Throughout much of the 1980s and 1990s, the EU's focus was on building a single market and a single currency. In the first decade of the 21st century, the emphasis has switched to making the EU a more effective international actor. Despite disunity over crucial questions such as the invasion of Iraq, the EU has made steady and quiet progress in many areas of foreign and defence policy. Thus the EU has embarked on military missions under the European Security and Defence Policy (see security & defence page), negotiated with Iran over its nuclear programme and become increasingly influential in parts of its neighbourhood.

Relations with Russia, China are of fundamental importance for EU foreign policy, and thus for the Centre for European Reform. Each is covered in separate pages on this site. The EU's role in the Middle East is equally crucial. Most of our work on the Middle East is handled through our participation in the Arab Reform Initiative, with its own page on this site.

Now that the pace of EU enlargement has slowed, the European Neighbourhood Policy (ENP) - the EU's framework for handling relations with neighbours that cannot join the Union any time soon, because they are unwilling, or unready, or not in Europe - has become increasingly important. Charles Grant's October 2006 pamphlet on enlargement and the neighbourhood policy proposes new schemes for strengthening the ENP, including the participation of some neighbours in the Common Foreign and Security Policy (CFSP). CER’s June 2007 policy brief, ‘Serbia's European choice’, by David Gowan, former UK ambassador, reviews the EU policy on Serbia. .

The CER believes that of the many reasons why the EU has failed to develop more effective foreign policies, inadequate institutions are not the most important. Better institutions would probably not have delivered a united position on Iraq in 2003, or a common approach to handling of Russia in 2006. The problem has been more fundamental: the larger member-states, which tend to dominate the CFSP, have disagreed, and lacked the political will to overcome those disagreements.

That said, the current institutions for making foreign policy are deeply flawed. The institution of the rotating presidency leads to a lack of continuity and expertise in EU foreign policy, and is viewed with contempt by many of the EU's partners. The institutional split between the Council of Ministers, which handles the diplomatic side, and the Commission, which is in the lead on economic issues, is disabling. The two institutions sometimes see each other as rivals, rather than as partners to work with in solving common problems.

The Reform Treaty would improve the institutions, for example by creating an 'EU foreign minister' through merging the jobs of the High Representative and the commissioner for external relations, and through downgrading the role of the rotating presidency. EU governments approved the treaty in October 2007 but it has yet to be ratified by all member-states. ‘The CER guide to the Reform treaty’ an October 2007 briefing note by Hugo Brady and Katinka Barysch offers a succinct overview of all its provisions, including sections on EU foreign policy.