RS21372

The European Union: Questions and Answers
Updated February 6, 2023
Congressional Research Service

https://crsreports.congress.gov
RS21372
SUMMARY
RS21372
February 6, 2023
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. Twenty EU member states use a common currency (the euro), and 23 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) on common internal security challenges.
Challenges Facing the EU

The EU is generally considered a cornerstone of European stability and prosperity, but the bloc is grappling with several
challenges. The EU has demonstrated solidarity in responding to Russia’s war against Ukraine (launched in February 2022),
although the conflict has contributed to rising energy prices and inflation in the EU; the war also has galvanized debate on
several long-standing EU initiatives, including related to EU defense, energy, and climate policies, and EU enlargement.
Other key issues facing the EU include the lingering effects of the Coronavirus Disease 2019 (COVID-19) pandemic,
democratic backsliding in some member states, the presence of populist and to some extent anti-EU political parties
throughout the bloc, tensions with the United Kingdom (UK) following its exit from the EU in January 2020 (Brexit),
ongoing migration concerns, and complex relations with China.
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. At
the same time, U.S.-EU policy differences on a range of foreign policy and economic issues emerge periodically. During the
Trump Administration, U.S.-EU relations faced considerable strain given President Trump’s criticisms of the EU and
numerous U.S.-EU policy divisions.
President Biden has committed to partnering with the EU on a wide range of global concerns, and the conflict in Ukraine has
bolstered U.S.-EU ties. The United States and the EU have demonstrated steadfast support for Ukraine’s territorial integrity
and have cooperated extensively in imposing sanctions on Russia and other responses. Resolving U.S.-EU trade disputes and
promoting technological cooperation have been priorities for the Biden Administration, as well. U.S. tax subsidies for clean
energy technologies (in P.L. 117-169, commonly referred to as the Inflation Reduction Act of 2022), however, have
generated new tensions with the EU. Other issues, including managing relations with Russia and China in the years ahead,
also may test the U.S.-EU partnership. EU concerns persist about ongoing U.S. political polarization and whether a future
U.S. Administration would maintain current U.S. policies toward Russia, Ukraine, and the EU.
This report serves as a primer on the EU. It also discusses U.S. relations with the EU that may be of interest to Congress. For
more information, see CRS In Focus IF12302, U.S.-European Relations in the 118th Congress.

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? ............................................................................... 9
What Is Justice and Home Affairs? ............................................................................................... 10
What Is the Schengen Area? ........................................................................................................... 11
Does the EU Have a Trade Policy and Process? ............................................................................ 11
How Do EU Countries and Citizens View the EU? ...................................................................... 12
What Is Brexit, and How Has It Affected the EU? ........................................................................ 14
How Might the EU Evolve in the Future? ..................................................................................... 15
Does the United States Have a Formal Relationship with the EU? ............................................... 17
Who Are U.S. Officials’ Counterparts in the EU? ......................................................................... 17
What Is the History of U.S.-EU Relations? ................................................................................... 17
What Is the Current State of U.S.-EU Relations?.......................................................................... 18
Figures
Figure A-1. European Union Member States and Candidates ....................................................... 21
Appendixes
Appendix. Map of the European Union and Aspirant Countries ................................................... 21
Contacts
Author Information........................................................................................................................ 21

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—initially 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; a common trade policy; a common agricultural policy; aspects of social and environmental
policy; and a common currency (the euro) that is used by 20 member states. EU members also
have 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-three EU members participate in the Schengen area of free movement,
which allows individuals to travel without passport checks among most European countries.
The EU is generally considered a cornerstone of European stability and prosperity, but it faces a
number of challenges. Although the EU has demonstrated solidarity in responding to Russia’s war
against Ukraine (launched in February 2022), the conflict has contributed to high energy prices
and inflation in the EU and has long-term strategic implications for the bloc. Other key issues for
the EU include the lingering effects of the Coronavirus Disease 2019 (COVID-19) pandemic,
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, tensions with the United
Kingdom (UK) following its exit from the EU in January 2020 (Brexit), and complex relations
with China. Renewing strong ties with the United States also has been a key EU priority
following frictions during the Trump Administration. The overall tenor of U.S.-EU relations has
improved under the Biden Administration, and the two sides have cooperated closely in
addressing Russia’s aggression in Ukraine. U.S.-EU differences, however, exist on issues such as
clean energy subsidies and China and pose tests for the U.S.-EU partnership. This report serves as
a primer on the EU and discusses U.S.-EU relations that may be of interest to the 118th 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 well as European Parliament approval and is legally binding on member governments. In
certain other areas—especially 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 all EU countries; any one national government can veto a
decision. EU institutions generally play a more limited role in the decisionmaking process in such
policy areas but may be involved in implementation and oversight.
1The 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.
Congressional Research Service 1

How Is the EU Governed?

The EU is governed by several institutions that 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 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 European Commission President and the
others hold distinct portfolios (e.g., agriculture, energy, trade). On many issues,
the European Commission handles negotiations with outside countries.
 The Council of the European Union (also called the Council of Ministers)
represents the national governments. The Council of Ministers enacts legislation,
usually based on proposals put forward by the European 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 of Ministers 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 of Ministers.
 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 European 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 European Parliament also decides on the
allocation of the EU’s budget jointly with the Council of Ministers. 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 European 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.

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 all 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 essentially 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 well 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 still 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 The Lisbon Treaty technically renames the “co-decision” procedure as the “ordinary legislative procedure.”

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.
Sweden holds the Presidency of the Council of the EU (often termed the EU Presidency) from January to June
2023; Spain will hold the presidency from July to December 2023.
Every 2½ years (twice per 5-year parliamentary term), Members of the European Parliament (MEPs) elect the
President of the European Parliament. In January 2022, Maltese MEP Roberta Metsola was elected as president
of the European Parliament; Metsola is from the center-right European People’s Party parliamentary group.
The current High Representative of the Union for Foreign Affairs and Security Policy is Josep Borrell 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?

