First glance

The EU and the UK are doomed to cooperate

There are compelling reasons for the European Union and United Kingdom to put the adversarial period of Brexit behind them

Publishing date
30 January 2025
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Brexit was a traumatic divorce. When the United Kingdom left the European Union, it split from the single market and customs union, and left EU institutions and programmes. But it is less remarked that at a summit in April 2017, where EU leaders took a position on the negotiations over the UK’s withdrawal, a similarly adversarial stance was adopted, inspired by the idea of creating an example for any other countries that might consider leaving.

Since then, the threat of more departures seems to have faded. In Italy, Prime Minister Giorgia Meloni, once considered an ultranationalist, plays a constructive role in the EU. The plans of extremist parties to leave the euro and the EU have been dropped. In the UK, meanwhile, the government has to decide whether to make deals with the EU and drop some of its red lines now or face further depression of its dismal economic growth.

And then there is Trump. The liberal international rules-based order is under threat. Trump seems set on further undermining the institutions that promote free trade and agree common action to combat climate change.

In this context, the EU and the UK, whose leaders will meet at the Egmont palace in Brussels on 3 February, five years on from the UK’s formal departure from the EU, need each other more than ever to uphold common fundamental values. Substantive new arguments suggest the EU and the UK should start a new phase of deeper cooperation.

First, the Ukraine war and Trump’s threat that he will cut US support for NATO make the UK a prime partner for the EU. The UK is among the top nations in terms of its defence budget. It has a nuclear deterrent and one of Europe’s largest navies. It maintains a worldwide military presence and it is a permanent member of the UN Security Council. The UK has leading defence manufacturers and excellent intelligence capabilities. For all these reasons, the UK can make an essential contribution to the defence of Europe and in helping Ukraine’s reconstruction once the war is over.

Second, despite Brexit, the degree of economic integration between the EU and the UK is unmatched. More than half the UK’s imports originate from the EU and the UK is the EU’s second most important trading partner. The US represents more than 20% of the EU’s exports and almost 18% of the UK’s exports.

Both the EU and the UK face the threat of Trump’s tariffs and therefore have a heightened interest in trading more between themselves and formulating a common answer to American protectionism. For agricultural products, there would be huge benefits from aligning sanitary and phytosanitary standards and avoiding border controls. Other promising areas include trade in energy and avoiding the application of carbon border levies. The UK would of course also need to engage on EU priorities, such as fisheries. 

Third, both the UK and the EU suffer from low growth: 1.4% to 1.5% annually since 2000, compared to more than 2% for the US. Deeper trade integration can help remedy this structural problem, without the need for spending large and hard-to-find amounts of public money.

Fourth, the EU still relies on London-based central counterparties (CCPs) for clearing and settlement, the backbone of capital markets. The 2008 Global Financial Crisis showed that such dependence can be risky; continental banks suddenly faced increased margin calls and lacked the liquidity to meet them. The EU has tried to reduce dependence on the UK since Brexit, but lacks alternatives. The European Commission has had to extend recognition of the equivalence of these CCPs until 30 June 2028, so that EU banks can continue hedging interest rate and exchange rate risks in London. The EU therefore needs to work closely with the UK to prevent any repeat of the turbulence of 2008.

Fifth, the EU and the UK can lead a coalition to maintain climate ambition and reinforce cooperation with large emitters in the developing world, including through climate financing. The same applies for the development of clean energy, such as wind energy in the North Sea.

These considerations suggest that it is time to leave the adversarial period of Brexit behind. The EU should reflect on whether the principles it laid out in 2017 can be modified given the new environment. The UK must maintain the EU’s confidence by correctly implementing the Withdrawal Agreement, which is the basis for further agreements. The UK should also recognise its interest lies with the EU; the ‘special relationship’ with the US, especially under Trump, is an illusion.

The 3 February leaders’ meeting is an opportunity for a new start. In an increasingly dangerous world, the EU and the UK are doomed to cooperate. 

About the authors

  • Ignacio García Bercero

    Ignacio García Bercero joined Bruegel as a Non-resident fellow in September 2024.

    Active at the European Commission since 1987, he participated in the Uruguay Round negotiations and was subsequently posted in the EU Delegation to the United Nations in New York. Upon his return to Brussels he worked in the preparation of what eventually became the Doha Development agenda and was head of unit for legal affairs and WTO dispute settment. 

    From 2005 until 2011 he was Director responsible for the areas of Sustainable Development, Bilateral Trade Relations (South Asia, South-East Asia, Korea, Russia and ex-CIS countries, EuroMed and the Middle East). He was also the Chief Negotiator for the EU-Korea and EU-India Free Trade Agreements. From 2012 he was responsible for overseeing EU activities in the field of Neighbouring countries, US and Canada and was Chief negotiator for the Transatlantic Trade and Investment Partnership.

    Mr García Bercero has written several papers and publications on WTO matters, including WTO reform, Dispute Settlement, Competition Policy and Regulatory Cooperation

    In 2020 he has completed a Fellowship at Saint Anthony’s College Oxford where his research focused on WTO reform. Since 2021 he is Visiting Professor in the Department of Political Science of the University College London and Visiting Senior Fellow at LSE Ideas, London School of Economics and Political Science.

    Mr García Bercero holds a Law Degree from the Law Faculty of Universidad Complutense, Madrid and a Master of Laws Degree (with Distinction) from University College, London.

  • Hans Geeroms

    Hans Geeroms was Senior Advisor for EU Affairs at the National Bank of Belgium until August 2024. As such, he was a member of the Economic and Financial Committee of the EU and of the International Relations Committee of the ESCB. He was the Co-chair of the EU-UK Network, gathering the ECB and the 27 National Central Banks to analyse the consequences of Brexit for the EU and its member states.

    He was EU adviser to two Belgian Prime Ministers and worked for the European Commission on the enlargement of the EU, financial support for future member states and approximation of legislation.

    Hans is Emeritus Professor of  the Katholieke Universiteit Leuven where he lectured EU economic policy and International Economics. He is a visiting professor at the College of Europe where he teaches EU macro-economic policy.

    His main fields of interest include: EU-UK relations, EU’s macro-economic policy, financial regulation and the EU’s budget. He has published extensively on these topics and is the author of a textbook on the crisis of the Eurozone and its impact on the EU’s economic governance and one on International Economics.

    Hans Geeroms holds a PhD. in economics from the Katholieke Universiteit Leuven.

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