as events warrant. For more information, see
CRS Report RS21372, The European Union: Questions and Answers.
The EU’s “Constitution”
Background. The European Union (EU) is a treaty-based, institutional framework
that defines and manages political and economic cooperation among its 25 member states
(Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United
Kingdom). In June 2004, EU leaders concluded work on a constitutional treaty that
contains changes to the EU’s governing institutions and decision-making processes. This
new “constitution” aims to enable a larger EU to operate effectively and prevent gridlock,
boost the EU’s visibility on the world stage, and enhance the Union’s democratic
legitimacy. It grew out of the 2002-2003 Convention on the Future of Europe and
previous EU efforts to institute internal reforms.
Major innovations in the over 300-page “constitution” include abolishing the EU’s
rotating presidency in favor of a single individual with longer tenure; creating a new EU
foreign minister position that will combine the roles of the High Representative for the
Common Foreign and Security Policy and the External Relations Commissioner;
increasing the European Parliament’s powers by extending its decision-making rights to
additional policy areas; and decreasing the size of the Commission in 2014. EU leaders
also agreed to simplify the EU’s current, complex system of Qualified Majority Voting
(QMV); beginning in 2009, QMV decisions will require 55% of member states
(compromising at least 15 of them) representing at least 65% of the EU’s population.
Congressional Research Service ˜ The Library of Congress

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Spain and Poland insisted that a blocking minority must consist of at least four countries
to prevent France, Germany, and the U.K. from blocking measures without input from
other member states.
In the defense field, EU leaders approved a “mutual assistance clause” that has been
likened to NATO’s Article 5 defense guarantee; “structured cooperation” to permit a
smaller group of members to cooperate more closely on military issues; and a European
Armaments, Research, and Military Capabilities Agency to promote procurement
harmonization and greater interoperability. The U.K. and other states, such as the
Netherlands and Poland, had initially strongly opposed the French-German-backed
proposals for the “mutual assistance clause” and “structured cooperation.” They had
worried that both could weaken NATO and the transatlantic link. The U.K. reportedly
acquiesced on these provisions, however, after securing some revisions. The “mutual
assistance clause” now includes stronger language reiterating that NATO remains the
foundation of collective defense for those EU members that are also NATO allies.
“Structured cooperation” activities have reportedly been refocused mostly on efforts to
boost military capabilities rather than on conducting operations.
Current Status. EU leaders officially signed the “constitution” in October 2004.
The new EU treaty must now be ratified by all 25 member states. The EU has set
November 2006 as the target date for the treaty’s entrance into force. Some members,
including the U.K., France, Denmark, Ireland, Poland, and the Netherlands will hold
public referenda on the treaty’s ratification. Ratification is proving controversial in
several states for a variety of reasons. Traditional Euro-skeptic voters in the U.K., for
example, worry that the “constitution” will infringe too much on national sovereignty; in
France, some fear that the new treaty could weaken Paris’ dominant role in the EU; others
view a “no” vote as a way to express dissatisfaction with the EU bureaucracy or register
concerns about Turkey’s prospective EU membership. If voters in one or more member
states reject the treaty, this could kill the treaty, or at a minimum, delay its entrance into
force while parts are renegotiated or new referenda are scheduled. The difficulties in
concluding the new treaty and potential ratification problems have sparked renewed
discussion of a “two-speed” EU, in which a vanguard of member states would drive
further integration. To date, Lithuania, Hungary, Slovenia, Italy, and Greece have
completed ratification through parliamentary approval; Spanish voters approved the treaty
in a referendum in February 2005.1
EU Enlargement
With the end of the Cold War, the European Union has sought to extend the political
and economic benefits of membership to central and eastern Europe. Ten states —
Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,
Slovakia, and Slovenia — joined the EU on May 1, 2004. Publicly, most EU officials are
enthusiastic about enlargement. They view it as solidifying a Europe “whole and free,”
claim it will further open markets in the east, and hope that ongoing growth in eastern
Europe will help jumpstart economic growth in the west. Others note that the enlarged
1 Judy Dempsey, “Support for Two-Speed Europe Gathers Momentum,” Financial Times, Dec.
15, 2003. For more information on the EU’s constitutional treaty, see CRS Report RS21618, The
European Union’s “Constitution.”


