Often overlooked in general policy journals, European Union (EU) social policy has gone through a remarkable expansion in the 1980s and 1990s. Some even argued that it was laying the foundation for a European welfare state. Through a brief review of its development and role in European integration theory, this article will argue that, despite its expansion, EU social policy lacks vital financial and political muscle to significantly affect national welfare regimes and create a European welfare state. Moreover, its broad guidelines and flexible implementation may even encourage national social policy diversification rather than harmonization. Following this conclusion, the article will briefly speculate on the future of EU social policy and social policy research.