The European Union: Questions and Answers

The European Union: Questions and Answers
January 22, 2021
The European Union (EU) is a political and economic partnership that represents a unique form
of cooperation among sovereign countries. The EU is the latest stage in a process of integration
Kristin Archick
begun after World War II, initially by six Western European countries, to foster interdependence
Specialist in European
and make another war in Europe unthinkable. The EU currently consists of 27 member states,
Affairs
including most of the countries of Central and Eastern Europe, and has helped to promote peace,

stability, and economic prosperity throughout the European continent.

How the EU Works
The EU has been built through a series of binding treaties. Over the years, EU member states have harmonized laws and
adopted common policies on an increasing number of economic, social, and political issues. EU members share a customs
union; a single market in which capital, goods, services, and people move freely; a common trade policy; and a common
agricultural policy. Nineteen EU member states use a common currency (the euro), and 22 members participate in the
Schengen area of free movement in which internal border controls have been eliminated . In addition, the EU has been
developing a Common Foreign and Security Policy (CFSP), which includes a Common Security and Defense Policy (CSDP),
and pursuing cooperation in the area of Justice and Home Affairs (JHA) to forge common internal security measures.
Member states work together through several EU institutions to set policy and to promote their collective interests.
Challenges Facing the EU
The EU is generally considered a cornerstone of European stability and prosperity, but it faces a number of internal and
external challenges. Managing the Coronavirus Disease 2019 (COVID-19) pandemic and its economic repercussions is
preoccupying EU leaders’ time and attention. Other key issues for the EU include democratic backsliding in some member
states (including Poland and Hungary), the presence of populist and to some extent anti-EU political parties throughout the
bloc, managing relations with the United Kingdom (UK) following its exit from the EU in January 2020 (Brexit), ongoing
political and societal pressures related to migration, and a range of challenges posed by both Russia and China. Many of these
challenges could have implications for the EU’s future shape and character.
U.S.-EU Relations
Successive U.S. Administrations and many Members of Congress have supported the European integration project since its
inception in the 1950s as a means to prevent another catastrophic conflict on the European continent and to foster democratic
allies and strong trading partners. Today, the United States and the EU have a dynamic political partnership and share a huge
trade and investment relationship. U.S. and EU officials traditionally have viewed the partnership as mutually beneficial.
During the Trump Administration, U.S.-EU relations came under considerable strain. EU officials were taken aback by what
they regarded as former President Trump’s unprecedented skepticism of the EU, his vocal support for Brexit, and his
contention that the EU engages in unfair trade practices that are detrimental to the United States. Many in the EU also were
uneasy with Administration policies on numerous issues, including aspects of relations with Russia and China, Syria, the
Middle East peace process, and the role of multilateral institutions. The EU opposed the Administration’s decisions to
withdraw from the 2015 nuclear deal with Iran and the Paris Agreement on combatting climate change. COVID-19-related
travel bans; competition for medical equipment, supplies, and the research and development of vaccines and treatments; and
U.S. steps to withdraw from the World Health Organization generated additional frictions in U.S.-EU relations.
Despite tensions, the Trump Administration sought to cooperate with the EU on some issues. For example, the former
Administration and the EU attempted to deescalate trade tensions and foster dialogue on certain areas of common interest,
including with respect to COVID-19 and China. With the entrance into office of the Biden Administration, the EU hopes to
renew and strengthen relations with the United States. At the same time, U.S.-EU differences will likely persist on trade,
China, and other concerns. Some in the EU continue to question whether the United States will remain a credible
international leader and reliable partner in the long term and argue that the EU must be better prepared to address both
regional and global challenges on its own.
This report serves as a primer on the EU. It also discusses U.S.-EU relations that may be of interest to the 117th Congress. For
more information, see CRS Report R44249, The European Union: Ongoing Challenges and Future Prospects, and CRS
Report R45745, Transatlantic Relations: U.S. Interests and Key Issues.
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Contents
What Is the European Union?............................................................................................ 1
How Does the EU Work? ................................................................................................. 1
How Is the EU Governed? ................................................................................................ 2
What Is the Lisbon Treaty? ............................................................................................... 3
What Are the Euro and the Eurozone? ................................................................................ 4
Why and How Is the EU Enlarging?................................................................................... 6
Does the EU Have a Foreign Policy?.................................................................................. 7
Does the EU Have a Defense Policy? ................................................................................. 7
What Is the Relationship of the EU to NATO? ..................................................................... 8
What Is Justice and Home Affairs? .................................................................................... 9
What Is the Schengen Area? ........................................................................................... 10
Does the EU Have a Trade Policy and Process? ................................................................. 11
How Do EU Countries and Citizens View the EU? ............................................................. 12
What Does the UK’s Withdrawal Mean for the EU? ........................................................... 13
Does the United States Have a Formal Relationship with the EU? ........................................ 15
Who Are U.S. Officials’ Counterparts in the EU? ............................................................... 15
How Are U.S.-EU Relations? .......................................................................................... 15


Figures

Figure A-1. European Union Member States and Candidates................................................ 18

Appendixes
Appendix. Map of the European Union and Aspirant Countries ............................................ 18

Contacts
Author Information ....................................................................................................... 18

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What Is the European Union?
The European Union (EU) is a unique political and economic partnership that currently consists
of 27 member states (see the map in the Appendix).1 Built through a series of binding treaties,
the EU is the latest stage in a process of integration begun after World War II to promote peace
and economic recovery in Europe. Its founders hoped that by creating specified areas in which
member states agreed to share sovereignty—initial y in coal and steel production, trade, and
nuclear energy—it would promote interdependence and make another war in Europe unthinkable.
Since the 1950s, this European integration project has expanded to encompass other economic
sectors; a customs union; a single market in which capital, goods, services, and people move
freely (known as the “four freedoms”); a common trade policy; a common agricultural policy;
many aspects of social and environmental policy; and a common currency (the euro) that is used
by 19 member states. Since the mid-1990s, EU members have also taken steps toward political
integration, with decisions to develop a Common Foreign and Security Policy (CFSP) and efforts
to promote cooperation in the area of Justice and Home Affairs (JHA). Twenty-two EU members
participate in the Schengen area of free movement, which al ows individuals to travel without
passport checks among most European countries.
The EU is general y considered a cornerstone of European stability and prosperity, but it faces
internal and external chal enges. Most notably at present, managing the Coronavirus Disease
2019 (COVID-19) pandemic and its economic repercussions has tested the EU. Other key issues
include democratic backsliding in some member states (including Poland and Hungary), the
presence of populist and to some extent anti-EU political parties throughout the bloc, managing
future relations with the United Kingdom (UK) following its exit from the EU in January 2020
(Brexit), ongoing political and societal pressures related to migration, and a range of chal enges
posed by both Russia and China. During the Trump Administration, the EU also grappled with
numerous foreign policy and economic disputes with the United States. Many experts expect
U.S.-EU relations wil improve with the new Biden Administration, but U.S.-EU tensions on
several issues likely will remain. This report serves as a primer on the EU and discusses U.S.-EU
relations that may be of interest to the 117th Congress
How Does the EU Work?
EU member states work together through common institutions (see “How Is the EU Governed?”)
to set policy and promote their collective interests. Decisionmaking processes and the role of the
EU institutions differ depending on the subject under consideration. On a multitude of economic,
social, and internal security policies, member states have pooled their sovereignty to varying
degrees and EU institutions hold decisionmaking authority. EU legislation in such areas often has
a supranational quality, because it is subject to a complex majority voting system among member
states as wel as European Parliament approval and is legal y binding on member governments.
In certain other areas—especial y foreign and security policy—member states have agreed to
cooperate but retain full sovereignty. Decisionmaking in such fields is intergovernmental and
requires the unanimous agreement of al EU countries; any one national government can veto a
decision. EU institutions general y play a more limited role in the decisionmaking process in such
policy areas but may be involved in implementation and oversight.