Twenty of the EU’s 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, potentially unsustainable levels of public debt, including Italy and
Spain (the eurozone’s third- and fourth-largest economies, respectively).
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 well 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.
4The 20 members of the EU that use the euro are Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France,
Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia,
and Spain.

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 2013; Portugal did so in 2014, and Cyprus did so in 2016. EU aid to
Spanish banks ceased in 2014. Nevertheless, many EU 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. 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 billion in loans from the EU, the ECB, and the
IMF.5 Greece officially exited the EU-IMF financial assistance program in August 2018.
From its start, the eurozone crisis generated tensions among member states over the proper
balance between imposing austerity measures and stimulating growth and the need for greater EU
fiscal integration. Traditionally fiscally conservative member states largely opposed integration
steps that might lead to “bailing out” more indebted countries in the future. Eurozone leaders
have discussed additional measures to improve the eurozone’s economic governance and stability,
but proposals such as establishing a common eurozone budget have long been controversial.6
Some analysts suggest the EU’s response to the COVID-19-related economic crisis could open
the door to further EU economic integration. In July 2020, EU leaders (acting in the European
Council) reached political agreement on a €750 billion recovery fund consisting of both grants
and loans for member states, attached to a €1.1 trillion EU budget for 2021-2027.7 Financing for
the COVID-19 recovery fund includes the unprecedented issuing of EU bonds backed jointly by
member states. Many EU officials, including ECB President Christine Lagarde, maintained that
the COVID-19 recovery plan—and issuing common EU debt—represented a “one-off response to
exceptional circumstances.”8 Some in the EU suggest that common EU borrowing should be
considered to deal with new challenges such as the economic shocks caused by Russia’s war in
Ukraine, financing Ukraine’s reconstruction in the longer term, or supporting EU industries and
innovation viewed as key to the bloc’s future competitiveness and clean energy transition.9
5 Bart Oosterveld and Alexatrini Tsiknia, “This Greek Tragedy Is Not Over Just Yet,” Atlantic Council, August 21,
2018.
6 Sam Fleming and Mehreen Khan, “EU Finance Ministers Approve Separate ‘Eurozone Budget’ Tool,” Financial
Times, October 10, 2019; Magnus G. Schoeller, “Preventing the EU Budget: Issue Replacement and Small State
Influence in the EMU,” Journal of European Public Policy, July 24, 2020.
7 European Commission, The 2021-2027 EU Budget – What’s New?, at https://ec.europa.eu/info/strategy/eu-budget/
long-term-eu-budget/2021-2027/whats-new_en. The EU formally approved the 2021-2027 budget in December 2020

and finalized the recovery fund in February 2021.
8 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.

9 Jacob Funk Kirkegaard, “Will the Russia-Ukraine War Speed European Fiscal Integration?,” Peterson Institute for
International Economics, May 30, 2022; Jorge Valero and Jillian Deutsch, “EU Should Seek Joint Borrowing for
Ukraine Impact, Official Says,” Bloomberg.com, June 30, 2022; European Council President Charles Michel, “Going
Big for EU Industry,” Politico Europe, January 15, 2023.

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 eight countries as official candidates for membership; all are at
different stages of the accession process. Joining the EU typically takes many years (if not
decades). Montenegro and Serbia are the farthest along in their accession negotiations, and
Albania and North Macedonia officially began negotiations in July 2022. Turkey has been a
candidate country since 1999, but its accession negotiations are stalled amid heightened EU
concerns about democratic backsliding in Turkey and other tensions in EU-Turkey relations. The
EU named Ukraine and Moldova as official candidates for membership in June 2022, and Bosnia
and Herzegovina as an official candidate in December 2022. The EU regards Kosovo and Georgia
as potential future candidates (see the Appendix).
The EU maintains that the enlargement door remains open to any European country that fulfills
the EU’s political and economic criteria for membership. At the same time, some European
leaders and publics have been cautious about additional expansion, especially to Turkey (given its
large size, predominantly Muslim culture, and relatively less prosperous economy). Concerns
about continued EU enlargement have ranged from fears of unwanted migrant labor to the
implications of an ever-expanding EU on the bloc’s institutions, finances, and overall identity.
Assessments of weakening rule of law in several existing EU members—including Poland and
Hungary—also have contributed to decreased enthusiasm for further enlargement.
Russia’s war against Ukraine has boosted political and public support across many EU countries
for EU enlargement to Ukraine and other aspirants. Nevertheless, some in the EU remain
concerned that a larger EU would strain the ability of the bloc’s current structures and
decisionmaking processes to function effectively. In August 2022, German Chancellor Olaf
Scholz called for EU institutional reform to enable future rounds of EU enlargement.10 (Also see
“How Might the EU Evolve in the Future?,” below.)
10Laurenz Gerhke, “Scholz Pitches Major EU Enlargement—With Reform,” Politico Europe, August 29, 2022. Also
see CRS Report RS21344, European Union Enlargement, by Kristin Archick and Sarah E. Garding.

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
all 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 the EU has made strides in forging common policies
on a range of international issues, from the Balkans to Iran, some argue that the credibility of
CFSP too often suffers from an inability to reach consensus. Others note that some differences in
viewpoint are inevitable among a multitude of countries with different historical 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 essentially 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 calls for the EU to become a more
assertive, independent global actor—often referred to as strategic autonomy. Although this
concept initially described the need for greater EU action in the security and defense fields, the
EU has recently widened it to include other areas, such as trade, digital technology, and climate
change, among others.11 For some in the EU, Russia’s war against Ukraine has given further
impetus to promoting the EU as a robust international leader and the conflict may bolster the
EU’s drive for strategic autonomy and efforts to strengthen CFSP’s credibility. EU officials have
been considering ways to improve CFSP decisionmaking, with some advocating for eliminating
or curtailing the unanimity requirement for certain CFSP decisions. Some EU members, however,
are hesitant to support possible changes to CFSP decisionmaking rules, and little appetite appears
to exist within the EU for wider reforms that would require EU treaty changes.12 (Also see “How
Might the EU Evolve in the Future?,” below.)
Does the EU Have a Defense Policy?

