Chancellor Rachel Reeves has called for closer economic ties between the UK and EU (European Union), arguing that a stronger partnership will boost growth and reduce trade barriers. In a landmark speech to the Eurogroup of European finance ministers in Brussels, Reeves emphasized that deepening UK-EU relations could create opportunities for businesses on both sides.
This marks the first time a British chancellor has addressed the Eurogroup since Brexit, signaling a shift in tone and approach to Europe under Labour’s leadership.
Reeves described her vision as a “mature, business-like relationship” between Britain and the EU. “The last few years have been fractious,” she told finance ministers. “Division and chaos defined the last government’s approach to Europe. It will not define ours.”
While Labour has firmly ruled out rejoining the EU, Reeves stressed that building a stronger relationship is in the mutual interest of both economies. “A closer economic relationship between the UK and the EU is not a zero-sum game. It’s about improving both our growth prospects,” she said.
Reeves highlighted the challenges UK businesses face in trading with the EU due to post-Brexit regulatory hurdles and paperwork. “For businesses to thrive, they need fewer barriers and more opportunities to sell across borders,” she stated.
This sentiment was echoed by the British Chambers of Commerce (BCC), which represents 50,000 businesses. The BCC emphasized that “UK firms are struggling under huge regulatory and paperwork burdens,” and boosting exports is vital for economic growth.
Labour has committed to honoring post-Brexit agreements made under the previous government, including the Windsor Framework that governs trade between the UK and Northern Ireland. Reeves used her speech to reassure European leaders that Labour’s approach would prioritize economic stability and mutual benefit.
“The reset in relations is about doing what’s in the best interests of our shared economies and the people who depend on them,” she said.
Reeves’ stance has sparked criticism from the Conservatives, who argue that her focus on the EU could distract from other global opportunities. Andrew Griffith, shadow business secretary, said, “If [Reeves] is interested in growth, she should tell the prime minister to jump on a plane to the US and talk to [President-elect] Trump about getting a US-UK trade deal done, not trying to take Britain backwards into the slow growth EU.”
Liberal Democrat Treasury spokesperson Daisy Cooper also weighed in, blaming the Conservatives’ “botched Brexit deal” for the economic challenges small businesses and farmers now face.
Reeves’ message aligns with recent comments from Bank of England governor Andrew Bailey, who in an unusual move urged the UK to “rebuild relations” with the EU. Bailey highlighted that trade in goods, particularly in sectors like food and farming, has been hit hard by Brexit-related barriers, though services such as banking have fared better than expected.
The Chancellor’s remarks come at a pivotal moment for the UK and European economies. With President-elect Donald Trump threatening to impose tariffs of up to 20% on all US imports, securing smoother trade relations with Europe could provide stability amid global uncertainty.
Reeves concluded her speech with a call to action for European finance ministers to collaborate with Britain. “The reset in relations is about breaking down barriers to trade, creating opportunities to invest, and helping our businesses sell in each other’s markets,” she said.
By fostering closer ties with the EU, Reeves hopes to chart a new course for the UK economy—one that prioritizes growth, collaboration, and a pragmatic approach to international trade.
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