Can Keir Starmer reset relations with the EU?: Annual report 2024

The CER's annual report starts with an essay on whether Keir Starmer can reset relations with the EU. The report then highlights some of the CER's most important publications and events from 2024.

Can Keir Starmer reset relations with the EU?

Keir Starmer’s planned reset of the UK-EU relationship is of fundamental importance for both sides. The stagnant British economy needs a better trade deal than that bequeathed by Boris Johnson’s government. Meanwhile the EU, facing an unprecedented set of geopolitical challenges – including a Trumpian America, a dangerous Russia and an unstable Middle East – needs to draw the British closer on foreign, security and defence policy. 

So far, efforts to achieve a reset have moved slowly. This essay highlights the many obstacles that Starmer’s government faces. But first, one should acknowledge that Starmer and his ministers are getting some things right. Just after Labour’s election victory, the CER published my ‘Open letter to Keir Starmer: Ten suggestions on how to foster better relations with Europe’. The Labour government has more-or-less followed three of my suggestions: 

• ‘When dealing with our European partners, be modest’. Few Britons realise how far the UK’s reputation had sunk in the eyes of EU leaders, during successive Conservative administrations. They viewed Johnson’s repeated threats to tear up parts of the Withdrawal Agreement that applied to Northern Ireland, a legally-binding international treaty that he himself had negotiated, as despicable and unserious. Subsequently Rishi Sunak adopted a more adult approach as prime minister, but when Starmer entered 10 Downing Street, levels of trust in the UK were still extremely low. Starmer’s government has, thankfully, adopted a calm and positive tone in its dealings with EU governments and institutions. The politeness has been noticed, and is helping to restore trust. 
• ‘Don’t ignore the Brussels institutions’. Starmer’s predecessors tended to make that mistake, but he has not, because he understands that, as well as the member-states, the EU’s institutions have real power. Though he has not yet given a major speech in Brussels or Strasbourg, most of the time he has just about avoided the classic British trope – which never works – of trying to go round the back of the European Commission by plotting with the member-states. What Starmer’s government has also done quite successfully – and rightly so – is rebuild strong bilateral relationships with key EU capitals. 
• ‘Start off with a focus on security co-operation’. Starmer has seen that he should do this, because working together on foreign and defence policy is not too controversial and is clearly in the interests of both sides. In February 2025 Starmer attended an informal summit of EU leaders to discuss defence. The UK hopes that the first EU-UK summit, in May 2025, will feature the signing of a security pact with the EU.  

However, talking in a civil manner, taking the Commission seriously and engaging on security is not enough. The Labour government needs to come up with more substance on what it wants from the EU. To be fair to the government, the new European Commission only took office in early December, so until then it did not have a proper negotiating partner. Nevertheless, on the EU side, after six months of dealing with the new UK government, frustration is growing – and some officials worry that a moment of opportunity is being lost. Some of the frustration can be explained by Labour not having yet followed three of my suggestions (and the jury is still out on the remaining four): 

• ‘Be clear about what you want.’ The government gives every impression of not having worked out what it wants from the EU, particularly on the trading relationship. There must be an element of ministers keeping their cards close to their chest, for tactical reasons. But having spoken to people on the UK and EU sides, I think the government has not yet decided on its game plan for the reset. At any rate that is the conclusion drawn by key EU officials – and it gives them an excuse to remain inflexible in their own positions. 
• ‘Demonstrate that you are strong enough to stand up to attacks by hard-line eurosceptics.’ EU leaders worry that a Labour government which puts forward policies in favour of closer integration could be blown off course by the force of eurosceptic media and politicians, as previous British governments have been. This may limit the EU’s ambitions in proposing or agreeing to new arrangements with the British. EU leaders notice that Starmer seldom talks about the EU, which worries them. 
• ‘Don’t forget to bring the British people with you.’ Starmer and his ministers have so far done rather little to explain to the British people – for example, through speeches or interviews – why closer co-operation with the EU would be good for their security and prosperity. There is a long tradition in the UK of pro-EU politicians – Tony Blair included – saying very little about the positive results of European co-operation, which is one of the reasons why the 2016 referendum was lost. If Britain’s political leaders do not seek to explain the benefits of working with the EU, they will leave fertile ground for eurosceptics to exploit. 

A theme that underpins Labour’s position on these three issues is its fear of losing the ‘Red Wall’ seats in the North and the Midlands that it won back from the Conservatives in the general election. These seats mostly voted Leave in the referendum. In July, Nigel Farage’s europhobic Reform UK party came second to Labour in 89 constituencies. The Labour leadership clearly worries that if it talks too much about Europe, or comes across as too pro-EU, it will lose votes to the Conservatives or to Reform UK. The next general election is probably more than four years away, but Starmer’s government sometimes gives the impression of being locked into campaign mode. 

Labour is evidently right to worry about Reform UK. But the best way for Labour to win a second term is to focus on governing well, delivering on promises and demonstrating a sense of direction. Then a year or two before the next election, it could point to its record in government and ask voters to judge it. And it should remember that public opinion on the EU has shifted since the referendum: a clear majority of those who voted Leave now favour closer ties. 

However, fear of eurosceptic populists is not the only explanation of the government’s excessive caution on the EU. Starmer has had a whole load of other things to worry about and consume his time, such as last summer’s Southport riots, the ‘freebiegate’ scandal, an unpopular budget, a loss of business confidence and a faltering economy. It does not help that at the highest levels of government, there are few figures with great knowledge of or liking for the EU. And there has been a general problem which seems to affect many policy areas, and not only Europe: the centre of the government sometimes finds it hard to co-ordinate the different ministries and take decisions. 

Apparently the key players in the government simply don’t spend much time talking about the EU. The key cabinet committee dealing with Europe met in February 2025 for only the second time since the election. This helps to explain why a clear strategy for dealing with the EU has yet to emerge. 

First security, then trade 

Concerning security co-operation with Europe, Starmer has taken a three-pronged approach. One prong is a closer relationship with Germany. The ‘Trinity House’ agreement of October 2024 envisages close co-operation on long-range precision strike capabilities, drones and armoured vehicles, and will in due course be wrapped up in a legally-binding treaty. The second prong will be an attempt to revamp and improve the existing Lancaster House treaties with the French. The third prong is the UK-EU relationship, which will start off with a security partnership covering foreign and defence policy and could in the long run broaden out to include other subjects like the defence industry. 

The UK also takes seriously ‘minilateral’ initiatives in Europe, like the Joint Expeditionary Force, which brings together the Nordic and Baltic countries and the Dutch, under British leadership; and ‘Weimar Plus’, which involves regular meetings of the British, French, German, Italian, Polish and Spanish defence ministers, as well as the EU’s High Representative, and focuses on bolstering support for Ukraine. 

Hopefully the UK-EU summit in May will set an agenda for future co-operation. One important element will be ‘justice and home affairs’, a subject on which Starmer, as a former public prosecutor, has real expertise. His government will test if it can get closer to EU institutions like Europol and Eurojust, and in particular gain better access to key criminal databases such as the Schengen Information System, Prüm and Eurodac. It will seek ways of working together to combat illegal migration. 

The most important – and the most controversial – element of the reset will concern trade. The implementation of the Trade and Co-operation Agreement (TCA) is due for review from December 2025 onwards.  

