Order Code RS21344
Updated December 27, 2005
CRS Report for Congress
Received through the CRS Web
European Union Enlargement
Kristin Archick
Specialist in European Affairs
Foreign Affairs, Defense, and Trade Division
Summary
On May 1, 2004, 10 states joined the European Union (EU), enlarging the Union
to 25 members. The EU views the enlargement process as a historic opportunity to
promote stability and prosperity in Europe. In addition to the 10 new members (Cyprus,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and
Slovenia), Bulgaria and Romania hope to accede to the EU in 2007. Turkey and Croatia
began accession negotiations in October 2005. Macedonia was named as a candidate
for EU membership in December 2005. This report will be updated as necessary. For
additional information, see CRS Report RS21372, The European Union: Questions and
Answers, by Kristin Archick, and CRS Report RL32071, Turkey: Update on Selected
Issues, by Carol Migdalovitz.
Background on the European Union
After World War II, leaders in western Europe and the United States were anxious
to secure long-term peace and stability on the European continent and create a favorable
environment for economic growth and recovery. In 1952, six states — Belgium, the
Federal Republic of Germany, France, Italy, Luxembourg, and the Netherlands —
established the European Coal and Steel Community, a single market in these two
industrial sectors that was controlled by an independent supranational authority. In 1958,
the “Rome Treaties” established the European Economic Community, extending the
common market to all economic sectors, and the European Atomic Energy Community
to ensure the use of nuclear energy for peaceful purposes. In 1967, these three formations
collectively became known as the European Community (EC).
The EC first added new members in 1973, with the entry of the United Kingdom,
Ireland, and Denmark. Greece joined in 1981, followed by Spain and Portugal in 1986.
The Single European Act modified the EC Treaties in 1987 by increasing the powers of
the European Parliament and enabling the 1992 single market program to move forward.
At the beginning of 1993, the near completion of the single market brought about the
mostly free movement of goods, services, capital, and people within the EC.
Congressional Research Service ˜ The Library of Congress

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On November 1, 1993, the Treaty on
EU Institutions
European Union (Maastricht Treaty) went into
effect, establishing the European Union (EU),
The European Union is a treaty-based,
institutional framework that defines and
which encompasses the EC. The European
manages economic and political cooperation
Union consists of three pillars: an expanded and
among its 25 member states. It is governed by
strengthened EC, a common foreign and security
several institutions.
policy, and common internal security measures.
The European Commission is essentially
The Treaty contains provisions that have
the EU’s executive and has the exclusive right
resulted in the creation of an economic and
of legislative initiative. It ensures that the
provisions of the Treaties are carried out
monetary union (EMU), including a common
properly. The 25 Commissioners are appointed
European currency.1 The European Union is
by agreement among the governments of the
intended as a significant step on the path toward
member states for five-year terms. Each
Commissioner holds a distinct portfolio (e.g.,
greater political and economic integration.
agriculture).
The Council of the European Union
On January 1, 1995, Austria, Finland, and
(Council of Ministers) is comprised of
Sweden acceded to the EU, bringing
ministers from the national governments. As
membership to 15 states. In June 1997, EU
the main decision-making body, it enacts
legislation based on proposals put forward by
leaders met to review the Maastricht Treaty and
the Commission. Different ministers
consider the future course of European
participate depending on the subject under
integration. The resulting Amsterdam Treaty
consideration (e.g., economics ministers could
convene to discuss unemployment policy). The
increases the legislative power of the European
Presidency rotates among the member states for
Parliament, strengthens the EU’s foreign policy,
a period of six months.
develops a more coherent EU strategy to boost
The European Council brings together
employment, and integrates procedures for
the Heads of State or Government of the
managing internal security. In December 2000,
member states and the President of the
EU leaders concluded the Nice Treaty to pave
Commission at least twice a year. It acts
principally as a guide and driving force for EU
the way for further EU enlargement. It sets out
policy.
internal, institutional reforms to allow an
The European Parliament consists of 732
enlarged Union to function effectively. Critics
members. Since 1979, they have been directly
argued, however, that Nice established an even
elected in each member state for five-year
more complex decision-making process. Thus,
terms. The Parliament cannot enact laws like
national parliaments, but has some “co-
the EU embarked on a new reform effort.
decision” power with the Council of Ministers
and can amend or reject the EU’s budget.
