Brexit ten years on: the EU

Ahead of the ten year anniversary of the EU referendum on 23 June, UK in a Changing Europe experts have written a short series of blogs reflecting on some of the issues at the heart of Brexit then and now. Here, Jannike Wachowiak reflects on Brexit’s impact on the EU.

The outcome of the 2016 referendum took many in the EU by surprise. Shocked at first, member states quickly closed ranks. Within a week, EU leaders agreed that there would be ‘no negotiations of any kind’ with the UK until Article 50 had been triggered. This was to prevent the British side from attempting a strategy of ‘divide and conquer’ whilst giving the EU time to define its negotiating position. Leaders also made it clear that access to the single market required the acceptance of all ‘four freedoms’ (goods, services, capital and people) and that any future agreement would have to strike a balance between rights and obligations. This was to signal that the UK would not be allowed to pick and choose when it came to access to the single market.

Ten years later, these principles still hold: the EU remains wary of offering the UK market access on conditions which could be interpreted as more lenient than those offered to other partners, let alone member states. In the autumn of 2024, in response to the Labour government’s stated ambition to ‘reset’ the relationship, the EU organised a series of strategic discussions which confirmed the validity of the 2017 European Council guidelines, including the wish to have the UK as a close partner whilst being clear there can be no ‘cherry picking’.

What has changed, however, is the level of attention being afforded to the UK. Back in 2016-2020, Brexit dominated one European Council summit after another. Today, relations with the UK no longer feature prominently on the EU’s list of priorities. The war in Ukraine, relations with the US and China, and the competitiveness of the single market have long replaced Brexit at the top of their agenda.

None of which is to say that the EU is not interested in closer relations with the UK.

There is a recognition that times have changed since the TCA negotiations of 2020, and that the UK is an important partner in a more dangerous world. The Commission’s 2024-29 political guidelines make it clear that the EU wants to strengthen relations ‘on issues of shared interest, such as energy, security, resilience and people-to-people contacts’. Conspicuously absent from this list is trade. More than five years into the application of the Trade and Cooperation Agreement, the Commission’s assessment maintains that it is a ‘very good’ agreement for the EU.

This matters more to some than others, as a function of geographical proximity and the importance accorded to bilateral relations. The German government, with its recently ratified British-German ‘friendship treaty’, has been an advocate of all-round closer relations. The Baltics and Nordics are interested in closer defence ties and would have liked to see UK participation in SAFE.

In other cases, it is more complicated. While Franco-British bilateral ties have gone from strength to strength in recent years, France has been fairly uncompromising when it comes to plugging the UK back into the EU. The French vision for a more self-reliant EU (often encapsulated in the phrase ‘strategic autonomy’) favours strengthening domestic industries (i.e. EU and, often, French) even if this means shutting out UK firms.

In other words, it is not just British red lines that are limiting the ‘reset’. There are political, legal and institutional constraints on the EU side also. And these have implications beyond economic cooperation. The EU’s Common Security and Defence Policy (CSDP) precludes any decision-making or planning role for third countries in CSDP missions and operations, imposes strict intellectual property rules in defence capability projects under the Permanent Structured Cooperation (PESCO), and largely limits input into defence industrial projects and supply chains to the EU, EEA countries and Ukraine.

The UK is not alone in wondering whether these limits undermine potential benefits to be had from participation, and two recent EU decisions have pushed the envelope in terms of allowing other countries to participate under certain conditions. Whilst previous EU defence industrial initiatives were mostly limited to single market members, SAFE allows procurement – of up to 35% of the value of a contract – from another country’s defence industry under the condition that a Security and Defence Partnership has been signed first.

Meanwhile, the Ukraine support loan will be open to purchases from third countries who either have a SAFE agreement or are ‘providing significant financial and military support to Ukraine’ and agree to make a ‘fair and proportionate financial contribution to the costs arising from borrowing’. This is a notable development but, if the aim is to build a common European defence market, more flexibility will be required.

The EU of today is a different organisation to the one the UK left. More deeply integrated in security and defence, more open to common borrowing (as evidenced during the pandemic), and increasingly shaped in the image of French preferences for European autonomy. And further changes are afoot. Member states have just given the green light to start the drafting of Montenegro’s accession treaty, a significant step towards the country’s aim to join the EU by 2028. On top of this comes renewed interest in membership in the EU’s Nordic neighbourhood. Icelanders will be asked on 29 August whether the country should reopen negotiations on EU membership. A positive outcome could put this back on the political agenda in Norway too.

There is also an open question about the future political direction of the EU project, with French presidential elections in April 2027, Polish parliamentary elections in November 2027, and German federal elections by early 2029. In France, the Rassemblement National is on track to reach the final run-off, and the Alternative für Deutschland and the Confederation of the Polish Crown are topping their respective polls. The paradox is that closer relations with the EU are seen as a distinctly ‘progressive’ project in the UK, whilst the organisation it wants to get closer to, or even rejoin, might come to be shaped by far-right governments.

All this to say that while the UK’s political class is bickering over Brexit, the EU is not standing still. It might start to look quite different over the next five-to-ten years, and the UK, whether it stays on the EU’s periphery, moves closer, or even rejoins, will have little say over the direction the EU is taking in its absence.

By Jannike Wachowiak, Research Associate, UK in a Changing Europe.