What's in the EU-UK Deal?
But Also — Pensions, Internal Market, Asylum, CS3D
Hello! Today is May 28, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.
The Briefing
Five years after Brexit, the United Kingdom and the EU have started a “new chapter” in their tumultuous relationship during a summit held on May 19 in London.
DEAL • “This is a historic moment,” Ursula von der Leyen declared at the end of the meeting, praising Keir Starmer’s leadership and stating that the agreement reached would allow for a “new chapter” in EU–UK relations.
“It’s time to look forward,” responded Keir Starmer, calling for an end to “old debates and political fights to find common sense, practical solutions which get the best for the British people.”
The agreement reached is undoubtedly the most significant bilateral advancement since the EU-UK Trade and Cooperation Agreement signed on December 24, 2020, just days before the Brexit transition period ended.
However, the three documents agreed upon by Brussels and London on Monday contain promises and pledges rather than tangible commitments.
DEFENCE IN FOCUS • Against the backdrop of the war in Ukraine and uncertainty around US security guarantees in Europe, the most tangible progress between the two partners was on defence.
In their joint statement, London and Brussels highlighted their alignment and willingness to collaborate on Ukraine, as well as their determination to continue “applying pressure” on Russia to achieve “a just and lasting peace.”
Most importantly, the two leaders also signed the Security and Defence Partnership, under which they committed to increasing military cooperation, including joint operations and training, and working together on cybersecurity, critical infrastructure protection, space, and maritime security.
This partnership also includes an agreement on the UK's participation in the European SAFE programme, which consists of €150 billion in loans aimed at boosting military spending across the continent.
However, in order to determine which UK entities are eligible and to finalise the UK’s financial contribution to the initiative, a further negotiation will be required.
These discussions—set to begin only once the 27 EU member states agree on the SAFE regulation’s content—are expected to be difficult, according to Politico, which notes that there are proposals to limit components from outside the EU to 35% in funded military equipment and raises questions about France’s role in the process.
DYNAMIC ALIGNMENT • Progress on controls on food products is also yet to be confirmed, with a lack of an agreement on this area having hindered bilateral trade for the last five years.
In a separate document, entitled “Common Understanding,” London and Brussels laid the groundwork for a sanitary and phytosanitary agreement that could ease trade.
The envisioned agreement would exempt “the vast majority of movements of animals, animal products, plants, and plant products between Great Britain and the European Union” from certificates and inspections.
To achieve this, Keir Starmer’s government accepts two major principles: a “dynamic alignment” of the UK’s sanitary and phytosanitary standards with those of the EU—though exceptions may apply—and the involvement of the EU Court of Justice.
This is likely to irritate hardline Brexit supporters, who fought to avoid these two concessions that give significant control to the EU and would increase pressure in the event of a finalised deal on this contentious issue.
GOOD CATCH • In order to obtain this draft agreement, the Labour government also had to cede on European fishing boats having access to British waters.
The current agreement has thus been extended for 12 years, until 2038, as requested by France and the Netherlands, among others.
The two partners also committed to aligning carbon taxes on both sides of the Channel to avoid double taxation for cross-border operators.
Other initiatives launched include better UK integration into the European energy market and the country’s return to the Erasmus+ programme, amid declining exchanges since Brexit.
On the EU’s side, the only truly concrete commitment at this stage is on trade, with a pledge not to impose tariffs on UK-manufactured steel.
In Case You Missed It
CS3D • Emmanuel Macron called for the withdrawal of the Corporate Sustainability Due Diligence Directive (CS3D or CSDDD) during the Choose France summit. He thus joined the position of German Chancellor Friedrich Merz.
This directive requires companies to monitor their entire supply chain to prevent human rights abuses and environmental harms. It has faced heavy criticism due to its complexity.
The CS3D was adopted in May 2024 but is currently undergoing legislative review as part of the Omnibus package presented by the Commission in February 2025. The Omnibus package aims to simplify the regulatory environment and reduce the administrative burden on European companies.
In mid-April, the Parliament and the Council approved a directive known as “Stop the Clock,” postponing the obligation for Member States to transpose the CS3D. This postponement is intended to allow for a revision of the CS3D, aimed at easing reporting obligations and reducing the number of companies concerned.
It is in this context that some are calling for the complete withdrawal of the directive.
INTERNAL MARKET • The Commission presented its single market strategy on May 21. The 31-page document outlines the roadmap to reduce barriers to intra-European trade, boost the services sector, and stimulate investment within the internal market.
Following this, the Commission unveiled new proposals aimed at reducing administrative burdens as part of the Omnibus packages.
The creation of a “small mid-cap” company status for businesses with fewer than 750 employees and a turnover of up to €150 million (or €129 million in total assets) has been proposed.
This status will be associated with simplified obligations regarding the GDPR or IPOs. It is intended to allow companies to grow without being hindered by the obligations imposed on firms once they exceed the 250-employee threshold.
Besides, the Commissioner for the Internal Market expressed openness to the introduction of a Buy European Act for public procurement in Europe. Speaking to Caroline de Camaret (La Faute à l’Europe), Stéphane Séjourné stated:
“Choose Europe will mean revising public procurement, introducing European preference clauses in a number of strategic sectors, implementing the Buy European Act—a small revolution for the European Union and for all countries that did not share the French concept of European preference.”
PENSIONS • A report by the European Court of Auditors has raised serious concerns about the EU’s inability to advance private pension schemes.
The pan-European Personal Pension Product (PEPP), launched in 2022, aimed to attract €700 billion in savings by 2030. It has currently fewer than 5,000 subscribers and collected €11.5 million.
According to the report, the three main obstacles are the lack of common tax rules, burdensome cross-border procedures, and fees capped at 1%, which makes the PEPP unprofitable for banks and insurers.
The Commission plans to revise the PEPP before the end of the year. The goal is to channel private savings into productive investments and ease pressure on public finances.
ASYLUM • The Austrian Chancellor has recently urged a comprehensive reform of the EU’s asylum system.
Austria has already suspended the processing of family reunification requests for refugees for a year, an unprecedented decision within the EU. The Austrian Chancellor stated that this suspension is only a “first step” and did not rule out a complete freeze on asylum applications in the event of a new massive influx of migrants comparable to 2015 or 2022.
The government is already planning to introduce a permanent quota system for family reunification starting in 2026, which could be set to zero, citing an “overload” of schools due to the arrival of migrant children and a rise in juvenile delinquency.
While NGOs and UN agencies are raising concerns about potential violations of fundamental rights, the European Commission proposed this week a relaxation of the legal framework to reject asylum applications from people transiting through safe third countries more easily.
What We’ve Been Reading
In an ECIPE paper, Andrea Dugo, Fredrik Erixon, and Oscar Guinea take cues from successful practices abroad to advocate for an EU industrial policy that emphasizes R&D investment, supports entrepreneurship, and avoids subsidies that protect inefficient firms.
The Peterson Institute’s Cecilia Malmström and Yeo Han-koo argue that the EU should join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
This edition was prepared by Mathieu Solal, Augustin Bourleaud, Hana Rajabally, Lucie Ronchewski, Antoine Langrée, Léopold Ringuenet, Alexis Rontchevsky and Maxence de La Rochère. See you next week!