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EU still faces several challenges as it seeks to integrate the 10 new members, whose
combined economic weight remains relatively small. Many new members need to
complete reforms in areas ranging from food safety to public administration. Enlargement
will necessitate a redirection of structural funds for development projects within the EU
from older members, such as Spain and Italy, to newer and more needy countries like
Poland. It will also be several years before most new EU members are deemed ready to
join the EU’s open borders system or the EU’s single currency, the euro.
Bulgaria and Romania concluded accession negotiations in December 2004 and hope
to be able to join the EU in 2007; some caution, however, that their accession could be
delayed for one year if they fail to implement remaining reforms. Also in December
2004, the EU announced it would begin accession talks with Turkey in October 2005,
provided that Turkey continues to make progress on democratic and human rights reforms
and extends its customs union to the EU’s 10 new members, including Cyprus. Turkey’s
membership talks are likely to take at least a decade to complete; the EU asserts that the
“shared objective of the negotiations is accession” but has cautioned that it is an “open-
ended process, the outcome of which cannot be guaranteed.” All of the western Balkan
states also harbor EU aspirations in the longer term. In June 2004, the EU named Croatia
as another candidate and hopes to begin accession talks as soon as Croatia is deemed in
full compliance with the International Criminal Tribunal for the former Yugoslavia.
Macedonia submitted its membership application in March 2004.2
A New European Parliament and European Commission
Elections for a new European Parliament (EP) with 732 members were held on June
10-13, 2004. The EP has seven political groups, which are based on ideology rather than
nationality or political party, plus some “non-attached” members. The center-right
European People’s Party retained its position as the largest political group in the EP.
Voter turnout, however, was very low throughout the newly enlarged EU (just over 45%),
and euro-skeptic parties made significant gains, especially in the U.K. In July 2004, the
EP elected a Spanish socialist, Josep Borrell, as EP President for the next 30 months.
A new European Commission also took office in 2004 amid considerable
controversy. After a contentious debate, member states in June 2004 named former
Portuguese Prime Minister José Manuel Durão Barroso as the successor to outgoing
Commission president Romano Prodi. The other Commissioners were nominated by the
member states; all of them, including Barroso, were subject to approval of the European
Parliament, which has the power to accept or reject a newly-proposed Commission as a
whole. In October 2004, some Members of the EP threatened to veto the new
Commission because they objected to its proposed composition. Barroso was forced to
revamp his team in order to ensure parliamentary approval. The new Commission took
office on November 22, three weeks after it was originally scheduled to have started
work; it has one Commissioner from each of the EU’s 25 member states.
2 For more information, see CRS Report RS21344, European Union Enlargement.

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Evolving EU Foreign and Defense Policies
The EU Security Strategy. Over the past decade, the EU has sought to forge a
Common Foreign and Security Policy (CFSP) to help boost its weight in world affairs and
match its growing economic clout. As part of this process, EU foreign ministers in May
2003 tasked the EU’s High Representative for CFSP, Javier Solana, with developing an
EU security strategy to identify common security interests and joint policy responses.
Some member states had resisted setting out a common EU strategy for years, fearing it
could constrain their national policies; but observers suggest that the internal EU rift over
Iraq gave impetus to this project as a way to help avoid similar internecine disputes in the
future. In December 2003, the EU approved the final version of its first-ever security
strategy, “A Secure Europe in a Better World.” It outlines five key global threats
confronting the EU — terrorism, weapons proliferation, regional conflicts, failed states,
and organized crime — and a range of tools, primarily diplomatic and economic, for
tackling them. In particular, it emphasizes the importance of conflict prevention and
multilateral solutions. The security strategy also calls on the EU to promote stability in
the European “neighborhood,” which includes the Balkans and the EU’s new eastern
border after enlargement, as well as the southern Mediterranean and the Middle East.
