Ten years ago, ‘Project Fear’ was at the heart of the ‘Remain’ campaign’s inept efforts to persuade Britons not to vote to leave the EU. 

Voting for Brexit, according to David Cameron’s government Doomsday forecasts, would cost every household £4,300 (€5,000) per year from 2030, lead to an immediate recession and mean lower house prices. 

It was a huge mistake. That all the pro-EU camp could say about being members of the club was that it would be very expensive to leave was a jarring admission of failure. And the promised economic apocalypse of instant recession and house price warnings didn’t happen. Most people simply didn’t believe the figures or that the politicians behind them were being honest about them. The result, as we know, is that more than 17m Brits gave the ‘establishment’ – or what they perceived it to be – a big kick up the arse. 

Fast forward to 2026 and newly-minted UK prime minister Andy Burnham has put all options for UK-EU relations – including rejoining – back on the table. 

The UK Treasury, which drew up the prophecies of doom, is now expected to publish a study analysing the potential economic benefits of Britain moving closer to the EU ahead of November’s EU-UK summit.

Personally, I think Brexit and the piecemeal trade and cooperation agreement that governs EU-UK trade has resulted in a small but significant economic hit.

The hope is that the treasury won’t promise milk, honey and gold-paved streets if the UK rejoins the EU or its single market.  

If over-promising increases the speed at which voters get disappointed with governments, the Brexit vote is proof that trying to frighten people is the fastest way to lose an election.  

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MEPs have put themselves on a collision course with EU governments by rejecting plans for a 17-percent cut in foreign spending – instead demanding additional spending worth €25bn. 

Earlier this month, the Irish government, which holds the six-month rotating EU council presidency, proposed that €38bn of cuts be made from the ‘Global Europe’ heading, which covers foreign aid, as part of an overall package of €141bn of cuts to the seven-year EU budget, known as the multi-annual financial framework (MFF). 

But in a vote on Monday evening (19 October), the European Parliament’s development committee instead backed a dedicated minimum budget of €25bn for humanitarian aid, as well as dedicated budget lines for a Gaza reconstruction fund and for candidate countries. Put together, that would mean a €25bn increase on the EU Commission’s original budget of €200bn for the Global Europe heading. 

The position agreed by MEPs, by a 61-to-34 vote margin, will eventually form the basis of negotiations between MEPs and ministers when EU governments agree their position on the budget. 

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Europe’s trade deficit with China reached a record $34.8bn [€31bn] in September, as EU leaders meet in Brussels on Thursday (15 October) to discuss Europe’s competitiveness agenda and what they call “macroeconomic imbalances” — a euphemism to avoid mentioning China by name.

EU heads of state and government are expected to give a mandate to the EU Commission to propose a set of trade defence measures and tools to reduce the EU’s reliance on Chinese industry, based on a new Franco-German blueprint, as a united front spreads across the bloc. 

There was a move towards a “surprising unitary position” on Beijing among member states, said an EU diplomat, ahead of a two-day summit in Brussels which began on Thursday (15 October).

A joint letter and policy paper submitted by French president Emmanuel Macron and German chancellor Friedrich Merz to commission president Ursula von der Leyen last week was viewed by many EU diplomats as marking a decisive shift towards a more consolidated EU stance on trade relations with China. 

“For a long time, there were significant differences between these two countries on how to deal with China, how to address the economic situation,” parliament president Roberta Metsola told reporters on Thursday. 

The diplomat added that the commission’s trade diversification package, designed to reduce the bloc’s reliance on Chinese industrial inputs and curb Chinese exports, will be presented by the end of the year and will be based on the Franco-German paper. 

But the commission, for its part, has downplayed the prospect of rapid progress to EU-Chinese trade statistics. “It’s an issue which is not going to be solved in a couple of months,” said one official. 

‘Be ready for escalation’ but do nothing

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A backlash is building against an EU ‘omnibus’ bill that seeks to make it easier to authorise and use pesticides across the bloc. 

MEPs are still yet to set a date to vote on the European Commission’s proposal to extend how long pesticide active substances can stay approved in the EU, amid a series of protest letters from scientists, UN health experts, and divisions among member states. 

