EPC: The EU–UK relationship: It is what it is

17 February 2021

The EU–UK Trade and Cooperation Agreement might have pulled both sides back from the brink of a no-deal cliff edge, but it remains a shaky foundation for the next stage of EU–UK relations. Both sides must invest in the relationship and rebuild trust to prevent any conflict from escalating into a tit-for-tat. Or else, they risk the collapse of the deal and the return to a no-deal-like state.

In the first months of its new phase, the relationship is already off to a rocky start. The rows over the diplomatic status of the EU mission in London and the Commission’s (now reversed) decision to trigger Article 16 of the Northern Ireland Protocol expose the volatility of the relations and the importance of good communication and trust. The hope for a deal came with the expectation that it would provide the foundation upon which a closer relationship could be constructed over time. It now seems more likely that it will be the basis for a diverging – and at times conflicting – relationship, with little prospect for a significantly closer economic relationship anytime soon.

There seems little political appetite on both sides to build on the economic settlement meaningfully, which would require a significant shift of red lines. Previous expectations that a deal would pave the way for outstanding issues, such as the EU granting equivalence for financial services, have also diminished. Given both the political climate and many red lines, the agreed thin economic settlement may be the most we can expect.


Read the full paper here.

© European Policy Centre EPC