In June 2004, EU leaders concluded work
The Court of Justice interprets EU law
on a constitutional treaty that simplifies EU
and its rulings are binding; a Court of Auditors
voting rules and contains changes to the EU’s
monitors the Union’s financial management. A
governing institutions. Commonly referred to as
number of other advisory bodies represent
economic, social, and regional interests.
the “constitution,” it must be ratified by all
member states through either parliamentary
approval or public referenda in order to come
into effect. The constitution’s future, however, has been thrown in doubt following its
rejection by French and Dutch voters in May and June 2005. Some suggest that the
difficulties with ratifying the EU constitution could call into question further expansion
1 Eleven members — Austria, Belgium, Finland, France, Ireland, Italy, Germany, Luxembourg,
the Netherlands, Spain, and Portugal — adopted a single European currency, the euro, on
January 1, 1999; Greece joined in 2001. The 12 participating countries have a common central
bank and a common monetary policy. Banks and many businesses began using the euro as a unit
of account in 1999; euro notes and coins replaced national currencies on January 1, 2002.

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of the EU, given that considerable public opposition to the constitution is tied to concerns
about EU enlargement. EU officials emphasize that EU enlargement can still proceed
under the terms set out in the Nice Treaty.2
EU Enlargement
The EU views enlargement as an historic opportunity to promote stability and
prosperity throughout Europe. The criteria for EU membership require candidates to
achieve “stability of institutions guaranteeing democracy, the rule of law, human rights
and respect for and protection of minorities; a functioning market economy, as well as the
capacity to cope with competitive pressure and market forces within the Union; the ability
to take on the obligations of membership, including adherence to the aims of political,
economic and monetary union.”3 The EU began accession negotiations in March 1998
with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia. In December
1999, at its summit in Helsinki, Finland, the EU decided to open negotiations with six
others: Bulgaria, Latvia, Lithuania, Malta, Romania, and Slovakia. Turkey was also
formally recognized as a candidate at Helsinki, but remained in a separate category for
several years as it sought to comply fully with the membership criteria (see below).
Accession talks begin with a screening process to see to what extent applicants meet
the EU’s 80,000 pages of rules and regulations (acquis), which is divided into 31 chapters
that range from free movement of goods to agriculture to competition. Then, detailed
negotiations at ministerial level take place to establish the terms under which applicants
will meet and implement the rules in each chapter. The European Commission proposes
common negotiating positions for the EU on each chapter, which must be approved
unanimously by the Council of Ministers. During negotiations, applicants may request
transition periods for complying with certain EU rules. All candidates receive financial
assistance from the EU, mainly to assist in the accession process. Once the Commission
concludes negotiations on all 31 chapters with an applicant, the agreements reached are
incorporated in a draft accession treaty, which is submitted to the Council for approval
and to the European Parliament for assent. After signature, the accession treaty must be
ratified by each EU member and the candidate country; this process can take two years.
At their June 2001 summit in Goethenburg, Sweden, EU members stated that the
“enlargement process is irreversible....the road map should make it possible to complete
negotiations by the end of 2002 for those candidates that are ready. The objective is that
they should participate in the European Parliament elections of 2004 as members.” At the
EU’s December 2001 summit in Laeken, Belgium, the EU announced that 10 states —
Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,
Slovakia, and Slovenia — would likely be able to conclude accession talks by the end of
2002. Accession negotiations in 2002 with the 10 candidates on the remaining chapters
— especially agriculture, regional assistance, and budgetary contributions — were
challenging because all raised money and burden-sharing issues. Members were divided
on how much financial assistance candidates should receive, and on how to finance it.
Meanwhile, the 10 candidates were dismayed by EU proposals that called for a 10-year
2 For more information, see CRS Report RS21618, The European Union’s Constitution, by
Kristin Archick.
3 Conclusions of the European Council, Copenhagen, Denmark, June 1993.

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transition period before they would be eligible for full EU farm subsidies and lower rates
of structural aid than existing members received. A deal was finally reached, and the EU
concluded accession talks with the 10 states at its December 2002 summit in Copenhagen.
