Beach front security [By Jiao Haiyang/China.org.cn]

As the entire world has watched and worried, the sovereign debt crisis in Europe has taken many turns – sometimes for the good, but more often, for the bad. In early December, when it looked as if the leaders of most European countries had an agreement with respect to dealing with many parts of the crisis, the United Kingdom (UK) announced it wanted veto powers on EU financial regulation and internal market decisions as a condition for its agreement.

This "balk" by Prime Minister Cameron was a surprise and it was an affront to Chancellor Angela Merkel and President Nicolas Sarkozy. Furthermore, there was apparent disagreement with the decision even within the UK itself. The leader of the UK's Liberal Democrats, Nick Clegg, whose party is part of the current coalition government, said he was, "bitterly disappointed" by the decision. He went on to elaborate that if the UK does not do its best to support and be part of the EU, it will not be taken seriously on the world stage.

But, since the days of Prime Minister Margret Thatcher's government, the UK has embraced the EU in a manner that can best be described as "lukewarm at times." Perhaps it is because the UK is not joined to the rest of continental Europe by land and, therefore, the British feel more "British" than they feel "European." Nevertheless, the British have been much more reluctant to be forthcoming than their continental counterparts when it has come to furthering the cause of the EU at the expense of national sovereignty.

As an example, when the eurozone was formed, England retained the British Pound Sterling as its currency instead of the Euro. In the years that followed, when times were good in Europe, England paid a high price for this decision. By-and-large, most direct (non European) foreign investment went to the mainland as it was much more convenient for businesses, etc., to access European markets from within without the hassles of exchange issues and exchange rate risk. Recall that the EU is the world's largest market and the UK makes up only a small portion of that market. Consequently, the Pound Sterling has lost much of its reputation as one of the world's major currencies.

Please do not misinterpret the previous discussion. Britain has benefited immensely from EU membership. She imports more from the EU member nations than she exports as imports from the rest of Europe have conveniently filled in many gaps in UK production. Without a doubt, this trade has fostered improved standards of living within the UK than otherwise. Cheaper freight transportation and air flights within Europe, standardized products and common banking and transaction practices have all benefited England in countless ways. Therefore, England cannot afford to leave the EU.

However, this latest display of UK independence has self interest at heart. Much of the demanded veto power would enable Britain to have significant influence over the rules and regulations that govern financial and capital markets in the EU. It is not by coincidence that London is one of the world's foremost financial centers. Protection of that rather substantial industry, which has been a foundation of the British economy for much more than 100 years, and the accompanying geopolitical advantages is viewed in England as being in the national interest.

This sentiment is supported by a poll conducted immediately after Prime Minister Cameron's announcement. It revealed a majority of more than 60 percent favored his decision.

So, the English strategy is to remain in the EU, but to eschew, as much as possible, the constraining requirements that may (or may not) come about from the reform attempts within the eurozone. To say the least, this strategy will be a delicate economic and political balancing act at best.

The author is a columnist with China.org.cn. For more information please visit: http://m.by33321.com/opinion/tylorclaggett.htm

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