Since 1999, 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
11 EU High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission
Josep Borrell, “Why European Strategic Autonomy Matters,” European External Action Service, December 3, 2020.
12 See, for example, Jacopo Barigazzi and Jakob Hanke Vela, “EU’s Unanimity Rules Are Here for Now, Despite the
Chatter,” Politico Europe, September 20, 2022.

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
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, especially given many
years of flat or declining European defense budgets following the end of the Cold War. Capability
gaps exist in strategic air- and sealift, command and control systems, intelligence, and other force
multipliers. 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
shortfalls. 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.
In recent years, renewed efforts to promote EU defense integration have been driven by mounting
concerns about a resurgent Russia, a desire to burnish the EU project in light of Brexit, and
questions about the former Trump Administration’s commitment to NATO and transatlantic
security. Since 2016, EU leaders have announced several initiatives to bolster EU security and
defense cooperation, including a European Defense Fund (EDF) to support joint defense research
and development activities. In 2017, the EU launched a new defense pact (known officially as
Permanent Structured Cooperation, or PESCO) aimed at spending defense funds more efficiently,
jointly developing military capabilities, and increasing military interoperability. EU leaders insist
that efforts such as EDF and PESCO do not represent the first steps toward an EU army and that
member states will retain full control over national military assets and over defense procurement
and investment decisions. Others note that progress on EU defense cooperation remains slow and
initiatives such as PESCO have yet to deliver significant new high-end military capabilities.13
For some in the EU, Russia’s war against Ukraine has generated a greater sense of urgency about
building a stronger, more capable EU in the field of security and defense. At the same time,
Russia’s aggression has reinforced NATO’s importance for many in the EU and prompted EU
members Finland and Sweden to seek NATO membership.14 In March 2022, the EU released a
new EU security and defense strategy—known as Strategic Compass—to improve EU military
and defense capabilities by 2030; the strategy also called for enhancing cooperation with partners,
including NATO.15 (Also see “What Is the Relationship of the EU to NATO?,” below.)
13 European Commission, “European Defense Action Plan—FAQs,” fact sheet, 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; Raluca Csernatoni, “New EU Defense Initiatives for Old Political
Problems,” EurActiv.com, February 18, 2021; Jacopo Barigazzi, “EU Military Projects Face Delays, Leaked Document
Shows,” Politico Europe, July 12, 2021.
14 Giorgio Leali and Barbara Moens, “Ukraine War Gives Macron’s Drive for EU Autonomy More Impetus,” Politico
Europe, March 9, 2022; Steven Erlanger, “When It Comes to Building Its Own Defense, Europe Has Blinked,” New
York Times, February 4, 2023.
15 European External Action Service, A Strategic Compass for the EU, https://eeas.europa.eu/headquarters/
headquarters-homepage/106337/towards-strategic-compass_en.

What Is the Relationship of the EU to NATO?

Since its inception, the EU has asserted that CSDP is intended to allow the EU to make decisions
and conduct military operations “where NATO as a whole is not engaged,” and that CSDP does
not seek to supplant 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 will
also benefit NATO given that 21 countries currently belong to both organizations.16 The Berlin
Plus arrangement—which was finalized in 2003 and allows EU-led military missions access to
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).17 Bureaucratic
rivalry also has contributed to frictions between the two organizations.
The emergence of new security threats over the past decade, however, prompted some 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, including boosting their common ability to counter hybrid threats.18 In 2018,
NATO leaders reaffirmed the importance of the NATO-EU partnership and both organizations
pledged to improve military mobility in Europe.19
Some U.S. experts remain concerned that a minority of EU member states (traditionally led by
France) would like to build an EU defense arm more independent from NATO in the longer term.
Given previous UK support for ensuring 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. Consistent with the views of most past U.S. Administrations, the Biden
Administration has sought to encourage recent EU defense efforts but also stresses that EU
defense initiatives must be linked to and must help to bolster NATO.20 In 2021, the Biden
Administration announced that the United States would join a PESCO project to improve military
16 Currently, six countries belong to the EU but not to NATO (Austria, Cyprus, Finland, Ireland, Malta, and Sweden,
although Finland and Sweden applied to join NATO in May 2022 and the NATO accession process is close to
completion for both countries); nine other countries belong to NATO but not the EU (Albania, Canada, Iceland,
Montenegro, North Macedonia, Norway, Turkey, the United Kingdom, and the United States).
17 Turkey has long objected to Cypriot participation in NATO-EU meetings on the grounds that Cyprus is not a
member of NATO’s Partnership for Peace (PfP) and thus does not have a security relationship with the alliance. The
absence of Cyprus from PfP also hinders NATO and the EU from sharing sensitive intelligence information.
Meanwhile, Cyprus has reportedly blocked various proposals over the years for enhancing NATO-EU cooperation.
18 NATO, “Joint Declaration by the President of the European Council, the President of the European Commission, and
the Secretary-General of the North Atlantic Treaty Organization,” July 8, 2016.

