It has been suggested in recent years that EU policies towards Northern Europe could serve as a potential model for the EU’s relations with its other neighbours. This paper focuses on two particular EU policies towards non-EU members in Northern Europe: the Northern Dimension (ND) initiative and the European Economic Area (EEA), which are analysed in light of two broader themes: first, how the EU organises its policy towards its neighbours more generally and, secondly, the enlargement process and how the EU has attempted to develop alternatives to EU membership. The Northern Dimension could be a useful model for the European Neighbourhood Policy (ENP), in particular vis-à-vis the Eastern neighbours, although it must be recognised that the regional approach has played a limited role in confronting strategic challenges and resolving politically contentious issues in EU neighbourhood policies. The initial proposals from the EU for its European Neighbourhood Policy fall far short of the sort of relations currently existing between the EU and the three EFTA (European Free Trade Association) states in the EEA. The agreements with the erstwhile EU accession candidates of Central and Eastern Europe and the countries of south-east Europe could appear to provide more suitable models for the ENP than the EEA. However, the prospect of eventual EU membership is a fundamental premise underlying these agreements, which makes certain provisions and institutional arrangements acceptable to the associated states that might otherwise be found objectionable. This conundrum is likely to dominate the debate on EU neighbourhood policies for years to come.