The EU of 2026: A New Landscape Post-Brexit for the UK

The relationship between the UK and the EU has been thrust back into the spotlight as Andy Burnham positions himself as a potential successor to Keir Starmer. With discussions on the UK’s possible rejoining of the EU gaining traction, it is crucial to recognize that the EU of 2026 is markedly different from the one the UK left behind.

The Changing Nature of the EU

Since the UK exited the EU, the organization has undergone significant transformations, evolving into a body characterized by common borrowing and a robust industrial policy. The EU has also asserted a more prominent role in security and defense, thereby encroaching on traditional nation-state powers. This shift raises essential questions about whether UK political elites and the public would even desire to rejoin this new EU.

As of 2026, the EU has embraced substantial levels of joint debt, a response to various crises that have affected its member states. For instance, to alleviate the economic impact of the Covid pandemic, the EU borrowed €100 billion from capital markets, which it subsequently lent to its members to support furlough programs. Further borrowing of €750 billion was allocated to assist the 27 governments with green and digital investments.

Fiscal Integration and Its Implications

The EU's current trajectory indicates a move towards deeper fiscal integration, with common borrowing emerging as a key tool for responding to future challenges. Under the proposed long-term budget for 2028 to 2034, the European Commission aims to establish a permanent fiscal capacity, enabling the EU to borrow from capital markets as needed.

• Common borrowing mechanisms established.
• Proposed permanent fiscal capacity for future borrowing.
• Increased EU-wide corporate and digital taxes to manage debt.

Such developments signal a shift from the UK’s historical preference for open markets and its opposition to large-scale supranational borrowing. The UK government has traditionally prioritized close ties with the US while balancing its relationship with China, but the EU’s stance is increasingly confrontational towards both powers.

Technological Sovereignty and Diverging Policies

The EU's approach to technological sovereignty further illustrates the divergence between the UK and the EU. The European Commission has introduced a tech sovereignty package aimed at reducing reliance on Silicon Valley, marking a departure from the UK’s preference for a lighter regulatory touch. This divergence is particularly evident in the realm of artificial intelligence, where the EU has opted for comprehensive regulations while the UK aims to attract AI investment through less stringent rules.

As the EU continues to evolve in response to global dynamics, the implications for the UK’s potential rejoining become increasingly complex. The question is no longer merely about the economic costs of Brexit or the feasibility of rejoining but rather the fundamental nature of the EU itself.