Reframing the Reset: From Post-Brexit Stabilisation to Strategic Partnership

Executive Summary

Despite significant progress in key areas of EU-UK cooperation, the relationship is far from being substantively reset, leaving a growing strategic gap at its core. The rapidly changing geopolitical environment requires the EU and the UK to define and act on shared strategic priorities more systematically. This is already happening across a growing number of minilateral and bilateral formats — notably the E3 — but has yet to be matched by a similarly ambitious and sustained agenda at the EU–UK level.

This summer, the EU and the UK meet for their second summit. Rather than treat it as a stock-take, leaders should use this moment to strategically reframe the relationship and to agree a way forward. Regardless of whether the UK drops its red lines, the EU–UK relationship should move towards flexible forms of cooperation in strategic areas where European scale, resilience and security require closer coordination between like-minded partners.

Genuine progress towards this effect requires the summit to:

• Deliver the Common Understanding and widen practical cooperation in areas such as economic and democratic resilience, technology and innovation, trade and regulation, connectedness, and foreign and security policy. This is possible within existing political constraints.

• Define a strategic direction in key areas through a Political Statement of Intent and create a high-level political negotiating group to to identify flexible forms of cooperation in politically sensitive but strategically relevant files.

Beyond the summit, the trajectory of the relationship will increasingly be shaped by political developments in both the EU and the UK. A softening of UK red lines could unlock deeper economic integration, along the lines of existing models. A more flexible EU approach towards including like-minded partners could unlock cooperation in areas like defence and resilience. This means:

• The EU should become more strategically open to structured cooperation with willing and capable non-member partners in areas where European fragmentation carries growing costs.

• The UK should launch a systematic, evidence-based review about the future of its relationship with the EU, including the long-term sustainability of its current red lines and the options for deeper integration over time, including that of rejoining.

Introduction

Given rising geopolitical tensions and the ongoing redrawing of the European security order, the case for a stronger and more strategic relationship between the UK and the EU has become even more compelling. But the second EU-UK summit scheduled for summer 2026 is set to solve no more than a number of technical issues on the bilateral agenda: negotiations on food and drinks standards, emissions trading, and a youth experience scheme.

Finalising these files will be far from easy. A particularly challenging issue is the youth experience scheme, particularly regarding university tuition fees. Unless a landing zone can be found, the summit could look underwhelming: EU member states will be reluctant to sign off other deals unless a satisfactory solution is found on youth mobility.

Expectations on the way forward are also diverging. In April, Prime Minister Keir Starmer announced his ambition to use the summit platform to seek deeper cooperation, including in the economic sphere, a position he reiterated, following substantial losses in the local and devolved elections in May.  Reportedly, the UK Cabinet Office has been working on plans to rejoin parts of the Single Market, whilst holding on to current red lines.

While the possibility of a leadership contest in the UK might result in a softening of red lines, the ask for selective alignment will likely come up against the EU’s principle of no cherry-picking of the Single Market. The EU is wary of granting privileged market access to the UK, which might unravel its recently agreed framework with Switzerland. More generally, there is hesitation around granting conditions which could be interpreted as more lenient than those offered to member states.

This creates the risk that the EU–UK relationship becomes trapped in technical and political disputes at precisely the moment when the wider strategic environment demands greater European coordination and ambition.

To avoid the impression that the process of resetting relations has run out of steam, both sides must use the summit to maximise cooperation opportunities within existing political constraints, which means delivering the current agenda and expanding it. But the summit must also begin to define a broader strategic direction for the relationship through more flexible forms of cooperation among like-minded partners in strategically critical areas – notably defence, economic security, critical technologies and energy resilience – where the costs of fragmentation are becoming increasingly difficult to sustain.

Levels of the EU-UK relationship

Level 0 is the baseline. Both sides must uphold and fully implement the Trade and Cooperation Agreement (TCA), the Withdrawal Agreement, and the Windsor Framework, as well as the Common Understanding. The faithful implementation of these agreements creates trust and credibility and is the pre-requisite for further progress.

