Overview
Political momentum is growing to admit new members into the EU for the first time since 2013. Before a June 5 summit hosted in Tivat, Montenegro, a non-paper circulated by Germany and France endorsed a “gradual enlargement” approach to grant EU candidates privileges as they complete relevant reforms, before full membership, thereby locking in accession. This pivot is a technical but important signal that the EU’s Franco-German engine is considering bending the rules to treat enlargement as a geopolitical necessity. However, enlargement is a political minefield. To translate momentum into reality, EU member states must also resolve questions of unanimity in foreign policy decision-making, where EU budget funds go, and the politics of whether Ukraine “cuts the line.” On the upside, an enlarged EU would eliminate nontariff barriers across Europe and open new investment opportunities. On the downside, a rushed enlargement could create friction with the US, complicate internal EU political dynamics, or create negative economic shocks, contributing to regional instability.
The Tivat Summit: Adjusting the Enlargement Method
Influential policymakers have embraced EU enlargement in recent weeks. Speaking at last week’s EU-Western Balkans Summit, French President Emmanuel Macron embraced Montenegro, nearing completion of its EU reforms, as the next potential member of the bloc. German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen portrayed EU enlargement as a “strategic investment” directly related to the EU’s credibility and geopolitical influence. These statements reflect an emerging mindset on EU enlargement. More than expanding a democratic community of states, EU enlargement represents a test of power in a multipolar world order. By admitting the Western Balkans, Ukraine, and Moldova, the EU could grow its market power by 60 million consumers, augment the bloc’s defense industrial base, and improve access to critical mineral reserves. With the US pivoting toward the Indo-Pacific and Russia’s defense build-up, an enlarged EU is an answer for “middle powers” to exert market leverage, defend international norms, or deter adversaries.
However, the elevated rhetoric for EU enlargement conflicts with institutional reality: it is exceptionally difficult for a candidate to become an EU member. Under the current process, candidates must align their governance with the EU’s body of law (acquis communitaire). This translates to 33 chapters of accession reforms, spanning judicial practices, procurement procedures, environmental protections, food safety oversight, and foreign policy alignment, just to name a few. Moreover, all 27 current EU member states must unanimously support closing each individual chapter and ratifying a final Accession Treaty. Therefore, EU accession is as much a political challenge as it is a technocratic one. The more members the EU admits, the more difficult enlargement becomes. Candidates like Montenegro concluded their free trade agreements with the EU 20 years ago, and others have not moved up the queue.
On the eve of the Tivat Summit, Germany and France sought to shake up the institutional morass by jointly releasing a non-paper calling for a “gradual enlargement” method. Specifically, they suggest “merging some procedural steps,” presumably to reduce the number of unanimous approvals needed to advance a candidate’s negotiations. Moreover, the paper endorses EU candidates participating in EU institutions and initiatives as they complete relevant accession chapters. For example, if a candidate is fully aligned with EU foreign policy decisions (Chapter 31), they could act as a non-voting observer on the foreign affairs ministerial council and benefit from defense industrial initiatives like PESCO (which coordinates joint ventures in defense tech). The paper also calls for Western Balkan heads of government to participate in summits of the European Council, the EU’s steering body, as non-voting members.
After the Tivat summit, a separate non-paper circulated by Germany, France, Belgium, the Netherlands, and Luxembourg endorsed a new “template” for modern Accession Treaties that will first presumably be applied to Montenegro. The template would allow a transitional period where new members cannot veto EU decisions requiring unanimity (i.e., foreign policy decisions like sanctions). Second, a safeguard mechanism could suspend a new member’s rights or funds due to democratic backsliding. Both of these measures, likely unpopular with frontrunner candidates, are intended to prevent a “Hungary” scenario in which a new member backslides on EU fundamentals (like an independent judiciary) or holds the bloc’s common foreign policy hostage to ad hoc demands. However, the details of such a transitional period and safeguard mechanism must be ironed out.
These non-papers offer a key political signal: That the EU’s oldest members are convinced that the bloc must accelerate the enlargement timeline, even if bending Treaty rules, to withstand the return of great power competition. Even France, traditionally a skeptic of EU enlargement due to fears of log-jamming the bloc’s (already inflexible) decision-making, appears to have arrived at this conclusion. German and French alignment suggests that “gradual enlargement” could shift the tempo of the debate, possibly steering the Western Balkans, Ukraine, and Moldova into EU initiatives within a few years. However, this does not mean a change in the process is guaranteed.