1 T he current 27 members of the EU are Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain , and Sweden.
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How Is the EU Governed?
The EU is governed by several institutions. They do not correspond exactly to the traditional
branches of government or divisions of power in representative democracies. Rather, they
embody the EU’s dual supranational and intergovernmental character:
 The European Council acts as the strategic guide for EU policy. It is composed of
the Heads of State or Government of the EU’s member states and the President of
the European Commission; it meets several times a year in what are often termed
“EU summits.” The European Council is headed by a President, who organizes
the Council’s work and facilitates consensus.
 The European Commission upholds the common interest of the EU as a whole
and serves as the EU’s executive. It implements and manages EU decisions and
common policies, ensures that the provisions of the EU’s treaties are carried out
properly, and has the sole right of legislative initiative in most policy areas. It is
composed of 27 Commissioners, one from each EU country. Commissioners
serve five-year terms; one Commissioner serves as Commission President, while
the others hold distinct portfolios (e.g., agriculture, energy, trade). On many
issues, the commission handles negotiations with outside countries.
 The Council of the European Union (also cal ed the Council of Ministers)
represents the national governments. The Council enacts legislation, usual y
based on proposals put forward by the commission, and agreed to (in most cases)
by the European Parliament. Different ministers from each country participate in
Council meetings depending on the subject under consideration (e.g., foreign
ministers would meet to discuss the Middle East, agriculture ministers to discuss
farm subsidies). Most decisions are subject to a complex majority voting system,
but some areas—such as foreign and defense policy, taxation, or accepting new
members—require unanimity. The Presidency of the Council rotates among the
member states, changing every six months; the country holding the Presidency
helps set agenda priorities and organizes most of the work of the Council.
 The European Parliament represents the citizens of the EU. It currently has 705
members who are directly elected for five-year terms (the most recent elections
were in May 2019). Each EU country has a number of seats roughly proportional
to the size of its population. Although the Parliament cannot initiate legislation, it
shares legislative power with the Council of Ministers in many policy areas,
giving it the right to accept, amend, or reject the majority of proposed EU
legislation in a process known as the “ordinary legislative procedure” or “co-
decision.” The Parliament also decides on the al ocation of the EU’s budget
jointly with the Council. Members of the European Parliament (MEPs) caucus
according to political affiliation, rather than nationality; there are seven political
groups and several dozen nonattached MEPs in the Parliament currently.2
 Other institutions also play key roles. The Court of Justice interprets EU laws,
and its rulings are binding; a Court of Auditors monitors financial management;
the European Central Bank manages EU monetary policy and the euro; and
advisory committees represent economic, social, and regional interests.
Also see the text box below on “Key EU Positions and Current Leaders.”

2 Also see CRS In Focus IF11211, The European Parliament and U.S. Interests, by Kristin Archick.
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What Is the Lisbon Treaty?
On December 1, 2009, the EU’s latest institutional reform endeavor—the Lisbon Treaty—came
into force following its ratification by al of the EU’s then-27 member states. It is the final
product of an effort begun in 2002 to reform the EU’s governing institutions and decisionmaking
processes. It amends, rather than replaces, the EU’s two core treaties—the Treaty on European
Union (TEU) and the Treaty on the Functioning of the EU (TFEU). Changes introduced by the
Lisbon Treaty seek to
 enable the EU to function more effectively;
 enhance the EU’s role as a foreign policy actor; and
 increase democracy and transparency within the EU.
To help accomplish these goals, the Lisbon Treaty established two new leadership positions:
 The President of the European Council, a single individual who chairs the
meetings of the EU Heads of State or Government, serves as coordinator and
spokesman for their work, seeks to ensure policy continuity, and strives to forge
consensus among the member states.
 A dual-hatted position of High Representative of the Union for Foreign Affairs
and Security Policy to serve essential y as the EU’s chief diplomat. The High
Representative is both an agent of the Council of Ministers—and thus speaks for
the member states on foreign policy issues—as wel as a Vice President of the
European Commission, responsible for managing most of the commission’s
diplomatic activities and foreign assistance programs.
Other key measures in the Lisbon Treaty included the following:
 Simplifying the EU’s qualified majority voting system and expanding its use to
policy areas previously subject to member state unanimity in the Council of
Ministers. This change was intended in part to speed EU decisionmaking, but
member states stil tend to seek consensus as much as possible.
 Increasing the relative power of the European Parliament by strengthening its
role in the EU’s budgetary process and extending the use of the “co-decision”
procedure to more policy areas, including agriculture and home affairs issues.3 As
such, the treaty gives the European Parliament a say equal to that of the member
states in the Council of Ministers over the vast majority of EU legislation (with
some exceptions, such as most aspects of foreign and defense policy).
For the first time in the EU’s history, the Lisbon Treaty also introduced an “exit clause”—Article
50 of the TEU—which outlines procedures for a member state to leave the EU. A member state
that decides to leave would invoke Article 50 by notifying the European Council of its intentions,
which would trigger a two-year period for withdrawal negotiations to be concluded; the EU may
also decide to extend the time for negotiations.

3 T he Lisbon T reaty technically renames the “co-decision” procedure as the “ordinary legislative procedure.”
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Key EU Positions and Current Leaders
The current President of the European Council is Charles Michel, a former prime minister of Belgium. The
president is appointed by the member states for a 2½-year term (renewable once).
The current President of the European Commission is Ursula von der Leyen of Germany, a former German
defense minister. The commission president is appointed by agreement among the member states, subject to the
approval of the European Parliament. In selecting the commission president, member states must take into
account the results of the most recent European Parliament elections.
Portugal holds the Presidency of the Council of Ministers (often termed the EU Presidency) from January to June
2021; Slovenia wil hold the presidency from July to December 2021.
Every 2½ years (twice per 5-year parliamentary term), Members of the European Parliament (MEPs) elect the
President of the European Parliament. In July 2019, Italian MEP David Sassoli was elected as president of the
parliament; Sassoli is from the center-left Socialists and Democrats parliamentary group.
The current High Representative of the Union for Foreign Affairs and Security Policy is Josep Borrel of
Spain. The high representative is chosen by agreement among the member states but, like the other members of
the European Commission, must be approved by the European Parliament.
What Are the Euro and the Eurozone?
Nineteen of the EU’s current 27 member states use a common single currency, the euro, and are
often collectively referred to as “the eurozone.”4 The gradual introduction of the euro began in
January 1999 when 11 EU member states became the first to adopt it and banks and many
businesses started using the euro as a unit of account. Euro notes and coins replaced national
currencies in participating states in January 2002. Eurozone participants share a common central
bank—the European Central Bank (ECB)—and a common monetary policy. However, they do
not have a common fiscal policy, and member states retain control over decisions about national
spending and taxation, subject to certain conditions designed to maintain budgetary discipline.
In 2009-2010, a serious crisis in the eurozone developed, beginning in Greece. Over the previous
decade, the Greek government had borrowed heavily from international capital markets to pay for
its budget and trade deficits. As investors became increasingly nervous during 2009 about
Greece’s high sovereign (or public) debt level amid the global financial crisis, markets demanded
higher interest rates for Greek bonds, which drove up Greece’s borrowing costs. By early 2010,
Greece risked defaulting on its public debt. Market concerns quickly spread to several other
eurozone countries with high, potential y unsustainable levels of public debt, including Ireland,
Portugal, Italy, and Spain (the latter two being the eurozone’s third- and fourth-largest economies,
respectively). The debt problems of these countries also posed a risk to the European banking
system, slowed economic growth, and led to rising unemployment in many eurozone countries.
European leaders and EU institutions responded to the crisis and sought to stem its contagion
with a variety of policy mechanisms. To avoid default, Greece, Ireland, Portugal, and Cyprus
received loans from the EU and the International Monetary Fund (IMF) but were required to
impose strict austerity measures. Eurozone leaders also approved a recapitalization plan for
Spanish banks. Other key initiatives included creating a permanent EU financial assistance
facility (the European Stability Mechanism) to provide emergency support to eurozone countries
and a single bank supervisor for the eurozone, as wel as ECB efforts to calm the financial
markets by purchasing large portions of European sovereign debt and providing significant
infusions of credit into the European banking system.

