As 2025 begins, the United Kingdom and the European Union are signaling a fresh start in their often-fraught relationship. UK Prime Minister Keir Starmer has accepted an invitation to an informal EU summit early in the year, marking the first such engagement since Brexit negotiations ended in 2020. This meeting, centered on defense and security cooperation, highlights a mutual recognition of shared challenges in a turbulent geopolitical climate.
A Shift in UK-EU Dynamics
Geopolitical instability has catalyzed renewed engagement between the UK and the EU. Conflicts in Ukraine and the Middle East, combined with growing tensions involving China and North Korea, have underscored the need for collaborative defense strategies. Adding to these pressures is the uncertainty surrounding NATO’s future, particularly with Donald Trump’s return to the White House, which raises questions about the alliance’s reliability and potential trade tariffs.
For the EU, Brexit meant the loss of one of its largest economies and most capable militaries. Conversely, stepping away from the EU has diminished the UK’s global influence. Starmer’s Labour government, elected in mid-2024, sees a closer partnership with Europe as an opportunity to address pressing domestic issues, including migration, economic recovery, and security.
Labour’s Ambitious Reset
Under Starmer, the Labour government has prioritized mending ties with the EU. Starmer has referred to this initiative as an “ambitious reset,” underscored by active diplomacy. Key figures like Chancellor Rachel Reeves and Foreign Secretary David Lammy have engaged with their EU counterparts, and Starmer himself has met with European Commission President Ursula von der Leyen.
The Labour government seeks pragmatic collaboration without reopening divisive Brexit debates. Their focus includes cross-border trade, energy security, and defense cooperation, aiming to align with European objectives while maintaining regulatory independence.
The Economic Imperative
Economically, the UK’s challenges are significant. GDP growth stagnated between July and September 2024, and Labour’s tax policies, including a £25 billion hike in National Insurance contributions, have faced criticism for potentially stifling recovery.
Despite these obstacles, long-term projections are cautiously optimistic. The Centre for Economics and Business Research (CEBR) predicts that the UK will remain the world’s sixth-largest economy by 2039. Moreover, the UK’s economy is expected to outperform those of Germany and France in the coming years, narrowing the gap with Germany and achieving a size 25% larger than France by 2039.
Labour has also prioritized growth through planning reforms and public investment. Initiatives to increase housing construction and modernize infrastructure aim to resolve long-standing inefficiencies in the UK economy.
Defense and Security: A Shared Priority
The evolving security landscape makes defense cooperation a cornerstone of UK-EU relations. Russia’s ongoing war in Ukraine, supported by allies like Iran and North Korea, has reshaped Europe’s defense needs.
The UK, with its robust military capabilities, remains an essential partner for EU security initiatives. Starmer’s participation in February’s summit signals the UK’s readiness to contribute to collective defense, especially as NATO’s future remains uncertain.
Regulatory Reform for Growth
Labour is also pushing regulatory reforms to stimulate economic growth. Starmer has tasked bodies like Ofgem and the Financial Conduct Authority (FCA) with proposing reforms to foster a pro-growth environment while respecting their independence.
Critics, however, warn that excessive deregulation could undermine market stability. Balancing these reforms with investor confidence will be crucial for Labour’s economic strategy.
Public Opinion and Freedom of Movement
Polling indicates that public sentiment in both the UK and EU is more favorable toward stronger ties than official policy might suggest. A recent survey by YouGov and Datapraxis revealed that 50% of UK respondents view closer EU engagement as beneficial for the economy, while 68% support reintroducing freedom of movement for single-market access.
Although Labour has ruled out rejoining the single market or restoring free movement, targeted agreements could provide middle-ground solutions. Youth mobility schemes or mutual recognition of professional qualifications are potential areas of compromise.
The Path Forward
The UK-EU reset offers significant opportunities but also comes with risks. Closer ties could facilitate solutions to shared challenges like trade barriers and regional instability. However, both sides remain cautious, with the UK unwilling to relinquish regulatory autonomy and the EU hesitant to make major concessions.
For Labour, success in these negotiations is tied to its domestic agenda. Achieving economic growth, improving public services, and managing migration all depend on fostering a productive relationship with Europe. Yet, the government faces political risks, including backlash from Brexit supporters wary of perceived concessions to the EU.
Turning Rhetoric into Action
While the UK and EU have expressed goodwill, meaningful progress requires more than symbolic gestures. Both sides must prioritize tangible benefits in trade, defense, and energy cooperation. By focusing on shared goals and embracing compromise, this reset has the potential to redefine UK-EU relations for the better.
