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The power to punish is traditionally seen as an essential prerogative of the national state. Over the last three decades, judicial and standard setting bodies of the Council of Europe (CoE) have sought increasingly, at a regional level, to monitor and control the power of European States to punish. In parallel, the European Union (EU) has become an increasingly important penal actor, fostering a common approach to transnational forms of criminality, as well as seeking judicial cooperation between EU Member States in order to deal with a wider range of crimes. Little attention has been paid, however, to the interactions, coherence or discrepancies between the CoE’s and the EU’s bodies and policies. Therefore, we analyse the inter-relationship of the CoE and EU penal and prison policies. We focus on the instruments that can be used to limit European states’ powers to punish, but also, particularly in the case of the EU, on countervailing forces resulting from policies conducted in the field of terrorism and from countries hit by populism. Finally, we develop the concept of ‘two Europes’, which encapsulates not only the discrepancies between the approaches adopted not only by the CoE and the EU towards human rights moderation of European prison and penal policies but also wider penal policy differences between a modern, liberal-democratic, humanistic Europe and a nationalistic Europe conducting harsh penal policies, increasing its margin of appreciation and using its sovereignty in order to avoid implementing such blurred policies.