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Because functionally the EU is a federation rather than a single entity. It’s a way of ensuring some common standards while still maintaining independence (exactly like the fediverse). In order for an EU passport to work, countries outside of the EU would need to recognize all countries in the EU as a single entity. That’s where it gets complicated.
It's not complicated. This is just for the cover of the passport. Our passports already have the "European Union" words, but each country has a different style.