Labour’s level of ambition for the economic relationship remains, at the time of writing, unclear. Its manifesto contained a slightly odd collection of proposals. One was for the mutual recognition of professional qualifications, though Labour surely knew that such an objective would take many years to negotiate, and is made extremely complex by the EU having to share legal competence with the member-states and professional bodies. A second ask was easier travel for touring musicians, though the EU had already rejected Sunak’s request for this. Finally, the manifesto called for an agreement on plant and animal health, ‘SPS’ in trade policy jargon, which would make life easier for farmers and companies that export and import food, and is important for reasons explained below. The CER’s John Springford has calculated that the positive impact on the UK economy of Labour’s three demands, plus the EU’s requests on youth mobility, would be just 0.3-0.7 per cent of GDP. 

Strangely, Labour has so far said nothing about facilitating short-term visits by people who need to work for a few days on the other side of the Channel, but now require a work permit or visa. According to a December 2024 report by the British Chambers of Commerce (BCC), 46 per cent of 1,111 businesses surveyed say they want the government to make it easier for staff to work in the EU. The reason the government is not talking about this is presumably that easier movement for business executives sounds like free movement – a phrase which is a red rag to many populists. 

The same reasoning probably explains why the government has been so categorical in rejecting the EU’s request for a youth mobility scheme. And this brings me to another reason for pessimism about the reset: the EU is proving to be a tough and in some ways difficult partner. While the EU is perfectly entitled to ask for a youth mobility scheme – the social, cultural and perhaps economic benefits on both sides of the Channel would be considerable – the way it asked for it was regrettable. The Commission came up with a scheme in May, just as the UK was preparing for an election, and the details were all in the EU’s favour (for example, the UK would have to reduce the tuition fees of EU students in the UK, and British youths would only be allowed to visit one EU country). The Commission should not have been surprised that the Sunak government and the Labour opposition rejected the idea – though Labour could and should have said: “We don’t like this particular proposal for youth mobility but we are willing to negotiate a better scheme.” 

The EU has been difficult in other ways, too. It need not have been so firm in rejecting the request to make it easier for British musicians to travel to the EU (on the grounds that it would require changes to the TCA). And then, at the end of 2024, the Council of Ministers came up with a paper opposing tighter ties between the UK and EU electricity markets. This was bizarre, since energy companies on both sides of the Channel see self-evident benefits in more integration between the two markets, such as lower prices, greater security of supply and increased investment.  

The attitude of many officials in the Commission’s secretariat-general – and the French government – remains that the TCA is a good deal for the EU and that there is no good reason to reopen it. The ‘review’ due in 2026 should focus on the TCA’s implementation, rather than reopening the deal. The British chose a hard version of Brexit and they have to live with the consequences of their decisions. The Labour government must not be allowed to ‘cherry-pick’ – that is to say to get closer to one or other part of the single market without rejoining the whole thing. And the four freedoms are indivisible, meaning that goods and services cannot travel freely across borders without freedom of movement for people.  

At the start of 2025, France was saying that there could be no agreement on anything – even a pact on security – unless the UK satisfied it on fishing rights. The Spanish may be tempted to apply similar conditionality to their arguments with the British over Gibraltar. 

Some cautious reasons for optimism 

All of which is to say that Starmer and his ministers will find it a hard slog to get their reset with the EU. But at the start of 2025 I am cautiously optimistic that they will make some progress.  

One thing that has changed since the Brexit referendum of 2016 is the geopolitical context, for both the UK and the EU. Russia is now a real threat to European security. China, though not a military threat, is an increasingly assertive and muscular super-power – and closely aligned with Russia. China and the US are growing their economies faster than are the EU and the UK. And Donald Trump, once more US president, is sympathetic to the world’s strongmen and opposed to the rules-based order that most Europeans, including the British, support. There is a risk that Trump will withdraw support from Ukraine, enabling Russia to impose a peace agreement on its own terms. 

Many continental governments know that Britain can make an important contribution to European security, as it already does via NATO. Quite a few of them think that closer UK-EU relations would leave the Union stronger. At the very least, this leaves several EU governments well-disposed towards the UK – so that if it asks for a better trade agreement, they might listen to it. 

One signpost of the evolution of EU thinking has been the recent discussion of the European Defence Industry Programme (EDIP), a regulation that aims to strengthen Europe’s defence industry. The French and the European institutions started off with the position that EU funds should only be spent on EU-based companies – on the grounds that the priority should be building up Europe’s defence industrial base. That principle had already been applied to the European Defence Fund. 

But there was considerable pushback from countries such as Poland, Sweden, Italy and the Netherlands that want to work with British or American defence companies, and in particular to integrate British firms with the European defence industry. The French had already taken a lot of criticism from the member-states closest to Ukraine, which thought it more important to get aid to Ukraine quickly, from whatever source, than to emphasise strengthening Europe’s defence industrial base through the use of ‘buy European’ rules. The French have found themselves in a minority and the final version of the EDIP is likely to be more open than Paris wishes. 

It is fortunate for the British that Thierry Breton, who spent five years as the commissioner responsible for defence industry, has not returned for a second term. He was unsympathetic to British rapprochement with the EU. In fact, the British are fortunate in the new combination of EU top officials. Andrius Kubilius, a former Lithuanian prime minister who has become commissioner for the defence industry, is favourable to closer EU-UK ties, just like Kaja Kallas, the former Estonian prime minister who is high representative for foreign policy. António Costa, the president of the European Council, is open to tighter ties. Meanwhile Ursula von der Leyen, who has started a second term as Commission president, has a track record of being flexible on UK-EU questions – at least compared to some of her officials. 

Opinions differ on whether Trump’s return could help or hinder Starmer’s reset. There is a school of thought on the right of the British and American political spectrums which notes that Trump dislikes the EU but has some sympathies for the UK. This school argues that Trump will offer the UK a special deal – perhaps including elements of a trade agreement and exemptions from the tariffs that he may impose on the EU – on condition that London distances itself from Brussels. Given the close UK-US security ties, the argument goes, the British would be obliged to do Trump’s bidding. 

Starmer says that Britain does not have to choose between friendship with America and close relations with the EU. Any British prime minister would and should say that. But what if Trump forced a choice? I think it unlikely that Starmer would abandon the reset with the EU. Many of the UK’s fundamental interests line up with those of the EU: both support an open, rules-based trading system (and the EU accounts for about half the UK’s trade); both support international action to combat climate change; both want to engage with China on issues such as trade, climate, health and finance, rather than view it as an enemy; and both are firmly committed to backing Ukraine in its struggle against Russia. If Britain continues to work closely with the EU on these issues, that could lead to tensions with the US, but Starmer and his ministers will have to cope with them. 

Another reason for cautious optimism is that Britain desperately needs economic growth – which the TCA is dampening. Trade in goods has suffered particularly badly since Brexit. According to the Office for National Statistics, from 2019 to 2023 goods exports dropped by 11 per cent, and goods imports by 7 per cent (services exports rose by 13 per cent, and services imports by 5 per cent in the same period). The Office for Budget Responsibility, a fiscal watchdog, says that in the long run Brexit will hit UK GDP by about 4 per cent.   