4 T he 19 members of the EU that use the euro are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany,
Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
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The eurozone crisis began to abate in late 2012, as market confidence became more positive and
the situation started to stabilize in most eurozone countries. Ireland exited the EU-IMF financial
assistance program in December 2013; Portugal did so in May 2014, and Cyprus did so in March
2016. EU aid to Spanish banks ceased in January 2014. Nevertheless, many member states
continued to experience weak economic growth and high unemployment. Greece’s economy and
banking system remained in particular distress.
In the first half of 2015, prospects grew that Greece might exit the eurozone (dubbed Grexit) as
the Greek government sought further financial aid from its eurozone creditors but also demanded
debt relief and an easing of austerity. For months, negotiations foundered. While France and Italy
emphasized the political importance of the eurozone, Germany and others (including the
Netherlands, Finland, Slovakia, and Slovenia) opposed debt relief and stressed that al members,
including Greece, must adhere to eurozone fiscal rules. In June 2015, Greece failed to make a
payment to the IMF, and the government closed the banks and imposed capital controls. In July
2015, however, the Greek government acceded to EU demands for more austerity and economic
reforms in exchange for the badly needed financial assistance. Between 2010 and 2018, Greece
received a total of $330 bil ion in loans from the EU, the ECB, and the IMF.5 Greece official y
exited the EU-IMF financial assistance program in August 2018.
From its start, the eurozone crisis forced EU leaders to grapple with weaknesses in the eurozone’s
structure and the common currency’s future viability. It also generated tensions among member
states over the proper balance between imposing austerity measures and stimulating growth and
the need for greater EU fiscal integration. Traditional y fiscal y conservative member states
largely opposed integration steps that might lead to “bailing out” more indebted countries in the
future. Eurozone leaders have continued to discuss additional measures to improve the eurozone’s
economic governance and stability, including through establishing a new eurozone budget
mechanism to support public investment and structural reform in eurozone countries.6
Analysts suggest the COVID-19-related economic crisis may open the door to further EU
economic integration in the longer term. In July 2020, EU leaders (acting in the European
Council) reached political agreement on a €750 bil ion (around $918 bil ion) recovery fund
consisting of both grants and loans for member states, attached to a €1.1 tril ion (roughly $1.3
tril ion) EU budget for 2021-2027. Financing for the COVID-19 recovery fund would include the
unprecedented issuing of EU bonds backed jointly by member states. Many EU officials,
including ECB President Christine Lagarde, maintain that the plan to provide grants (as wel as
loans) and to issue common EU debt represents a “one-off response to exceptional
circumstances.”7 At the same time, Lagarde asserts that the EU should consider keeping the
recovery fund arrangements in the EU’s “toolbox” for possible use in future economic crises.8
The EU formal y approved the 2021-2027 budget in December 2020 and is in the process of
finalizing the recovery fund.

5 Bart Oosterveld and Alexatrini T siknia, “T his Greek T ragedy Is Not Over Just Yet,” Atlantic Council, August 21,
2018.
6 Jan Strupczewski, “EU Ministers Close to Deal on Small Euro Zone Budget,” Reuters, October 9, 2019; Sam Fleming
and Mehreen Khan, “EU Finance Ministers Approve Separate ‘Eurozone Budget’ T ool,” Financial Times, October 10,
2019.
7 As quoted in Bjarke Smith-Meyer, “European Central Bank President Dismisses News Reports and Calls the
Pandemic Recovery Fund a One-off,” Politico Europe, September 28, 2020.
8 Bojan Pancevski and Laurence Norman, “How Angela Merkel’s Change of Heart Drove Historic EU Rescue Plan,”
Wall Street Journal, July 21, 2020; Carolynn Look, “ Lagarde Urges EU to Consider Recovery Fund as Permanent
T ool,” Bloomberg.com, Oct ober 19, 2020.
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Why and How Is the EU Enlarging?
The EU has long viewed the enlargement process as an extraordinary opportunity to promote
stability and prosperity in Europe. The EU began as the European Coal and Steel Community in
1952 with six members (Belgium, France, Germany, Italy, Luxembourg, and the Netherlands). In
1973, Denmark, Ireland, and the United Kingdom joined what had then become the European
Community. Greece joined in 1981, followed by Spain and Portugal in 1986. In 1995, Austria,
Finland, and Sweden acceded to the present-day European Union. In 2004, the EU welcomed
eight former communist countries—the Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Slovakia, and Slovenia—plus Cyprus and Malta as members. Bulgaria and Romania
joined in 2007. Croatia became the EU’s newest member on July 1, 2013.
To be eligible for EU membership, countries must first meet a set of established criteria,
including having a functioning democracy and market economy. Once a country becomes an
official candidate, accession negotiations are a long and complex process in which the applicant
must adopt and implement a massive body of EU laws and regulations. Analysts contend that the
carefully managed process of enlargement is one of the EU’s most powerful policy tools and that,
over the years, it has helped to transform many European countries into more democratic and
affluent societies. At the same time, EU enlargement is also a political process. Most significant
steps on the path to accession require the unanimous agreement of the EU’s existing member
states. Thus, a prospective candidate’s relationships or conflicts with individual members may
influence a country’s accession prospects and timeline.
The EU currently recognizes five countries as official candidates for membership. Of these, four
are in the Western Balkans—Albania, Montenegro, North Macedonia, and Serbia. Turkey is also
an official candidate country.9 Al five candidates are at different stages of the accession process.
Montenegro and Serbia are the farthest along in their accession negotiations. The EU approved
opening accession negotiations with Albania and North Macedonia in March 2020, but these talks
have yet to begin official y. EU accession negotiations with Turkey are stal ed amid heightened
EU concerns about democratic backsliding in Turkey and other tensions in EU-Turkey relations.
The EU regards Bosnia and Herzegovina and Kosovo as potential future candidates for EU
membership (see the Appendix).
The EU maintains that the enlargement door remains open to any European country that fulfil s
the EU’s political and economic criteria for membership. Nevertheless, some European leaders
and publics are cautious about additional expansion, especial y to Turkey (given its large size,
predominantly Muslim culture, and relatively less prosperous economy) or countries farther east,
such as Ukraine or Georgia, in the longer term. Apprehensions about continued EU enlargement
range from fears of unwanted migrant labor to the implications of an ever-expanding EU on the
bloc’s institutions, finances, and overal identity. Experts also point to assessments of weakening
rule of law in several existing EU members—including Poland and Hungary—and questions
about some EU aspirants’ ability to implement EU democratic standards as contributing to
decreased political and public enthusiasm for further enlargement.10

