European External Action Service – Treaty of Lisbon – High Representative of the Union for Foreign Affairs and Security Policy – combination with role of Vice President of the European Commission responsible for external action – Institutional balance between the Commission and the Council – Curtailment in practice of High Representative's ‘Vice Presidential’ powers – Hybrid approach toward role of EEAS: both intergovernmental and communitarian

A sales edition of this dissertation is published by T.M.C. Asser Press, The Hague,The Netherlands, The cover illustration shows the renovated Old Bridge (Stare Most) in Mostar. All rights reserved. © 2007, Steven Blockmans, Brussels, BelgiumNo part of the material protected by the copyright notice may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the copyright owner. Natural resources oil, some coal, bauxite, low-grade iron ore, calcium, gypsum, natural asphalt, silica, mica, clays, salt, hydropower TOUGH LOVE: THE EUROPEAN UNION'S RELATIONS WITH THE WESTERN BALKANSAgricultural products wheat, sugar beets, sunflower seed, barley, alfalfa, clover, olives, citrus, grapes, soybeans, potatoes, livestock, dairy products Industries chemicals and plastics, machinery, fabricated metal, electronics, pig iron and rolled steel products, aluminium, paper, wood products, construction materials, textiles, shipbuilding, petroleum (refining), food and beverages, tourism Export products transport equipment, textiles, chemicals, foodstuffs, fuels Import products machinery, transport and electrical equipment, chemicals, fuels and lubricants, foodstuffs Currency Euro Most prominent trading partners Government budget balance1.2% of GDP Current account balance-9.1% of GDP (2005) Foreign debt 27.6% of GDP (2005) Natural resources bauxite, hydroelectricity

The European Union's security and defence policy (ESDP) was invented 10 years ago and has been operational for more than five years. During this period the EU has launched over 20 ESDP missions allowing the organization to be engaged in international crisis management in various ways. The coming years will reveal whether the European Union is able to meet its ambitions to carry out a greater number of more complex ESDP missions in higher-risk theatres. While the EU has stepped up the plate to meet these challenges, the three case studies discussed in this article (EULEX Kosovo, EUPOL Afghanistan, EUFOR Tchad/RCA) reveal that the path paved with good intentions might in this case indeed lead to hell. Whereas the new Treaty of Lisbon introduces quite a few institutional changes to the current treaty regime of foreign affairs and security policy, it is questionable whether these innovations will significantly improve the decision-making and leadership on issues of ESDP and, consequently, the effectiveness of the Union as an international crisis manager. [M]ore than 20 civilian and military operations, are or have been deployed on almost every continent, from Europe to Asia, from the Middle East to Africa. Thousands of European men and women are engaged in these operations, ranging from military to police, from border guards to monitors, from judges to prosecutors, a wide range of people doing good for the stability of the world. This is the European way of doing things: a comprehensive approach to crisis prevention and crisis management; a large and diversified tool box; a rapid response capability; playing our role as a global actor. Obviously, if the Lisbon Treaty were to be ratified, and I hope it will be, we would be even more effective.

In response to the need expressed by European leaders to protect their citizens better against security threats emanating from within and outside the EU’s borders, a package of defensive measures has been developed with remarkable speed. Permanent Structured Cooperation (PESCO) in the area of defence is the most emblematic innovation in this regard. This unique form of enhanced cooperation was triggered under Article 46 TEU. Yet the political rhetoric surrounding its launch has raised expectations that the EU may not be able to meet. This is mainly due to misperceptions about the legal nature and enforceability of the so-called “binding” commitments agreed to. PESCO will need to overcome at least three key challenges: raising the level of ambition while ensuring inclusivity; maintaining credibility in case participating States do not comply with their commitments; and ensuring coherence with the many other building blocks in Europe’s defence architecture. Arguably, legal commitments are the hardest in the area of industrial integration.With moves to incentivize capability development and create a single market for defence, the Community method will be applied to a field hitherto jealously shielded off by the Member States. This dimension of the incipient European Defence Union represents a game-changer in the integration process. “If you need a helping hand, you will find one at the end of your arm”, Donald Tusk, President of the European Council, 16 May 2018.

Differentiation, or what some have called the ‘negative starting point’ of integration, has always been the norm in EU defence policy. Driven by both endogenous and exogenous (f)actors, political leaders in the European Council are nevertheless mindful of the need for Member States to cooperate in more structured ways to better protect their citizens against security threats. For this reason, a package of harmonizing measures has been developed with remarkable speed since 2016. Permanent Structured Cooperation (PESCO) is the most prominent innovation in this field. Given the high levels of politicization in defence it is perhaps surprising that PESCO has produced the most inclusive expression of enhanced cooperation, even if it is the most flexible of the differentiated integration mechanisms provided by the Treaties. This is largely the result of a German push for inclusivity, which prevailed over a French desire for a higher level of ambition. Monitored by the European External Action Service (EEAS) and the European Defence Agency (EDA) and increasingly driven by the Commission’s Directorate General for Defence Industry and Space (DG DEFIS), which manages the European Defence Fund (EDF), PESCO is a force that generates ‘positive integration’ by de-fragmenting the defence market in the European Union. This article builds on empirical research that maps the varied clusters of Member States lining up behind different types of defence capability development projects. It observes a process of coagulation across the microcosm of PESCO, coupled with formal expressions of differentiated integration, both vertically and horizontally, and offers explanations for these trends. European Union, differentiated integration, defence, PESCO