Level 1 is about building on the Common Understanding in a way that is pragmatic and within existing political constraints. This can be achieved in the fields of economic and societal resilience, technology and innovation, trade and regulation, connectedness and foreign policy, security and defence. Concrete proposals for such cooperation are set out in section 1 and in the annex of this paper.

Level 2 is about a more fundamental deepening of the economic relationship, which will only be possible if the UK is willing to revisit its current red lines, which preclude membership of the Single Market, a customs union or a return to free movement. This could open up new possibilities, including that of EU membership. This opportunity is addressed in section 2 of this paper.

Level 3 is about reframing EU–UK relations as part of a broader effort among like-minded partners. This could mean opening EU formats to the UK and others, or exploring new formats. Whatever form the bilateral EU-UK relationship takes, this is where the most immediate strategic gains could lie. They are addressed in section 3 of this paper.

Level 1 – Expansion: Widening practical cooperation at the summit

The upcoming summit should move beyond a stock take of agreements on food and drinks standards, emissions trading and a youth experience scheme and deliver further progress. An agenda that crosses red lines might not be conceivable for now but there are opportunities to expand cooperation significantly within current political constraints.

This can be achieved through practical measures in the policy fields of (1) economic and societal resilience, (2) technology and innovation (3), trade and regulation (4) connectedness and (5) foreign policy, security and defence. They are summarised below and set out in more detail in the annex, published separately to this piece.

Economic and Societal Resilience

• A resilience and crisis preparedness partnership would address the cross-border effects of pandemics, conflicts and climate-related disasters, which increasingly affect European citizens and require coordinated responses. With the US stepping back from global health and climate frameworks, there is added pressure on Europe to fill the gap through closer cooperation. In practice, this could involve establishing a dedicated EU–UK Health and Climate Security Dialogue to share data, strengthen existing collaboration, and potentially link to wider international efforts. It could also lead to more formal arrangements, such as UK participation in EU mechanisms like the European Climate and Health Observatory or the EU Civil Protection Programme to improve joint crisis responses.

• An EU–UK cooperation track on democratic resilience would help both sides deal with shared challenges such as foreign information manipulation, declining public trust and pressures on democratic participation. As the EU builds a more integrated approach through initiatives like the European Democracy Shield, excluding the UK from these efforts weakens the broader European response. A structured cooperation track could establish regular exchanges on threat assessment and counter-disinformation, while linking the UK to emerging EU initiatives and networks. It could also mean strengthening democratic participation through citizen engagement, and joint initiatives to empower think tanks and civil society organisations.

• Structuring EU–UK cooperation on economic security could formalize existing ad hoc engagements on issues like supply chains, industrial policy and economic coercion. The lack of a strategic framework limits the ability to tackle longer-term challenges and to align responses to geoeconomic pressures. A designated dialogue, akin to those that exist with other EU-like-minded partners, could introduce regular political stock takes and clearer prioritisation of key areas such as critical raw materials, energy security and supply chain resilience. Over time, it could also pave the way for deeper, more strategic cooperation with like-minded partners such as Canada, Japan, Australia, etc.

Technology and Innovation

• Structuring EU–UK cooperation on technology and innovation could increase Europe’s ability to scale, compete globally and manage dependencies in critical technologies. This will not be straightforward as EU and UK preferences on how to regulate emerging technologies are not always aligned. Nevertheless, cooperation could be strengthened through a set of targeted measures: promoting reciprocity and balanced risk-sharing, advancing joint projects and talent initiatives, deepening regulatory exchanges, and exploring UK participation in European scale-up financing instruments, including the proposed Scaleup Europe Fund and relevant EU innovation funding programmes. Over time, this could enhance joint capacity to innovate at scale, strengthen resilience and bolster Europe’s role in shaping global technology standards.

Trade and Regulation

• A Small Business Agreement would deal with the unintended impact of removing the de minimis exemption, which has long facilitated low-value trade—especially for SMEs—between the EU and the UK. As both sides introduce new duties and potential handling fees to respond to rising imports from countries like China, smaller businesses risk facing higher costs and administrative burdens. A targeted agreement could exempt SMEs from these changes, helping to preserve cross-border trade and limit disruption. This would maintain a key channel for small business activity while broader trade rules evolve.