9 Iceland formally applied for EU membership in 2009 and was recognized as a candidate country in 2010, but
accession negotiations have been on hold since May 2013, when a new Icelandic coalition government largely opposed
to EU membership t ook office. In March 2015, Iceland’s government requested that Iceland no longer be regarded as a
candidate country, although it did not formally withdraw Iceland’s application for EU membership.
10 In early 2020, following pressure from France and several other member states, the EU revised some aspects of the
enlargement process, partly in response to criticism that the accession process was falling short of its goal of
entrenching democratic reforms in candidate countries.
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Does the EU Have a Foreign Policy?
The EU has a Common Foreign and Security Policy (CFSP), in which member states adopt
common policies, undertake joint actions, and pursue coordinated strategies in areas in which
they can reach consensus. CFSP was established in 1993; the eruption of hostilities in the Balkans
in the early 1990s and the EU’s limited tools for responding to the crisis convinced EU leaders
that the Union had to improve its ability to act collectively in the foreign policy realm. Previous
EU attempts to further such political integration had foundered for decades on member state
concerns about protecting national sovereignty and different foreign policy prerogatives.
CFSP decisionmaking is dominated by the member states and requires unanimous agreement of
al national governments. Member states must also ensure that national policies are in line with
agreed EU strategies and positions (e.g., imposing sanctions on a country). However, CFSP does
not preclude individual member states pursuing their own national foreign policies or conducting
their own national diplomacy.
CFSP remains a work in progress. Although many view the EU as having made considerable
strides in forging common policies on a range of international issues, from the Balkans to the
Middle East peace process to Iran, others argue that the credibility of CFSP too often suffers from
an inability to reach consensus. The launch of the U.S.-led war in Iraq in 2003, for example, was
extremely divisive among EU members, and they were unable to agree on a common EU
position. Others note that some differences in viewpoint are inevitable among a multitude of
countries that stil retain different approaches, cultures, histories, and relationships—and often
different national interests—when it comes to foreign policy.
The EU’s Lisbon Treaty sought to bolster CFSP by increasing the EU’s visibility on the world
stage and making the EU a more coherent foreign policy actor. As noted, the treaty established a
High Representative of the Union for Foreign Affairs and Security Policy to serve essential y as
the EU’s chief diplomat. The Lisbon Treaty also created an EU diplomatic corps (the European
External Action Service) to support the High Representative. In recent years, many European
leaders have renewed cal s for the EU to become a more assertive, independent global actor
(often referred to as strategic autonomy). For some EU officials, ensuring the EU’s position as a
robust international leader reflects concerns about the future trajectory of the U.S.-EU
partnership, heightened by strained relations during the former Trump Administration.11
Does the EU Have a Defense Policy?
Since 1999, with political impetus initial y from the UK and France, the EU has been working to
develop a Common Security and Defense Policy (CSDP), formerly known as the European
Security and Defense Policy (ESDP). CSDP seeks to improve the EU’s ability to respond to
security crises and to enhance European military capabilities. The EU has created three defense
decisionmaking bodies and has developed a rapid reaction force and multinational “battlegroups.”
Such EU forces are not a standing “EU army” but rather a catalogue of troops and assets at
appropriate readiness levels that may be drawn from existing national forces for EU operations.
CSDP operations focus largely on tasks such as peacekeeping, crisis management, and
humanitarian assistance. Many CSDP missions to date have been civilian, rather than military, in
nature, with objectives such as police and judicial training (“rule of law”) or security sector

11 “Emmanuel Macron in his Own Words,” Economist, November 7, 2019; Lili Bayer, “Meet von der Leyen’s
Geopolitical Commission,” Politico Europe, December 9, 2019.
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reform. The EU is or has been engaged in CSDP missions in regions ranging from the Balkans
and the Caucasus to Africa and the Middle East.
However, improving European military capabilities has been difficult, especial y given many
years of flat or declining European defense budgets. Serious capability gaps exist in strategic air-
and sealift, command and control systems, intel igence, and other force multipliers. Also, a
relatively low percentage of European forces are deployable for expeditionary operations. Some
analysts have suggested pooling assets among several member states and the development of
national niche capabilities as possible ways to help remedy European military shortfal s. In 2004,
the EU established the European Defense Agency to help coordinate defense-industrial and
procurement policy in an effort to stretch European defense funds farther.
Recently, many EU officials and national leaders have supported increased defense spending and
advocated for further EU defense integration. Such cal s have been driven by both the new
security chal enges facing Europe, including a resurgent Russia, and a desire to bolster the EU
project in light of Brexit. Some analysts contend that Brexit could make closer EU defense
cooperation more likely because the UK traditional y opposed certain measures—such as an EU
military headquarters—that it viewed as infringing too much on national sovereignty or the
primacy of NATO as the main guarantor of European security. Commentators also suggest that
European concerns about the former Trump Administration’s commitment to NATO and
transatlantic security provided additional impetus for renewed EU defense efforts.
Since 2016, EU leaders have announced several new initiatives to bolster EU security and
defense cooperation, including a European Defense Fund to support joint defense research and
development activities. EU leaders insist that such efforts do not represent the first steps toward
an EU army and that member states wil retain full control over national military assets and over
defense procurement and investment decisions. In December 2017, 25 member states launched a
new EU defense pact (known official y as Permanent Structured Cooperation, or PESCO) aimed
at spending defense funds more efficiently, jointly developing military capabilities, and increasing
military interoperability. The EU also has identified a more robust partnership with NATO as a
key pil ar of its strategy to improve European defense capabilities and EU security cooperation
(see next question). Although some observers are encouraged by such steps, they note that the EU
and national governments wil continue to face decisionmaking and procurement chal enges that
could limit PESCO’s effectiveness.12
What Is the Relationship of the EU to NATO?
Since its inception, the EU has asserted that CSDP is intended to al ow the EU to make decisions
and conduct military operations “where NATO as a whole is not engaged,” and that CSDP is not
aimed at supplanting NATO’s collective defense role. The United States has supported EU efforts
to develop CSDP, provided that it remains tied to NATO and does not rival or duplicate NATO
structures or resources. Advocates of CSDP argue that more robust EU military capabilities wil
also benefit NATO given that 21 countries currently belong to both organizations.13 The Berlin
Plus arrangement—which was finalized in 2003 and al ows EU-led military missions access to