19 NATO, “Joint Declaration on EU-NATO Cooperation,” July 10, 2018.
20 See, for example, the White House, “Joint Statement on the Phone Call between President Biden and President
Macron,” September 22, 2021.

mobility in Europe and launched a new U.S.-EU dialogue on security and defense cooperation
aimed in part at raising “the level of ambition” for the NATO-EU partnership.21
As noted above, the EU’s 2022 Strategic Compass strategy document calls for enhancing ties
between NATO and the EU. In January 2023, NATO and the EU signed a new declaration
pledging to enhance cooperation further in light of Russia’s aggression in Ukraine and emerging
challenges, including China’s “growing assertiveness,” protection of critical infrastructures,
disruptive technologies, climate change, and “foreign information manipulation.”22 Some experts
argue that with Finland’s and Sweden’s expected accession to NATO in the near future, 23 of the
EU’s 27 member states will belong to both organizations and this could help alleviate rivalry and
improve NATO-EU cooperation. Others suggest that Finnish and Swedish NATO accession—
along with heightened concerns about Russia—may underscore NATO’s dominance as Europe’s
security guarantor and may weaken ambitions to develop a separate EU defense capacity.23
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
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 measures, key initiatives have included
establishing an EU-wide arrest warrant and bolstering Europol, the EU’s agency for law
enforcement cooperation.
The EU’s 2009 Lisbon Treaty expanded the role of the EU institutions in JHA policymaking. The
treaty gave the European Parliament “co-decision” power over the majority of JHA policy areas
and 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,
EU member states largely continue to strive for consensus on sensitive JHA policies. For some
issues in the JHA area, the Lisbon Treaty added an “emergency brake” that allows any member
state to halt a measure it believes could threaten its national legal system and, ultimately, to opt
out of the measure. Despite such 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 all others,
and Denmark extended its previous opt-out in some JHA areas to all JHA issues. The Lisbon
Treaty technically renamed JHA as the Area of Freedom, Security, and Justice.
21 Jacopo Barigazzi, “U.S. to Join EU Project on Military Mobility,” Politico Europe, May 5, 2021; U.S. Department of
State, “Joint Statement by the Secretary of State of the United States of America and the EU High Representative for
Foreign Affairs and Security Policy/Vice President of the European Commission,” press release, December 3, 2021.
22 NATO, “Joint Declaration on EU-NATO Cooperation,” January 10, 2023.
23 “Judy Asks: Is Finnish and Swedish NATO Membership Useful for Europe?,” CarnegieEurope.eu, April 28, 2022;
Lili Bayer, “EU and NATO Vow to Expand Cooperation,” Politico Europe, January 10, 2023.

What Is the Schengen Area?

The Schengen area of free movement encompasses 23 EU member states plus 4 non-EU
countries.24 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,
originally 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 allow 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
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.
Three EU countries (Bulgaria, Cyprus, and Romania) are not yet full Schengen members, but are
obliged to join in the future, after meeting the required security conditions and following the
approval of the Council of Ministers and the European Parliament. 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 well-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 partially to include trade in services, the defense of intellectual 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 allow the Council of Ministers 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
24The 23 EU members that belong to the Schengen area of free movement are Austria, Belgium, Croatia, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg,
Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, and Sweden. The four non-EU members of the
Schengen area are Iceland, Liechtenstein, Norway, and Switzerland.

approve all such trade agreements before they can enter into force. The process for negotiating
and concluding a new international trade agreement begins with discussions among all three EU
institutions, and the European Commission initiates an informal scoping exercise with the
potential partner country or trade bloc. The European Commission then requests authorization
from the Council of Ministers to begin negotiations and usually submits to the council
negotiating directives (sometimes termed the negotiating mandate), which set out the overall
objectives for the future agreement. The directives also are shared with the European Parliament.
Provided the Council of Ministers provides authorization, the European Commission then
launches formal negotiations for the new trade agreement. Within the European Commission, the
department that handles EU trade policy—the Directorate General for Trade (DG Trade)—leads
the negotiations. Typically, 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 European Commission is expected to keep both the Council of Ministers and the
European Parliament apprised of its progress.
Once negotiations on a new trade agreement conclude, the proposed accord must be approved by
the Council of Ministers and submitted to the European Parliament for its consent. Although the
European Parliament is limited to voting “yes” or “no” to the new accord, it can ask the European
Commission to review or address any concerns. If parts of the trade agreement fall under member
state competence, all EU countries must also ratify the agreement according to their national
ratification procedures. After the European Parliament gives its consent and following ratification
in the member states (if required), the Council of Ministers adopts the final decision to conclude
the agreement, which then may be officially published and enter into force.25
How Do EU Countries and Citizens View the EU?

Most member states believe 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 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 have opted out of certain aspects of integration,
including the eurozone and the Schengen area (this included the UK, which traditionally was
reluctant to cede too much sovereignty during its tenure as an EU member state). Another classic
divide in the EU falls along big versus small state lines; small members often are cautious of
initiatives that they fear could allow 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 brought in many members with histories of Soviet control,
which often prompted skepticism of past EU efforts to engage with Russia and at times 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. History and geography also may affect member state positions on
frequently contentious issues, from fiscal and monetary policy, defense integration, and EU
reforms to migration, energy and climate initiatives, trade, and managing relations with China.
25 Some trade agreements submitted for Council of Ministers and European Parliament approval are accompanied by
European Commission legislative proposals needed for implementation, which must also be adopted by both the
Council of Ministers and the European Parliament. For more on the EU process for concluding new trade agreements,
see European Commission, “Negotiating EU Trade Agreements,” at http://trade.ec.europa.eu/doclib/docs/2012/june/
tradoc_149616.pdf.