A better deal for Britain? 

The UK cannot get a better deal with the EU unless it works out what it wants to achieve. This is not the place for a detailed analysis of what the UK could seek from its former partners. Much good work on this has been done, for example in the autumn of 2024 by, among others, Ignacio García Bercero, David Henig, Sam Lowe, BCC and the Resolution Foundation, as well as my colleagues at the CER. What follows are some broad suggestions of four themes for the reset that Starmer and his ministers could pursue. 

To eliminate the costs of Brexit, the UK would have to rejoin the EU, which is unlikely to happen for a generation. Nevertheless, the Starmer government could retain its three red lines – no single market, no customs union and no freedom of movement – while still forging a deal that is better for the UK economy than Johnson’s TCA. If Starmer is serious about maximising economic growth, he will have to work hard on improving the TCA. One positive side effect of such a strategy would be to win the goodwill of British businesses, many of which have not been impressed by the first six months of the Labour government.

• A deal on SPS. Sometimes called a veterinary agreement, it could reduce the most onerous border bureaucracy for importers and exporters of food, plants and animals. But the EU will not agree to a Swiss-style deal on SPS – removing most border controls – unless the UK accepts ‘dynamic alignment’, meaning that when the EU changes its rules, the UK must follow. The EU will also insist on a role for the European Court of Justice (ECJ) in dispute settlement. The UK will probably agree to those conditions, but the negotiations will still be fraught; Commission officials claim that new British laws on gene-editing are incompatible with the EU’s SPS rules. 
  
  Still, a deal should be feasible, since it would be in both sides’ interests – the EU exports much more food to the UK than vice versa. An SPS deal would greatly reduce the tensions created by the need for checks on farm goods and food crossing the Great Britain-Northern Ireland border. If Starmer’s government gives up autonomy on SPS, and accepts a role for the ECJ, the europhobes will be furious. In that sense, SPS will be a real test of Starmer’s mettle. 
  
  An SPS deal would also preclude a future free trade agreement (FTA) with the US: the Americans would not want an FTA that excluded greater access to the UK market for their farm goods. But the application of EU standards – such as the ban on hormone-treated beef and chlorine-washed chicken – would prevent the UK from opening up to American food. 
  
  A deal on SPS would set a precedent for much closer integration in other areas, so long as the UK accepted dynamic alignment and a role for the ECJ. This could only work if there was a clear mutual interest, as there is in the case of SPS. An SPS deal would involve the EU effectively acknowledging that the UK can be allowed to ‘pick a cherry’, where both sides benefit from it doing so. 
  
  
• A deal on energy and climate policy. A second cherry that should be picked is energy and climate co-operation. There is quite an urgent need to link the British and European Emissions Trading Systems (ETSs), an outcome envisaged in the TCA. In 2023, the EU implemented a Carbon Border Adjustment Mechanism (CBAM), requiring importers of carbon-intensive goods such as steel, cement and fertiliser to disclose their carbon intensity and, starting in January 2026, to pay a CBAM fee – essentially a carbon price on imports in line with the price that EU-based producers pay under the ETS. This means that UK exports of such goods to the EU will face additional bureaucracy and perhaps charges. Even clean power exports would face bureaucratic hurdles, which energy companies say would dampen incentives to invest in North Sea offshore wind and grid infrastructure. But if Britain linked its ETS to that of the EU, it would not be subject to the CBAM, and thus its exports would avoid the CBAM fees and bureaucracy. 
  
  ETSs are only one part of what should become a much closer UK-EU energy partnership. The British have a lot to offer the EU: a huge North Sea wind power capability, many LNG terminals and capacious undersea capacity to facilitate carbon capture and storage (CCS). But Brexit took the UK out of the highly efficient but extremely complex electricity trading arrangements that function across the EU internal energy market. So electricity is now traded less efficiently between the UK and EU, increasing energy prices, and discouraging investment in more integrated offshore infrastructure. Building more interconnections between the UK and EU energy markets around the North Sea, and fixing the trading mechanism, would boost investment, enhance security of supply and put downward pressure on prices in both markets. The quid pro quo for de facto integration into the EU’s energy market could be dynamic alignment and perhaps some role for the ECJ. 
  
  The same principles could be applied to other sectors, for example chemicals – which has been particularly hit by the post-Brexit trading arrangements. But the EU is likely to raise its red flag of freedom of movement if the UK tries to get close to the single market in too many sectors.  
  
  
• A deal on mobility. The EU is highly unlikely to agree to any revamping of the TCA without some sort of accord on youth mobility, which could include the re-entry of Britain into the Erasmus+ student exchange scheme. Germany has particularly strong views on this. In return the UK should obtain easier travel for businesspeople, touring artists and others who need to cross the Channel for their work for a short period. During the original Brexit negotiations, the EU proposed allowing short-term visits for paid work across the border, but Johnson rejected this. So the EU is unlikely to oppose a scheme that allowed, for example, temporary paid work in the EU for up to 30 days. The sooner that Starmer shows he is willing to engage on youth mobility – and indeed fish – the sooner will the EU view him as a man they could and should do business with. 
  
  
• Technical fixes. There are a number of technically complex areas where a UK-EU accord could make life much easier for businesses. These should not be controversial politically. 

A simplification of VAT procedures. The BCC points out that many smaller companies find the post-Brexit VAT system mind-numbingly complex and a real deterrent to trading with the EU. It calls for an agreement on VAT co-operation and data sharing with the EU to remove the requirement for UK companies to hire a fiscal intermediary in the Union to conduct cross-border trade. This already exists for companies in Norway, under the Norway-EU VAT co-operation accord. 

The Pan-Euro-Mediterranean (PEM) convention. The Commission has said it would be open to the idea of Britain joining the PEM. This would allow for inputs sourced from other PEM members such as Turkey and Switzerland to be considered as local for the purpose of meeting the TCA’s rules of origin, thus enabling exports of British goods containing these inputs to more easily qualify for zero tariffs. 

Data adequacy. The EU has recognised the UK’s rules on data protection as adequate, but the recognition needs renewing in June 2025. The requirement for regular renewals of the accord – and the possibility that firms could be restricted in their ability to move data freely between the UK and the EU – causes much worry to businesses. The UK should do what it takes to ensure that the EU continues to grant adequacy and in the long run aim for a binding treaty. 

The Lugano Convention. When the UK left the EU it left the convention, which ensures that civil and commercial court judgements are enforced cross-border in EU and European Free Trade Association (EFTA) countries. The UK applied to join in 2020 and the Commission said no – creating needless uncertainty for businesses in the EU and the UK. The UK should apply again and – in the right political climate – the EU might agree. 

The longer term 

There is a case for the UK unilaterally adopting dynamic alignment for rules on many though not all manufactured goods. There is a particularly strong argument for doing this in areas where UK and EU rules start the same – and the UK has already begun to do this in some respects, for example by accepting the EU’s CE marking system. In newer areas, such as digital or green technologies, unilateral alignment merits discussion. In areas where the UK may have a competitive advantage, such as financial services or AI, the case for alignment may be weaker. 

