NATO vs EU: What Are The Differences?

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NATO (The North Atlantic Treaty Organization) and the EU (European Union) are two of the most important treaty-based organizations in Europe. Both are headquartered in Brussels, Belgium, but they have key differences in their purposes, structure, membership, and funding. In this article, you’ll learn what those differences are, as well as what NATO and EU do and how they work together.

NATO and the UN are both treaty-based organizations, but NATO is a military defense and security intergovernmental organization while the EU is a trade and finance intergovernmental organization. They also have different structures, members, and funding. 

What are the main differences between NATO and the EU?

NATO and the EU are frequently mentioned side-by-side in international news. Both are intergovernmental organizations with many Member States, but they have different purposes, structures, memberships, and funding.

NATO and the EU: purposes

NATO was created as a response to the aftermath of WWII and the weakening of ties between the Soviet Union and the Western Allies. Concerned with defense and security, several European and North American countries signed the North Atlantic Treaty in 1949. Its purpose? Serve as a guard against threats to freedom and peace in Europe. If one ally was attacked, NATO should consider it an attack on all allies. In addition to having a military purpose, NATO promotes democratic values and cooperation on security issues.

While the EU also has origins in WWII’s aftermath, the modern EU was founded through the Maastricht Treaty. In 1991, twelve member states gathered in the Dutch city to collaborate and debate their national concerns. The Treaty also paved the way for the Euro, the shared currency of the EU, and EU citizenship. Creating a single market ensured closer economic integration and success. The EU’s current form was established with 2007’s Lisbon Treaty, which clarified the Union’s powers and updated regulations. Like NATO, the EU promotes peace and freedom, but it focuses on the economy and financial sectors, not defense.

NATO and the EU: structures

NATO has civilian and military structures. NATO headquarters, the Permanent Representatives, National Delegations, and International Staff are in the civilian structure. NATO Delegations are the North Atlantic Council, the main political decision-making body and top of a network of committees, and the Nuclear Planning Group, which has the same authority as the Council regarding nuclear policy issues. The Secretary-General heads the International Staff and serves as NATO’s main spokesperson. The military structure is headed by the Military Commitee, which is made of the International Military Staff and the military command structure. This includes Allied Command Operations and Allied Command Transformation. While NATO doesn’t have its own standing army, it has a permanent, integrated military command structure made from all member states’ military and civilian personnel.

NATO also has organizations and agencies, including Support, Science and Technology, Civil Emergency Planning, Electronic Warfare, and more. NATO Headquarters (Brussels, Belgium) is home to member countries’ national delegations.

The EU, which is also headquartered in Brussels, Belgium, has seven major institutions and dozens of smaller bodies. The seven official EU institutions are grouped into executive, legislative, judicial, and financial functions. They are:

  • The European Council – The Council consists of the EU’s top political leaders, like the president or prime minister of each member state. Member states elect a president.
  • The European Commission – The Commission, which is the EU’s main executive body, proposes laws, manages the budget, issues regulations, and so on. Members are appointed by the European Council and approved by the European Parliament.
  • The European Parliament – This directly-elected EU body doesn’t propose legislation, but legislation can’t pass with its approval. It also negotiates and approves the EU budget and oversees the commission.
  • The Council of Ministers – As the EU’s second legislative branch, nothing can pass without this group’s approval. It’s made of government ministers (i.e. agricultural ministers, foreign ministers, etc) from EU members.
  • The Council of Justice of the European Union – CJEU is the EU’s highest judicial authority. It interprets EU law, settles disputes, and hears cases brought against EU institutions.
  • The European Central Bank – This bank manages the euro, implements the EU’s monetary policy, and helps regulate the EU’s banking system.
  • The European Court of Auditors – The ECA audits the EU budget and reports on any fraud.

EU countries cooperate on military missions, but they’re voluntary and there’s no standing army.

NATO and the EU: membership

At the time of its founding, NATO had 12 members: France, Belgium, Denmark, Luxembourg, the Netherlands, Norway, Iceland, Portugal, Italy, the UK, Canada, and the United States. Membership has expanded to 30 members. Who can join? Membership is open to any European state committed to advancing the Treaty’s principles and keeping the North Atlantic secure. The North Atlantic Council chooses what countries to invite. States must reach a consensus; there’s no vote. Several countries work with NATO on a partnership basis, though because they aren’t members, they don’t have decision-making power. Most of these countries aim for membership.