The prevailing view among European publics has been historically 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. Traditionally, 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 more than a decade, however, economic difficulties and worries about income inequality,
immigration, and globalization have heightened support for populist, antiestablishment parties
throughout the EU. 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 greater member state sovereignty and others calling 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.
In the May 2019 European Parliament elections, an array of antiestablishment and euroskeptic
parties secured up to 25% of seats. Traditionally such parties in the European 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 European Parliament, some of
the most hard-line 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 question the ability of such parties to work together to block or influence
legislation. Euroskeptic parties remain a collective minority in the European Parliament and must
gain support from other groups to have much impact on the legislative process.26
Despite concerns about euroskepticism, opinion polls indicate that a majority of EU citizens are
supportive of the EU.27 Some analysts note that euroskeptic parties did not do as well 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 Rally and the Netherlands’ Freedom
Party, have focused more on calling for EU reforms in recent years than on promoting the
dissolution of the eurozone or the EU itself. The EU’s efforts to respond to the COVID-19
pandemic, through both substantial financial support and vaccine procurement for the bloc, also
may have contributed to diminished euroskepticism in some EU countries.28 Polls conducted in
the second half of 2022 indicate increased trust in the EU and strong support for the EU’s
response to Russia’s aggression against Ukraine.29
At the same time, populism and related euroskeptic sentiments remain potent political forces in
Europe. Parties with euroskeptic views have led Hungary’s government since 2010 and Poland’s
government since 2015. In France’s April 2022 presidential elections, National Rally candidate
Marine Le Pen lost to pro-EU President Emmanuel Macron (42% to 59% in the second round of
voting), but this was Le Pen’s best finish in a presidential election and National Rally also made
26 For more information, see CRS In Focus IF11211, The European Parliament and U.S. Interests, by Kristin Archick.
27 Moira Fagan and Sneha Gubbala, “Positive Views of European Union Reach New Highs in Many Countries,” Pew
Research Center, October 13, 2022; Eurobarometer, EP Autumn 2022 Survey: Parlemeter, January 2023.
28 Economist, “Populists Fall Short of Expectations in the European Elections,” May 26, 2019; Bojan Pancevski, “Why
the COVID-19 Pandemic Weakened Far-Right Groups in Europe,” Wall Street Journal, June 30, 2021.
29 European Commission, “Eurobarometer: Trust in the EU on the Rise, Amid Strong Support for the EU’s Response to
Russia Invasion of Ukraine and Energy Policies,” press release, September 6, 2022; Nicolas Camut, “74 Percent of
Europeans Support EU Backing for Ukraine, Poll Finds,” Politico Europe, January 12, 2023.

significant gains in France’s June 2022 parliamentary elections. In Sweden’s September 2022
elections, the nationalist and euroskeptic Sweden Democrats (SD) party won roughly 20% of the
vote and became the second-largest party in the Swedish parliament; SD played a key role in
shaping the new center-right government’s policy priorities (especially on issues such as
immigration and asylum) and provides the government with parliamentary support in passing
legislation. In Italy’s September 2022 elections, the far-right, nationalist, euroskeptic Brothers of
Italy won 26% of the vote and leads a new coalition government with another right-wing,
euroskeptic party (although Brothers of Italy leader and new Prime Minister Giorgia Meloni
appears to have toned down her anti-EU rhetoric and sought to work cooperatively with the EU,
including on economic and migration policies).30
What Is Brexit, and How Has It Affected the EU?31

The UK had long been considered one of the most euroskeptic members of the EU, with many
British leaders and citizens traditionally cautious of ceding too much sovereignty to Brussels.
Brexit—or the UK’s withdrawal from the EU—stems from a June 2016 public referendum in the
UK on whether the country should remain a member of the EU. UK voters favored leaving the
EU by 52% to 48%. Several factors heavily influenced this outcome, including economic
dissatisfaction, fears about globalization and immigration, and anti-elite and antiestablishment
sentiments. The UK government enacted the results of the Brexit referendum in March 2017,
when it invoked Article 50—the so-called exit clause—of the Treaty on European Union. The UK
and the EU subsequently began negotiations on the terms of the UK’s withdrawal.
UK-EU negotiations on the withdrawal agreement proved complicated and lengthy. Challenges
related to maintaining an open border between Northern Ireland (part of the UK) and the
Republic of Ireland (an EU member state) were key stumbling blocks. In October 2019, in order
to ensure an open border on the island of Ireland and preserve the peace process, the UK and EU
agreed that Northern Ireland would effectively remain in the EU’s single market and customs
union post-Brexit. Known as the Northern Ireland protocol (to the UK-EU withdrawal treaty),
this arrangement eliminates the need for regulatory and customs checks on trade in goods on the
Northern Ireland land border, but it also essentially creates a customs border in the Irish Sea
between Northern Ireland and the rest of the UK (i.e., Great Britain) to safeguard the rules of the
EU single market. The UK officially withdrew as a member of the EU on January 31, 2020, but
continued to apply EU rules and to participate in the EU’s single market and customs union for an
11-month transition period.
Days before the end of the transition period on December 31, 2020, the UK and the EU
concluded a 1,200-page Trade and Cooperation Agreement (TCA), along with two other accords
on nuclear cooperation and on protecting the security of classified information. The post-Brexit
arrangements for Northern Ireland also took effect after the end of the transition period, in
January 2021. Since then, difficulties with implementing the protocol have arisen and disrupted
some trade between Northern Ireland and Great Britain, heightened political and societal
divisions within Northern Ireland, and strained UK-EU relations.
30 Sylvie Corbet and Barbara Surk, “France Reshaped: Election Emboldens Le Pen, Undercuts Macron,” Associated
Press, June 20, 2022; Malu Cursino, “Ulf Kristersson: Swedish Parliament Elects New PM Backed by Far Right,”
BBC.com, Octoberber 17, 2022; Valentina Pop, “Italy’s Leader Looks to Mend EU Fences in Visit to Brussels,”
Financial Times, November 3, 2022.
31 For more information, see CRS Report R46730, Brexit: Overview, Trade, and Northern Ireland, coordinated by
Derek E. Mix.

The EU rejects calls by the UK government and some in Northern Ireland for a fundamental
renegotiation of the protocol but has sought to engage with the UK on ways to overcome the
protocol’s operational challenges and ease tensions in Northern Ireland. UK-EU talks on the
protocol have been contentious and progress has been slow, although discussions are ongoing and
an agreement may be possible in early 2023. The UK government asserts that it would prefer a
negotiated solution on the issues posed by the protocol, but legislation introduced in the UK
Parliament in June 2022 would allow the UK to unilaterally stop applying parts of the protocol.
The EU views the UK legislation as violating the terms of the protocol and international law.32
Despite Brexit, EU leaders assert that “the Union of 27 countries will continue.”33 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.” Many observers view the EU as having taken a tough line in the
withdrawal agreement and subsequent trade agreement negotiations—refusing to allow 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 in the longer term, especially 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. 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.
How Might the EU Evolve in the Future?

