UK and EU to begin formal talks on resetting ties next year
Bloomberg | 9 December 2024
UK and EU to begin formal talks on resetting ties next year
The UK and European Union will begin formal talks on a reset of their relationship next year, as Britain’s Chancellor of the Exchequer Rachel Reeves said she wanted to deepen economic ties with the bloc to boost growth.
“Those conversations about the reset and those negotiations will begin in the new year,” Reeves told reporters after addressing the Eurogroup meeting of European finance ministers in Brussels. “I recognize that the deal that the previous government secured post-Brexit was not the best one for our country.”
Mending ties with the EU has become one of the key features of Prime Minister Keir Starmer’s foreign policy since he won power in July, after the former Tory administration took Britain out of the bloc and oversaw a post-Brexit decline in trade. The EU continues to be the UK’s largest trading partner, but firms have faced extra cross-border red tape and bureaucracy since the divorce.
Reeves said forging closer ties with Europe offers the prospect of lifting Britain’s economy, and she told her European colleagues that she’d be “more ambitious” in strengthening their economic relationship. However, she wouldn’t be drawn on the specifics of what the UK wants from the talks, or how it would approach its negotiations with the EU.
“I did not come here to start a negotiation or lay down a set of demands,” Reeves said. “Today was the preliminary work that is needed to rebuild trust.”
Speaking alongside Reeves at the press conference, Ireland’s finance minister Paschal Donohoe — who is also president of the Eurogroup — said her presence had been welcome at the meeting and the finance ministers discussed areas of common ground and shared values. Asked if the EU would push Britain for concessions in areas such as fisheries and youth mobility as part of the reset talks, Donohoe replied: “All those matters are for another day.”
The UK-EU talks could assume even greater importance for Starmer given the incoming presidency of Donald Trump in the US and the prospect of tariff wars that could hurt trade. Though Starmer has tried to argue the UK won’t be forced into taking sides, Trump’s victory has complicated matters.
Reeves echoed that view to her European counterparts on Monday, saying it was a “false choice” for Britain between the US and EU. The idea that the UK is “either with America or the EU is completely wrong,” she said.
Still, on the question of EU cooperation, Starmer’s new Labour government has ruled out the most growth-enhancing options concerning relations with bloc — including re-joining the bloc’s single market or customs union — and instead talks about collaboration on issues such as security and energy. Reeves also talked on Monday about working together on financial services.
Irish Finance Minister Jack Chambers said Reeves’ appearance in Brussels was “an important day in terms of the wider reset of EU-UK relations” and “turning a new leaf.” Joerg Kukies, Germany’s finance minister, said it was a “good signal” that there was a new dialog with the UK.
Kukies also said the UK’s position on the single market and customs union was a domestic issue and not for Germany to question. “Of course any progress would be highly welcome, but we completely understand that the UK population has taken a different decision,” he said after meeting Reeves.
Concerning other options for potential cooperation with the EU, Reeves has previously mooted a veterinary agreement that might reduce some customs burdens for food and drink traders, and mutual recognition of professional qualifications which would help services firms.
“UK firms wanting to trade with Europe are struggling under huge regulatory and paperwork burdens,” said Shevaun Haviland, director general of the British Chambers of Commerce. “A better deal can’t come soon enough.”