The accession treaty was signed by the members and the 10 candidates on April 16,
2003. Although Brussels would have preferred a prior political solution to the conflict
over Cyprus, it stated that this was not a “precondition” for the divided island’s accession.
Moreover, Athens had threatened to block any enlargement that excluded Cyprus. The
EU had hoped that a settlement between the Turkish Cypriot community in the north and
the Greek Cypriot government in the south would be reached in time for enlargement.
Twin referenda on a U.N. plan to reunify the island were held on April 24, 2004; 65% of
Turkish Cypriot voters approved the plan, but it was rejected by 76% of Greek Cypriot
voters. Without a settlement, EU laws and financial benefits apply only to the southern
Greek Cypriot part of the island, which is the internationally recognized state.
On May 1, 2004, the 10 states acceded to the EU, increasing the EU’s population to
roughly 450 million. The new members, however, still face several challenges. Reforms
in areas ranging from public administration to competition must be completed, and it will
be some time before the new states are ready to join the EU’s monetary union or to
participate fully in the Schengen area of free movement to which most EU members
belong. Citizens of new member states will have to wait up to seven years before they are
able to work in all EU countries, many of which fear an influx of low-cost labor.
In June 2004, the EU named Croatia as a candidate. The EU asserted, however, that
Croatia still needed to make further progress on some of the political preconditions for
membership related to issues such as minority rights, judiciary reform, and the
apprehension of war criminals. In December 2004, the EU announced it would open
accession negotiations with Croatia in mid-March 2005, provided that Croatia
demonstrated “full cooperation” with the International Criminal Tribunal for the former
Yugoslavia (ICTY). Croatia’s accession talks, however, were delayed because EU
members were not convinced that Croatia was cooperating fully with the ICTY in
apprehending a prominent suspected war criminal. The EU opened accession talks with
Croatia on October 3, 2005, following a determination that Croatia was in full compliance
with the ICTY. Some suggest that Croatia only received a positive EU nod as part of a
deal to also open accession negotiations with Turkey on the same day (see below).
Also in December 2004, the EU concluded accession negotiations with Bulgaria and
Romania. Both hope to join the EU in January 2007. EU officials maintain that their
membership will not be jeopardized by a failure to ratify the EU constitution. However,
their accession could be delayed for one year if they fail to implement remaining reforms.
In December 2005, the EU named Macedonia as another candidate for EU membership
but has not announced a start date for accession talks.
Turkey and the EU
The relationship between Turkey and the European project has been characterized
by a series of ups and downs. Turkey and the EC first concluded an association
agreement aimed at developing closer economic ties in 1963, but Turkey’s 1987
application for full EC membership was rejected. A customs union between the EU and
Turkey entered into force in 1995, but the 1997 Luxembourg summit failed to put Turkey

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on a clear track to membership. The EU recognized Turkey formally as a candidate at the
1999 Helsinki summit but asserted that Turkey still needed to comply fully with the EU’s
political and economic criteria. The EU’s decision stemmed largely from improving
Greek-Turkish relations, and Berlin’s more positive attitude toward Ankara. Many
observers suggest that U.S. pressure also played a part. The United States had long
advocated an EU policy shift on Turkey, believing Turkey to be a vital, strategic ally that
should be anchored firmly to Europe. Washington urged Ankara to take the EU’s offer,
even though it did not set out a timetable for accession talks and guaranteed Greece that
Cyprus’ EU bid would not hinge on a settlement of that conflict.
In February 2001, the EU formally adopted an “Accession Partnership” with Turkey,
which set out the priorities Turkey needed to address in order to adopt and implement EU
standards and legislation. The EU provides Turkey with about $150 million annually to
help develop the Turkish economy. Ankara had hoped the EU would set a firm date for
starting negotiations at the December 2002 Copenhagen Summit, but was disappointed.
