Category Archives: Europe

Britain’s Budget and Europe’s Future

Yesterday in Great Britain, the new Conservative government’s Chancellor of the Exchequer, George Osborne, announced a new austerity program that includes deep reductions in spending and a raft of tax hikes. The budget, which cuts everything from education to the military by an estimated 25 percent over five years, is the most ambitious of its kind since the days of Margaret Thatcher, who, through the use of shock-therapy revived the British economy from its decades-long slump. It also raises the value-added tax (VAT) 2.5 percent while increasing to 28 percent the amount of money investors will pay on capital gains.

UK's Chancellor of the Exchequer George Osborne with the budget brief.

In unveiling this new plan, the United Kingdom has become the face of the wave of austerity that is sweeping Europe and threatening that continent’s much-vaunted welfare state economic model. Awash in unpaid bills and the victims of capricious markets, many European governments have reached the conclusion that unfunded social spending is unsustainable and have responded by raising retirement ages, cutting benefits, and backing away from their commitment to a cradle-to-grave society.

The European debt crisis, which originated in Greece and has spread to many nations on the periphery of the Eurozone, threatens the world’s fragile economic recovery and it is comforting that the continent’s leaders have responded to the situation in earnest. However, it is their responsibility to ensure that the medicine isn’t worse than the disease and that in their bid to quell the markets they don’t plunge the world back into recession. In other words, they must walk a tightrope between austerity and stimulus; keeping the economy going through tax incentives and limiting the pain of spending cuts on average citizens, while slashing some of the excess and unfunded liabilities that threaten European bonds with junk status.

The long and winding road towards fiscal solvency will be bumpy and painful and will require sacrifice, but if the continent does not get in control of its finances it will be strangled by debt. The European Union and the economic model that its member states have adopted are worth preserving and sometimes to save something it must be shrunk.

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America, Britain, and the Special Relationship

The Stars and Stripes and the Union Jack.

Britain and the United States share the same language, culture, history, and values. Together, we have weathered World Wars I and II, the Cold War, and the conflict in Iraq. The special relationship — official policy since the legendary camaraderie of Churchill and Roosevelt — has been a boon to both nations and has endured British and American governments of all stripes. Yet today, that important tie — the linchpin of US foreign policy — is under fire and it is up to America to shore it up.

Last month, the new Tory-led British government of David Cameron came to power with the help of its junior coalition partner, the Liberal Democrats, and that party’s leader, Nick Clegg. Clegg, who is now deputy prime minister, and whose foreign policy positions stand in stark contrast to Cameron’s, wants to end the special relationship, as stated in a January Daily Telegraph piece, and “repatriate [British] foreign policy.” This rhetoric has caught on among others as well, with Prime Minister Cameron declaring that the UK seeks   “a strong, but not slavish” relationship with the US.

Britain's Premier, David Cameron, (right) and Deputy Prime Minister, Nick Clegg (left).

To be sure, Britain certainly has some legitimate gripes. There is a natural resentment in the UK over its place as the junior partner in the Anglo-American relationship, a role it has played since the Suez Crisis of 1956. There is also anger at the United States for having dragged them into an unnecessary war in Iraq, which has cost thousands of British lives and billions in British treasure.

However, these complaints should not translate into the termination of the special relationship. Rather, America should act to salvage this bond by putting the UK on more equal footing with the US, hesitating before it asks our best friend to commit blood and bullion to a war, and re-emphasizing Atlanticism and the trans-Atlantic alliance. It is a tie worth saving for its sentimental worth and practical value. As the two countries march hand-in-hand into the 21st century and confront the challenges of a new age, they will need strong, dependable, and trustworthy friends to rely on and fall back upon.

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