In light of Brexit and other challenges, the EU has faced questions about its future shape and
character in recent years. In 2017, during the commemoration of the 60th anniversary of the
Treaties of Rome (foundational EU treaties), EU leaders renewed their commitment to the
European integration project and pledged to make the EU “stronger and more resilient, through
even greater unity and solidarity.”34 Some experts argue that “more EU” and further integration is
necessary to better address the range of political and economic issues confronting the bloc. Others
are skeptical that national governments will be inclined to cede more authority to a Brussels
bureaucracy viewed as opaque and out of touch with the problems of average Europeans.
Considerable attention since 2016-2017 has focused on developing a “multispeed EU,” in which
some member states could agree to greater integration in certain areas and others could opt out.
Some European policymakers and analysts suggest that such a multispeed EU already exists in
practice, with varying membership on a range of EU initiatives, including the eurozone,
Schengen, justice and home affairs issues, and defense policy. Critics contend, however, that
making the multispeed concept central to the EU’s identity could be divisive, undermine EU
solidarity, and potentially lead to different classes of EU membership.35
32 The Northern Ireland Protocol Bill passed the UK House of Commons in July 2022 and is currently under
consideration in the House of Lords.
33 European Council, “Statement by the EU Leaders and the Netherlands Presidency on the Outcome of the UK
Referendum,” press release, June 24, 2016.

34 European Council, The Rome Declaration, March 25, 2017.
35 Maia de la Baume, “Multispeed Europe: The EU’s Loch Ness Monster,” Politico Europe, March 10, 2017; Matthew
Karnitschnig, “With Plenty of Pomp, Europe’s Leaders Renew Vows,” Politico Europe, March 24, 2017.

Although the EU has not formally moved toward a multispeed EU, the EU has sought to respond
to recent challenges with new common policies and by pursuing greater integration in certain
areas (such as security and defense, as discussed in “Does the EU Have a Defense Policy?”). In
May 2022, the EU concluded a year-long Conference on the Future of Europe, aimed at
promoting dialogue on a wide range of topics among citizens, experts, and EU officials; the
conference issued a final report with 49 proposals on issues such as European democracy and the
rule of law, the economy, health policy, climate change, and migration, among others. The EU
institutions are committed to evaluating the conference proposals and considering their
implementation, some of which would require treaty changes and could be controversial (see
below). Following the example set by the conference, the European Commission has pledged to
ensure European citizens continue to have a closer role in EU policymaking going forward.36
Russia’s war against Ukraine has galvanized debate further on the future of the EU. As previously
discussed, Russia’s aggression in Ukraine may boost EU efforts to strengthen its common foreign
and defense policies and has given impetus to enlarging the EU to include Ukraine and other
countries in the longer term. Such issues have sparked considerable discussion about whether EU
treaty reform may be necessary to alter EU decisionmaking rules and adapt EU institutions to
accommodate an even larger and more diverse membership. For years, Germany and France also
have called for eurozone reforms, and some analysts suggest the EU’s COVID-19 economic
recovery measures and the need to address the economic downturn stemming from the war in
Ukraine may lead to further EU economic integration. At the same time, EU initiatives in many
policy areas may be limited by diverging policy preferences among member states and between
EU institutions. Moreover, some member states are likely to be hesitant about embarking on
significant EU reforms that could lead to curtailing member state prerogatives and sovereignty.37
The leadership of key EU countries also may affect the EU’s evolution. Germany and France
traditionally play prominent roles in EU policymaking. French President Emmanuel Macron has
been a leading proponent of EU defense integration and EU strategic autonomy. German
Chancellor Olaf Scholz, who took office in late 2021, appears to share some of Macron’s
ambitions for the EU. Scholz outlined his vision for the EU in an August 2022 speech, which
included calling for EU reforms to help pave the way for further enlargement. At the same time,
the Franco-German partnership currently faces some tensions and divisions on a range of trade,
financial, defense, and foreign policy issues. Meanwhile, Central and Eastern European countries,
such as Poland and the Baltic states, have been instrumental in shaping the EU’s response to
Russia’s war against Ukraine and may play increasingly influential roles in determining the EU’s
future development. Efforts to revitalize or reform the EU also could be affected by member state
governments led or supported by euroskeptic parties.38
36 European Commission, Conference on the Future of Europe, at https://ec.europa.eu/info/strategy/priorities-2019-

2024/new-push-european-democracy/conference-future-europe_en; European Commission, Conference on the Future
of Europe: Putting Vision into Concrete Action, June 17, 2022.
37 See, for example, Stefan Lehne, “Does the EU Need Treaty Change?,” CarnegieEurope.eu, June 16, 2022; Max
Bergmann, “The EU’s Next Big Deal: Enlargement for Treaty Reform,” Politico Europe, August 2, 2022.
38 Eoin Drea, “The EU’s Balance of Power Is Shifting East,” ForeignPolicy.com, June 21, 2022, Erika Solomon,
“Condemned to Lead Europe, German Chancellor Struggles for Impact,” New York Times, September 2, 2022; Mathieu
Droin, “Rebooting the Franco-German Engine,” CSIS, October 5, 2022; Jean Pisani-Ferry, “Why Europe’s Franco-
German Engine Is Stalling,” Project-Syndicate.org, January 31, 2023.

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 challenges, 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 European 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.
What Is the History of U.S.-EU Relations?

