This paper presents an analysis of recently adopted EU policies on fragile states. While the European Union has incorporated governance issues into its strategies for fragile states, its approach to governance has a highly technocratic character, with a strong emphasis on public sector reform and public finance. This approach, the paper will argue, is in stark contrast with the increasing awareness in the donor community of the political-economic dimensions of governance reforms. In particular, the EU’s failure to take cognisance of the lessons formulated by the World Bank on the application of political-economy and conflict analysis is highly surprising.