Such an approach would not in itself guarantee improved access to the EU market – British exporters would still need to demonstrate compliance with EU rules by producing documentation. But UK business would benefit from greater regulatory certainty and a level playing field, since a single regulatory regime would apply to all goods marketed in the UK. Unilateral alignment would also limit the scope for tensions on the Great Britain-Northern Ireland border.  

More alignment would create a certain amount of goodwill on the EU side, and increase the chances of it scrapping the need for safety and security declarations on British exports, as the EU has done for Norway and Switzerland. It could also make it more likely that the EU would agree to the mutual recognition of certification bodies – a privilege it has extended to several of its trading partners but not to the UK. This means that many British goods sold on EU markets have to be certified in both the UK and the EU. 

The relationship would benefit from the creation of a political body to oversee it – Ignacio García Bercero has suggested a Trade, Technology and Climate Council (TTCC), with three strands of work. One would be co-operation on trade and economic security; a second would be dialogue on climate and other environmental issues; and the third would be the regulation of emerging technologies and the digital economy. The TTCC might turn out to be mostly a talking shop, but could still serve a purpose in helping to build trust and connections. Meeting at official level, a TTCC would enable discussion of the pros and cons of regulatory divergence. In its political mode it could prepare the ground for UK-EU summits. 

The trade and security relationships cannot be considered in isolation. What happens in one part of the EU-UK partnership is bound to affect attitudes in the other parts. Which is not to say that the UK should use security as a lever to get a better trade deal. Then-Prime Minister Theresa May hinted at such a link in her January 2017 Lancaster House speech. The obvious response was, Britain should and will commit itself to European security because doing so makes Britain more secure. 

That said, the more that the UK shows that it is willing to contribute blood and treasure to the defence of Europe, the more goodwill that will generate among its former partners. In such circumstances, many member-states, particularly those geographically close to Russia, would regard it as churlish to reject a British request to revisit the trading arrangements. It is true that for a majority of member-states, revamping the TCA is not a particular economic priority – though for some, such as Belgium, Ireland and the Netherlands, it is.  

However, in the long run, when trust is rebuilt between London and European capitals, the case for a much closer security and economic relationship will become self-evident on both sides of the Channel. This should be a unique, bespoke partnership, that the EU will not offer to other third countries. That is because the relationship should be tailored to accommodate the specific needs and interests of both sides, as the EU has done in the past for other partners such as Switzerland. In this case, the uniqueness would include the UK’s vital role in European security, the situation in Northern Ireland and the specific characteristics of both EU-UK trade and British politics. In economic terms, the UK will find such a deal markedly less good than EU membership. But it will be considerably better than the TCA.  

Charles Grant, director, Centre for European Reform

The CER in 2024

The Labour Party’s return to office in Britain creates great opportunities for the CER. As a non-partisan organisation, the CER engages with whichever party is in power in the UK, as well as the opposition. We always found Conservative ministers willing to appear on our platforms, while Keir Starmer spoke four times at CER events when in opposition. Now, the Labour government’s manifesto commitment to reset Britain’s relations with the EU offers new opportunities for the CER to contribute to the debate about how to do that.

As we and many others have noted, one of the downsides of Brexit is the diminishing quantity of EU expertise within Britain. So the CER has a particularly important role to play in providing information and arguments about the EU in the UK – and vice versa. European governments and opinion-formers know much less about the UK than they used to. The CER is uniquely well plugged in to the centres of power on both sides of the Channel. We have offices in Brussels and Berlin and more than half of our researchers are non-British.

But UK-EU relations is only one strand of our work. In 2024 we were busy with subjects such as EU enlargement, trade policy, the European economy, the rule of law, climate and energy, the war in Ukraine, EU defence policy, and the EU’s relations with the US and China. The arrival of a new team of European commissioners at the end of the year created opportunities for the CER to influence the debates on Europe’s future.

In 2024 we were as busy as ever, publishing 65 papers, organising 57 events and posting 21 podcasts. Our team was largely stable, but we were sad to bid farewell to Camino Mortera-Martinez, who after nearly ten years at the CER went to work for the Spanish prime minister as an EU sherpa. 

In her place we hired Zselyke Csaky, an expert on human rights and the rule of law, who had previously worked for Freedom House and the European University Institute. As a Hungarian from Romania, Zselyke brings us valuable expertise on Central Europe. 

We said goodbye to one Clara Marina O’Donnell fellow, Christina Keßler, and welcomed another, Anunita Chandrasekar – the eleventh such fellow. In the admin team we lost Octavia Hughes, though fortunately she continues to manage the CER podcasts; and we took on Mali Tucker-Roberts. Our advisory board continued to give us much good advice, though Kersti Kaljulaid decided to step down.

Struggling with the reset

Given the importance of the issues covered in the opening essay of this report, it is not surprising that many of our publications and meetings in 2024 covered UK-EU relations. Starmer’s stunning election victory raised great hopes on the continent – shared by British europhiles – of a fundamental change in the relationship.

A few days after the election we held a webinar with Cambridge University’s Catherine Barnard, Stella Creasy MP, chair of the Labour Movement for Europe, and David Lidington, former Conservative Europe minister and deputy prime minister. The speakers agreed there was plenty of scope for further co-operation, both in the Trade and Co-operation Agreement (TCA) and by means of additional side-agreements with the EU. But any substantial improvement in the economic relationship would require Labour to shift on some of its three red lines – no single market, no customs union and no freedom of movement. In a podcast, former Labour leader Neil Kinnock discussed how the rise of the eurosceptic Reform UK party could create difficulties for Starmer in his efforts to forge a new deal with Europe – but concluded that the darkening geopolitical situation should help.

Both before and after the election, there were tensions between Labour politicians and those active in the policy world – experts, journalists and businesspeople – over the party’s strategy for resetting relations with the EU, particularly where trade was concerned. The politicians kept their cards close to their chests, while policy people wanted them to be more forthcoming about their ambitions. 

Above (L to R): Stella Creasy, Charles Grant, Kitty Donaldson, Stephen Doughty and Pedro Serrano
CER/Delegation of the EU to the UK Labour Party conference fringe event on 'Working together for European security', Liverpool

The tensions were evident at a breakfast discussion with Nick Thomas-Symonds, now the minister responsible for the reset, in April, and again at our Labour Party conference fringe event with Stephen Doughty, the new Europe minister, in September, at which Stella Creasy argued for the government to be more ambitious. In November, Lindsay Croisdale-Appleby, the British ambassador to the EU, told a CER/KREAB breakfast in Brussels that the commentariat should be patient over the reset and that the government had plenty of proposals in the pipeline, though it would start with the relatively easy subject of security.

Indeed, Labour politicians speaking on foreign and defence policy were relatively open at CER events. This was the case at our breakfast in May with Luke Pollard, now armed forces minister, who was positive about closer defence ties with the EU, though cautious on defence industry co-operation.

One of the highlights of the year was the dinner in May with then shadow foreign secretary David Lammy. He spoke to a mix of business leaders and foreign policy experts around a single table, and emphasised his guiding principle of ‘progressive realism’. Not everyone liked the concept but all were impressed by Lammy’s willingness to listen to others’ ideas.

In an insight in August, Luigi Scazzieri suggested that Labour’s approach to security co-operation with the EU should start modestly with a joint declaration, and not delve into broader themes such as energy, climate and migration, since they were Commission competences and would therefore prove more complicated; and that it should avoid heavy institutional structures. Labour has so far followed the approach suggested by Luigi.