EI parliament’s environment and agriculture committees were originally expected to hold a joint vote on a compromise text on 5 October, but shelved that date without proposing another as this article went to publication. 

Sustained criticism has come from the scientific community. 

Last month, a group of more than 500 scientists signed an open letter to the commission on 16 September demanding a pause on the file pending “an independent assessment, whether carried out by parliament’s own research service or by an equivalent independent body.” 

And last week, a group of five UN health experts penned their own letter to the EU executive.

They warned that the commission’s plan to extend grace periods for products withdrawn on safety grounds, widen derogations for hazardous substances, and restrict the use of the latest independent scientific evidence “seem difficult to reconcile with the precautionary principle and with obligations to respect, protect and fulfil human rights, including the rights of peasants and other people working in rural areas”. 

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Belgium’s foreign minister has called on the EU to deepen its economic, trade, and defence ties with Turkey, amid concerns from Ankara that it risks being shut out of the bloc’s new rules on industrial supply chains and multi-billion euro defence procurement scheme. 

Speaking at a Turkey-EU business forum in Brussels on Tuesday (13 October), Belgian foreign minister Maxime Pévot said that European manufacturers were increasingly looking for reliable partners closer to home as they seek to reduce their reliance on Chinese inputs. 

“We should make values of its proximity, particularly in sectors where Europe needs to reduce strategic dependencies,” he added. 

“Our economic relationship should no longer be limited to buying and selling goods. We should also be developing, producing, and investing together,” he said. 

For his part, following talks with Ankara’s trade minister, Ömer Bolat, EU trade commissioner Maroš Šefčovič told reporters that the two sides had agreed on reforms to Turkey’s import control system to make the system easier for EU exporters to use and a mutual recognition pact on trusted traders. 

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Getting co-decision powers on the budget, finally enshrined in the Lisbon Treaty after more than a decade of inter-institutional battles, was one of the European Parliament’s big wins. 

The challenge facing MEPs in the coming months is whether they are really going to use those powers on the 2028-34 budget. 

The early signs are that they are spoiling for a fight. The Irish government’s compromise proposal tabled on Saturday (10 October) – an 8 percent cut worth €141bn to the European Commission’s spending plan – isn’t exactly butchery. 

But it does display a startling lack of ambition, in particular on the raft of ‘own resources’ proposed by MEPs to make the budget process less vulnerable to member states wanting to reduce or at least freeze their annual contributions  

This time round, MEPs have proposed a digital services levy, an online gambling levy, and a levy on crypto-asset capital gains.

Put together the parliament reckons that these new taxes could bring an additional €30bn to the EU’s budget, on top of the €57.4bn that the EU commission believes can be raised from other levies, such as the emissions trading scheme and the carbon border levy. 

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The Irish government has set the path for a showdown between MEPs and governments over the next seven year EU budget after proposing an 8 percent cut worth €141bn to the European Commission’s spending plan. 

Savings from the commission proposal have been found across all headings in the so-called ‘negotiating box’ for the 2028–2034 Multiannual Financial Framework (MFF). But farmers’ subsidies under the common agricultural policy and the bloc’s cohesion policy, which provides funding to the EU’s poorest regions, have been exempted from any cuts. 

That is a nod to a sustained lobbying effort by a group of seventeen EU countries, known as ‘Friends of Cohesion’. 

As expected, meanwhile, cuts totalling €38bn have been made from the ‘Global Europe’ heading, which covers foreign aid, while €75bn has been taken from the competitiveness fund and €10bn from the EU’s administrative costs. 

In a statement on Saturday (10 October), Ireland’s minister for Europe, Thomas Byrne, said that the €1.62 trillion spending plan was “intended to bridge the many differences between Member States. It brings us closer to resolving the critical questions our Union faces on how to balance both new priorities and core policies, whilst also reflecting the fiscal realities that all Member States face.” 

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EU and Chinese officials agreed a series of trade concessions covering electric cars, rare earths and tariffs that dragged them away from a damaging trade war on Friday (9 October), following two days of crisis talks.

