in mustering Europe’s defences, just as it played a vital part in helping Ukraine. Only 8% of Britons are opposed to defence co-operation with other Europeans, according to Ipsos: 60% are in favour. Sir Keir Starmer, the prime minister, says all the right things, but has been hopeless about finding the resources to match his rhetoric. On June 11th the defence secretary, John Healey, resigned after the government broke yet another promise to spend more. Britain looks weak—and hence a target for Russia. Its wavering negates one of the country’s main potential attractions for partners across the English Channel. The government is also squandering Britain’s advantages in AI. Britain will never match America’s dominance—which has security implications, too. But it has strengths in basic research, innovative startups, tech talent and creative policies. These could help boost productivity in a moribund economy. Alas, the sums businesses are investing in AI infrastructure and institutions are piddling. One reason is a net-zero policy that ends up limiting the production and consumption of energy, throttling the construction of data centres. Another is hostility towards American tech firms, including Palantir, which can work with law enforcement and health care. Nobody said that solving these problems would be easy. Unfortunately, against the backdrop of covid-19 and wars, it has only got harder. Debt as a share of GDP is 94%, a level not seen since the 1960s. The budget deficit is 4.3%. And Britain’s government debt is the most expensive to service in the G7. Closer relations with the EU, Britain’s main trading partner, could help. The government has been right to seek to remove barriers to trade in food, aiming to align rules and sometimes being prepared to pay a price to take part in desirable EU programmes, such as the Erasmus student-exchange scheme. This involves continual negotiation with the EU, as it has over years for Switzerland. But the relationship must not become an all-consuming distraction. Britain is not yet ready to rejoin the EU. Nigel Farage, arch-Eurosceptic, could be
prime minister within a few years. The EU would be wary of a country without a settled majority for membership. Britain must manage outside the club, as it has in finance or farming, a rare Brexit success story. The pro-growth policies Britain needs are not a mystery. More Britons, especially the young, need to get off benefits and into work; the labour market is over-regulated; energy must be cheaper; government decisions are subject to too many veto-points, especially in planning; power must be devolved from Westminster; and so on. But each policy involves someone, somewhere giving something up. Brexit imbued voters with the fantasy that they can escape hard choices. Someone else will take the pain, be they foreigners or the super-rich, while Britons pocket all the gains. That world never existed and, despite ten bad years, British voters are still in denial. It increasingly looks as if they will need a Thatcher-style shaking to awaken them. ■ For subscribers only: to see how we design each week’s cover, sign up to our weekly Cover Story newsletter. This article was downloaded by zlibrary from https://www.economist.com//leaders/2026/06/18/britain-is-not-yet-ready-to-rejoin- the-eu
Donald Trump gambles that Iran wants money more than power The peace deal is all carrot and no stick June 18th 2026 HAVING FAILED to defeat Iran with bombs, can President Donald Trump salvage something with bribes? After weeks of haggling over how to end the war, he and his Iranian counterpart have signed a short peace memo. It amounts to the promise of lots and lots of money for Iran, so long as it can satisfy Mr Trump that it has abandoned any plans for a nuclear weapon. That is a huge and unlikely gamble and it leaves the countries of the Middle East with some hard thinking. The memo ditches many of Mr Trump’s war aims. There will be no regime change; no succour for Iran’s oppressed people; no limits on Iran’s ballistic missiles or its support of proxies. Instead the deal focuses on two things.
