Labour’s Brexit Reversal Faces Euro Price Tag

Monday, May 25, 2026

Labour's plan to rejoin the EU faces major hurdles as Brussels insists the UK must adopt the euro and forgo previous financial rebates, while also rejecting partial commitments like the single market. These demands complicate efforts to reverse Brexit and signal that any return would require significant sacrifices on UK sovereignty and economic policy.

Labour’s ambition to rejoin the European Union faces significant challenges as key EU figures have signaled conditions that the UK must meet, including adopting the euro and foregoing previous financial rebates. Sandro Gozi, the head of the EU-UK Parliamentary Assembly, indicated that Britain's return to the bloc could be expedited due to institutional familiarity and existing regulatory alignment. However, he emphasized that the UK would need to abandon demands for special exemptions, including retaining its former budget rebate known as the “UK correction,” which previously reduced the country’s financial contributions by about two-thirds.

The comments come as the Labour Party prepares for a leadership contest following Sir Keir Starmer’s tenure as Prime Minister. Leadership contenders Wes Streeting and Greater Manchester Mayor Andy Burnham have both expressed support for reversing Brexit, although Burnham has tempered expectations about how soon this might be achievable. Meanwhile, Starmer aims to present a plan for a closer relationship with the EU at a summit initially slated for around the 10th anniversary of the Brexit referendum. Reports, however, suggest the event may be postponed as Brussels awaits clarity on the UK’s leadership.

Despite Gozi’s willingness to discuss reconciliation, he cautioned that the UK must move away from its historical resistance to commitments such as currency union. The euro’s adoption is viewed as a non-negotiable condition for rejoining, raising concerns among some UK politicians about abandoning the pound. Additionally, the EU appears unlikely to reinstate the UK’s former rebate, a position that could result in significantly higher financial obligations for the country compared to its previous membership.

On the UK side, Labour has maintained red lines against rejoining the EU’s single market or customs union, as outlined in the party’s manifesto. Cabinet minister Darren Jones affirmed that these positions would remain firm. Nevertheless, it emerged that during recent negotiations, Sir Keir’s chief negotiator, Michael Ellam, proposed reentry into the single market, a suggestion rejected by the EU due to UK reluctance to accept free movement of people. Brussels has expressed concern that allowing the UK to selectively engage with certain EU rules and institutions without full membership could provoke resistance from existing members.

As the debate over Brexit’s future unfolds, both sides appear to grapple with fundamental questions about sovereignty, economic integration, and political compromise, leaving the prospect of the UK rejoining the EU subject to complex and potentially protracted negotiations.