Will the Next Administration Lose Britain? by Paul Craig Roberts (October 24, 2000)

Summary:
The British have nothing to gain from becoming part of Europe, but they have everything to lose: political sovereignty, a strong currency, and relatively low payroll and income tax rates.

With the demise of the Soviet Union a decade ago, U.S. foreign policy has fallen off the screen. Arab-Israeli conflict is trying to put it back on, but until the latest outbreak of violence in Palestine, the focus of U.S. foreign policy was on Kosovo, a break-away province of a small country, Serbia. This is nothing short of amazing considering that the United States is on the verge of losing its great ally of the 20th century -- Great Britain. The problem is not that the Brits have turned against their American cousins. The problem is that Britain is about to become a province of a European superstate.
It is paradoxical that the U.S. government supports tiny Kosovo's independence from Serbia, but not Great Britain's independence from Europe. Kosovo is historically a part of Serbia's heartland, where Serbs fought their greatest battles against the Turks. The English have never been a part of Europe.

A campaign of fear, orchestrated by Prime Minister Tony Blair's Labor government and misguided British business interests, is driving the British people into the maw of the European superstate. Unless the British give up their currency and adopt the Euro, the argument goes, the British will be left economically isolated and slowly sink into the sea.

Brussels' bureaucrats can hardly wait to begin "harmonizing" English income tax rates by raising them by 20 percentage points (a 50 percent increase) to match Europe's higher levels. With one stroke, Margaret Thatcher's reforms, which revitalized the British economy, would be repealed.

Other woes await the British people.

Unlike Europe, England's Social Security and general welfare system are not funded with a payroll tax. This gives the British an employment advantage, which will have to be "harmonized" away -- likewise for the British ability to hire and fire. In addition, Britain's funded private pensions would be raided in order to pay for Europe's unfunded state pension systems.

For the past two decades the British economy has outperformed Germany and France. The British have nothing to gain from becoming part of Europe, but they have everything to lose: political sovereignty, a strong currency, and relatively low payroll and income tax rates.

The British would also lose their greatest historical achievement -- their legal system. In Britain, law originates in "the bosoms of the people," not in the writ of the European Commission. There is a huge difference, as the independently minded British people would discover once bureaucrats start giving them orders.

The United States would be another big loser. Our special relationship with Great Britain cannot survive British integration into Europe. We would lose our most important ally. The trans-Atlantic bridge would be closed, and the United States would be politically isolated from Europe.

The impact on our diplomatic clout would be dramatic. When we have trouble lining up a self-absorbed Europe behind a necessary action, the British help us lobby the Europeans and apply the screws. Once Britain is part of Europe, our diplomacy will have lost a critical ally.

To protect our diplomatic influence, the first task of the new government in Washington is to convince the British to forget the Euro and join the North American Free Trade Agreement (NAFTA). The British belong in NAFTA with the United States, Canada and Mexico. The United States invests twice as much in Britain as Europe does, and Britain is the single largest foreign investor in the United States.

The United States needs to rethink its foreign policy interests. Great Britain's absorption into Europe would fracture the English-speaking peoples. How are we served by the disappearance of our most important ally?

If the American political mind can again come alive to foreign policy, we should weigh the pros and cons of also bringing Japan, Taiwan, Australia and even Russia into NAFTA. Now is the time for the United States to think about protecting its influence, not after we are enfeebled by the loss of Britain.

The battle for Britain in the opening years of the 21st century could prove to be far more decisive for our future than the famous Battle of Britain in the fall of 1940.