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In 2004, the European Union adopted the European Neighbourhood Policy (ENP)[1] to support its partners’ political, economic and social reform processes and to deepen bilateral relations with them. Today, Commission reports on the progress achieved by the first partners to have agreed ENP Action Plans with the EU: Ukraine, Moldova, Israel, Jordan, the Palestinian Authority, Tunisia and Morocco – during the first eighteen months of their implementation.

France and Germany on Thursday (12 March) agreed that the emphasis at the upcoming G20 meeting in London should be on greater financial regulation and rejected calls coming from the US to increase spending as a way to deal with the crisis. During a meeting of their cabinets in Berlin, the two countries "underlined their determination to pursue and strengthen the co-ordination of their economic policy in the face of the financial and economic crisis and to work together so that such a crisis does not reproduce itself," reads a joint declaration of German Chancellor Angela Merkel and French President Nicolas Sarkozy.

For the first time ever, the president of the European Commission joined the Munich security conference over the weekend, a meeting of European, US and Russian leaders.

"I believe this is the first time a president of the European Commission has been invited to speak at the Munich Security Conference. Could this mean the Commission is thinking of strengthening its divisions of bureaucrats with those of the military kind? Or in fact does it mean that the security dimension is widening beyond its hard military core?" Mr Barroso said in his speech, sent to the media in a press release.

The EU on Monday (26 May) admitted there may be some delays in the deployment of its mission to Kosovo, but insisted they would not be "dramatic."

But question marks over the divisions of power between the UN, the EU and the local authorities, as well as over the mission's legal basis, seem likely to delay the process. "I believe EULEX could be operative on the field after the summer – September and October," Italian foreign minister Franco Frattini said after a meeting of the EU's foreign ministers in Brussels, according to Reuters.

Bosnia to sign pre-accession deal in June On Monday, the bloc's foreign ministers also announced that a pre-accession deal with Bosnia and Herzegovina would be signed on 16 June, after a two-month delay mainly due to translation issues.

Serbia achieved a long proclaimed foreign policy goal earlier this week when it signed a pre-membership pact with the European Union in Luxembourg.But though this was declared a priority when the isolationist rule of Slobodan Milosevic ended in 2000, both the content and the timing of the Stabilisation and Association Agreement (SAA) has brought deep controversy.

Some leaders have seen the agreement as triumph. "This is a historic moment for Serbia," foreign minister Vuk Jeremic said after deputy Prime Minister Bozidar Djelic signed the SAA with the EU's enlargement commissioner Olli Rehn and foreign ministers of all 27 EU nations. Jeremic and Djelic belong to the Democratic Party (DS) of Serbian President Boris Tadic, who also attended the ceremony. The DS was part of the coalition government led by conservative outgoing Prime Minister Vojislav Kostunica from the Democratic Party of Serbia (DSS). The DSS wants all ties with nations that recognised Kosovo to be cut. Besides the 17 EU countries, that would mean also the United States and other countries.

It notes that the 27-nation bloc continues to achieve results and "integrate" using intergovernmental bodies such as the European Defence Agency and through new laws such as those on liberalising the energy market in Europe or the Emissions Trading Scheme. But the paper suggests that the EU would be "much better off" with the Lisbon Treaty - already ratified by 23 member states - as it would clear up the "dreadful arrangements" for managing EU foreign policy, currently a mishmash of personalities and responsibilities.

Polish President Lech Kaczynski on Tuesday (1 July) toned down his rhetoric against the Lisbon treaty, with the French EU presidency also downplaying the mini-crisis and analysts saying Mr Kaczynski's stance is a bargaining tool for foreign policy concessions.

Mr Kaczynski is fighting to win oversight powers on Polish government behaviour in EU negotiations and to get government approval to host a US missile shield. The Lisbon row also generates momentum for his flagging conservative opposition party, as campaigning slowly begins for the 2009 European Parliament elections. "If Lech Kaczynski signs the treaty it will be a victory for [Polish liberal Prime Minister Donald] Tusk. So the president wants his own victory by winning concessions from the liberals," Polish Institute of Political Sciences analyst Kazimierz Kik told AFP.

This Living Review deals with the division of competences between the EU and its member states in a multilevel political system. The article summarises research on the relations between the EU and the national and sub-national levels of the member states. It provides an overview on normative and theoretical concepts and empirical research. From the outset, European integration was about the transfer of powers from the national to the European level, which evolved as explicit bargaining among governments or as an incremental drift. This process was reframed with the competence issue entering the agenda of constitutional policy. It now concerns the shape of the European multilevel polity as a whole, in particular the way in which powers are allocated, delimited and linked between the different levels. The article is structured as follows: First of all, normative theories of a European federation are discussed. Section 2 deals with different concepts of federalism and presents approaches of the economic theory of federalism in the context of the European polity. The normative considerations conclude with a discussion of the subsidiarity principle and the constitutional allocation of competences in the European Treaties. Section 3 covers the empirical issue of how to explain the actual allocation of competences (scope and type) between levels. Integration theories are presented here only in so far as they explain the transfer of competence from the national to the European level or the limits of this centralistic dynamics.

With Serbia determined to reject the UN plan for Kosovo, the European Union has conceded it may postpone planned consultations on the plan until a new government is formed in Belgrade. An EU delegation to Belgrade, led by foreign policy chief Javier Solana, enlargement commissioner Olli Rehn and German foreign minister Frank-Walter Steinmeier, and separately Britain’s Europe minister Geoff Hoon, gave ground on February 7 after meeting Serbia’s president Boris Tadic, Prime Minister Vojislav Kostunica and Foreign Minister Vuk Draskovic. After urging them to form a democratic government and take part in planned consultations over the Kosovo’s final status, they indicated they might push back the timetable.