As the 10th anniversary of the Brexit referendum approaches, and after years of vitriolic rhetoric, the rapprochement between London and Brussels now appears to be well and truly underway.
Talks on trade, tariffs and deepening defense integration are accelerating, with steady positive signals on both sides of the Strait in recent days. Perhaps officials on both sides are distancing themselves from the nostalgia trend that swept social media in 2016, with users embracing the “simpler times” of a decade ago.
But more likely it is a response to growing pressure on Britain’s ruling Labor Party, which has consistently trailed Brexiteer Nigel Farage’s right-wing populist Reform UK by several points, and to an increasingly hostile geopolitical environment that is upending the world order.
Momentum began to build in 2024 when newly elected Prime Minister Keir Starmer called for a “reset” of the UK’s trade and economic relationship with the EU. He has recently expressed enthusiasm for linking up with the single market in the hope of boosting Britain’s struggling economy and strengthening its defenses against global trade fluctuations.
Talks on trade checks and the removal of barriers are expected to intensify after a meeting in Downing Street on Monday between British Prime Minister Rachel Reeves and EU trade and economic chiefs Maroš Šefčović and Valdis Dombrovskis.
Mr Dombrovskis told the BBC after the meeting that the EU was “ready to participate” in talks to reintegrate the UK into the customs union. Mr Starmer initially rejected the idea, but is now under increasing pressure from several ministers to reconsider.
Brussels has always been clear that the UK cannot opt for privileged access to the single market without accepting the EU’s ‘four freedoms’ – complete freedom of movement of goods, services, capital and people.
Full reintegration into the EU’s single market also remains politically sensitive for Starmer, as accepting the free movement of people across the EU-UK border would impact on Reform UK’s anti-immigration platform.
The EU is reportedly negotiating a “Farage Clause” to be included in a future EU-UK deal. This would ensure that the EU receives adequate compensation if a Reform UK comes to power and withdraws from the deal negotiated by Labor.
A general election in the UK may not be held until summer 2029, but Reform Britain currently leads the polls.
“A new way to collaborate”
Spanish Prime Minister Pedro Sánchez told the New Statesman earlier this week that he supported Britain’s rejoining of the EU, saying it was “clear that we need to get Britain back into the EU”.
a transaction Last June, the deal reached between the Sánchez government and the UK regarding Gibraltar, a British overseas territory that remained in limbo after the 2020 Withdrawal Agreement, cleared a major hurdle to a broader EU-UK deal. The deal ended long-standing tensions between Madrid and London, leaving Brussels officials free to act and lead negotiations for a broader “reset” of relations with the UK post-Brexit.
On Tuesday, European Parliament President Roberta Messola called for new momentum in these negotiations in a speech to the Spanish Senate in Madrid.
“Ten years after Brexit, and with the world so changed, Europe and the UK need new ways to work together on trade, customs, research, mobility, security and defence, and more. This is about looking to the future and doing what makes sense for Europe and the UK today,” said the Maltese politician.
“It’s time to exorcise the ghosts of the past, reset our partnership and find solutions together. It’s pragmatic pragmatism rooted in values that will move us all forward together.”
stronger defense
Brussels and London also hope they can find a compromise to deepen defense cooperation and ensure Ukraine can buy the military equipment it needs using the EU’s recently agreed 90 billion euro loan, two-thirds of which is earmarked for military aid, including British-made systems.
Talks between the two countries to allow the UK full participation in the EU’s €150 billion Defense Financing Facility (SAFE) collapsed in November last year after failing to find a compromise on how much London should contribute financially.
Euronews understands that these negotiations broke down due to major differences between the two sides. The final proposal from the EU was around 2 billion euros, while the UK estimated it would have to contribute just over 100 million euros.
Mr Starmer told reporters during a visit to China over the weekend that the EU and UK should “work together more closely” on defence.
“It makes sense for Europe in the broadest sense, the EU and other European countries, to work more closely together, whether on SAFE or other initiatives,” he said. “That’s what I’ve been advocating and I hope we can make some progress on that.”
EU officials are currently grappling with how to involve third countries, including the UK, in the EU’s 90 billion euro common loan to Ukraine.
An EU diplomat told Euronews that the legal text governing the loan is expected to be approved by member states this week. The plan includes a so-called “Europe first” approach, with a majority of the 15 member states supporting proposals to require funding from third countries to join the plan.
This is particularly supported by France.
“France has never opposed Britain’s participation in financing Ukraine,” a French diplomat said. “Our only point is that third countries should also contribute financially. Otherwise they will be in a better situation than the EU member states themselves, which will be unfair.”
The EU will raise funds on the market and pay for the repayments, including interest. Contributions from third countries will be used to repay the interest, estimated at around 2-3 billion euros per year.
Currently, these costs will only be repaid by 24 of the 27 EU member states that have secured an opt-out: Hungary, Slovakia and the Czech Republic, with individual contributions likely to be calculated based on GDP.
Similar arrangements applying to third countries are likely to be much more favorable to London than those envisaged in SAFE.