• An EU–UK business mobility package would address the growing friction firms face when moving staff across borders, as post-Brexit rules require compliance with multiple national systems, creating costs, delays and legal uncertainty. Current provisions under the Trade and Cooperation Agreement are limited and fall short of supporting sectors reliant on short-term assignments and professional mobility. Building on the commitment in the Common Understanding to foster dialogue on business-travel, a targeted package could establish clearer rules for temporary travel, improve guidance across member states and advance mutual recognition of professional qualifications. This would incrementally ease barriers to services trade and investment without reintroducing free movement.

• An enhanced EU–UK regulatory dialogue would tackle the growing “passive divergence” caused by new EU legislation, which is creating new barriers to trade despite limited UK divergence. While the UK shows increasing openness to alignment in selected areas, the TCA’s specialised committees meet too infrequently to support deeper, forward-looking coordination. A more structured and regular dialogue could improve information-sharing, act as an early warning system for new regulations and strengthen links between regulators. Building on existing TCA structures, this would help manage divergence pragmatically while supporting trade and regulatory coherence.

• An EU–UK initiative on Better Regulation and regulatory learning would address the lack of structured cooperation on how rules are designed and evaluated, despite shared challenges in fast-moving sectors like AI and financial services. Without such exchange, there is a risk of divergence driven by process differences and missed opportunities to improve regulatory quality. A structured initiative could enable regular exchanges on impact assessment, consultation and evaluation, alongside sectoral comparisons and potential joint pilots. This would promote mutual learning, improve regulatory outcomes and build trust for deeper cooperation over time.

Connectedness

• The post-Brexit erosion of EU–UK institutional links has reduced collaboration, access to funding and networks, as well as mutual understanding and familiarity. The cultural and creative sector offers a good starting point for rebuilding social and personal bonds. A package could combine a Protocol on Cultural Cooperation (including dedicated dialogues on mobility, sectoral knowledge exchanges, and a pathway to Creative Europe participation), a review of UK affiliation with selected EU agencies, and new secondment programmes between administrations and parliaments. Together, these measures would rebuild practical ties, support collaboration and strengthen long-term trust and cooperation.

Foreign Policy, Security and Defence

• The EU–UK Security and Defence Partnership (SDP) provides a strong basis for strategic dialogue, but not yet for consistent operational follow-through. While it enables broad political exchange, it lacks clear prioritisation and pathways to implementation, meaning that politically sensitive issues can become trapped in wider institutional processes and neither side consistently takes the initiative on practical cooperation. Rather than expanding its scope, the focus should be on translating existing convergence into coordinated action in a limited number of priority areas, such as defence industrial cooperation, UK engagement with the European Defence Agency, and UK participation in civilian CSDP missions. This would require a clearer joint agenda for operationalising the significant cooperation opportunities already identified in the SDP and ensuring more consistent political follow-through.

• An MoU on (cyber) sanctions would address the ad hoc nature of EU–UK cooperation despite shared objectives and complementary strengths—namely the EU’s market reach and the UK’s intelligence capabilities and financial sector expertise. Unanimity requirements in decision-making and differing technical and intelligence capabilities in member states have limited EU action, while the UK has moved more quickly with designations. A structured agreement could enable regular information-sharing, coordination of listings and public messaging, and could include closer institutional links such as secondments. This would improve the effectiveness, coherence and impact of sanctions against hostile actors.

• Lastly, cooperation on an irregular migration sanctions regime would tackle the shared challenge of combating migrant smuggling networks, where both sides are developing similar tools but lack structured coordination. The UK has already established a dedicated sanctions regime, while the EU is moving in a similar direction, creating an opportunity for alignment. Practical cooperation could include exchanges on design and implementation, joint engagement with the private sector, and coordinated or parallel listings. This would strengthen collective efforts to disrupt smuggling networks and enhance the impact of targeted sanctions.

Level 2 – Revisiting the red lines: An evidence-based review

The current, rather incremental, reset has been shaped by the UK government’s red lines of no Single Market, Customs Union or free movement.