Some EU members argued that although Turkey had taken significant steps toward
improving human rights, it still did not fully meet the membership criteria. In December
2004, however, the EU announced that accession talks with Turkey would begin in
October 2005, provided that Turkey brought into force several pieces of reform legislation
and fulfilled its pledge to extend its customs union with the EU to the 10 new members,
including Cyprus (Turkey fulfilled both of these requirements by July 2005). The EU
asserted that the “shared objective of the negotiations is accession,” but that it would be
an “open-ended process, the outcome of which cannot be guaranteed beforehand.”4
Many analysts worried that the EU’s difficulties with ratifying its constitution —
which highlighted voter concerns about EU enlargement — could delay the start of
Turkey’s negotiations. After some contentious debate among EU members over issues
related to Turkey’s lack of formal recognition of Cyprus and whether a “privileged
partnership” short of full membership for Turkey should be retained as a future option,
the EU opened accession talks with Turkey on October 3, 2005. The negotiating
framework effectively requires Turkey to continue working toward normalizing relations
with Cyprus and asserts that “if Turkey is not in a position to assume in full all the
obligations of membership it must be ensured that Turkey is fully anchored in the
European structures through the strongest possible bond.” Austria was the last EU
member to give its assent, and some speculate that a deal was cut in which Austria agreed
to allow talks with Turkey to go forward partly in exchange for also opening negotiations
with Croatia, with which Austria has cultivated close ties. EU talks with Turkey are
expected to take at least a decade to complete. Some EU members and many EU citizens
remain wary about Turkey’s possible accession given its size and Muslim heritage.5
Possible Future Rounds of EU Enlargement
The EU maintains that the enlargement door remains open to any European country
that is able to meet the political and economic criteria for membership. Besides Croatia
4 See the European Council, Presidency Conclusions, December 16-17, 2004; available online
at [http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/83201.pdf].
5 “Turkey Faces Toughest Test for EU Entry,” Financial Times, June 30, 2005; “Shock, Awe, and
Exhaustion,” BBC News, October 4, 2005.

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and Macedonia, Albania, Bosnia, and Serbia harbor EU aspirations in the longer term, and
the EU has acknowledged these countries as potential candidates. The EU hopes that the
possibility of membership will help accelerate reform and promote greater stability in
these countries. Ukraine has also expressed long-term EU aspirations.
Some observers caution that voter worries about further EU enlargement could slow
EU efforts to enlarge to the Balkans or beyond. Even before the debate over the EU
constitution, many experts believed that enlargement was reaching its limits and that the
EU was unlikely to include countries such as Russia for the foreseeable future. They note
that in the spring of 2003, the EU launched a new “European Neighborhood Policy”
(EPN) to develop deeper relations with a “ring of friends,” or countries in close proximity
to an enlarged Union. This initiative covers Russia, Ukraine, Moldova, Belarus, as well
as the southern Mediterranean countries (including Israel and the Palestinian Authority);
it offers these countries a stake in the EU’s internal market and participation in selected
EU activities in return for a demonstrated commitment to EU values and implemented
reforms. The EU already has cooperation or association agreements with some of these
neighboring countries. In June 2004, the EU decided to include the three southern
Caucasus states of Armenia, Azerbaijan, and Georgia in the EPN.
U.S. Perspectives
Successive U.S. Administrations have supported EU enlargement, believing that it
serves U.S. interests by spreading stability and the benefits of the single market
throughout the continent. Members of Congress generally share this view; over the years,
the only criticism has been that the EU was moving too slowly. U.S. businesses believe
they will gain access to a larger, more integrated European market, and see enlargement
as forcing further reform of the EU’s Common Agricultural Policy, a perennial source of
U.S.-EU trade conflict. Some analysts posit that enlargement may also decrease overall
U.S.-EU tensions because many new members are more pro-American. The Bush
Administration welcomed the EU’s enlargement in 2004, noting that it would help
strengthen the “enduring partnership” between the United States and Europe. Some U.S.
officials are concerned that voter worries about EU enlargement, as expressed in the
debate over the EU constitution, could hinder additional EU expansion, especially to
Turkey and the Balkans in the longer term.
Others argue that EU enlargement could have some negative implications for U.S.
interests. Even with EU institutional reforms, decision-making will likely remain
cumbersome and the EU may be an increasingly frustrating partner. Some suggest that
political instability in a number of acceding central and eastern European countries may
further complicate EU negotiations if frequently changing governments shift policy
positions. Others worry that a larger, more confident EU — with an economic output
roughly equivalent to that of the United States and growing political clout — may
increasingly rival U.S. power and prestige.6
6 Also see CRS Report RS21875, EU Enlargement: Economic Implications for the United States,
by William H. Cooper.

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