Don't stop loving your neighbor: the EU and Britain decided to reset relations

The European Union and the United Kingdom want to reset relations amid the Ukrainian crisis and difficulties with the United States. On May 19, London and Brussels signed an agreement to expand cooperation in the field of defense, food trade and border control, as well as access for European fishing vessels to British waters. This event was the first since Brexit in 2020. At the same time, Europe is experiencing a crisis caused by the deterioration of relations with the United States due to trade and foreign policy differences. The expert community believes that the parties may face a number of difficulties in the process of rapprochement, in particular, due to completely different economic structures.

The first EU-UK Summit

After years of political tension caused by Brexit, London and Brussels have agreed on a large—scale reset of relations - the most significant since Britain's withdrawal from the EU in 2020. On May 19, the parties signed an agreement to expand cooperation in several areas: food trade, border control, and access for European fishing vessels to British waters.

Thus, according to the agreements, the British authorities agreed to extend the access of EU fishing vessels to their waters for 12 years until 2038. In exchange, British Prime Minister Keir Starmer secured an agreement that should remove key obstacles to the export of agricultural and fish products from the UK to the EU market. This solution should facilitate trade and reduce costs for British producers. Interestingly, nothing will change for Europeans, as London has not changed anything in this regard since Brexit, fearing food supply disruptions and shortages in stores.

"The UK has signed a new agreement with the European Union to support British businesses, restore jobs in the UK and increase household incomes. The package of measures will help to reduce the cost of food, reduce bureaucracy, open up access to the EU market and bring almost £9 billion to the UK economy by 2040," Downing Street said in a statement.

Tourists are also promised relief. Britons will soon be able to cross borders in many European countries through electronic gates, which should speed up these procedures. The new system should also simplify travel with pets — they will be issued passports, which will eliminate the need to get a certificate from a veterinarian before each trip. The parties also confirmed their desire to deepen cooperation in solving problems related to irregular migration. Strengthening cooperation between carbon markets was also on the agenda. London and Brussels have expressed their intention to work on creating a link between them.

It is worth noting that this is the third deal for the UK in May. Earlier, a free trade agreement with India and a trade deal with the United States were signed. The new agreement may help the British economy to increase exports to third countries amid the difficulties associated with leaving the EU. For the European Union, the deal with Britain is an opportunity to mitigate the consequences of the trade war with the United States, which was unleashed by the administration of Donald Trump. In March-April, the United States announced 25% duties on steel and aluminum imports from the EU and "mirror" tariffs of 20% for it. The measures have been postponed for now. In response, Brussels has prepared its own list of products that could be subject to duties.

— Duties from the United States are one of the factors that makes Europeans think about what to do in response. Trump is skeptical about Europe because the region conducts unfair trade with the United States. The level of dependence on trade with the United States is quite high," Igor Kovalev, First Deputy Dean of the Faculty of World Economy and World Politics at the National Research University Higher School of Economics, told Izvestia.

But it will be quite difficult for the UK and the European Union to get closer due to completely different economic structures, the analyst believes. In Germany, for example, the economy is focused on the production of goods, while in the UK it is focused on the financial sector. It will be difficult to find points of contact and mutual compromises. The range of problems that need to be solved in Europe is really huge now. But the question of whether the leaders present at the summit are capable of doing this is highly questionable, the expert noted.

Military rapprochement between Brussels and London

In addition to trade and economic rapprochement, London and Brussels are moving towards strengthening military cooperation. Perhaps the central document signed on May 19 at the London summit was the agreement on partnership in the field of security and defense. Thus, the parties approved an agreement that will allow British companies to apply for funds from the new EU SAFE rearmament fund of up to €150 billion.

"The parties have a need for military cooperation, which is especially important in the context of the conflict in Ukraine," Igor Kovalev said.

As previously noted in the media, the new EU document intends to show the US presidential administration the unity of the positions of European countries on the most pressing issues of world politics, in particular, on Ukraine. It was also reported that the United States is preparing to begin negotiations with European allies regarding the gradual withdrawal of American troops from Europe. A total of 80,000 military personnel from the United States are currently stationed there.

EU leaders are trying to work out a common policy or a common approach to resolving the Ukrainian issue, but so far they have not been very successful: no one takes their calculations into account, Igor Kovalev notes. Back in February, European countries demanded a place at the negotiating table to resolve the conflict. At the same time, the EU announced its intention to continue helping Kiev with weapons. It was reported that the association was preparing a package of military assistance to Ukraine in the amount of € 20 billion. However, the development was suspended due to Hungary's veto of the previous version of the document.

The rapid growth of defense spending could hit the EU economy. So, in March, the President of the European Commission, Ursula von der Leyen, announced that she had proposed to EU leaders a plan for the rearmament of the community with a budget of 800 billion euros. According to her idea, the EC will borrow this money from the capital markets and give it to the states on condition that they jointly purchase weapons in Europe. These funds will be used, among other things, for arming Ukraine.

A sharp increase in defense spending could lead to a noticeable increase in the national debt of the EU countries, Politico notes. The publication says that such a strategy will give the regional economy a short-term boost. However, this dynamic is unlikely to continue for a long period of time. Increasing the production of military shells, tanks, howitzers, mines and other types of weapons and military equipment will not bring tangible benefits to local GDP.