Some commentators have criticized the EU’s security strategy as being too vague
and lacking in detail. EU officials counter that it merely represents the first step in
developing a more comprehensive security strategy and that work will now begin on
specific policies for implementation. Others contend that the new security strategy is
weak because it does not clearly identify the possible use of force as an option for
confronting threats posed by terrorism or weapons of mass destruction (WMD). EU
leaders dismiss this criticism, however, pointing out that the security strategy
acknowledges that military means may be needed to deal with certain threats.3
Countering WMD. Following the war with Iraq, the EU adopted a common policy
on WMD in June 2003. The EU’s “Declaration on Non Proliferation of Weapons of Mass
Destruction” recognizes WMD proliferation as a growing international threat, and the risk
that terrorists may acquire WMD. The Declaration sets out a range of diplomatic tools
for tackling WMD proliferation, including strengthening multilateral forums such as the
International Atomic Energy Agency (IAEA), and improving export controls. However,
this WMD policy also sanctions the use of “coercive measures” as a last resort. In
December 2003, the EU approved a “Strategy Against Proliferation of Weapons of Mass
Destruction” that further elaborates on the June Declaration. These WMD documents are
separate from the EU’s overarching security strategy, but are viewed as implementing
mechanisms for the portions of the security strategy related to WMD.4
3 Borut Grgic, “A Strategy with No Muscle,” International Herald Tribune, Dec. 13, 2003. For
the text of the EU security strategy, see [http://ue.eu.int/uedocs/cmsUpload/78367.pdf].
4 For the text of the June 2003 Declaration on Non Proliferation of Weapons of Mass Destruction
see Annex II in the Thessaloniki Presidency Conclusions [http://ue.eu.int/ueDocs/cms_Data/docs/
pressData/en/ec/76279.pdf]; the June 2003 Declaration was also accompanied by a set of Basic
Principles and an Action Plan against WMD proliferation. For the text of the December 2003
Strategy Against Proliferation of Weapons of Mass Destruction, see [http://ue.eu.int/uedocs/cms
Upload/st15708.en03.pdf].

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European Security and Defense Policy (ESDP) and EU-NATO Relations.
Since 1999, the EU has sought to develop a defense identity outside of NATO to provide
a military backbone for CFSP and to give itself more options for dealing with
international crises. This project, known as ESDP, has led to the creation of a 60,000-
strong rapid reaction force, three defense decision-making bodies, and ties to NATO
intended to ensure close links between the two organizations and prevent a wasteful
duplication of NATO resources or structures. The EU insists that ESDP is not aimed at
usurping NATO’s collective defense role and most EU NATO allies, led by the U.K., say
that EU efforts to enhance military capabilities should complement those of the Alliance.
As part of ongoing efforts to further develop ESDP, the EU adopted in December
2003 a new agreement on enhancing the EU’s military planning capabilities. This
agreement represents a compromise negotiated by the U.K., France, and Germany, and
stems from the desire of France and some other countries to forge a more autonomous
European defense arm. The compromise entails:
! Establishing a British-proposed EU planning cell at NATO headquarters
(SHAPE) to help coordinate “Berlin Plus” missions, or those EU
missions conducted using NATO assets.
! Adding a new, small cell with the capacity for operational planning to the
existing EU Military Staff — which currently provides early warning and
strategic planning — to conduct possible EU missions without recourse
to NATO assets.
! Inviting NATO to station liaison officers at the EU Military Staff to help
ensure transparency and close coordination between NATO and the EU.
