Ever since Britain tied their fates with that of the Continent joining originally the Common Market and later its mutated big brother, the European Union, they have had a rocky relationship with Britain considering breaking off numerous times. Every single time Britain considered going off on their own the United States hit their panic button and rallied to keep Britain economically and financially tied into the Continent. Once again Britain is having second thoughts especially with the European Union once again complaining and blaming many of their ills on the British membership. Many British Parliament Ministers and a plurality if not an outright significant percentage of the population have basically come to their wit’s ends with their animosity further aggravated by consistent attempts by the Brussels bureaucracy to marginalize the City of London through hostile regulations. Add to that the economic perils now threatening the European Union are simply another reason to depart before Britain becomes dragged down because of their ties to the European Union. Add to that the ultimate insult the European union pushed upon the loyal British subjects when they instituted fines for anybody utilizing standards weights and measures requiring all transactions and weights, distances and all other measures in metric weights and measures laying steep fines for anybody caught utilizing the English Standard Measures.
The British have one great advantage over almost every other member of the European Union in going their own way in that they never adopted the Euro and retained their own currency, the Pound Sterling. They would not be required to go through a massive inconvenience of having to print and reissue their native currency and change out the Euros as they never quite got all the way into the morass that is the European Union, especially tying one’s economy and monetary system to the unified monetary Euro system which is what has been at the base of the financial failures of many European Union members. For everybody in the European Union who chose to replace their native currency with the Euro, which is almost all of the older members on the Continent, they no longer had complete control over fluctuating monetary difficulties and the rates of inflation and deflation of their currency was now tied to the European Union’s consolidated financial health. This was doomed from the beginning to run into a very basic and simple problem, if every nations GDP, productivity, production, cost of living and virtually every other macroeconomic indicator did not closely match the general average of the European Union, then their economy would drift away from the worth of their currency as the Euro was valued equal in every nation. A country like Germany where they had an industrial growth curve ahead of the rest of the European Union simply because when the two halves of Germany, the East and West, merged together Germany experienced a great opportunity for economic growth as they modernized and rebuilt much of the communist neglected infrastructure and modernized East German industry. This allowed Germany to have a higher cost of living increase than was reflected in the Euro’s value thus allowing Germans to live with an overly-valued economy to currency ratio, an envious position to be sure. Take any of the nations whose GDP and economy are heavily based on tourism such as Italy or Greece and you find the opposite situation. When the United States led the world into economic near oblivion in 2008, it had a disastrous effect upon the tourist industry which drove the economies of nations such as Greece and Italy to fall way behind the worth of the euro which followed the average of the European Union. This problem would have eventually come to bear and have slowly torn the European Union supposedly common economy and currency apart but the economic ailments from the 2008 real estate crash in the United States which was felt worldwide quickened and accentuated this effect. Without being able to allow their currencies to slide with respect to other currencies of the world because of being tied in using the Euro, those nations who were most affected by the downturn experienced overvalued monetary situation which magnified their potential for inflation which resulted in increased unemployment which in turn pushed inflation higher as they spiraled unable to adjust their currency and balance their troubled economic situation allowing for increased demand for items and manufacturing in their country because of lower cost of business. Keeping their own currency, the Pound Sterling, allowed Britain to adjust the worth and exchange rates against the rest of the world, including those other countries in the European union who were utilizing the Euro, and keep a balance between their economic growth and health and their currency worth against the rest of the world.
The British are going to once again hold a popular referendum on whether to remain or pull out from the European Union. Once before when they tried to hold such a referendum the people voted by a slight but more than negligible margin to withdraw and go off on their own. Of course as soon as the results were announce the United States had a complete hissy fit and demanded they redo the vote. There were debates on both sides of the pond, heated phone calls and meetings, everything short of politicians jumping off the Washington Monument or the Tower Bridge with the British claiming the people had spoken and the United States claiming they did not realize what they had done. In the end they held another vote which was reported to have a different result where the people by the smallest of margins voted to remain in the European Union. Well, wasn’t that convenient for Washington and less so for London as London was struck immediately with a number of days of less than normal British stoicism in the form of agitated demonstrations against the European Union in particular and the continent in general. The polls and predictions for any ballot should one be taken is for overwhelming margin for those who wish the European Union and Britain to go their separate ways. The margin will hopefully be so lopsided that the United States simply resigns and accepts the dictates of the British people. Such might actually have a better than average chance this time since President Obama appears to make most of his decisions by inspecting what all the other United States Presidents have done in the past and then proceeding to do exactly the opposite. So, congratulations Britain, you may actually be allowed to do what is best for Britain and not so much what makes the United States and European Union happiest.
Now for a few notes on the European Union which will likely prove the British wisdom for picking this moment to finally depart the European Union. As Discussed earlier, the Euro as the unifying currency cannot work as long as each nation retains their independent financial policies. The European Union cannot act as if it was the United States of Europe unless it can find some manner of providing a unified overriding economic policy which is uniformly applied to all member states. One of the measures for nations is GDP which can be determined as straight GDP or GDP per capita which measures it against population. Looking at European Union nations in straight GDP for 2012 we find a disparity with Germany rated at the top with a GDP of $3,400,579 and at the bottom is Malta with a GDP of $8,689. Using the more balanced GDP per capita removes the bias against smaller nations and our 2012 results in this measure are, at the top Luxemburg with $107,206 followed by Denmark with $56,202 while at the bottom we have Bulgaria with $7,033 and just above them come Romania with $7,935. With such a disparity of GDP having the same currency which disallows independent adjustments to allow for these disparities the Euro as the uniting currency for the European Union was a guarantee of unavoidable difficulties. With these predictable stresses due to a unified currency and disparate economic outputs and productivities the European Union eventually had to come to depend upon the nations with the most powerful economic engines to uphold those who were destined to fall behind. This has led to high levels of distrust, resentment, dependency, and misgivings between the stronger nations and those who they prop up. Germany and France had been carrying the brunt of this burden and as long as these two were able to cooperate neither was overly resentful of their being put upon to prop up the weaker European Union economies such as Portugal, Greece, Spain, Italy and Ireland to name a few. The problem is of late acrimony and mud-slinging has replaced Franco-German friendship. At one end, nations such as Greece have been heavily resentful of the demands put upon them by German Chancellor Angela Merkel for all the financial sacrifices and belt tightening she has demanded as the price for bailing them out over their previous profligacy. Meanwhile, German Chancellor Merkel is fed up and furious at French President Francois Hollande over the French government’s internal problems, particularly the evidence of corruption and rule-breaking by its members. While French President Hollande believes that government investment and increased spending is the solution to the European Union and its individual nations’ economic woes, German Chancellor Merkel is resolved to stick to her formula of spending cuts and austerity. These two have an animus that goes far beyond their opposite approach to solve the economic woes of the European Union but has apparently evolved into a personal dislike that guarantees to produce great levels of stress, smoke and noise and little else. As stated earlier. Britain has chosen a very opportune time to reconsider their membership in the sinking ship known as the European Union.
Beyond the Cusp