FINANCE IN THE 21ST CENTURY
2011-12-14
LONDON – Ever since the United Kingdom joined the European Economic Community in 1973, after the French withdrew Charles de Gaulle’s veto of its membership, Britain’s relationship with the European integration process has been strained. The British are reluctant Europeans, for historical and cultural reasons.
For centuries, British foreign policy strove to avoid permanent European entanglements; but, most importantly, it aimed to prevent a single continental power from achieving dominance – especially if that power happened to be France. In the meantime, the British colonized large portions of the globe. Later, after the sun set on their empire, they tried to maintain a “special relationship” with the United States. Joining the European Union was not an affirmation of belief in European integration, but rather a reluctant recognition that the transatlantic strategy had run its course. British public opinion concerning the EU has since remained lukewarm, at best.
In recent years, having opted-out of the single currency and the Schengen area (which allows Europeans to cross borders without passports), the UK has distanced itself from important EU initiatives. Nonetheless, Prime Minister David Cameron surprised everyone by vetoing a new EU treaty on December 9 – a first for the UK since joining the Union – leaving the other 26 member states to press ahead with greater fiscal integration on their own. More surprisingly, the negotiations broke down over arcane details of financial regulation.
For example, Cameron wanted to strike a “red line” through the proposal to subject the planned Deposit Guarantee Scheme Directive to the Qualified Majority Voting procedure (meaning that no member state would have veto power). Cameron also objected to the requirement that third-country financial firms in London without business in other EU states be required to hold a “single passport,” which would enable them to operate in any member country, but would also require them to submit to Europe-wide regulations.
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