EU-UK co-operation in foreign policy was a major area of focus for our work in the framework of a three-paper project supported by the Konrad-Adenauer-Stiftung. The first paper analysed UK-EU co-operation on Ukraine. Despite the lack of formal structures for co-operation, the two sides had worked together well on sanctions and on economic and military support to Ukraine. But there was scope to collaborate more closely on defence capabilities, Ukraine’s reconstruction and on its EU integration. The second paper looked at the prospect of Donald Trump’s return to the US presidency and its impact on EU-UK ties. Trump’s policies on NATO, Ukraine and trade would create pressure for the UK and its European partners to co-operate more closely. A Trump presidency might also facilitate a broader UK-EU rapprochement, particularly if Britain felt isolated and squeezed by the economic hit from a Trump trade war. The third paper looked at Anglo-German co-operation in the Nordic-Baltic region, which is strategically and economically important to Germany and the UK, and in which Russia could try to disrupt critical infrastructure and military movements. We argued that there was plenty of scope for the UK and Germany to team up more closely on military affairs.  

Northern Ireland was out of the headlines for much of 2024, following the UK-EU agreement on the Windsor Framework the previous year and the return of the Democratic Unionist Party to power-sharing in February 2024. But Anton Spisak, a CER associate fellow, warned in an insight in March that many unionists were far from happy with the Windsor Framework. The only durable way of stabilising Northern Ireland, he argued, was much closer alignment of UK rules to those in the EU.

Above: David Lammy
Dinner on 'Britain, Europe and the world', London

John Peet, The Economist’s Brexit editor, took a broad historical perspective to the UK-EU relationship in a magisterial essay that we published in July. John argued that the underlying causes of Brexit were Britain’s almost unique experience of World War II; the fact that the EU’s most important rules were written before the UK joined; the ignorance of the British people as to how the EU worked and what it did; and the role of the media in spreading poison about the Union. Looking to the future, John argued that it would be hard to persuade the EU to give the UK a better deal, partly because of the state of British politics, and in particular the opposition Conservatives’ europhobia. But he concluded on a positive note, suggesting that the EU’s enlargement would lead to a multi-speed Europe and that that would give the British opportunities to enter one of the EU’s outer circles.

The British economy and the EU

Discussions on the economics of Brexit took place against the background of increasingly gloomy data from the UK. In January, associate fellow John Springford published an insight on why, in some respects, the UK’s trade figures looked relatively robust: goods exports to the EU did not perform any worse than to the rest of the world, while Britain’s services exports had grown strongly. John explained that the UK would probably have performed even better if it had been a member of the EU. 

In March, Aslak Berg published an insight pointing out that the UK’s attempts to expand its network of free trade agreements would deliver only marginal benefits for Britain, given its service-oriented economy – and certainly nothing compared to the losses caused by leaving the EU. In April, Aslak wrote another insight on the lessons the UK could learn from European Free Trade Association (EFTA) countries on deepening its relationship with the Union, and then in May came a third insight, pointing to specific areas where the UK could viably push the EU to improve the terms of the TCA. In November, Aslak testified to the European Parliament’s delegation to the EU-UK Parliamentary Partnership Assembly on prospects for closer EU-UK ties.

After Labour’s election triumph in July, Aslak argued in an insight that Starmer’s red lines should not preclude the UK agreeing to dynamically align its regulations with the EU’s. The UK continued to face the core post-Brexit dilemma: should it incur the costs of diverging from the EU, or follow the bloc’s rules without influencing them? In April, Zach Meyers gave evidence to the House of Lords European Affairs Committee, explaining how the UK would struggle to benefit economically from dropping the EU’s data protection rules. Then in a July insight, Zach turned to Artificial Intelligence (AI), arguing that London would be better off trying to influence how European authorities implemented the EU AI Act, rather than seeking a fundamentally different approach to regulating the technology. 

The Labour government has made planning reform and house building a key component of its growth strategy. But in December John Springford published a policy brief, and an accompanying Financial Times opinion piece, arguing that planning reforms would not be enough to turn the UK economy around. He argued that instead Labour should improve the conditions affecting investment in the economy’s two most promising sectors – professional services and tech.

Trump’s re-election in November posed challenges for the UK’s relationship with Europe. But Aslak argued in an insight published in December that the UK would probably face less economic disruption than many feared – because of its trade deficit with the US – and that it would be better off deepening trade with the EU than trying to curry favour with the new president. 

Europe’s competitiveness problem

Having adjusted to the short-term shocks of Covid, the decoupling from Russia and the consequent spike in energy prices, in 2024 European leaders turned their attention to the EU’s so-called competitiveness crisis. While its economic growth had been slow for decades, the issue moved to the top of leaders’ agendas because of a massive wave of greentech imports such as electric vehicles (EVs) from China, Europe’s structurally high energy prices, the return of an active industrial policy in the US, and growing global protectionism.

CER researchers covered the EU’s evolving thinking on the competitiveness agenda throughout the year, as it wrestled with how to compete with the US and China, while maintaining the integrity of the single market, an open trade policy, and strict fiscal rules. In January, Sander Tordoir published an insight exploring how the thinking of former Commission President Jacques Delors and German Finance Minister Wolfgang Schäuble – who both died at the end of 2023 – could help Europe confront its competitiveness jitters. He also warned in an opinion piece in Die Zeit that Trump’s return could exert further pressure on the European economy’s reliance on export-led growth. In March, Zach published a policy brief on how the Commission should advance its ‘better regulation’ agenda – an initiative which took on even greater importance after Trump’s re-election and his promises to cut regulation in the US significantly. The brief was launched in Brussels with a panel event including Wolfgang Hiller from the European Parliamentary Research Service, MEP Jörgen Warborn and the Commission’s Michael Wimmer. 

While much of the debate on competitiveness emphasised productivity, the CER pointed out that demographics mattered too. In May, John argued in an insight that to maintain its prosperity the EU would have to boost immigration, rather than relying solely on improving productivity, employment rates and free movement within the EU. The CER also thought about how to keep the EU’s dwindling workforce happy and healthy. In September, the we co-hosted an event on how the new EU fiscal rules could encourage public health investments. Sander published an insight on the same topic later in the year. 

In June, John, Sander and Lucas Resende Carvalho wrote a policy brief looking at the potential for cohesion funds to boost growth, and recommending that more regional funds should be directed towards city-regions with a high services export potential. The brief was launched at an event in Brussels with speakers including Peter Berkowitz from the Commission and Frederik Toscani of the International Monetary Fund (IMF). John, Sander and Lucas’s recommendations were later endorsed in the landmark report on EU competitiveness by former Italian prime minister Mario Draghi. 

We had strong views on both the Draghi report and the other big report by a former Italian prime minister, Enrico Letta. They both recommended that the EU deepen its single market, develop a capital markets union and push forward with its own industrial policy. In April, Zach and Aslak published an insight on Letta’s report, concluding that though it suggested largely sensible reforms, it had not done enough to confront the necessary trade-offs or propose an agenda to help overcome the entrenched resistance of national capitals to enacting reform. 