The Political Minefield of EU Enlargement: What to Watch
The main obstacle to EU enlargement is the cherished power of the national veto. All foreign policy decisions, from enlargement to sanctions, require unanimity. Each step in the accession process requires unanimous approval, enabling bilateral disputes to stall candidates. For example, Hungary under Viktor Orban vetoed even opening Ukraine’s EU negotiations due to his anti-Ukraine politics. The European Commission has hinted that it seeks to reduce unanimity votes in the EU accession process to allow negotiations to continue unimpeded, and to move more foreign policy decisions to qualified majority voting (55% of members comprising 65% of the population). Large players like France see this as a prerequisite to allow the EU to function with up to 35 members. However, small players view this as a violation of their Treaty rights that protect their interests, and moving towards qualified majority voting would itself require unanimity. The European Commission, unable to resolve this tension, has delayed a specific policy proposal since November 2025.
The politics of fund distribution could compel countries to wield their vetoes to preserve budget privileges. Nearly a third of the EU’s budget goes to Cohesion funds (€392 billion from 2021-2027), which supports productivity-enhancing investments, like infrastructure connectivity, to facilitate economic convergence between the EU’s most and least developed members. This money is currently directed mostly to Central and Eastern Europe: Poland received €76 billion in the latest budget, followed by Romania’s €31 billion and Hungary’s €22 billion. Due to these funds and supply chain integration, these countries have grown to about three-quarters of the EU average GDP per capita, adjusted for purchasing power. However, new members would redirect cohesion funds away from the current winners. Moldova’s GDP per capita sits at 30% of the EU average, Ukraine’s at 32%, and the Western Balkans at 40%. Farm subsidies, another third of the EU budget, would be redirected from winners like France and Spain to Ukraine due to its abundant farmland. Unless the pot grows—necessitating new EU taxes or larger member state contributions—current winners could leverage their veto to preserve their benefits from the EU’s redistribution schemes.
Beyond the budget problem, there is also a sequencing problem. Who becomes a member first? Montenegro is the leading frontrunner, and Iceland is also a contender if they vote to reopen accession negotiations in an August referendum (as a member of the Single Market, most of its reforms are finished). However, there is growing pressure to allow Ukraine to cut the line as part of a political settlement to end the war. Even Russia and the US have suggested openness to this through the November 2025 Witkoff-Dmitriev peace proposal. Doing so would require a change in accession rules, as Ukraine’s negotiations have not even been opened (although Hungary has signaled it will drop its veto). German Chancellor Merz proposed a new category of “associate membership,” where Ukraine can be admitted as a member subject to the EU’s mutual defense clause and Cohesion funds, but unlock voting and integration rights as they complete reforms. So far, no other member state has agreed to this proposal, and Kyiv has also expressed skepticism about this model.
Finally, there is a political problem. Germany and France are aligned in their vision of a larger and more flexible EU, but populists—wary of economic shocks, larger contributions to the EU budget, or the loss of the national veto—could either take power or leverage enlargement as a campaigning issue. For example, the National Rally could control the French Presidency in 2027, or a bruised centrist candidate could narrowly win and tactically abandon enlargement to command authority, freezing enlargement momentum. The same problem applies to Germany, whose governing coalition will be tested in regional elections in September. Beyond domestic politics, enlargement has constantly been struck off the agenda at EU summits as the bloc scrambles to respond to crises like the Iran war. Ironically, as much as enlargement is meant to strengthen the bloc’s geopolitical leverage over events, events continue to prevent decisive action.
The Risk Outlook
EU enlargement entails upside risks for multinational businesses. The expansion of the Single Market would harmonize regulations across Europe, allowing for the elimination of border checks, carbon tariffs, and capital restrictions. Industrial sites in the Western Balkans, Ukraine, and Moldova will become prime targets for investment and joint ventures, enhancing output and supply chain integration. For a country like Ukraine, this could be key to rebuilding its postwar economic capacity. However, there are some downside risks. Enlargement entails foreign policy alignment, potentially creating friction with the US, which is skeptical of the EU’s green regulations, fearing they could hinder gas exports to Southeastern Europe through Greece’s Vertical Corridor. The EU itself will not want a rushed enlargement including countries like Ukraine, which could create contagion effects. As mentioned, populists could campaign against enlargement, contributing to political instability in Germany and France, among other places.
