|
|
While attention has focused on countries that seem perpetually on the brink of sovereign default or banking collapses, the British government has embarked on a path that could lead it out of Europe, with profound consequences for itself and for the US-UK relationship.
Britain's risk is threefold. First, the City of London is the leading financial hub of the eurozone, even though Britain remains outside the euro. Continued eurozone malaise will inevitably affect the City, as long as investors see that currency and Europe generally as less attractive.
Second, in December the British government decided not to participate in the new European fiscal compact, and also insisted the accord remain apart from EU institutions. This sounds like a highly theological debate, but other EU countries are now convinced that Britain wants no part of Europe's future. The Cameron government's credibility in Europe is now close to nil. As a result, Britain will struggle to protect the City and its financial institutions from the EU's tendency toward strong, sometime punitive, regulations.
Third, the eurozone crisis has emboldened Britain's eurosceptics, who are calling for a referendum on continued EU membership. Until now, Prime Minister David Cameron has been able to contain those in his party who want to leave the EU, but once his government starts renegotiating Britain's relationship with the EU, no one knows where it will end. Outside of Europe, Britain will find itself strategically adrift.
UK leaders are fond of describing their country as a bridge between the United States and Europe, but bridges must have firm foundations on both shores. It is time to build a new vision of the Anglo-American relationship, one based on Britain's commitment to be a strong leader in the European Union.
Frances G Burwell is Atlantic Council Vice President and Director for Transatlantic Relations.