As a consequence, the UK’s economic gains from the reset will be modest relative to the overall impact of Brexit. The Office of Budget Responsibility estimates that UK GDP will be 4% lower in the long-term compared to EU membership, while further studies suggest the negative impact may be as much as 8 %. The current reset will have little effect on this. The government’s own forecasts project a 0.3% GDP boost from the deals on food and drinks and emissions trading, only to be realised by 2040.

Against this backdrop, it is increasingly difficult to see how the UK government can square the circle between its choice of reset and the promise to prioritise growth. In the long-run, it might become untenable for the government to emphasise the ‘deep’ economic pain caused by Brexit, whilst ruling out the steps that would ease it.

On top of this comes a geopolitical environment which is pushing the UK to see Europe as its primary partner. This is also borne out by public opinion, with most of the public favouring closer relations with the EU. And for the first time in a long time, the idea of rejoining the EU is no longer considered completely unthinkable.

This does not mean that the red lines are about to be dropped, but it means that there is an opening to discuss the costs of keeping them in place. This debate is already starting, particularly – and increasingly openly – within the Labour party and with a view to a possible leadership contest, the next Labour manifesto or both.

While this is a UK internal debate, it is important that it takes into account the practical and political realities of what is feasible from the EU’s perspective. There is therefore a strong case for a more systematic and evidence-based assessment of the options available to the UK over the longer term, ranging from a customs union to more integrated models of cooperation to rejoining the Union.

Such a review would provide a structured way of assessing the implications of softening the red lines across core dimensions such as prosperity, security, resilience, sustainability, affordability and Britain’s position in the world. There is precedent for such an exercise in the UK’s 2012–14 Balance of Competences Review. But since then, the international context has changed drastically, creating a strong case for a new assessment of the implications for security and resilience in particular. And unlike pre-referendum exercises, the UK could assess the actual data that has become available since its exit from the EU in 2021. This could prepare the ground for a more open-ended and informed discussion on the possible trajectory of the relationship.

Level 3 – A new strategic destination: cooperation among like-minded partners

European countries are already responding to the changed geopolitical environment by cooperating more closely on security and defence. Formats such as the E3, the Joint Expeditionary Force (JEF), Weimar Plus, and bilateral partnerships — particularly between the UK and France and the UK and Germany — are becoming more important. This reflects a growing recognition across Europe that countries cannot deal with today’s security challenges alone.

At the same time, Europe’s security and defence landscape remains highly fragmented. European countries still develop, finance and procure capabilities largely at national level. This is inefficient, limits scale and slows innovation. Brexit has added another layer of fragmentation by creating new barriers and regulatory divergence between the EU and the UK.

The EU has started to respond to some of these problems. Initiatives such as SAFE are designed to encourage Europeans to pool resources, reduce duplication and strengthen Europe’s defence industrial base. More broadly, the EU is also pursuing a wider industrial and economic security agenda aimed at strengthening European production capacity, reducing strategic dependencies and building resilience in key sectors.

As welcome as these initiatives are, they risk excluding the UK. Eligibility rules, local content requirements and preferential access to EU financing instruments could reinforce separate industrial and regulatory ecosystems rather than support a more integrated European economic and defence space. As a result, efforts to reduce fragmentation inside the EU risk creating new fragmentation between the EU and one of its most important security and economic partners.

This is why movement is also needed on the EU side. More flexible and pragmatic forms of cooperation would allow willing and capable partners to participate in strategically important European initiatives. This could extend to countries beyond the UK, such as Canada, Japan, Australia, South Korea, Norway and Ukraine, with whom Europeans share growing strategic interests and vulnerabilities.

This does not mean weakening the EU’s institutional core. In many areas, cooperation outside formal EU structures will still need to remain closely aligned with EU policies and institutions in order to preserve coherence and make full use of the EU’s scale, market size and regulatory influence.

What matters is therefore less whether cooperation happens formally inside or outside EU institutions, and more whether different frameworks reinforce Europe’s overall strategic capacity. The guiding principle should be pragmatic: include capable partners where this strengthens Europe’s ability to act.

Such flexible forms of cooperation among like-minded partners would be particularly relevant in several areas.