Successive U.S. Administrations and many Members of Congress have long viewed the European
integration project as a way to foster democratic allies 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 (especially 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
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
traditionally has supported the EU aspirations of Turkey and the Western Balkan states.
Over the past 25 years, the United States has often looked to the EU for partnership on common
foreign and security policy concerns worldwide, and the two partners 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 challenges, such
as cybersecurity. In 2014, the United States and the EU began imposing targeted sanctions on
Russia 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.
Trade and investment ties have deepened and evolved over time. In recent years, total U.S. trade
in goods and services with the EU typically has been around $1 trillion per year. 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 was $5 trillion in 2021 (historical-cost basis), and U.S.
and EU multinational firms employed roughly 6 million workers (in direct employment) in 2020
on both sides of the Atlantic.39 Historically, 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 challenges. 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. 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 law enforcement information-sharing
agreements and commercial data transfers. Long-standing U.S.-EU trade disputes persist over
poultry, bioengineered food products, and protection of geographical indications.
Significant strains in U.S.-EU relations emerged during the Trump Administration. Many EU
leaders were taken aback by former President Trump’s seeming hostility toward the bloc, his
expressed support for Brexit, and his reported contention that the EU engaged in unfair trade
practices that harmed U.S. economic interests.40 EU officials were concerned by the Trump
Administration’s imposition of steel and aluminum tariffs and what the EU regarded as
protectionist U.S. trade policies. Other U.S.-EU policy divisions also existed during the Trump
Administration, including on Russia, China, Iran, the Israeli-Palestinian conflict, climate change,
managing the COVID-19 pandemic, and the role of multilateral institutions such as the United
Nations and the World Trade Organization (WTO).
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 stalled amid discord on their scope,
especially 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.41
What Is the Current State of U.S.-EU Relations?

Upon entering office, President Biden “underscored his support for the [EU] and his commitment
to repair and revitalize the U.S.-EU partnership.”42 The United States pledged to work with the
EU on a wide range of global concerns, including the COVID-19 pandemic and climate change.
EU officials welcomed the renewed U.S. commitment to multilateralism—signaled by President
Biden’s decisions to reverse certain Trump Administration policies and rejoin the World Health
39 U.S. Bureau of Economic Analysis, International Trade and Investment, at https://www.bea.gov/data/intl-trade-

investment.
40 See, for example, “‘I Think the European Union Is a Foe,’ Trump Says Ahead of Putin Meeting in Helsinki,”
CBSNews.com, July 15, 2018.

41 For more information on U.S.-EU relations during the Trump Administration, see CRS Report R45745,
Transatlantic Relations: U.S. Interests and Key Issues, coordinated by Kristin Archick.
42 The White House, “Readout of President Joseph R. Biden, Jr. Call with European Commission President Ursula von
der Leyen,” press release, March 5, 2021.

Organization and the Paris Agreement on climate change, as well as by U.S. engagement on ways
to revive the 2015 Iran nuclear deal. In its first year in office, the Biden Administration also
coordinated human rights-related sanctions on both Russian and Chinese officials with the EU,
restarted the U.S.-EU dialogue on China begun during the Trump Administration, and launched
high-level consultations with the EU on the Indo-Pacific. Although some U.S.-EU tensions
remained—and new controversies emerged related to EU concerns about the U.S. troop
withdrawal from Afghanistan in August 2021 and the Australia-UK-U.S. security pact for the
Indo-Pacific (known as AUKUS) announced in September 2021—the overall tenor of U.S.-EU
relations improved with the start of the Biden Administration.
In 2022, Russia’s war against Ukraine largely dominated the U.S.-EU agenda and bolstered U.S.-
EU ties further. The United States and the EU have demonstrated steadfast support for Ukraine’s
territorial integrity and have cooperated extensively on imposing sanctions on Russia and other
responses. The Biden Administration also supports EU efforts to end its dependency on Russian
energy imports. President Biden pledged to work with international partners to help boost
liquefied natural gas (LNG) shipments to the EU in 2022 and committed to enabling additional
U.S. LNG shipments through 2030. A U.S.-EU task force on energy security is seeking to
implement these and other goals related to transitioning away from fossil fuels and toward clean
energy. For many on both sides of the Atlantic, Russia’s invasion of Ukraine has reinforced the
importance of the U.S.-EU partnership and its combined political and economic clout.43
Revitalizing U.S.-EU economic ties, resolving trade disputes, and promoting technological
cooperation have been other key areas of focus for the Biden Administration.44 In 2021, the
United States and the EU reached an agreement to address a long-standing dispute over civil
aircraft subsidies and a deal on the steel and aluminum tariffs imposed by the Trump
Administration. The Biden Administration also established a Trade and Technology Council
(TTC) with the EU to discuss issues such as emerging technologies, supply chain security, and
digital governance, as well as a separate Joint Technology Competition Policy Dialogue. The
United States views the TTC, in part, as a vehicle for U.S.-EU cooperation on challenges posed
by China and other nonmarket economies; recent TTC meetings also have discussed U.S.-EU
export controls and other sanctions on Russia. In 2022, the Biden Administration reached a new
commercial data transfer arrangement with the EU to replace the Privacy Shield framework
(which the EU’s top court invalidated in 2020 on grounds that it did not meet EU data protection
standards).45 The Biden Administration also has worked with the EU in the WTO on an
intellectual property rights waiver for COVID-19 vaccines and an international deal on setting a
15% global minimum corporate tax rate.
Despite a strengthened U.S.-EU partnership, certain issues pose challenges. U.S. tax credits for
the purchase of electric vehicles and other clean energy subsidies in P.L. 117-169 (commonly
referred to as the Inflation Reduction Act of 2022, or IRA) have sparked new U.S.-EU trade
frictions. The EU contends that some measures in the IRA could harm EU industries, discriminate
against EU firms, and breach multilateral trade rules. Some in the EU suggest the IRA fails to
take EU economic interests into account at a time when many member states are struggling with
high energy costs and inflation, in part because of Russia’s aggression in Ukraine and the EU’s
43 Also see CRS Insight IN11897, Russia’s War Against Ukraine: European Union Responses and U.S.-EU Relations,
by Kristin Archick.
44 Also see CRS Report R47095, U.S.-EU Trade Relations, coordinated by Shayerah I. Akhtar.
45 The EU is in the process of granting final approval to allow the new U.S.-EU Data Privacy Framework to take effect.
See European Commission, “Questions & Answers: EU-U.S. Data Privacy Framework, Draft Adequacy Decision,”
press release, December 13, 2022.

