The writer is managing director for Europe at Eurasia Group
The European Commission’s “list of demands” that Sir Keir Starmer must address to improve the UK-EU bilateral relationship shows how much the bloc needs to rethink its approach to Britain and Brexit.
The Labour government has already done so. The European Political Community meeting at Blenheim Palace in July provided the perfect platform for Starmer to advance phase 1 of his EU “reset” — restoring trust after the antagonistic relationship with the Conservative government. Phase 2 involves scoping out policy areas of common interest and phase 3, hammering them out.
Senior Labour officials hope that a deal on a security pact, given the UK’s heft on defence and intelligence, will provide a big opening offer that allows the EU to respond by reducing trade barriers.
In public, the EU welcomes Starmer’s constructive approach. There is appetite to co-operate on security and defence. Yet in private many senior EU officials remain stuck in 2016, emphasising the third-country status of the UK and the EU’s opposition to cherry picking and to mixing security and trade. This suggests an unwillingness to seize the opportunities of a Starmer-led Britain.
Today’s context is different. The EU’s stance in 2016 was driven by the fear that a sweetheart deal for the UK outside the bloc would set a precedent. Thanks to the political chaos and economic challenges of Brexit, that risk no longer exists; European populists of all stripes no longer advocate exit.
This should create more political space for creative thinking. So should Labour’s approach to the EU. While Starmer has ruled out rejoining the customs union or single market, his party has few hangups over dynamic alignment with EU standards, the level playing field or the role of the European Court of Justice in policing new agreements.
Things Labour is ready to consider include a visa scheme for EU nationals aged 18 to 30 — an early priority for Brussels. The EU will probably seek an early review of fishing quotas to secure continued access to British waters which, though politically difficult, will be a less symbolic issue for Labour than it was for the Conservatives.
These concessions should address the deep-seated reservations of France, one of the tougher member states, by showing that a Labour government is willing to give up some sovereignty to get closer to the EU.
While Starmer will not accept all of the elements of the single market, such as free movement of labour, he will accept some. The EU needs to respond in kind. Accepting more obligations should confer more rights. While senior EU officials acknowledge this, they still have no settled view on what additional market access a Starmer offer should secure.
The geopolitical context also points to the need for more European ambition. A return to the White House for Donald Trump could fundamentally weaken US commitment to Nato and European security. Russia’s invasion of Ukraine has seen the return of large-scale war to the continent. This has spurred a willingness to revive enlargement as a foreign policy tool — and implement it more innovatively. Ukraine is now being progressively integrated into parts of the single market rather than being forced to swallow the acquis communautaire — the body of common law — wholesale, showing that the EU can prioritise politics, and think creatively, when it wants to.
More security and defence collaboration between the EU and UK, including over defence industrial policy, makes perfect sense. But improving the trading relationship is also key. The big fear in senior Labour circles is that the EU will pocket a defence deal to benefit from the UK’s military muscle, without giving much in return. Yet ultimately, the two sides will only be safe if their economies are growing as robustly as possible and generating the resources that will enable them to remain secure.
Poland and the Baltic and Nordic states, which see the existential threat to liberal democracy of the military crisis on Europe’s eastern border, need to help make this bigger case.
No one in Europe is keen on a formal renegotiation: the idea that the review of the Trade and Cooperation Agreement in 2026 is the best way to address the core economic relationship is wrong. This reset needs to be political, not technocratic or legalistic.
Starmer and Commission President Ursula von der Leyen should prepare an ambitious political declaration for their first summit in the coming weeks. It should prioritise foreign and security policy. But Brussels should not fear an upgrade to the core trade and economic relationship. As on security, this would be to mutual benefit. The zero-sum game of UK-EU relations since the 2016 referendum is finally over; the EU needs to recognise that closer co-operation is a win for both sides.
Read the full article here