Following two days of talks in Beijing, EU trade commissioner Maroš Šefčovič said that he and China’s commerce secretary Wang Wentao had made a “crucial first step” towards rebalancing EU-China trade relations.

Europe can point to progress on hybrid vehicles, stronger assurances over the supply of critical raw materials, and continued engagement on market access issues in China.

Hours before Šefčovič arrived, Beijing rejected an EU demand for so-called “voluntary export restrictions” on its electric vehicles (EVs). However, in a joint statement on Friday, the two sides said that they had reached an “understanding on trade in hybrid vehicles in a WTO compliant manner”, but without providing further details.

They added that further negotiations on reducing tariffs and minimum pricing deals would allow Chinese EVs to enter the EU at a lower duty rate.

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Persuading China that its €1bn daily trade surplus with the EU is not sustainable was always going to be a hard sell for EU trade commissioner Maroš Šefčovič.  

And the early signs are that Šefčovič’s two days of talks with Chinese commerce secretary Wang Wentao, which conclude on Friday (9 October), are not going to deliver the breakthrough demanded by EU leaders when they gather for a summit in Brussels next week. 

“The message around the table was clear: the need to improve access to the Chinese market, while boosting our economic security,” Šefčovič posted on X ahead of the first day of talks. 

But rhetoric aside, three months after the EU Commission set up a series of ‘work streams’ with Chinese officials, with a mandate to address the multi-layered EU-Sino trade dispute, it is hard to see much tangible progress. 

Hours before Šefčovič arrived, Beijing rejected an EU demand for so-called “voluntary export restrictions” on its electric vehicles (EVs). 

In August, data published by Schmidt Automotive Research found that 14 percent of EV sales across Europe this year were Chinese-made, up from 9.4 percent last year. 

That is despite the EU imposing additional tariffs of between 17 and 36 percent on Chinese EVs in October 2024. 

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European Commission president Ursula von der Leyen has joined MEPs in urging the bloc’s governments not to gut the EU’s next seven-year budget, as talks on spending reach a critical phase. 

“I would like to caution against large cuts. It would risk cutting deep into critical priorities that we all together have agreed on,” von der Leyen told MEPs during a speech in Strasbourg on Tuesday (6 October), ahead of an EU summit on 15 October.

The commission has proposed a budget worth just under €2 trillion, equivalent to 1.26 percent of the EU’s gross national income, a small increase on the previous seven year spending plan. But the so-called ‘frugal’ group of countries, led by Germany, have demanded hefty cuts, complaining that they are contributing too much. 

“Having no new financial framework is by far the most financially advantageous solution for Germany,” chancellor Friedrich Merz said on Monday. 

But 17 EU countries from Southern and Eastern Europe signed a joint letter last week, demanding that farmers’ subsidies via the Common Agricultural Policy are maintained, as well as spending across the EU’s poorest regions, known as cohesion policy 

During a press conference on Tuesday, Siegfried Muresan, the Romanian centre-right MEP who is co-leading parliament’s negotiating team on the seven-year budget with Portuguese socialist and democrat Claudia Tavares, said that there was “still time” for the Irish presidency to avoid proposing “unjustified cuts” that “would make Europe weaker and severely undermine the institutional cooperation between parliament and council.” 

Though Muresan conceded that governments did not want to increase their national contributions, “there is a way out”, he said. 

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Having said several months ago that he had no intention of a ‘rerun’ of the Brexit debate, UK prime minister Andy Burnham told Labour delegates at the party’s annual conference in Liverpool last week that nothing should be off the table as far as EU-UK relations are concerned. 

Brexit had “done more harm than good”, he said, adding that “we will not give Britain the clear path we need into the rest of the century until we decide on a long-term relationship with what is still our largest market.” 

In fact, Britain could “go all the way” back into the EU, said Burnham.  

The new prime minister is still enjoying something of a honeymoon period. His Labour party now tops the opinion polls, albeit by less than 30 percent, and his early policy announcements on nationalising utilities and pension reform are the most radical in a generation. 

Even so, Burnham’s remarks were a surprise that left pro-European columnists positively giddy with optimism over the weekend. 

In truth, rejoining the EU – if it happens – would probably take a decade. 