12 Sophia Besch, “Waging War on the Myth of an EU Army,” Politico Europe, June 8, 2016; European Commission
Fact Sheet, “European Defense Action Plan—FAQs,” November 30, 2016; Council of the EU, “Defense Cooperation:
Council Establishes Permanent Structured Cooperation (PESCO), with 25 Member States Participating,” press release,
December 11, 2017.
13 Currently, six countries belong to the EU but not to NAT O (Austria, Cyprus, Finland, Ireland, Malta, and Sweden);
nine other countries belong to NAT O but not the EU (Albania, Canada, Iceland, Montenegro, North Macedonia,
Norway, T urkey, the United Kingdom, and the United States).
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NATO planning capabilities and common assets—was designed to help ensure close NATO-EU
links and prevent a wasteful duplication of European defense resources. Two Berlin Plus missions
have been conducted in the Balkans, and NATO and the EU have sought to coordinate their
activities on the ground in operations in Afghanistan and various hot spots in Africa.
At the same time, NATO-EU relations have been somewhat strained for years. More extensive
NATO-EU cooperation at the political level on a range of issues—from countering terrorism or
weapons proliferation to improving coordination of crisis management planning and defense
policies—has been stymied largely by EU tensions with Turkey (in NATO but not the EU) and
the ongoing dispute over the divided island of Cyprus (in the EU but not NATO).14 Bureaucratic
rivalry and varying views on both sides of the Atlantic regarding the future roles of NATO and
the EU’s CSDP also have contributed to frictions between the two organizations.
The emergence of new security threats in Europe, however, has prompted some recent progress
toward enhanced NATO-EU cooperation. In 2016, NATO and the EU concluded two new
arrangements—one on countering migrant smuggling in the Aegean Sea and another on cyber
defense—and issued a joint declaration to “give new impetus and new substance” to their
strategic partnership.15 Among other measures outlined, NATO and the EU agreed to boost their
common ability to counter hybrid threats, expand operational cooperation on migration
(especial y in the Mediterranean), and further strengthen coordination on cybersecurity and cyber
defense. In July 2018, NATO leaders reaffirmed the importance of the NATO-EU partnership and
both organizations pledged to improve military mobility in Europe. Despite the apparent
momentum toward closer NATO-EU relations, some analysts worry that political uncertainty on
both sides of the Atlantic and ongoing tensions with Turkey could derail these efforts.
Some U.S. experts remain concerned that a minority of EU member states (traditional y led by
France) would like to build an EU defense arm more independent from NATO in the longer term.
These experts note that the EU’s 2016 global security strategy reaffirmed the EU’s ambition to be
able to act “autonomously” (although it also stressed the need for cooperation with NATO and the
United States).16 Given previous UK support for ensuring that any EU defense efforts remained
closely tied to NATO, some U.S. analysts worry that Brexit could embolden the EU to develop a
more autonomous EU defense identity. Trump Administration officials voiced both support for
the EU’s new defense pact, PESCO, as wel as concerns that it could distract European al ies
from their NATO commitments or impede U.S.-European defense industrial cooperation.17
What Is Justice and Home Affairs?
The Justice and Home Affairs (JHA) field seeks to foster common internal security measures
while protecting the fundamental rights of EU citizens and promoting the free movement of
persons within the EU. JHA encompasses police and judicial cooperation, migration and asylum

14 T urkey has long objected to Cypriot participation in NAT O-EU meetings on the grounds that Cyprus is not a
member of NAT O’s Partnership for Peace (PfP) and thus does not have a security relationship with the alliance. T he
absence of Cyprus from PfP also hinders NAT O and the EU from sharing sensitive intelligence information.
Meanwhile, Cyprus has reportedly blocked various proposals over the years for enhancing NAT O -EU cooperation.
15 NAT O, “Joint Declaration by the President of the European Council, the President of the European Commission, and
the Secretary-General of the North Atlantic T reaty Organization,” press release, July 8, 2016.
16 See European Union, Shared Vision, Common Action: A Stronger Europe, June 2016.
17 Aaron Mehta, “U.S. Cautiously Watching EU Military Proposal,” DefenseNews.com, February 13, 2018; Guy
Chazan and Michael Peel, “U.S. Warns Against European Joint Military Project,” Financial Times, May 14, 2019.
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policies, fighting terrorism and other cross-border crimes, and combating racism and xenophobia.
JHA also includes border control policies and rules for the Schengen area of free movement.
For many years, EU efforts to harmonize policies in the JHA field were hampered by member
states’ concerns that such measures could infringe on their legal systems and national sovereignty.
The 2001 terrorist attacks on the United States and subsequent attacks in Europe in the 2000s
galvanized progress in the JHA area. Among other steps, the EU has established a common
definition of terrorism, an EU-wide arrest warrant, and enhanced tools to stem terrorist financing.
The EU also has worked to bolster Europol, its joint agency for police cooperation. In recent
years, terrorist attacks in France, Belgium, Germany, Spain, and elsewhere have led the EU to
devote significant attention to combat those inspired by the Islamic State group (or ISIS/ISIL).18
The EU’s Lisbon Treaty gave the European Parliament “co-decision” power over the majority of
JHA policy areas. The Treaty also made most decisions on JHA issues in the Council of Ministers
subject to the qualified majority voting system, rather than unanimity, in a bid to speed EU
decisionmaking. In practice, member states largely continue to strive for consensus on sensitive
JHA policies. Moreover, for some issues in the JHA area, the EU added an “emergency brake”
that al ows any member state to halt a measure it believes could threaten its national legal system
and, ultimately, to opt out of the measure. Despite these safeguards, Ireland (along with the UK at
the time) negotiated the right to choose those JHA policies that it wished to take part in and to opt
out of al others, and Denmark extended its previous opt-out in some JHA areas to al JHA issues.
The Lisbon Treaty technical y renamed JHA as the Area of Freedom, Security, and Justice.
What Is the Schengen Area?
The Schengen area of free movement encompasses 22 EU member states plus 4 non-EU
countries.19 Within the Schengen area, internal border controls have been eliminated, and
individuals may travel without passport checks among participating countries. In effect, Schengen
participants share a common external border where immigration checks for individuals entering
or leaving the Schengen area are carried out. The Schengen area is founded upon the Schengen
Agreement of 1985 (Schengen is the town in Luxembourg where the agreement was signed,
original y by five countries). In 1999, the Schengen Agreement was incorporated into EU law.
The Schengen Borders Code comprises a detailed set of rules governing both external and
internal border controls in the Schengen area, including common rules on visas, asylum requests,
and border checks. Provisions also exist that al ow participating countries to reintroduce internal
border controls for a limited period of time in cases of a serious security threat or exceptional
circumstances, such as a conference of world leaders or a major international sporting event.
Along with the abolition of internal borders, Schengen participants agreed to strengthen
cooperation between their police and judicial authorities in order to safeguard internal security
and fight organized crime. As part of these efforts, they established the Schengen Information
System (SIS), a large-scale information database that enables police, border guards, and other law
enforcement and judicial authorities to enter and consult alerts on certain categories of persons
and objects. Such categories include persons wanted for arrest, missing persons (including

