The UK and EU see 2025 as a reset year, but there is little room for compromise.

EU officials say they are confused by the UK government's declaration of an 'ambitious' reset after Brexit while maintaining restrictive red lines.

A recent research paper outlining the EU's interests noted that “the proposed economic benefits are limited” because it ruled out Britain rejoining the EU customs union or single market or accepting free movement of people.

Some in the EU suspect the British government believes it can get in return for defense trade. What they say will never happen.

“The UK is mistaken if it thinks it can use the defense deal as a backdoor to get a good deal with us on trade,” said one EU diplomat.

“For us it’s like we’re playing a strange tug-of-war: the EU has the devil on one shoulder and the angel on the other. There is more that unites us in terms of values ​​than divides us with the UK.

“The EU wants to take steps to get closer to the UK, but on the other hand we cannot do away with the technical details on which the EU is based. We cannot do a special deal with the UK, even if that limits the relationship. “

For economic relations to improve significantly, both sides will have to compromise.

Brussels has no intention of tearing up the TCA, the trade agreement that already exists between the EU and the UK. However, the EU's openness to launching negotiations in different economic sectors simultaneously was perceived.

“We can walk and chew gum at the same time,” claimed one EU diplomat.

The sectoral agreements also recognize the UK's need to comply with EU regulations in those sectors.

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