Michel Barnier's latest intervention has sparked renewed debate over the UK's possible re-entry into the EU, with the former chief Brexit negotiator suggesting that the country could potentially retain its special terms, including keeping the pound and remaining outside the Schengen passport-free travel area. This stance contradicts earlier warnings from some influential figures, such as Poland's foreign minister, who had hinted that the UK might face tougher conditions upon re-entry.
Under current EU treaties, member states are generally expected to adopt the euro, with Denmark enjoying a permanent opt-out, and new members typically required to join the Schengen area once specific technical, legal, and security criteria are met. However, Mr Barnier points out that several existing member states – including Sweden and some Eastern European countries – have managed to secure exemptions from the eurozone, while Ireland holds an official opt-out from Schengen, highlighting established precedents within the EU.
While Mr Barnier's comments offer a potential boost to those advocating for UK re-entry, he has stopped short of commenting on whether the country could retain its historic budget rebate – a contentious issue that has sparked debate in the past. He stressed the importance of the EU's principle of solidarity and noted that any future negotiations would be complex and involve trade-offs.
From an economic perspective, Mr Barnier reiterated his long-held view that the UK made the wrong choice in leaving the EU, pointing to mounting evidence of its impact on the country's economic performance. He linked the current economic challenges facing the UK – including rising inflation and labour shortages – directly to Brexit, stating, "It would not be fair to say that all these problems are due to Brexit, but I am sure of this: they are more difficult because of it." This assessment aligns with broader concerns about the UK's post-Brexit economic growth trajectory.
The potential for rejoining the EU with special terms could have significant implications for UK households and businesses, although any such move remains purely speculative at this stage. For businesses, a return to the single market could lead to reduced trade barriers, customs checks, and regulatory divergence – potentially lowering operational costs and boosting exports. However, the economic impact would ultimately depend on the specifics of any negotiated agreement, particularly regarding access to the single market and the free movement of goods, services, capital, and people.