One is reopening the Strait of Hormuz, where the foolishness of Mr Trump’s war and the humiliation of his climbdown are laid bare. Before the fighting, vessels had free passage; after the 60 days in this deal, they may well have to pay a fee. The other focus is the nuclear programme. The regime has given up almost nothing. Its promise not to get a bomb is old. It will down-blend its stocks of enriched uranium and discuss the rest of its programme, but the issues are complex and Iran is masterful at stringing things along. And then there are the bribes. Iran can immediately export oil and derivatives. Depending on the talks’ progress, America will unfreeze assets worth tens of billions of dollars, lift sanctions and help create a fund of at least $300bn for reconstruction and development. Mr Trump is tired of war. If, as planned, American troops depart within 30 days, his ability to use force will be limited. The regime thus has an unprecedented opportunity to trade nukes for cash and investment. Unlike previous presidents, Mr Trump doesn’t care about democracy. Having weaponised the strait, Iran may now see less value in nuclear bombs. The regime is unpopular at home: it could use the money. Yet there are many reasons to think this gamble will fail. Iran’s hardline leaders have no reason to trust America. They will expect Israel to sabotage the deal. The regional influence they crave comes from being the foe of the Great Satan. The nuclear programme offers prestige and, potentially, protection. Inspectors will struggle to stop them cheating. Iran’s leaders will be tempted to have their yellow cake and eat it. Israel argued for this war, but it has turned out a bitter disappointment. It fought shoulder to shoulder with the Americans only for Mr Trump to cut it out of the negotiations and undermine its campaign against Hizbullah in Lebanon. That could cost its prime minister, Binyamin Netanyahu, re- election in October. The war was a strategic failure, because Iran remains a threat. Mr Netanyahu tested how far America was prepared to go, and it was not far enough for Israel to prevail. Any successor will need to devise a new security doctrine.
The Gulf countries need to restore their reputations as havens of prosperity in a violent neighbourhood. Prepare for some wishful thinking, but the fact is that Iranian drones and missiles will continue to pose a threat. Pipelines that bypass the Strait of Hormuz will help. But the Gulf also needs to overhaul its security. Nobody can be sure how willingly America will fight in the future. Some states will look for ways to deter Iran—the United Arab Emirates could seek even closer ties with Israel. Others may attempt to accommodate it. Still others may steer between the two. Mr Trump should never have begun this war. Once again, he is basing his way out of it on the idea that people will do anything for money. However, the first rule of diplomacy is not to imagine that your opponent thinks as you do. ■ Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence. This article was downloaded by zlibrary from https://www.economist.com//leaders/2026/06/18/donald-trump-gambles-that-iran-wants- money-more-than-power
Don’t restrict Chinese biotech Patients benefit from faster, cheaper treatments, wherever they are invented June 18th 2026 Someone whose life is saved by a new medicine is unlikely to care whether it was invented at home or on the other side of the world. Yet America’s policymakers have begun treating China’s biotechnology industry as the next front in the tech war. A bill before Congress would amend the COINS Act, which restricts American investment in sensitive technologies abroad, to include licensing Chinese biotech. Some want the Food and Drug Administration (FDA), America’s drug regulator, to disregard clinical-trial data from China. America’s worries have been brought about by a remarkable shift in where innovation happens. Chinese firms ran nearly a third of the world’s clinical
trials last year, up from just 6% a decade earlier. China is now the world’s second-largest source of new drugs, behind only America itself. In 2025 nearly half of licensing deals worth $50m or more were struck with Chinese firms, up from none in 2020. In some categories, such as antibody-drug conjugates, a promising class of cancer treatments, Chinese firms accounted for almost all the licensing. To view Chinese medical innovation as anything other than good news would be a mistake. In AI and semiconductors, America worries about its intellectual property leaking to China. In biotechnology the flow of information runs in the opposite direction. And though anxiety about China’s dominance in the physical supply chain for drugs is understandable —the country accounts for over 70% of the active pharmaceutical ingredients for essential drugs—manufacturing resilience and scientific collaboration are different issues. America cannot lose from gaining new knowledge. Setting aside Chinese advances would be especially foolish, given that drug development suffers from poor productivity. Bringing a new medicine to market now costs roughly $2.8bn and can take well over a decade. Policymakers often complain about the rising cost of medicines. Yet proposals such as disregarding Chinese clinical-trial data would lengthen development timelines, raise costs and make drug discovery less productive. Does Congress really want pioneering treatments to be available in Europe or Asia before they reach Americans? Some politicians fear that if drug firms spend their research budgets licensing Chinese molecules, less capital will be available for American biotechnology. But investment is not a lump to be divvied up. As the AI boom shows, when opportunities grow, so capital flows in. What matters is to make sure that American biotech is not hindered by bad policies. Fortunately, American firms remain the world’s leaders in drug discovery. They possess deep expertise in taking promising molecules through late- stage clinical trials, regulatory review and commercial launch. Chinese biotechnology executives privately acknowledge the FDA as the global regulatory leader.