In 1995 the newly enlarged European Union has proved to be capable to handle its problems and to take decisions in a large array of issues. The EU tried to cope with unemployment, continued the preparation of the third stage of the Economic and Monetary Union, adopted its 1996 budget decisions relatively smoothly, and intensified its relations with different parts of the world. On the other hand however, enlargement itself is increasingly affecting the Union as it preparing itself for the upcoming accession of some of its Central European and Mediterranean neighbors. The northern member states look with some suspicion at the budgetary consequences and already show a lot of restraint in paying more to the EU-budget, for the sake of their southern counterparts. Some member states are looking for a balanced enlargement in which the eastern enlargement would be counterbalanced by a Mediterranean one, and for a balance in the financial support that is provided by the EU to third countries. The biggest issue is however, the institutional adaptation of the European Union to a new enlargement. The preparations of the 1996 Intergovernmental Conferencethat took place in 1995, have shown however, that this process will be a difficult one. With the 1995 enlargement, the European Union has increased the number ofmember states that perceive the process of European integration primarily as an economic one. This will make institutional adaptations more difficult and risks to paralyze the Common Foreign and Security Policy of the Union even more than it already did in the past few years. Stated differently, 1995 has left a number of question marks on the EU's future. Whether these will disappear soon, 1996 will show.