Some observers criticize the British for agreeing to this deal, accusing U.K. Prime
Minister Blair of bowing to French demands for a more independent ESDP to help
burnish his European credentials following the rift with Paris and Berlin over Iraq. U.K.
officials are keen to point out that the deal considerably scales back the original April
2003 proposal by France, Germany, Belgium, and Luxembourg to create a European
military headquarters, planning staff, and armaments agency. They claim that language
in the agreement reaffirms NATO as Europe’s preeminent security organization, and
stress that the EU cell will “not be a standing headquarters.” Although Washington
grudgingly approved this compromise, some U.S. officials still fear that the new EU
planning cell of 20 to 30 officers may be the first step in driving the transatlantic alliance
apart. They believe this small cell will grow over time into a larger staff, which could
duplicate NATO structures.5 The EU is working to implement its new planning cell and
is collaborating with NATO to establish the EU cell at SHAPE and to finalize the NATO
liaison arrangements.
In 2004, the EU also agreed to enhance its rapid reaction capabilities by creating 13
battle groups, of 1,500 troops each, able to deploy to trouble spots, especially in Africa,
within 15 days. The EU has set 2007 as the deadline for these battle groups to be fully
operational. They will likely be employed mostly as spearhead forces that would seek to
“prepare the ground” for larger, follow-on peacekeeping operations.
5 “Straw Defends Joint Euro Force,” BBC News, Nov. 29, 2003; Judy Dempsey, “NATO Split
over Separate Brussels Military Planning Unit,” Financial Times, Dec. 1, 2003.

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U.S.-EU Relations
Since the end of major combat operations in Iraq, many European officials have
sought to mend fences with the United States. EU leaders have continually stressed the
fundamental importance of close U.S.-European ties and sought to portray the EU as a
reliable partner. U.S. officials reportedly welcomed the EU’s WMD doctrine, asserting
that it marked a “new realism” in the EU.6 At the June 2004 U.S.-EU summit in Ireland,
both sides sought to portray the transatlantic dispute over Iraq as being firmly behind them
and stressed the value of the U.S.-EU partnership.
The Bush Administration says that it will make improving transatlantic relations —
in both the EU and NATO — a priority in its second term. Europeans have welcomed
these efforts, and many believe that the Administration has succeeded in improving the
atmospherics of the relationship. Nevertheless, transatlantic tensions have not
disappeared and resolving differences will require a sustained political commitment from
both sides. The next regular U.S.-EU summit will be held in June 2005.
Over the next several months, EU officials will likely continue to engage with the
United States on the greater Middle East and various “homeland security” issues, such as
U.S. visa waivers for citizens of new EU member states and U.S. requirements for air
marshals on transatlantic flights. The EU’s takeover of the NATO-led peacekeeping force
in Bosnia in December 2004 will be closely watched as a significant test for the NATO-
EU relationship. The potential lifting of the EU’s arms embargo on China, which
Washington strongly opposes, also figures prominently on the U.S.-EU agenda. In
addition, several trade disputes persist. These include aircraft subsidies, beef hormones,
genetically-modified foods, U.S. anti-dumping practices, and exemptions in U.S. export
tax legislation that leave tax breaks in place for contracts already signed on certain heavy
goods.
As the EU continues to evolve, some U.S. analysts worry that a larger, potentially
more confident EU may seek to rival the United States and could weaken the transatlantic
link. They also contend that a more unified EU would likely lessen Washington’s
leverage on individual members and could complicate U.S. efforts to rally support for its
initiatives in institutions such as the United Nations or NATO. Others suggest that an EU
able to “speak with one voice” — especially on foreign policy and defense matters —
would be a more credible, capable partner for the United States in managing global
challenges and could shoulder a greater degree of the security burden, both within and
outside of Europe. During President Bush’s February 2005 visit to the EU’s institutions
in Brussels, he asserted that “the United States wants the European project to succeed”
and that a strong Europe is in U.S. interests.7
6 Judy Dempsey, “U.S. Arms Talks Test Realism in EU Relations,” Financial Times, June 23,
2003.
7 See the transcript of the press conference following the meeting of EU heads of state and
government and President Bush, February 22, 2005, available on the EU’s website
[http://europa.eu.int/comm/press_room/presspacks/us20050222/transcript.pdf].