UK and EU look to 2025 as year of redefinition, but little room for trade-offs

In early 2025, Prime Minister Sir Keir Starmer has been invited to an informal summit of EU leaders. It is the first such invitation for Britain after the bitter days of Brexit negotiations.

The focus of the February meeting is future security and defense cooperation. Background: The unstable situation in the world from Europe’s perspective.

Wars are raging in the Middle East and Europe – with Russia being aided by Iran, North Korea and China in attacking Ukraine.

Adding to the uncertainty prevailing across the continent, Donald Trump is set to re-enter the White House.

He has threatened Western solidarity with his pledge to impose punitive tariffs on imports – a major concern for the EU and Britain – and to potentially walk away from NATO, the transatlantic defense alliance on which Europeans rely for security. Since its establishment after World War II.

These threats to security and trade revenues have helped remind the EU and the UK of their shared values ​​in unprecedented times.

In 2016, Brexit left the EU feeling weakened. This meant losing a large economy and its only significant military power other than France.

As for post-Brexit Britain, which is now free from the constraints of EU membership, it is now also a much smaller power on the world stage.

And, closer to home, the Labor government has recognized that Europe is vital to delivering on a number of priority promises to the British people.

Mark Leonard says, “The economy, defence, migration… there’s a European element to all of this, making EU relations vital to the whole government agenda. The things that will make this government successful are being connected to Europe.” Are.” Director of the Council on European Foreign Relations.

Labor has repeatedly promised an “ambitious reset” of EU–UK relations.

There has been a lot of shuttle diplomacy and symbolism since she won the general election in the summer.

Foreign Secretary David Lammy attended a meeting of EU foreign ministers, Chancellor Rachel Reeves spoke at a summit of EU finance ministers, and the Prime Minister sat down with EU Commission chief Ursula von der Leyen. Went to Brussels for.

But what does this “reset” actually mean? What can we expect in 2025?

Could the UK government allow some freedom of movement in return for economic benefits on EU trade?

An EU-UK summit is planned for the spring, and several political figures and high-level diplomats from EU member states and the UK spoke to me on condition of anonymity before the start of bilateral talks.

I keep hearing about the “huge amount of goodwill” in the EU towards the oft-repeated “reset” enthusiasm of the new Labor government.

At the same time, however, there is a clear note of skepticism from Brussels that the Labor government must address if it wants to see concrete results.

“The headspace is there. There is an appetite in Europe for closer ties to the UK,” one EU person told me.

“It is less clear what London is really interested in – and what compromises it is willing to make to get there. This is important and does not appear to have been finalized in London yet.”

The defense and security arrangements I mentioned are the proverbial “low hanging fruit” as far as the EU-UK reset is concerned.

It is relatively easy to formalize what is already happening: for example cooperation on Russia sanctions, as well as military and defense capabilities, is already being discussed inside NATO and on countering cyber attacks and attacks on key installations. How to best protect Europe against. Like energy infrastructure in the North Sea.

This is seen as a win-win agreement.

And there is no proposal to make any defense agreement legally binding.

Here the Labor government does not have to worry about being seen as an attempt to “roll back Brexit” by the political opposition or by those in Britain who voted for Leave. And it is vulnerable to this potential charge.

But Labor has also made promises on trade and the economy: to “make Brexit a success” and to “break down” the trade barriers imposed by Brexit. The Office for Budget Responsibility believes that Brexit would cause the UK economy to lose 4% of GDP in the long term.

Labor wants to avoid this, but it is not as straightforward as it might seem.

EU figures say they are confused by the UK government announcing an “ambitious” reset while insisting on maintaining restrictive red lines after Brexit.

A recent working paper setting out the EU’s interests said Britain’s refusal to re-join the EU customs union or single market, or to accept the free movement of people, would lead to “limited action on the proposal”. There were economic benefits.

Some in the EU suspect that the UK government believes it can get a quid pro quo on trade for defence. They say, that’s never going to happen.

“If Britain thinks it can use the agreement on defense as a backdoor way to get a good deal with us on trade then it is wrong,” an EU diplomat told me.

