The European Union that the UK left in 2020 no longer exists, according to Mujtaba Rahman, managing director for Europe at Eurasia Group. In a commentary published on 3 July 2026, Rahman argues that the EU has transformed into a more fiscally integrated, interventionist, and geopolitical bloc, and that any serious discussion about the UK rejoining must begin with an honest assessment of what the EU has become.
Andy Burnham's Rise Fuels Rejoin Debate
The question of the UK's relationship with the EU has resurfaced as Keir Starmer's premiership draws to a close and Andy Burnham, his likely successor, prepares to enter No 10. Wes Streeting, until recently a contender for the top job and now a possible future chancellor, went as far as to say that Britain should be back in the EU. However, the rejoin debate in the UK has focused narrowly on two issues: the cost imposed by Brexit on the UK economy, and the price of rejoining, such as whether the UK could win back its opt-outs from the Euro and Schengen areas.
EU's Transformation: Common Borrowing and Fiscal Integration
Rahman points out that the EU of 2026 is built increasingly on common borrowing, an assertive joint industrial policy, and a growing role in security and defence that encroaches on traditional nation-state powers. Confronted with a series of shocks, the remaining 27 governments have responded with substantial levels of joint debt backed by the EU budget. To deal with Covid, the EU borrowed €100bn from capital markets and lent it to member states for furlough programmes. As the pandemic worsened, the EU borrowed a further €750bn, largely passed on as grants for green and digital investments.
The US's retreat from its promise to keep Europe secure prompted the European Commission to borrow €150bn through the Security Action for Europe (Safe) initiative to support defence-industrial collaboration. Much of the EU's aid to Ukraine has been funded similarly. This represents one of the most profound shifts in European integration history. Common borrowing is not merely a new financing tool but a form of quasi-political and fiscal integration that many Eurosceptics long warned the EU would pursue. Had the UK remained a member, it would almost certainly have opposed it.
Industrial Policy and Protectionism
The EU of 2026 is also more interventionist and protectionist regarding its single market. Its increasingly permissive approach to state aid, alongside instruments such as the proposed Industrial Accelerator Act – designed to boost Europe's strategic industries and counter unfair Chinese competition – and Safe reflect a new willingness to use industrial policy as a geopolitical tool. Brussels has targeted Chinese overcapacity and restricted US firms' access to EU defence financing through 'buy European' requirements intended to strengthen Europe's industrial base and strategic autonomy.
Divergence from UK Preferences
Under both Conservative and Labour governments, the UK historically opposed closer European fiscal integration, large-scale supranational borrowing, and an activist EU industrial policy, preferring open markets. Successive British governments have also preferred to preserve close economic, security, and strategic ties with Washington while balancing increasingly hawkish rhetoric on China with continued economic pragmatism. The EU's stance toward both countries is heading in a much more combative direction.
Technological Sovereignty and AI Regulation
The EU's growing push for technological sovereignty marks another departure from British instincts. The commission's tech sovereignty package reflects a growing determination to reduce the EU's dependence on Silicon Valley providers. While the UK shares some concerns, British governments have been more comfortable operating within a US-led technology ecosystem, favouring transatlantic cooperation. Artificial intelligence may prove the clearest example of divergence on tech policy. Whereas the EU has led with comprehensive regulation, the UK has deliberately marketed itself as a lighter-touch alternative, arguing that freedom from EU rules strengthens its attractiveness for AI investment and innovation.
Institutional Changes: Majority Voting
Institutionally, the EU is moving away from traditional British preferences. The arrival of Hungary's new prime minister, Péter Magyar, has provided senior EU officials with the opportunity to move away from national vetoes in EU law-making in areas such as foreign policy, sanctions, and EU enlargement – and towards a majority voting approach long championed by Brussels, Paris, and other advocates of a more sovereign Europe.
The Real Question for the UK
Rahman concludes that these developments are not necessarily wrong for the EU, nor should they mean the UK should not seek to rejoin, or that a future British government could not pull the EU back in a more liberal direction from within. But any serious rejoin debate must start from an honest assessment of what the EU has become. The real question is no longer whether Britain could recover its old opt-outs and budget rebates, but whether it is prepared to join a union that is more fiscally integrated, more interventionist, more geopolitical, and, in many respects, markedly less British than the one it left.
