Euro-Mediterranean relations have been shaped by the EU’s neo-functionalist approach to pacify, stabilise and govern the Mediterranean region through the expansion of its own norms, laws and standards and the integration of sectors. Trade liberalisation based on neoliberal considerations has been at the core of the economic development policies promoted by the EU. After the Arab uprisings, the European Neighbourhood Policy has been still trapped in neoliberal paradigms and the idea that Europe’s experiences are a lesson for all. Expert analyses as well as the policies and instruments developed have exclusively focused on elites and formal institutions and have largely ignored the vast sphere of informality which has emerged and infused all sectors of life. This paper focuses on informality as a central element of neo-authoritarian governmentality. It suggests that policies towards the southern neighbourhood need to re-evaluate the effects of neoliberal reforms, include informal relations on all levels of state and society into its policy considerations and rethink the indicators measuring change and development.