Burnham didn’t offer any timetable or any other specifics, and has said that no moves towards EU membership would be taken before the next UK election due in 2029. And talk of rejoining the EU is not purely borne out of pro-European enthusiasm. 

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The EU has played down claims by the Dutch government that the bloc’s decision to suspend aid support for Sierra Leone was because the west African country refused to extradite one of the world’s most-wanted drug traffickers to face trial in the Netherlands. 

Speaking on Thursday, (1 October) after a meeting of EU justice ministers in Luxembourg, migration commissioner Magnus Brunner told reporters that the decision to suspend support was made for “technical reasons” — but without giving more detail.  

Sierra Leone was allocated €352m in EU funding between 2021 and 2027, under the bloc’s seven-year budget framework. The country was set to receive €18m from the EU this year. 

But Dutch justice minister David Van Weel insists that the suspension of funds is the result of months of pressure from the Dutch government to persuade president Julius Maada Bio’s government to hand over convicted Dutch drug trafficker Jos Leijdekkers.  

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The sudden escalation in fighting between Ethiopian federal forces and Tigrayan rebels in the Afar region, raising fears of a new civil war, is part of a wider potential cascade effect from Yemen that could hurt Europe. 

After months of low-level skirmishes, Ethiopian officials have accused the Tigrayan People’s Liberation Front of launching an all-out offensive against federal government positions in northern Ethiopia. 

So what does that mean for Europe and the EU? More than you might think. 

Ethiopia’s economy is particularly vulnerable following the capture of Yemen’s entire Red Sea coastline by the Houthi rebel group, who now control the Bab el-Mandeb Strait. 

Some 97 percent of Ethiopia’s trade is via Djibouti’s port. There is now a real prospect of a series of regional chain reactions and the prospect of civil war in northern Ethiopia is one of them. 

This doesn’t directly impact on the EU’s interests, but it could soon enough.  

Ethiopia is not alone in facing major new threats posed by the Houthis’ advances.  

Egypt, a vital ally for the EU on migration control, faces its own economic crunch as it relies on Suez Canal tolls as a main source of foreign currency. That could lead to more financial demands being made of Brussels 

For their part, Djibouti and Somalia face major security concerns. Djibouti hosts military bases for a handful of EU countries, as well as the EU itself, and the United States, China, and others.  

Somalia, meanwhile, has a longstanding African Union (AU)-led security mission aimed at combatting the Al-Shabaab terror group to which the EU is the biggest single donor.

And the AU mission is particularly reliant on the EU after the Trump administration pulled the plug on US financial support earlier this year. The Houthis already supply at least $100m (€88m) in arms to Al-Shabaab, a smuggling operation now made easier by its coastal advances. 

For the moment, the EU is offering only modest additional support. Last week, EU governments agreed to double financial support for the Djibouti Armed Forces to €20m under the European Peace Facility. 

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EU governments are deadlocked on how to proceed with a major overhaul to the bloc’s pesticides rules following a sustained pushback from scientists and countries outside the EU. 

The revisions to the pesticides regulation form part of a food-and-feed ‘Omnibus’ law proposed by the EU Commission last December and are primarily aimed at reducing bureaucracy for European farmers by making it easier to authorise and use pesticides. 

But there are deep divisions among member states about some proposals, particularly the revised thresholds on maximum residue levels of chemicals. 

Earlier this week, the Irish EU council presidency abandoned plans to get diplomats to adopt a formal negotiating position on the file. 

For their part, a group of more than 500 scientists signed an open letter to the commission on 16 September demanding a pause on the file pending “an independent assessment, whether carried out by parliament’s own research service or by an equivalent independent body.” 

“Given the scale of the changes under consideration, and in a broader context in which the scientific community is increasingly called upon to warn of cumulative environmental and health pressures, we believe that responsible policymaking calls for caution rather than speed,” the letter says. 

Under the proposal, residue limits for certain pesticides banned in the EU could be lowered to the lowest level laboratories can reliably detect, even when those substances remain legally-used in exporting countries. 

In order to avoid leaving any residue on fruits and vegetables, producers would essentially have to stop using the substance in question. 

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