In September, the CER team produced a more positive policy brief assessing Draghi’s report. Our researchers agreed with Draghi’s diagnosis: Europe’s innovative capacity was in decline, and the EU was on track to stagnate permanently if policy-makers failed to take action. Sander co-authored an opinion piece in the German newspaper Handelsblatt highlighting this problem. The CER team argued that Draghi had brought together important reforms into a coherent agenda, even if his report left open many questions and his proposals to modernise competition policy posed unacknowledged risks. This was a point Zach returned to in an October insight, which pointed out that both Draghi and Letta assumed that competition policy could help drive reforms to the EU economy – but overlooked the risk that a revised competition policy could raise prices for European consumers without making much of a positive impact on the bloc’s innovative capacity. 

Letta and Draghi both championed the long-awaited capital markets union and banking union projects, as ways to boost funding for innovative and high-potential EU firms. The CER hosted a number of events discussing these projects throughout the year, including a dinner in May with Andrea Enria, former chair of the European Central Bank’s (ECB’s) supervisory board; a June breakfast on the capital markets union with John Berrigan from the Commission; and a September event with Nicolas Véron of Bruegel and of the Peterson Institute, on Europe's banking union. Central bankers featured at other CER events. 

Above: François Villeroy de Galhau
Dinner on 'The future of the European economy and its relationship with the UK', London

In March, the CER hosted a talk by Piero Cipollone, an ECB board member, on monetary policy and the eurozone economy. Then at an October CER dinner, the Banque de France’s president, François Villeroy de Galhau, sketched out a vision for the future of the European economy.  He also discussed the prospects of a closer UK-EU relationship.

Draghi correctly pointed out that the competitiveness crisis was, to a large extent, a question of the EU’s lack of business dynamism and innovation. Small firms did not grow, and EU firms on average invested less in developing or deploying technology than their American peers. In a February policy brief, Zach pointed to the key steps required to deliver a thriving digital economy in Europe, such as addressing the lack of digital skills and infrastructure and refining the bloc’s data laws to promote innovation. The policy brief was launched at an event in Brussels with speakers including the Commission’s Renate Nikolay and MEP Axel Voss. Zach was critical of the EU’s continued fervour for regulating technology. In March, he published an insight looking at the Digital Markets Act, the EU’s effort to create greater competition in digital markets; he concluded that the law’s impact would be mixed, delivering few new opportunities for European tech firms. 

On the regulation of AI, Zach was similarly critical. In May, he argued in an insight that the EU and UK competition authorities were too focused on minimising the role of large US technology firms in AI, rather than nurturing innovation and investment. In June, the CER hosted a panel featuring Werner Stengg, from the cabinet of commissioner Margrethe Vestager, which explored how AI posed challenges to the EU’s current approach to regulation. Zach also looked critically at the EU’s long-planned AI Act and in December argued in an insight that the EU should adopt ‘better regulation’ principles in implementing the Act.

Above: Conference on 'A European path to higher economic growth', Ditchley Park

Many of these questions of competitiveness were addressed in the CER’s annual economics conference at Ditchley Park, on the theme of ‘A European path to higher economic growth’. Participants included Maarten Verwey from the Commission; Isabel Vansteenkiste from the ECB; Paweł Karbownik from the Polish Ministry of Finance; and Robert de Groot of the European Investment Bank. The conference addressed whether the EU should use fiscal policy to boost demand and create a high-pressure economy to drive productivity growth; whether it should rely less on external demand for its products and services; how the bloc could best take advantage of new technology; the future of green industrial policy; and how the EU could effectively reconcile economic security and higher growth.

Towards the end of the year, the re-election of Donald Trump as US president signalled that the EU would face even bigger economic challenges in 2025, given Trump’s promise to impose tariffs on imports, his demand that other NATO countries increase defence spending and his hawkish approach to China. In October, prior to the election, Zach and Aslak published a policy brief setting out how the contrasting policies of Trump and Democratic candidate Kamala Harris would affect Europe’s economy – concluding that the US would pose several economic challenges for Europe, regardless of the election outcome.

Energy and climate

As Europe became reliant on imported liquefied natural gas to replace sanctioned Russian pipeline gas, the EU continued to suffer from energy prices which were structurally higher than before the Russia-Ukraine war. The European elections in June led to an increase in the representation of the far right, and a growing ‘greenlash’ against environmental legislation, resulting in a delay in applying important laws such as that on deforestation. There was increasing concern about how the rest of the world perceived EU measures like the Carbon Border Adjustment Mechanism (CBAM). The mechanism aims to ensure that EU manufacturers are not at a disadvantage to firms elsewhere that pay less for their carbon emissions. But in doing so the CBAM promised to impose greater costs on some poorer countries that produce goods falling under its scope. These collective challenges contributed to growing questions about how the EU should achieve its climate goals. 

The CER reflected on these questions throughout the year. In September, for example, CER distinguished fellow Philip Lowe published an insight that applauded the Commission for pragmatically accepting the usefulness of ‘carbon offsets’ to help firms reach their net zero targets, but emphasised that offsetting must be credible and rigorous. In September, the CER hosted Kurt Vandenberghe, the Commission’s director-general for climate action, to discuss whether the ‘green deal’ would work for both the climate and the EU’s green industries. And in December, Elisabetta Cornago and Aslak published a policy brief assessing the impact of the CBAM, pointing out that, although it was early days, the mechanism had not yet had visible impacts on the EU’s trade flows – though it was already encouraging trading partners to take up carbon pricing. They suggested the EU should provide funds to help the poorest countries decarbonise and adapt to the CBAM.

The global challenge of reforming the international financial architecture to help the developing world rekindle growth in a sustainable way was the subject of a CER event co-organised with the UK mission to the EU in March. Sander also returned to the World Bank-IMF annual meetings in Washington in October, to take stock of the deal to lower IMF lending costs by 36 per cent. Sander and Tobias Krahnke had advocated a reduction in IMF lending costs in a policy brief they had presented a year previously in Marrakech – and Sander co-authored a G20 paper to lay out the reform options. 

The Middle East, Türkiye and migration

As the Middle East became increasingly unstable, the CER continued to focus on security issues to Europe’s south. Europeans proved unable to exert any influence on the conflict between Israel and its opponents. In February, Luigi warned, correctly, that the conflict in Gaza risked spilling over into a broader war. As Luigi wrote in an October insight, Europeans had been reduced to being marginal players. He argued that they could at least try to stop matters from getting worse.  

In October we held the 20th edition of our annual Bodrum Roundtable with the Turkish think-tank the Centre for Economics and Foreign Policy Studies (EDAM). The speaker at the opening dinner was Mehmet Şimşek, Turkish finance minister, who talked up the Turkish economy. Other speakers included Mehmet Kemal Bozay, deputy foreign minister of Türkiye; Alexander Graf Lambsdorff, Germany’s ambassador to Russia; Gurvan Le Bras from the European External Action Service (EEAS); Leslie Vinjamuri from Chatham House; Maeve Ryan of Meta; and Jeannette Gorzala of the European AI Forum. 

The topics covered included Türkiye’s economic reform programme and its prospects; NATO’s strategy for its southern neighbourhood; the future of the EU/Türkiye customs union; the implications of the European Parliamentary and US elections; Ursula von der Leyen’s second term as Commission president; and the effect AI might have upon the world. 