imposition of sanctions and other responses. The Biden Administration asserts that EU companies
could benefit from parts of the IRA and has proposed some flexibilities in recent implementation
guidance. A U.S.-EU task force on the IRA is seeking to address EU concerns.46 Meanwhile,
some U.S. officials and business interests appear wary that new EU digital trade and competition
rules could unfairly target large U.S. technology firms.47
Managing relations with China also may test U.S.-EU relations. EU views on China have
hardened in recent years and have come to mirror more closely U.S. concerns about China’s
growing political and economic influence. The Biden Administration and the EU have committed
to intensify cooperation on the range of strategic and economic challenges posed by China; at the
same time, many in the EU remain wary about a possible new U.S.-China “Cold War” and are
reluctant to antagonize a major economic partner. Some in the EU question the U.S. commitment
to work together on China, while the EU recognizes the need for cooperation with China on
common global concerns, such as climate change. In addition, varying political and economic
interests among EU countries may impede or otherwise affect efforts to promote closer U.S.-EU
policy alignment toward China.48
Some experts warn that U.S.-EU solidarity against Russia could begin to fray as the war in
Ukraine continues, as many European countries face a difficult economic climate and as some in
Europe begin to consider requirements for future peace negotiations for Ukraine or how to
manage relations with Russia in the longer term. At times, French, German, and Italian leaders
have broached the possibility of a cease-fire in Ukraine and eventual negotiations with Russia.
Officials in the United States and other EU countries (such as Poland and the Baltic states) have
raised concerns about any efforts to encourage Ukrainian concessions in order to give Russia a
face-saving way out of the conflict and/or ease future European relations with Russia. U.S.-EU
divisions also could emerge over the extent of military and/or financial assistance that each
partner is providing to Ukraine.49
EU concerns also exist about ongoing U.S. political polarization and whether a future U.S.
administration would maintain current U.S. policies toward Russia, Ukraine, the EU, and
European security more broadly. Some in the EU remain skeptical about whether the United
States will be a credible global leader and a reliable partner in the long term and argue that
Europe must be better prepared to address future challenges on its own. The EU has emphasized
enhancing defense cooperation and concluding new trade agreements (including with Canada,
Japan, and Latin America) in recent years and has sought to become a global standard setter on
data protection and climate change mitigation. These and other efforts to position the EU as a key
international player are likely to remain EU imperatives for the foreseeable future.50
46 See, for example, Alberto Nardelli et al., “EU Doubts Biden Will Make Europe-friendly Tweaks to Climate Bill,”
Bloomberg.com, January 11, 2023; Alexander Ward and Suzanne Lynch, “You’re Hurting My Country: Manchin
Faces Europe’s Wrath,” Politico, January 19, 2023.
47 Leah Nylen and Samuel Stolton, “U.S. Slow to Respond to EU’s Landmark Tech Regulation,” Politico, March 25,
2022.
48 Also see CRS In Focus IF10252, The European Union and China, by Sarah E. Garding et al.
49 Holly Ellyatt, “The West’s Unity over Ukraine Could Be Starting to Crack,” CNBC.com, June 16, 2022; Chris
Cameron and Helene Cooper, “U.S. Shores Up Ukraine Support as Energy Crisis in Europe Looms,” New York Times,
September 20, 2022; Jonathan Lemire, “White House Leans on Congress, Rallies Allies, to Aid Ukraine through
Winter of War,” Politico, December 18, 2022.
50 See, for example, Majda Ruge and Jeremy Shapiro, “No Laughing MAGA: What the Next US Presidential Election
Could Mean for Europe,” European Council on Foreign Relations, June 3, 2022; Brian Klaas, “The Trump Apocalypse
Has Not Been Canceled,” The Atlantic, November 10, 2022.

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

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
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The European Union: Questions and Answers

Updated February 6, 2023

Congressional Research Service

How the EU Works

Challenges Facing the EU

Congressional Research Service

Figure A-1. European Union Member States and Candidates ....................................................... 21

Congressional Research Service

What Is the European Union?

How Does the EU Work?

Congressional Research Service 1

How Is the EU Governed?

Congressional Research Service 2

What Is the Lisbon Treaty?

Congressional Research Service 3

Key EU Positions and Current Leaders

What Are the Euro and the Eurozone?

Congressional Research Service 4

long-term-eu-budget/2021-2027/whats-new_en. The EU formally approved the 2021-2027 budget in December 2020

Pandemic Recovery Fund a One-off,” Politico Europe, September 28, 2020.

Congressional Research Service 5

Why and How Is the EU Enlarging?

Congressional Research Service 6

Does the EU Have a Foreign Policy?

Does the EU Have a Defense Policy?

Chatter,” Politico Europe, September 20, 2022.

Congressional Research Service 7

Congressional Research Service 8

What Is the Relationship of the EU to NATO?

the Secretary-General of the North Atlantic Treaty Organization,” July 8, 2016.

Macron,” September 22, 2021.

Congressional Research Service 9

What Is Justice and Home Affairs?

Congressional Research Service 10

What Is the Schengen Area?

Does the EU Have a Trade Policy and Process?

Congressional Research Service 11

How Do EU Countries and Citizens View the EU?

Congressional Research Service 12

Congressional Research Service 13

What Is Brexit, and How Has It Affected the EU?31

Congressional Research Service 14

How Might the EU Evolve in the Future?

Referendum,” press release, June 24, 2016.

Congressional Research Service 15

36 European Commission, Conference on the Future of Europe, at https://ec.europa.eu/info/strategy/priorities-2019-

Congressional Research Service 16

Does the United States Have a Formal Relationship

Who Are U.S. Officials’ Counterparts in the EU?

What Is the History of U.S.-EU Relations?

Congressional Research Service 17

What Is the Current State of U.S.-EU Relations?

39 U.S. Bureau of Economic Analysis, International Trade and Investment, at https://www.bea.gov/data/intl-trade-

CBSNews.com, July 15, 2018.

der Leyen,” press release, March 5, 2021.

Congressional Research Service 18

Congressional Research Service 19

Congressional Research Service 20

Appendix. Map of the European Union and