The organization that would become the EU had just six founders in 1957: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. The EU now has 27 member states: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. To join, members must meet conditions set by the “Copenhagen criteria,” which include a stable democracy, stable rule of law, and the acceptance of all EU legislation, including the euro. Candidates apply to the Council, which asks the Commission to assess the country. Negotiations come next, which can take a long time. Countries then have to integrate EU legislation into their national law. Several countries are in the process: Ukraine, Albania, Moldova, Montenegro, North Macedonia, Bosnia and Herzegovina, Serbia, and Turkey.

NATO and the EU: funding

Members can make direct and indirect contributions to NATO. The amount is calculated using an agreed-upon cost-share formula, which uses Gross National Income. The United States and Germany make the largest contributions (22% and 15% respectively). Direct contributions fund NATO budgets and programs benefiting all members, but indirect contributions make up the largest funds. They’re used when Allies participate in NATO-led operations. By volunteering their forces, the Allies take on the costs. NATO recommends that members spend at least 2% of their GDP on armed forces, but there’s no punishment if they don’t. The Resource Policy and Planning Board is responsible for NATO’S funding process, while the Budget Committee and Investment Committee implements the budget. In 2022, the civil budget was EUR 289.1 million and the military budget was EUR 1.56 billion.

EU members agree upon and finance the organization’s budget years in advance. Income comes from contributions from members, import duties on products made outside the EU, new contributions based on non-recycled plastic packaging waste, and fines gathered from businesses that fail to comply with EU rules. Like NATO, member contributions are calculated based on gross national income. This means wealthier countries pay more. In 2021, ten states paid more into the EU budget than they received. Germany was the largest net contributor with 21.4 billion euros. France came next (10.9 billion euros) followed by the Netherlands (4.1 billion euros). Before the UK left the EU in 2020, it was one of the top three countries that contributed the most.

How do NATO and the EU work together?

NATO and the EU have a complex relationship because while they focus on different spheres, they’re both focused on peace, freedom, and security in Europe. If they can’t work together, it threatens both of their missions. The two organizations have not always had much to do with each other. As an article from The Conversation describes, NATO and the EU had few ties because the EU didn’t have a defense component. That eventually changed, but because of the organization’s differences – NATO remained very focused on security while the EU was more open – there was still room for improvement. In the 2000s, relations grew stronger as NATO and the EU tried to promote more responsibility regarding defense. IN 2002, the NATO-EU Declaration on a European Security and Defense Policy solidified the EU’s access to NATO’s planning capabilities, which the EU needed for its military operations.

More formal arrangements were created. The Berlin Plus Agreement, which was a package of agreements negotiated from 1999-2002, increased the EU and NATO’s working partnership. There were seven major parts, including an arrangement that established procedures for releasing, monitoring, returning, and recalling NATO assets and capabilities. In 2016 and 2017, NATO foreign ministers endorsed a series of measures designed to improve how NATO and the EU work together. The measures included:

  • Increase resilience to hybrid threats, like disinformation campaigns
  • Exchange information on cyber threats and best practices on cybersecurity
  • Ensure coherent and complementary strategies on each other’s defense planning
  • Support the local capacities of partner countries on security and defense
  • Promote women’s roles in peace and security
  • Share information in the fight against terrorism

In 2022, NATO’s Strategic Concept named the EU as a “unique and essential partner” in its mission for international peace and security.

The future of NATO-EU cooperation

In recent years, the need for a strong partnership has become even more clear. NATO and the EU are increasingly sharing members (they now share 22 members), interests, and challenges, so it only makes sense to work together more. In January 2023, the EU and NATO voted to increase their cooperation in light of Russia’s invasion of Ukraine and Sweden and Finland’s plans to join NATO. As a quote from a Politico article says, the groups need to cooperate on “geostrategic competition, resilience issues, protection of critical infrastructures, emerging and disruptive technologies, space, the security implications of climate change, as well as foreign information manipulation and interference.” Historically, cooperation has been difficult due to different internal dynamics and the complexity of the issues at hand. NATO and the EU have their work cut out for them.