Luigi also published an insight on the EU-Türkiye relationship, still dogged by disagreements. He argued that the EU needed to abandon its passive approach, and seek to manage differences with Ankara while trying to deepen co-operation in selected areas.  

Migration continued to be a major issue on the EU’s agenda. In May, the EU finalised its New Migration and Asylum Pact, after nearly a decade of negotiation. Luigi wrote an insight arguing that the new rules would not make the current system more humane or effective, or less controversial. In particular, co-operation with partners on returns was likely to remain challenging. Luigi argued that the problem with the EU’s approach was that migration was seen purely as a threat.  

Transatlantic relations  

America’s presidential election and its implications for transatlantic relations were a major focus of both our economic and foreign policy work. In an insight in January, Ian Bond warned that there was a good chance that Trump would be elected again, and worried that European leaders were not preparing for that outcome. The implications of the US election were an important theme throughout the Daimler Forum in Brussels in June – the last of these transatlantic gatherings, organised by The Brookings Institution, the Stiftung Wissenschaft und Politik (SWP) and the CER, to bear the Daimler title. Speakers included recently retired MEP Reinhard Bütikofer; Susan Glasser of The New Yorker; US ambassador to the EU Mark Gitenstein; the Commission’s deputy director-general for trade, Leopoldo Rubinacci; NATO assistant secretary-general Boris Ruge; French political director Frédéric Mondoloni; then national security adviser to the US vice president Philip Gordon; British ambassador to China Caroline Wilson; and the American Enterprise Institute’s Kori Schake. 

In a policy brief in July, Luigi assessed the consequences of Trump winning a second term and argued that he was likely to be more familiar with the levers of power and less restrained. Trump’s scepticism about NATO and his desire to end the war in Ukraine quickly worried European policy-makers, who were trying to hedge against possible disruption by increasing defence budgets and support for Ukraine.  

After the US election, CER researchers examined the consequences of Trump’s victory for Europe, concluding that his policies would be deeply disruptive in terms of security and of economic policy. The question facing Europeans was whether they would be able to remain united and craft a coherent response to Trump, or whether the pressure would cause Europe to fragment. The same issues were the focus of a CER/AIG webinar on the election results with Heather Conley from the German Marshall Fund, Christian Jetzlsperger from the German foreign ministry, Anna Kantrup from the BDI and the SWP’s Laura von Daniels. 

The war in Ukraine  

Worry about the reliability of US support for Ukraine grew throughout 2024. Europeans were forced to consider what they could do to fill any gaps. In January we hosted Michael Siebert from the EEAS to discuss what the EU had done to aid Ukraine so far, and how it planned to support Kyiv in the future. We also held an event in Brussels with David O'Sullivan, the EU’s sanctions envoy. David set out the challenges of effectively implementing sanctions, notably in terms of tackling circumvention, and explained how the EU was addressing them. In February, we focused on Ukraine’s EU accession process, holding a roundtable in Brussels together with University College London (UCL). Speakers included Maryna Iaroshevych from the NGO Ukrainian Prism, the Commission’s Natalie Pauwels and Andrew Wilson from UCL.  

In March we wrote an assessment of the conflict, two years after its start, warning that European governments needed to boost their support to Ukraine and disprove Vladimir Putin’s belief that he just needed to wait for US aid to dry up before Europe would also give up.

In March, with any credible potential rivals dead (opposition leader Aleksey Navalniy had died in prison in February), in gaol or in exile, Putin won re-election to another six-year term as Russian president. In an AIG/CER webinar on the eve of the voting, we looked at Putin’s world view, the threat from Russia and the threats to Russia, with Maria Domańska of the Polish Centre for Eastern Studies, Matthias Krämer of the BDI, Kadri Liik of the European Council on Foreign Relations (ECFR) and Alexander Graf Lambsdorff. In another event with UCL, we looked at the effect of Putin’s re-election on the war in Ukraine and on European security more generally. In a policy brief in April, Ian warned that Western and especially European leaders were underestimating the costs and impact of possible Russian victory in Ukraine.  

In July we held a roundtable discussion in London on the end of the concept of Russia’s near abroad, with Carnegie’s Thomas de Waal and Anna Matveeva of the King’s College London Russia Institute. The discussion focused on how Russia’s neighbours in the Caucasus and Central Asia were trying to rebalance relations, increasing trade and connectivity with Russia, while also seeking closer ties to the West. 

Above (L to R): Bernard Jenkin, Alicia Kearns, Valerii Zaluzhnyi (with interpreter), George Freeman, Isabell Poppelbaum and Charles Grant
CER/Delegation of the EU to the UK Conservative Party conference fringe event on 'Working together to support Ukraine', Birmingham

In October, we held an event with Daniel Fried, one of the US’s most experienced diplomats, now at the Atlantic Council. He set out his assessment of the war and how the outcome of the US election would influence it. In the same month our fringe meeting at the Conservative Party conference in Birmingham discussed how the EU and the UK could work together in helping Ukraine. This featured Valerii Zaluzhnyi, formerly Ukraine’s top general, and now ambassador to the UK, alongside senior Conservative MPs George Freeman, Bernard Jenkin and Alicia Kearns.

The war was also a major theme of the US-European Forum on Global Issues (the successor to the Daimler Forum), which met in Washington in December – along with China, international trade and the Middle East. Speakers at the forum included Thomas Wright from the National Security Council; Jens Plötner, Chancellor Olaf Scholz’s foreign policy adviser; Julianne Smith, outgoing US ambassador to NATO; Angus Lapsley, NATO assistant secretary-general; Salman Ahmed, director of policy planning at the US State Department; Tristan Aureau, France’s head of policy planning; Mary Lovely from the Peterson Institute; and Enrique Mora, the EEAS’s political director.    

China   

The EU’s relationship with China remained frosty and deteriorated further over the year. The main factors accounting for the poor relationship were, first, China’s continuing support for Russia in its war against Ukraine; and second, its industrial strategy of making huge quantities of subsidised green goods and then dumping them on global markets, threatening the viability of the strategic industries Europe had hoped to nurture. In an insight written after a visit to Beijing in May, Charles Grant concluded that the gap between China and the West was likely to grow. Even in areas previously seen as offering scope for co-operation, such as combating climate change, it was now clear that European and Chinese interests were only partially aligned, as Christina Keßler explained in a policy brief in June. At the same time, as she had explored in a January insight, the approach of the EU and its member-states to the Indo-Pacific region, including China, was divided and often incoherent.

In a June opinion piece in Politico, Sander laid out the risks to the EU’s productivity growth and innovation from China’s burgeoning economic and trade imbalances. These tensions were illustrated most clearly by the EU’s decision to impose new duties on imported Chinese EVs, based on the subsidies they received. However, as Anton argued in an October insight, China’s competitiveness was also fuelled by fierce competition in its domestic market, the country’s investment in EV infrastructure and superior technology. 

