Europe matters, but in different ways in different countries. The European Union affects the policy fabric of all member states, but that impact is differential rather than convergent. In some instances, new policy goals have been added to national agendas and fresh policy instruments are applied, while old ones become less important or are openly challenged. In other instances, when European and national policy objectives are concurrent, national practices may be reinforced, or even redirected, by EU policies. In all instances, however, state actors reconsider national policy practices wherever the EU extends it activities. This innovative study solves the differential puzzle by developing a sophisticated theoretical and conceptual framework for studying the impact of European policies on member states. Focusing especially on transport policy, the authors employ extensive interviews and archival research in an empirically rich set of case studies (Britain, France, Germany, Italy, and the Netherlands) to demonstrate convincingly that this influence depends on pre-existing policies and institutional capacity to change. Depending on the particular phase of regulation in which a country finds itself and on its institutional flexibility, an identical EU policy has remarkably diverse impacts within individual member states. The authors' research points to fascinating counterintuitive results and a new general model that will have implications for anyone studying policymaking in Europe.