18 For more information, see CRS Report RS22030, U.S.-EU Cooperation Against Terrorism , by Kristin Archick, and
CRS In Focus IF10561, Terrorism in Europe, by Kristin Archick.
19 T he 22 EU members that belong to the Schengen area of free movement are Austria, Belgium, the Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, and Sweden. T he four non -EU members of the Schengen
area are Iceland, Liechtenstein, Norway, and Switzerland.
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children), criminal suspects, individuals who do not have the right to enter or stay in Schengen
territory, stolen vehicles and property, lost or forged identity documents, and firearms.
Four EU countries (Bulgaria, Croatia, Cyprus, and Romania) are not yet full Schengen members,
but are legal y obliged to join once they meet the required security conditions. Ireland has an opt-
out from the Schengen free movement area but takes part in some aspects of the Schengen
Agreement related to police and judicial cooperation, including access to the SIS.
Does the EU Have a Trade Policy and Process?
The EU has a common external trade policy, which means that trade policy is an exclusive
competence of the EU and no member state can negotiate its own international trade agreement.
The EU’s trade policy is one of its most wel -developed and integrated policies. It evolved along
with the common market—which provides for the free movement of goods within the EU—to
prevent one member state from importing foreign goods at cheaper prices due to lower tariffs and
then re-exporting the items to another member with higher tariffs. The scope of the common trade
policy has been extended partial y to include trade in services, the defense of intel ectual property
rights, and foreign direct investment. The European Commission and the Council of Ministers
work together to set the common customs tariff, guide export policy, and decide on any trade
protection or retaliation measures. EU rules al ow the Council to make trade decisions with
qualified majority voting, but in practice the Council tends to employ consensus.
The European Commission negotiates trade agreements with outside countries and trading blocs
on behalf of the EU as a whole. Both the Council of Ministers and the European Parliament must
approve al such trade agreements before they can enter into force. The process for negotiating
and concluding a new international trade agreement begins with discussions among al three EU
institutions, and the commission initiates an informal scoping exercise with the potential partner
country or trade bloc. The commission then requests authorization from the Council to begin
negotiations and usual y submits to the Council negotiating directives (sometimes termed the
negotiating mandate), which set out the commission’s overal objectives for the future agreement.
The directives also are shared with the European Parliament.
Provided the Council provides authorization, the commission then launches formal negotiations
for the new trade agreement. Within the commission, the department that handles EU trade
policy—the Directorate General for Trade (DG Trade)—leads the negotiations. Typical y, there
are a series of negotiation rounds. The duration of the negotiations varies but can range from two
to three years or longer. During the course of negotiations, the commission is expected to keep
both the Council and the Parliament apprised of its progress. When negotiations reach the final
stage, both parties to the agreement initial the proposed accord. It is then submitted to the Council
and the Parliament for review.20 If the Council approves the accord, it authorizes the commission
to formal y sign the agreement.
Once the new trade accord is official y signed by both parties, the Council submits it to the
Parliament for its consent. Although the Parliament is limited to voting “yes” or “no” to the new
accord, it can ask the commission to review or address any concerns. If parts of the trade
agreement fal under member state competence, al EU countries must also ratify the agreement
according to their national ratification procedures. After Parliament gives its consent and

20 Some trade agreements submitted for Council and Parliament approval are accompanied by Commission legislative
proposals needed for implementation, which must also be adopted by both the Council and the Parliament.
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following ratification in the member states (if required), the Council adopts the final decision to
conclude the agreement. It may then be official y published and enter into force.21
How Do EU Countries and Citizens View the EU?
Member states have long believed that the EU magnifies their political and economic clout (i.e.,
the whole is greater than the sum of its parts). Nevertheless, tensions have always existed within
the EU between those members that seek an “ever closer union” through greater integration and
those that prefer to keep the bloc on a more intergovernmental footing in order to better guard
their national sovereignty. As a result, some member states over the years have opted out of
certain aspects of integration, including the eurozone and the Schengen area (this included the
UK, which traditional y was reluctant to cede too much sovereignty during its tenure as an EU
member state). Another classic divide in the EU fal s along big versus smal state lines; smal
members often are cautious of initiatives that they fear could al ow larger countries to dominate
EU decisionmaking.
In addition, different histories and geography may influence member states’ policy preferences.
The EU’s enlargement to the east has brought in many members with histories of Soviet control,
which may color their views on issues ranging from EU reform to relations with Russia to
migration; at times, such differences have caused frictions with older EU member states.
Meanwhile, southern EU countries that border the Mediterranean may have greater political and
economic interests in North Africa than EU members located farther north.
The prevailing view among European publics has likewise been historical y favorable toward the
EU. Many EU citizens value the freedom to easily travel, work, and live in other EU countries. At
the same time, there has always been a degree of “euroskepticism”—or anti-EU sentiments—
among some segments of the European public. Traditional y, such euroskepticism has been driven
by fears about the loss of national sovereignty or concerns about the EU’s “democratic deficit”—
a feeling that ordinary citizens have no say over decisions taken in faraway Brussels.
For much of the past decade, however, Europe’s economic difficulties and worries about income
inequality, immigration, and globalization have heightened support for populist, antiestablishment
parties throughout Europe. Many of these parties also are considered euroskeptic, but they are not
monolithic. Although most of these parties are on the right or far right of the political spectrum, a
few are on the left or far left. Moreover, they hold a range of views on the future of the EU, with
some advocating for EU reforms and others cal ing for an end to the eurozone or the EU itself.
Austria, Denmark, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Poland,
Spain, and Sweden are among those EU countries with prominent populist and, to at least some
extent, euroskeptic parties. Parties with moderately euroskeptic views lead the governments in
Poland and Hungary. In Germany, the euroskeptic, anti-immigrant, right-wing Alternative for
Germany party secured enough support in federal elections in 2017 to enter parliament, becoming
the first far-right German political party to do so since the end of World War II. Such parties have
put pressure on mainstream parties to embrace some of their positions on issues such as migration
and further EU integration. The UK government’s decision to hold the 2016 public referendum
on continued EU membership was driven largely by increasing pressure from hard-line
euroskeptics, both within and outside of the governing Conservative Party.

21 For more on the EU process for concluding new trade agreements, see European Commission, “Negotiating EU
T rade Agreements,” at http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149616.pdf.
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In the May 2019 European Parliament elections, an array of antiestablishment and euroskeptic
parties secured up to 25% of seats. Traditional y, however, such parties in the Parliament have
struggled to form a cohesive opposition due to competing agendas and diverse views (including
on EU reforms, fiscal policy, migration, and Russia). In the current Parliament, some of the most
hardline euroskeptic parties on the right of the political spectrum have sought to overcome their
political fragmentation and have banded together to forge a larger euroskeptic group. Many
experts remain doubtful about the ability of such parties to work together to block or influence
legislation. Euroskeptic parties are stil a collective minority in the Parliament, and would have to
gain support from other groups to have much impact on the legislative process.22
Despite concerns about euroskepticism, opinion polls indicate that a majority of EU citizens are
supportive of the EU. Some analysts note that euroskeptic parties did not do as wel as expected
in the 2019 European Parliament elections. The difficulties encountered by the UK as it sought to
leave the EU appear to have dampened euroskeptic enthusiasm in other EU countries. Many
stridently euroskeptic parties, such as France’s National Ral y and the Netherlands’ Freedom
Party, have focused more on cal ing for EU reforms in recent years than on cal ing for the
dissolution of the eurozone or the EU itself. At the same time, experts caution that populism and
related euroskeptic sentiments remain potent political forces in Europe. Some suggest that
COVID-19’s economic chal enges could lead to increased support for antiestablishment, anti-EU
parties in the years ahead.23
What Does the UK’s Withdrawal Mean for the EU?24
In a June 2016 public referendum, UK voters favored leaving the EU by 52% to 48%. The UK
government enacted the results of this Brexit referendum in March 2017, when it invoked Article
50—the so-cal ed exit clause—of the Treaty on European Union. The UK and the EU
subsequently began negotiations on the terms of the UK’s withdrawal.
In early 2019, the UK Parliament rejected the withdrawal agreement negotiated between then-
Prime Minister Theresa May’s government and the EU due to divisions over what type of Brexit
the UK should pursue and chal enges related to the future of the border between Northern Ireland
(part of the UK) and the Republic of Ireland (an EU member state). In October 2019, new UK
Prime Minister Boris Johnson renegotiated the Irish border provisions in the withdrawal
agreement with the EU. Following an early general election in which Johnson’s Conservative
Party won a decisive majority, the UK Parliament approved the withdrawal agreement in January
2020. The UK withdrew from the EU on January 31, 2020, ending its 47-year membership. The
UK continued to apply EU rules and participate in the EU’s single market and customs union
until the end of a 10-month transition period that concluded on December 31, 2020.
During the transition period, the UK and the EU engaged in complex negotiations on the future
UK-EU relationship, but talks were contentious, especial y on trade and economic issues. On

