"The European Union entered a new phase of integration in 2002. The single currency, the European Convention, and enlargement signalled progress. The conflict over the Stability and Growth Pact, the tensions between the member states, and the political turmoil in a number of core countries suggested retreat. This paper examines the resulting pattern of integration. It argues that the European Union is becoming more legalistic than leader-oriented, and that it rests on common principles rather than accepting the imposition of some grand design. Such a European Union cannot challenge the United States for global leadership. But it is likely to prove stable nonetheless."

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