The first is Ukraine. The EU and the UK are already coordinating closely in support of Kyiv, including through discussions around possible UK participation in the EU’s €90bn loan scheme. But European responsibilities are likely to grow further in the event of a ceasefire or negotiated settlement. Long-term military assistance, the use of frozen Russian assets, and the financing and governance of Ukraine’s reconstruction will require sustained coordination between the EU, the UK and other partners.

The second area is European defence and defence industrial cooperation. Europeans are under growing pressure to strengthen their own capabilities, and the UK remains an indispensable partner in this effort. Yet without deeper coordination, Europeans risk spending significantly more while still failing to generate sufficient deterrence and operational readiness. Closer EU–UK cooperation could include UK participation in current and future EU defence finance initiatives and, over time, contribute to a more integrated European defence market. This would strengthen interoperability, reduce duplication and support larger and more efficient European supply chains. Europe could also make better use of London’s role as a major financial centre to improve access to capital for strategic priorities such as defence financing.

A third area is economic resilience. Fragmentation across Europe’s economic and technological landscape weakens competitiveness, limits scale and reduces strategic leverage. In an era in which industrial policy and economic security are increasingly geopolitical, unnecessary divergence between the EU and the UK risks undermining the effectiveness of both sides. Closer coordination on supply chains, industrial policy, critical technologies and capital markets would allow Europeans to make better use of their combined strengths while avoiding the emergence of competing or duplicative frameworks. This could include initiatives such as an Economic Security Alliance or sector-specific cooperation, for example a Western steel club.

Energy should also form part of this broader resilience agenda. Russia’s weaponisation of energy demonstrated that energy systems can no longer be treated primarily as commercial questions. Energy infrastructure, electricity interconnection, critical minerals and clean technology supply chains are now central to geopolitical resilience. This creates a strong case for closer coordination between the EU, the UK and partners such as Norway on energy security, renewables and strategic infrastructure.

Ultimately, the question is no longer whether the EU should cooperate more closely with trusted partners such as the UK, but whether it can build new forms of cooperation capable of matching the scale and urgency of today’s geopolitical challenges.

Outlook and Delivery

There is a growing risk of mismatch in the EU–UK relationship. While the current reset agenda remains focused on technical and incremental forms of cooperation, the strategic challenges facing Europeans are becoming more urgent and far-reaching. In areas such as security, economic resilience and critical technologies, the costs of fragmentation and strategic drift are rising rapidly.

Closing this gap will require the EU and the UK to move beyond a narrowly technocratic approach and define a more credible joint strategic agenda. This, in turn, will require movement on both sides: the UK will need to align its ambitions more closely with political realities on the EU side, while the EU will need to show greater openness to more flexible forms of cooperation with close and like-minded partners.

If this broader strategic agenda is to move beyond ad hoc cooperation, both sides will need stronger mechanisms for coordination and delivery. Existing formats remain too reactive and fragmented, particularly in politically sensitive areas where misunderstandings can quickly escalate into public disputes.

One way of advancing cooperation in strategically sensitive areas would be the creation of a high-level political negotiating group. Its purpose would not be to reopen the entire relationship, but to identify shared interests and develop realistic landing zones in areas where cooperation is strategically necessary but politically difficult.

This could help avoid a repeat of the failed SAFE negotiations, where politically sensitive discussions unfolded in an ad hoc and reactive way, causing misunderstandings and public fallout. A more structured mechanism could help avoid this. At the same time, such a group would push forward on the new strategic agenda outlined above.

Ultimately, the significance of the summit will depend less on any single agreement than on whether it establishes a credible direction of travel and a stronger mechanism for strategic coordination and delivery. The logic for closer cooperation is evident. The challenge now is to translate it into a more durable political framework.

About the authors

Dr. Fabian Zuleeg is Chief Executive and Chief Economist of the European Policy Centre.

Jannike Wachowiak is an External Expert on EU-UK relations at the European Policy Centre and a Research Associate at UK in a Changing Europe.

Prof. Dr. Daniela Schwarzer is a member of the 
executive board of the Bertelsmann Stiftung.