Britain and the Eurozone. Britains May 2005 parliamentary elections produced some very telling answers for the coming direction of EU policy in the United Kingdom.

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Britain’s May 2005 parliamentary elections produced some very telling answers for the coming direction of EU policy in the United Kingdom. The election simply came down to a referendum on the performance of Prime Minister Tony Blair, particularly on his actions in Iraq. Voters voiced their opinions by slashing some 100 seats from the Labour party’s majority. Conservatives and Liberal Democrats saw the largest gains, and the Labour party’s popular vote share shrunk from 41% to 35%. Some in the Labour party have been calling for Tony Blair’s head, and in an effort to infuse the party with new life and distance itself from the politically disastrous Iraq conflict, calling for Gordon Brown to be the new PM. As the Eurosceptic Conservatives gained more seats and the likelihood that Blair may be removed in favor of his rival Gordon Brown, I see no new shifts in policy to move Britain into the Eurozone. While there are advantages and disadvantages for Britain adopting the euro, the recent Iraq conflict as well the failure of the euro to pass the five part test and problems with a referendum on the issue will keep the UK out of the Eurozone.

         The arguments for the UK staying out of the Eurozone are divided into three parts: 1. Political factors both internally in England and externally with the “special” Blair-Bush relationship exhibited post 9/11. 2. The economic factors of transatlantic cooperation between United States and United Kingdom countries and the integration of economies in the “Atlanticist” sphere. London’s economic community being separate from the restrictive fiscal policies of the EMU, as well as the overregulation of EU economies helps US-UK companies, especially banking and oil companies. 3. Finally the well documented economic problems in Europe resulting from the Maastricht Treaty and the Stability and Growth Pact, which have produced lower growth rates and higher unemployment in the EU than in the US and UK.

While Tony Blair and the Labour party spent much of the late 1990s championing some EU policies, they have done little to back up their rhetoric. Blair has led the Labour party to play both sides of the pond; on issues they see tactical advantages in the EU they act accordingly, while at the same time keeping the Atlanticist model in play with close UK-US relations. The political factors in the close relationship between the United Kingdom and the United States are very strong, most notably the relationship exhibited between the Blair-Clinton administration and the Blair-Bush administrations, especially on the issue of Iraq and foreign policy. The recent reaction in the UK election showed the voters bitterness for the Iraq conflict. Blair risked a lot politically in entering this alliance with the United States, as “since 9/11, the Blair administrations headline prioritization of diplomatic and military support for the United States and its strategies against terrorism has produced tensions between Britain and its EU partners – as well as considerable domestic opposition in Britain, notably toward the 2003 military action in Iraq”. England was the only EU country to offer such sweeping support of Bush’s unilateral decisions on Iraq. Blair had to deal with many problems, including protests over the war, division in the Labour party, and a considerable loss of faith in the government; but he never wavered in his conviction and support of the Iraq conflict even in light of the recent elections he has not pulled troops out. Blair has guaranteed Britain a high level of security in the face of new world terrorism events that they simply could not produce on their own. His support of the United States in Iraq also gives Blair confidence from Washington and the ability to help the United Kingdom both politically and economically.

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The United States and Britain have been closely linked in terms of financial markets for the last half-century. Since the British pound was replaced by the dollar as a reserve currency the United States has had much more economic power worldwide. The Atlanticist cooperation between the US and UK revolves around the same liberal fiscal policies that promote business and do not interfere with unnecessary regulation. The US and UK share many similarities in the world of banking and finance, as London’s West End is very similar to Wall Street. The level of integration between US and UK companies can ...

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