The British Prime Minister has called general elections for June 7. Issues such as education, health and environment are major ones for decisions. People are divided over the options for economic independence and political superiority — either by maintaining a close relationship with the US or going along with the European Union. European nations in their goals and their welfare-oriented economies are more or less alike. Most probably Europe will not be an issue. According to a recent survey about 70 percent of Britons do not favor the country’s joining a European single currency.
The Conservative opposition has demanded a re-examination of the terms for joining the euro. According to the Conservatives, Britain should have the last word in all economic and political decisions in EU. The other EU members should not only take away Britain’s financial burdens in return for its joining the euro but guarantee sufficient profit for every sterling pound Britain spends. The party’s conditions amount to a withdrawal from the union without acknowledging it in public. The party chief considers that the cooperation with the European community will not be helpful to its close relations with the United States. On the other hand, there are people who think the Tory view unreasonable.
This bias toward US might have prompted a British economist to comment that the views were reminiscent of Adam Smith two centuries ago.
Adam Smith, on whose principles modern economic thought is based, wrote ‘The Wealth of Nations’ when Europe was not so strong economically nor America a superpower. In those days Britain was the greatest colonial power and America a mere colony. If King George III had heeded Adam Smith’s writings, neither the present British government nor the country would have been puzzled about whether they should join the Europeans or be loyal dependents of US. Adam Smith wrote in his books that if his country wanted to save itself, it should confront the American revolution not by military force but by giving American colonies the right of representation in the British parliament in proportion to the taxes they paid. This was a basic demand of American revolutionaries in those days. He noted that American colonies would amass wealth and eventually get richer than the British empire. The increasing economic strength of the American colonies, he wrote, may lead to reducing Britain’s power and shifting the empire’s capital from London to a prosperous North American city. The present economist quoted Adam Smith to prove the argument that the country has two choices —either to be content with the status of a state of the US or to be an ally with European countries such as Germany or France and forge an economic alliance against the increasing US influence. The US, which is fully aware of the significance of economic blocs in modern times, has formed alliances such as NAFTA with other North American countries. Preparations to form wider blocs, including the central and south American countries, are also underway. The official British stand toward the EU and US will, however, be determined after a national referendum.
Certain national bodies pointed out early in the year that Britain’s economic cycles have been closer European ones rather than to American ones. Though the performance of US companies differed greatly from European ones, the mutual trade between the US and the EU countries amounted to 80 percent. European companies such as Volkswagen, Porche and BMW have increased their sales figures while American companies such as Ford and General Motors had reduced sales and profits. These are factors that support those who favor stronger ties with EU.
On the contrary, the IMF has announced that the UK’s economic pattern is related more to North America than to Europe. It might have been an accident that the IMF report came simultaneously with Blair’s announcement that the British economy was more inclined toward Europe.
The pro-European members of the British cabinet, specifically the secretary for trade and industry, noted the new foreign investments in the country were mainly by Ford and Nissan. Both invested heavily in the UK because they believed that Britain would eventually integrate with the Europeans. The secretary also believes that he British interests are with Europe which has begun the new century with a markedly stronger economy than the United States. They also pointed out that Europe would not be affected by outside economic factors.