The strong opposition of some member-states to EV tariffs illustrated the EU’s continuing divisions over China. In May, Sander and Zach pointed out in an insight that US pressure on Europe to stop high-tech exports to China was likely to continue and that the EU needed unity to negotiate a joint China policy with the US from a position of strength. The EU’s, and in particular Germany’s, dilemmas and dithering on how to confront China’s economic model and save Europe’s own industry were also the subject of a widely-read interview in the Frankfurter Allgemeine Zeitung with Sander, as well as a podcast with Shahin Vallée of the German Council on Foreign Relations.

At the same time, many businesses started to question whether the EU’s proposed economic security strategy – which aimed to limit Europe’s dependencies and protect the Union’s position in strategic industries – took sufficient account of Europe’s attractiveness for investment, of compliance costs for businesses and of regulatory unpredictability. These questions were addressed in a panel discussion in November with Denis Redonnet from the Commission and MEP Marie-Pierre Vedrenne.

European defence and NATO  

In January, Luigi wrote a policy brief assessing Europe’s efforts to boost defence production. EU defence industrial policies would have a tangible impact on whether Europeans could increase their support to Ukraine and strengthen their own defences. Luigi argued that the EU needed to focus more resources on fostering joint procurement and expanding production of critical matériel. However, finding the money for EU defence was likely to prove challenging. In a podcast in the same month Camille Grand of the ECFR discussed the difficulties of boosting Europe’s defence industrial capacity.

In March, the EU released its first ever defence industrial strategy and a legislative proposal for a European Defence Industry Programme. In an insight, Luigi argued that in the short term, lack of funding and member-states’ doubts would constrain the Commission’s thinking. In the long run, however, the likelihood of more EU funding would exert a growing gravitational pull on defence co-operation.

In July, NATO leaders gathered in Washington for the Alliance’s 75^th anniversary summit. In some ways, NATO was in good shape, with most European allies now meeting the 2 per cent of GDP spending target. Large challenges loomed beneath the surface, however, as Luigi argued in an insight. Strengthening deterrence and supporting Ukraine depended on higher allied defence spending and defence production. Meanwhile, the prospect of Donald Trump’s re-election threatened NATO’s survival in its current form. Luigi argued that the allies would have to strengthen NATO’s ‘European pillar’ in response. 

European security was the focus of a panel event on European security that we organised in Berlin in September, in co-operation with UCL and the British Embassy. Speakers included the SWP’s Claudia Major, the ECFR’s Jana Puglierin and the German foreign ministry’s Michael Scharfschwerdt.  

More and more European leaders were advocating joint debt as a way to fund defence. So Luigi and Sander wrote a policy brief on defence bonds in November, arguing that they could be used to support Ukraine, enhance Europe’s defence R&D and military production, encourage joint procurement, and pay for efforts to strengthen borders and critical infrastructure. The authors concluded that though defence bonds faced high political hurdles, as threats to European security grew, their lure could prove irresistible.

Enlargement and the eastern neighbourhood 

EU leaders continued to say that further enlargement was important, but the process moved forward very slowly. The 20^th anniversary of the EU’s ‘Big Bang’ enlargement in May 2004 was marked by a joint event with the EU delegation to the UK, at which Surrey University’s Amelia Hadfield, Slovene ambassador Simona Leskovar and Anand Menon of the UK in a Changing Europe looked at the lessons of the last two decades and the prospects for future EU enlargement. 

Above (L to R): Charles Grant and Gert Jan Koopman 
CER/Kreab breakfast on 'How ready are the candidate countries for the obligations of EU membership?', Brussels

In October we held a breakfast event with Gert Jan Koopman, the Commission’s director-general for enlargement, looking at the progress of current candidates for membership. He sought to reassure the audience that the process had real momentum. In an insight that month, Ian warned that, for different reasons, both Georgia and Moldova risked coming under Putin’s influence – and that the EU had to try harder to keep them in its camp. 

In November, Zselyke Csaky assessed where the candidate countries stood on the rule of law and democracy. She argued that the increasing disconnect between the Commission’s official reports and the public statements by EU leaders that called for a speedy process was unsustainable. Of the six countries actively negotiating, none was well prepared on the rule of law in 2024. If the EU was to enlarge in the near future, it needed to provide more support to fragile democracies.

European politics and the rule of law

The year began with the funeral in Paris of Jacques Delors, who had died at the end of December 2023 at the age of 98. His impact on the history of the EU was enormous: he was the father of the European single market, and the euro would not have been created in the way it was, when it was, without him. Charles Grant, Delors’ biographer, was the only Briton to attend the funeral at Les Invalides, at which President Emmanuel Macron spoke. The CER published Charles’ ‘Ten reflections on Jacques Delors’ in January.

In June, voters elected a new European Parliament. In May we organised a panel discussion in co-operation with the Hanns Seidel Foundation, with Eli Gateva from Oxford University, Catherine Fieschi of the European University Institute, Tom Nuttall of The Economist, Nathalie Tocci of the Istituto Affari Internazionali and Klaus Welle of the Wilfried Martens Centre. In a pre-election insight, Christina examined the Spitzenkandidat (‘lead candidate’) process. She concluded that although it had not engaged ordinary voters in the way intended, it had helped elections to the Parliament to become less national and more European in character. 

Following the election, CER researchers wrote a piece assessing the implications of the vote in individual policy areas. Despite their gains, the populist right and far right would not dominate the new European Parliament. But as Luigi had predicted in a pre-election insight, the election results would impact climate and migration policies: the centre right was leaning further to the right on these issues, in the hope of winning disillusioned voters back. We also held a webinar with AIG on the implications of the elections. Our speakers were Carnegie’s Rosa Balfour, Katharina Braig of the German foreign ministry, the SWP’s Raphael Bossong and the BDI’s Joscha Ritz. 

One adverse consequence of the election was the impact on France. Macron, upset at his own party’s poor performance, dissolved the National Assembly. The gamble did not pay off: in the first round of the parliamentary elections Marine Le Pen’s far right National Rally came out on top. In the second round, anti-far right solidarity ensured that her party slipped to third place. But a leftist alliance won, making it impossible for Macron to form a stable centrist government. French commentator Christine Ockrent untangled the complex election results in an insight, as did Macron biographer Sophie Pedder in a podcast. French politics remained unstable for the rest of the year.

Right after the European elections, Hungary took over the EU’s rotating presidency. Zselyke argued in an insight that the Hungarian presidency would have a limited impact on EU policies, but if given a free rein, Prime Minister Viktor Orbán could cause considerable harm to the Union’s reputation. And so it proved: Orbán’s controversial trips to Russia, China and Georgia demonstrated that the rest of the Union was unprepared to counter Hungary’s messages.

Problems related to the rule of law and democracy persisted throughout the year. Speaking at a CER breakfast in February, Věra Jourovà, commissioner for values and transparency, described the huge efforts the Commission was making to ensure that member-states complied with European values. In an overview of the first von der Leyen Commission’s performance published in October, Zselyke argued that the EU’s enforcement mechanisms had improved, but that they had failed to prevent or remedy rule of law problems due to patchy implementation. The one success story, Poland’s return to the democratic fold after the departure of the previous Law and Justice government, came not through EU action but rather a successful opposition campaign (albeit one assisted by EU pressure). Then in December, Zselyke assessed the first year of the new government led by Donald Tusk in an insight, highlighting the difficulties of restoring the rule of law.  

February 2025

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