Invest3 publishers2 min readPublished
Macron and Sanchez welcome a UK return that Burnham has only floated
Emmanuel Macron and Pedro Sanchez welcomed the idea of Britain rejoining the EU after Prime Minister Andy Burnham raised it in a speech. Sterling holders are still waiting on London, because a welcome from two EU capitals commits Britain to nothing.
The Investor · Invest desk
What happened
- Speaking in Madrid, Macron said of Burnham, "This prime minister is moving in that direction," referring to a British return to the EU.
- Sanchez called Brexit a "huge loss" for the UK population and for Europe.
- Semafor reports that rejoining remains politically divisive in Britain even as more voters voice frustration with the lasting effects of Brexit.
- A leading Spectator journalist wrote that any move closer to the EU is unthinkable without reopening borders, and that this is not what the British public wants.
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Why it matters
- constraint Any concrete step toward the EU would have to settle the immigration question first, and Semafor names immigration as what makes the move particularly tough.
- decision Burnham has to decide whether to spend his government's political capital making rejoining Labour's main dividing line with Reform UK, or leave it as a line two EU leaders have already applauded.
- exposure A sterling position built on rejoining is in effect a bet on a British election in which Reform, led by Brexit champion Nigel Farage, polls level with Labour.
Neither report cites a move in sterling or any other UK price, and neither leader in Madrid put a condition or a date on the welcome [1]. Sanchez said Spain would "certainly welcome" a returned Britain "and open its arms once again to a brotherly people with whom Spain has such good relations in every sphere" [5]. Macron said "I think it's very good news both for his country and for the Europeans" [3].
Semafor's account of the British side is thinner than Macron's. By its reporting, Burnham raised the prospect of rejoining [6] but has not backed a campaign. The outlet mentions a campaign only in the conditional: it would be a dividing line with Reform UK that he would draw if he chose to support one [8].
The sources allow about three outcomes. In the first, Burnham backs a campaign and takes it to voters against Reform, giving the question a date and a vote. In the second, he keeps rejoining as a speech line that sets him apart from Nigel Farage's party [9] without making a commitment that leaves him exposed on immigration. In the third, the border objection raised in the Spectator [11] keeps any Labour leader from going further than warm words. Only the first gives a holder of UK assets a dated event to put into a model.
I think it is too early to price rejoining as a real long-term possibility. Both sources place the obstacle in British politics, and a welcome from Paris and Madrid does not change the polls or the border question. The counter-case is real. Two EU governments have now said on the record that they would want Britain back [1], and that takes one unknown out of any long-dated view of sterling. The view is wrong if Burnham commits Labour to a rejoin campaign [8] and Labour then opens a clear polling lead over Reform while campaigning on it [9].
What to watch
- Whether Burnham or Labour commits to a campaign to reenter the EU, the step Semafor says would draw a dividing line with Reform UK.
- Labour-versus-Reform polling after the rejoin idea, with the two parties currently neck-and-neck.
- Whether other EU governments respond, and whether any attach conditions on borders to a British return.