22 For more information, see CRS In Focus IF11211, The European Parliament and U.S. Interests, by Kristin Archick.
23 Bruce Stokes, Richard Wike, and Dorothy Manevich, “Post-Brexit, Europeans More Favorable T oward EU,” Pew
Research Center, June 15, 2017; “Populists Fall Short of Expectations in the European Elections,” Economist, May 26,
2019; Eurobarometer Survey, Parlem eter 2019 Heeding the Call Beyond the Vote, commissioned for the European
Parliament, October 2019; Yasmeen Serhan, “T he Pandemic Isn’t a Death Knell for Populism,” The Atlantic, August
22, 2020.
24 Also see CRS Report R45944, Brexit: Status and Outlook, coordinated by Derek E. Mix; CRS Report RL33105, The
United Kingdom : Background, Brexit, and Relations with the United Sta tes
, by Derek E. Mix; and CRS In Focus
IF11123, Brexit and Outlook for a U.S.-UK Free Trade Agreem ent, by Shayerah I. Akhtar, Rachel F. Fefer, and Andres
B. Schwarzenberg.
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December 24, 2020, UK and EU negotiators announced a 1,200-page Trade and Cooperation
Agreement (TCA), along with two other accords on nuclear cooperation and protecting the
security of classified information. The UK parliament approved the TCA at the end of December
2020, but the deal applies provisional y until the European Parliament grants its approval
(expected in February or March 2021). Although most UK and EU officials, stakeholders, and
outside experts regard the TCA as better than a “no-deal” outcome, the TCA is relatively narrow
in scope. The TCA provides for tariff-free and quota-free merchandise trade between the UK and
the EU (if rules of origin requirements are met) but does not eliminate regulatory or other non-
tariff barriers. Provisions in the TCA on trade in services are limited, and the deal does not
address data protection rules. UK-EU negotiations on these and other areas—including UK-EU
foreign policy and security relations—are likely to continue in 2021 and beyond.25
Despite Brexit, EU leaders assert that “the Union of 27 countries wil continue.”26 However, the
UK was the bloc’s second-largest economy and, along with Germany and France, was regarded
as one of the EU’s “big three.” As such, Brexit could have political and economic implications
for the future of the EU integration project. Many observers view the EU as having taken a tough
line in the withdrawal agreement and subsequent trade agreement negotiations—refusing to al ow
the UK to cherry-pick the benefits of the EU without taking on the required obligations—in part
to discourage other member states and euroskeptic publics from contemplating a break with the
EU that would further fracture the bloc. Some in the EU continue to express concerns that the UK
could become an economic competitor, especial y if the UK were to diverge significantly from
EU environmental, labor, or state aid standards in ways that could give UK businesses a trade
advantage. Other experts argue that Brexit could reduce the EU’s influence on the world stage,
given that the EU now finds itself without the UK’s diplomatic, military, and economic clout.
Post-Brexit, various analysts suggest the EU faces a fundamental choice in the longer term
between those supporting further integration and those contending that integration has gone too
far and should be put on hold (or possibly even reversed in certain areas). Although some experts
argue that “more EU” is necessary to better address political and economic chal enges facing the
bloc, others are skeptical that national governments wil be inclined to cede more authority to a
Brussels bureaucracy viewed as opaque and out of touch with the problems of average
Europeans. At the same time, some contend that Brexit ultimately could lead to a more like-
minded EU, able to pursue deeper integration without UK opposition.
Considerable attention has focused recently on developing a “multispeed EU,” in which some
member states could agree to greater integration in certain areas and others could opt out. Critics
contend, however, that this approach could be divisive and detrimental to EU solidarity.27 The EU
has not made a formal decision to move toward a “multispeed EU,” but it appears to be pursuing
greater integration in certain areas. EU leaders have announced several new initiatives to bolster
security and defense cooperation, in particular (as discussed in “Does the EU Have a Defense
Policy?”
). For several years, Germany and France—regarded as key countries in determining the
EU’s future direction—have cal ed for eurozone reforms. German and French support for
common EU bonds as part of the EU’s COVID-19 recovery plans provided crucial political
momentum for the July 2020 deal among EU leaders that some experts suggest could spark

25 Chris Morris, “Brexit Deal: What Is In It?,” BBC.com, December 28, 2020; UK Parliament House of Commons
Library, The UK-EU Trade and Cooperation Agreem ent: Sum mary and Implementation, December 30, 2020.
26 European Council, “Statement by the EU Leaders and the Netherlands Presidency on the Outcome of the UK
Referendum,” press release, June 24, 2016.
27 Matthew Karnitschinig, “With Plenty of Pomp, Europe’s Leaders Renew Vows,” Politico Europe, March 24, 2017.
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further EU economic integration (see “What Are the Euro and the Eurozone?”).28 The EU intends
to convene a two-year Conference on the Future of Europe to promote dialogue between citizens,
experts, and EU officials. This initiative has been delayed because of internal EU differences on
the conference’s scope and leadership, as wel as by the COVID-19 pandemic.29
Does the United States Have a Formal Relationship
with the EU?
For decades, the United States and the EU (and its predecessor institutions) have maintained
diplomatic and economic ties. The 1990 U.S.-EU Transatlantic Declaration set out principles for
greater consultation, and established regular summit and ministerial meetings. In 1995, the New
Transatlantic Agenda (NTA) and the EU-U.S. Joint Action Plan provided a framework for
promoting stability and democracy together, responding to global chal enges, and expanding
world trade. The NTA also sought to strengthen individual, people-to-people ties across the
Atlantic, and launched a number of dialogues, including ones for business leaders and legislators.
The Transatlantic Legislators’ Dialogue (TLD) has been the formal mechanism for engagement
and exchange between the U.S. House of Representatives and the European Parliament since
1999, although inter-parliamentary exchanges between the two bodies date back to 1972.
Who Are U.S. Officials’ Counterparts in the EU?
During U.S.-EU summits, the U.S. President meets with the President of the European
Commission and the President of the European Council. The U.S. Secretary of State’s most
frequent interlocutor in the EU context is the High Representative for the Union’s Foreign Affairs
and Security Policy. The U.S. Trade Representative’s key interlocutor is the European
Commissioner for Trade, who directs the EU’s common external trade policy. Other U.S.
Cabinet-level officials interact with Commission counterparts or member state ministers in the
Council of Ministers formation as issues arise. Many working-level relationships between U.S.
and EU officials also exist. A delegation in Washington, DC, represents the European Union in its
dealings with the U.S. government, while the U.S. Mission to the European Union represents
Washington’s interests in Brussels.
How Are U.S.-EU Relations?30
Successive U.S. Administrations and many Members of Congress have long viewed the European
integration project as a way to foster democratic al ies and strong trading partners in Europe. In
the immediate aftermath of World War II, the United States supported the European integration
project as a way to promote political reconciliation (especial y between France and Germany),
boost economic recovery, and prevent another catastrophic war on the European continent.
During the Cold War, the European integration project—and the peace and prosperity it helped to
engender in Western Europe—was considered central to deterring the Soviet threat. With the end

