12 May 2025

The EU is not what you think it is

Remainer fantasies still have too much sway over the Labour Party.

Photo by Justin Tallis / AFP via Getty Images

It’s been billed as the “big Brexit reset”. On 19 May, Keir Starmer’s government will sit down with Brussels in a fresh negotiation of UK-EU relations. In fact, discussions have reportedly already begun. And while some of the issues under debate are post-Brexit priorities – deepening defence collaboration for instance – issues such as cross-border trade and youth mobility visas will also feature. The Brexit tomb, where so much of the country might have hoped the question had been buried for good, has been reopened. Remainers within Labour and beyond spy an opportunity: to reunite Britain with the EU they believe it should never have left.

Reform UK’s victory in the Runcorn and Helsby by-election proves that after almost ten years the shock waves of Brexit continue to reverberate. Yet in some ways it is remarkable how little our structural position has changed, despite the talk of economic collapse during the referendum campaign. Britain is much the same country it was for most of the 21st century, grappling with long-standing problems of low productivity, regional imbalances and an over-reliance on financial services as a source of growth. Populism is a threatening political force, but it was before: Reform may have achieved 4.1 million votes at the 2024 election, but in 2015 Ukip got 3.8 million. At the same time, seismic changes have been occurring on the other side of the English Channel. And those who see a return to the 2016 status quo as a silver bullet to Britain’s malaise should take note. The EU of 2025 is not what the UK Rejoiner movement thinks it is.

As last year’s general election showed, Britain has not entirely lost faith in the politics of the centre left. Rather, it has been Germany, France and Italy that have witnessed a true ascendancy of the hard right, stimulated by weak growth and flatlining living standards. To be sure, the UK economy has not performed well since Brexit, but it has done no worse than France and is in better shape than a clearly struggling Germany.

The EU’s fundamental problem is that it is caught between two stools. There are demands from disgruntled voters for their governments to do what fully functioning nation states were once expected to do as a matter of course: boost living standards, craft industrial strategies, and invest more in public services. Yet, the EU is not set up to deliver what voters want. As Wolfgang Streeck puts it in his recent book Taking Back Control?: “In central respects, the post Maastricht EU amounted to a perfect realisation of the prescription of post-communist neo-liberal economic globalism, indeed hyper-globalism.”

This model – centralised, bureaucratic and de-politicised – had its moment during the 1990s, when it was fashionable to think that handing power to technocrats in the European Central Bank and the European Commission would result in making economic policy more rational and therefore (it was thought) more successful. All barriers – whether to goods, people or more – would be removed so that a frictionless market could be created. Since then, however, the approach has not delivered. Europe has shown a marked lack of economic dynamism, as the impressively self-critical Draghi report on EU competitiveness concluded. There is no European rival to Tesla, Google or Apple. The United States and China are streets ahead in the development of artificial intelligence. Design flaws in the single currency were exposed in the global financial crisis of 2008 – an event that prompted the start of globalism’s long retreat.

The years since have been tough for all Western economies, but the EU has suffered most. Economic stagnation has bred disaffection with mainstream political parties and the rise of right-wing populism. The AfD came second in the German elections and now leads national polls, Le Pen’s National Rally topped the poll in both rounds of the French parliamentary elections, the Freedom Party won power in Austria, and there has been a rightward shift in elections in the Netherlands, Finland, Slovakia and Sweden. Rejoiners in the UK have little to say about these developments, preferring to see the EU as they think it ought to be rather than as it is. There was a time when the UK lagged behind its continental European peers, but it is almost half a century since the this was consistently the case. Since then the EU has become simultaneously more integrated and more sclerotic.

As a result it has become increasingly hard for the British pro-EU movement to make a positive case for closer integration. To be sure, there has been no shortage of negative reasons posited for supporting the EU, dating all the way back to Margaret Thatcher who saw it as a way of thwarting left-wing radicalism in the 1970s. For Labour in the late 1980s, rule by Brussels was preferable to rule by Thatcher. During the Brexit referendum, virtually no positive arguments were put forward for remaining part of the EU. Instead there was a reliance on Project Fear: the supposed economic Armageddon that would befall Britain in the event of Brexit. The latest negative reason for supporting the EU is that it isn’t Donald Trump’s America.

There isn’t going to be another UK referendum on EU membership any time soon. But in the event that one were called, it would be fascinating to see how the two sides would shape up. Brexiteers would say the past decade has seen a welcome rebirth of the nation state as the locus for policy making, with the vulnerabilities exposed by the Covid pandemic rekindling interest not just in active industrial strategies but in measures to control capital, trade and people. There was always a left-wing case for Brexit and its time has come.

Any Rejoin campaign would have a trickier job. It could make a direct case for “ever closer union” (even though that has been both an economic and political failure) or it could accept that the dream of a United States of Europe is over. Friedrich Merz – Germany’s new chancellor – symbolises the changing mood with his determination to relax borrowing rules and toughen border controls. Germany was once the poster child for what Europe was doing right. Now it highlights what is going wrong. Handing power back to nation states looks like failure and to an extent it is. But it also offers a path back to the model that once made Europe so successful – a looser confederation of countries free to do their own thing and to respond to the demands of their own voters.

The “reset” talks provide the opportunity to forge exactly this sort of relationship. Yes, there is scope to make intelligent adjustments to UK-EU relations. No question, it is a good idea to be on good terms with your neighbours. But re-joining an EU that is so clearly on the wrong track would be a mistake. The aim of “ever closer union” was a bad idea whose time has come – and gone.