Scholars and politicians alike agree that the EU is the epitome of modern international cooperation – and is a triumph of formal institutionalism in international relations. Yet, at its very core lies a troubling puzzle: governmental behavior in decision-making bears little resemblance to its formal rules. Does this mean realists are correct when they view institutions like the EU as phony? What, if not formal rules, explains patterns in EC decision-making? My central thesis is that the behavior we observe has been largely induced by informal institutions, which governments construct around formal rules according to informed, issue-specific imperatives. They are functional in nature, even when they are informal and adaptive. I shall argue that these informal institutions solve the dilemma of uncertainty, that is, the increase in domestic uncertainty in response to international economic cooperation – a trade-off that may confront governments with domestic recalcitrance and induce noncompliance. These informal institutions permit governments to close gaps of political support by regularly accommodating legitimate preference outliers in expectation of equal treatment. In short, the seemingly imperfect deviations from formal rules are in fact optimal in that they sustain the EU’s self-enforcing domestic conditions in such a way that formal rules do not permit. The result of this diffuse reciprocity is a solid basis of political support, low levels of non-compliance, and a subsequent deepening of cooperation that is without equal.