28 Steven Erlanger, “Merkel, Breaking German ‘T aboo,’ Backs Shared EU Debt to T ackle Virus,” New York Times,
May 18, 2020; Paul T aylor, “Merkel’s Milestone Moment,” Politico Europe, May 19, 2020.
29 Elena Sanchez Nicolas, “Future of Europe: EU Council Urged to Propose a Chair,” EUObserver.com, October 14,
2020.
30 For more information on U.S.-EU relations and the broader U.S.-European partnership, see CRS Report R45745,
Transatlantic Relations: U.S. Interests and Key Issues, coordinated by Kristin Archick.
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of the Cold War, the United States strongly backed EU efforts to extend the political and
economic benefits of membership to Central and Eastern Europe. The United States also
traditional y has supported the EU aspirations of Turkey and the Western Balkan states.
Over the past two decades, the United States has often looked to the EU for partnership on
common foreign and security policy concerns worldwide. Many analysts assert that the United
States and the EU have a strong track record of cooperation. The United States and the EU have
promoted peace and stability in various regions and countries (including the Balkans,
Afghanistan, and Africa); enhanced law enforcement and counterterrorism cooperation; and
sought to tackle cross-border chal enges, such as cybersecurity. Since 2014, the United States and
the EU also have imposed sanctions on Russia (including those targeting key sectors of the
Russian economy) in response to Russia’s annexation of Ukraine’s Crimea and its support for
separatists in eastern Ukraine.
The United States and the EU also share an extensive and interdependent economic relationship.31
In 2019, total U.S. trade in goods and services with the EU was roughly $1.3 tril ion. The United
States and the EU are each other’s largest source and destination for foreign direct investment.
Total stock of two-way direct investment is nearly $6 tril ion. In 2018, U.S. and EU foreign
affiliate sales totaled over $5 tril ion, and U.S. and EU multinational firms employed nearly 9
mil ion workers (in direct employment) on both sides of the Atlantic. Historical y, U.S.-EU
cooperation has been a driving force behind efforts to liberalize world trade and ensure the
stability of international financial markets.
At times, however, the U.S.-EU relationship has faced serious chal enges. U.S.-EU relations hit a
low point in 2003 over the U.S.-led invasion of Iraq, which some EU members supported and
others strongly opposed. Long-standing U.S.-EU trade disputes persist over poultry,
bioengineered food products, protection of geographical indications, and subsidies to airplane
manufacturers Boeing and Airbus. Data protection and balancing privacy and security have been
key U.S.-EU sticking points for years; EU concerns about what it views as insufficient U.S. data
privacy and protection safeguards have put pressure on U.S.-EU information-sharing
arrangements, in both law enforcement and commercial contexts.
Although periodic frictions in U.S.-EU relations were thus not new, many EU leaders were taken
aback by the Trump Administration’s seeming hostility toward the bloc and its skepticism of the
EU’s value as an institution. Former President Trump expressed support for Brexit. He contended
that the EU engages in unfair trade practices and was especial y critical of the U.S. goods trade
deficit with the EU ($179 bil ion in 2019). President Trump described the EU as a “foe” for “what
they do to us in trade,” although he also noted, “that doesn’t mean they are bad … it means that
they are competitive.”32 EU officials countered that U.S.-EU economic relations were largely in
balance, given the U.S. services surplus with the EU ($71 bil ion in 2019) and higher profits
earned by U.S. companies doing business in Europe.33
Numerous U.S.-EU policy divisions emerged during the Trump Administration, including on
aspects of relations with Russia and China, Syria, the Middle East peace process, and the role of
multilateral institutions such as the United Nations and World Trade Organization (WTO). The
EU opposed the Administration’s decisions to withdraw from the 2015 multilateral nuclear deal
with Iran and the Paris Agreement on combatting climate change. COVID-19-related issues—

31 U.S.-EU trade and investment data in this section is for 2018 or 2019, and thus includes the UK; data is drawn from
CRS In Focus IF10930, U.S.-EU Trade and Investm ent Ties: Magnitude and Scope, by Shayerah I. Akhtar.
32 As quoted in, “‘I T hink the European Union is a Foe,’ T rump Says Ahead of Putin Meeting in Helsinki,”
CBSNews.com, July 15, 2018.
33 Rebecca Morin, “T rump Speaks with Juncker on T rade Negotiations,” Politico Europe, July 27, 2018.
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including the imposition of U.S. and EU travel bans; competition for medical equipment,
supplies, and the research and development of vaccines and treatments; and the U.S. decision to
withdraw from the World Health Organization—further strained U.S.-EU relations. EU officials
also were concerned by the Trump Administration’s imposition of steel and aluminum tariffs on
the EU and what it regarded as protectionist U.S. trade policies.
Despite the heightened difficulties, the EU pursued cooperation with the Trump Administration
where possible. The two sides attempted to deescalate trade tensions, in part through pursuing a
U.S.-EU trade liberalization agreement (although talks stal ed amid discord on their scope,
especial y with respect to agriculture). The EU sought to work with the Trump Administration on
areas such as counterterrorism, cybersecurity, and WTO reform. U.S. and EU scientific and
regulatory experts established technical dialogues on pandemic-related issues. In October 2020,
the Trump Administration and the EU launched a dialogue on China to discuss both common
concerns and differences in U.S. and European views.
With the Biden Administration taking office, EU leaders hope to renew and strengthen relations
with the United States. In December 2020, the European Commission and the EU’s High
Representative for Foreign Affairs and Security Policy presented a joint proposal for a New EU-
US Agenda for Global Change based on “common values, interests, and global influence.”34 This
proposal centers on the need for U.S.-EU cooperation in four key areas: responding to the
COVID-19 pandemic; addressing climate change and other environmental chal enges through a
“transatlantic green agenda”; strengthening democracy and security; and working together on
trade, technology, and digital governance (in part through possibly establishing a new EU-U.S.
Trade and Technology Council). Upon President Biden’s inauguration on January 20, 2021,
European Council President Charles Michel reaffirmed the importance of the EU’s partnership
with the United States and cal ed for a new U.S.-EU “founding pact,” with priorities similar to
those highlighted in the December 2020 proposal.35
Biden Administration policies on a range of issues are expected to align more closely with EU
positions. The new Administration’s stated commitment to work with international partners in
multilateral institutions and on key chal enges such as China could help ease tensions and rebuild
trust with the bloc. At the same time, certain U.S.-EU differences in perspective likely wil persist
with respect to trade, digital technology, data privacy and protection, and how best to address the
strategic and economic concerns posed by China, among other issues.
Some European policymakers and experts continue to question whether the United States wil
remain a credible, reliable partner in the years ahead and argue that the EU must be better
prepared to address regional and global chal enges on its own. Many observers view EU efforts
over the last few years to enhance defense cooperation and conclude trade agreements with other
countries and regions (including Canada, Japan, and Latin America) as aimed not only at boosting
the EU project in the wake of Brexit but also at reducing European dependence on the United
States. Efforts to position the EU as a key international player are likely to remain EU
imperatives during the Biden Administration amid European concerns about U.S. political
polarization and ongoing doubts about the degree to which the EU wil be able to rely on U.S.
cooperation and global leadership in the long term.36

34 European Commission and the High Representative of the Union for Foreign Affairs and Security Policy, A New EU-
US Agenda for Global Change
, December 2, 2020.
35 European Council, “Speech by President Charles Michel at the European Parliament on the Inaugur ation of the New
President of the United States,” press release, January 20, 2021.
36 Ivan Krastev and Mark Leonard, “T he Crisis of American Power: How Europeans See Biden’s America,” European
Council on Foreign Relations, January 19, 2021 .
Congressional Research Service

17


The European Union: Questions and Answers

Appendix. Map of the European Union and
Aspirant Countries

Figure A-1. European Union Member States and Candidates

Source: Created by the Congressional Research Service.



Author Information

Kristin Archick

Specialist in European Affairs

Congressional Research Service

18

The European Union: Questions and Answers



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Congressional Research Service
RS21372 · VERSION 59 · UPDATED
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