Under what conditions can the European Neighbourhood Policy (ENP) achieve one of the objectives of the European Union (EU): to resolve conflicts in its neighbourhood? In the spirit of Montesquieu and Monnet, the basic hypothesis of the EU is that closer economic integration helps resolve political conflicts and vice versa, creating a virtuous circle of prosperity and detente. The EU has a strong self-interest in resolving conflicts in its neighbourhood since their consequences spill over into the EU itself through refugee flows and trans-border criminal activities. The paper identifies factors important for the neighbourhood countries to succeed: access to active facilitators of compromise, a well-functioning market economy, strong common institutions to realise potential intra-regional free trade, the prospect of accession to the EU and the absence of third parties to the conflicts. However, characteristic of the key conflicts in the European Neighbourhood is that few of the parties are prospective members of the EU and that a third party outside the Partnership is involved in major conflicts. To succeed in conflict resolution, the EU must, therefore, provide these parties significantly stronger arbitration, more technical and financial resources and stronger institutions anchoring the partner country to the EU. This applies to conflicts involving partners in the Eastern Partnership as well as in the Mediterranean Partnership.