“For us, it’s like being in a strange tug-of-war. The EU has the devil on one shoulder and the angel on the other. In terms of values, there is much more that unites us than what divides us with the UK. ”

“The EU wants to take action to bring the UK closer, but on the other hand, we cannot remove the technical nuances that are the foundation of the EU. We cannot make special deals, even if this limits relations with the UK. with.”

To see significant improvement in economic relations, both sides will have to make compromises.

In Brussels, there is no desire to tear up the TCA – the trade agreement already in place between the EU and the UK. But you detect the openness of the EU to start negotiations together on different economic areas.

One EU diplomat insisted, “We can walk and chew gum at the same time.”

There is also an acknowledgment from the UK that regional agreements may involve harmonizing EU rules in those areas.

The key to any deal Labor strikes with the EU going forward will be: can they sell the result as a victory for the British public back home?

The EU will push hard for long-term fishing rights in UK waters.

It also wants a youth mobility scheme, which would allow 18-30 year olds to work and/or study in the UK or EU for up to three years, paying local fees at university if they choose the study option.

The UK government says there will be no return to freedom of movement with the EU.

Migration is a burning issue. But it is notable that Labor has not outright rejected the youth plan. He has only said that he has “no plans” to do so.

On youth mobility, the assumption is that more EU citizens than UK citizens will take advantage of the youth mobility scheme due to language barriers.

But the UK Government could use the mobility scheme requested by the EU and/or the openness in the fishing agreement as leverage to negotiate something important to UK interests, such as mutual recognition of professional qualifications, which would be cross-Channel. Makes business easier, or makes mobility easier. UK artists and entertainers will travel to the EU.

Both of these were listed as priorities in the Labor election manifesto if the party came into government.

Labor also wants to press ahead on a veterinary agreement with the EU to reduce barriers to trade in food and agricultural products. This will require the UK to align with EU animal and plant health rules.

Both the EU and the UK are interested in better cooperation and coordination on energy and climate.

Sir Keir also described it as a priority.

Linking carbon emissions trading schemes, as the EU does with many other countries, would mean the UK would avoid the implications of the EU’s Carbon Border Adjustment Mechanism (CBAM) – UK businesses fear the costs of this. .

Removing post-Brexit barriers to electricity markets would save EU and UK consumers €44bn (£36bn) by 2040 and reduce investment costs in North Sea wind by 16%, according to Baringa business consultancy.

The North Sea Basin includes the UK and EU member states Belgium, Denmark, Germany and the Netherlands, and single market member Norway. It is one of the world’s most promising areas for offshore wind.

On illegal migration, the EU says it is ready to cooperate more closely with Britain. He wants Britain to take more action against people working in the country illegally.

France complains that the ease with which it says irregular migrants can disappear and earn a living is a major factor in the decline of economic migrants to the UK.

The European Union has ruled out that Britain will be able to deport migrants who arrive illegally on small boats to its shores back to the EU countries from which they originated.

Any developments in EU-UK relations in 2025 and beyond are likely to happen slowly due to political concerns and because negotiations tend to get bogged down in detail.

In sharp contrast, a recent survey by YouGov and Datapraxis for the European Council of Foreign Relations shows that EU and UK voters are more likely than leaders in Brussels and London to move past political taboos in order to strengthen ties. Far more excited.

The survey found that almost half of those asked in Britain believe greater engagement with the EU would help boost Britain’s economy (50%), strengthen its security (53%) and migration (58%). The best way to manage it effectively.

When asked with whom the UK government should prioritize relations, 50% chose Europe and only 17% chose the US.

68% of respondents in the UK see benefits in reintroducing cross-Channel freedom of movement in exchange for access to the European single market.

The desire for cooperation, and the willingness to abandon previous red lines, is also mutual in Europe.

Majorities of voters in Poland (54%) and Germany (53%) – and prevailing opinion in Spain (43%), Italy (42%) and France (41%) – believe the EU should leave Britain Special access should be granted to certain parts of the European single market to ensure a closer security-based relationship.

Geopolitical threats and uncertainties appear to be dramatically changing public opinion. Will the political class in Britain and the EU want this to continue?