Time to revise down aspirations?

The "Special relationship"

One of the key elements of the British national psyche, which helps Brits to feel different from their "European" counterparts, is the "Special relationship" Britain is said to enjoy with the USA. For many Brits, a Union with other Europeans does not make sense when Britain is side by side with the world super power... well sort of.

It is clear that through culture, a common language and generations of migrants, the UK and the US have a special link. Such a link may get looser over the year with a decrease in the proportion of Americans with a European ancestry, but it is unlikely to be seriously undermined in the short term.

However, there is more in the notion of "special relationship" than just stating the obvious about these cultural links. There is the idea that the British and US governments share an understanding and stand together on the world stage. There also the idea that Britain has a special status as a partner for the USA.

A British insecurity

There has been, over the recent years, a deep anxiety in British media about the reality of this relationship. There was first the nagging feeling that the relationship was going only one way when Britain was following the US in the Iraq war with phony American arguments. The casual way Bush was recorded to address the British PM with a "Yo Blair" did not help.

The new Obama administration has made things worse. One of his first moves was to remove the Churchill bust from the Oval office. Then Gordon Brown was allegedly snubbed by Obama in his visit to the US with no full-blown press conference and no formal dinner. Answering to British journalists, a White House official declared: "There's nothing special about Britain. You're just the same as the other 190 countries in the world. You shouldn't expect special treatment."

Beside these symbolical issues, the USA did not even supported Britain when recently Argentina talked again of the Falklands problem. Instead of standing with Britain on an issue which is of symbolical importance for it, Hilary Clinton suggested that a "discussion across a table" would be a good solution (something Britain is surely not ready to accept).

An asymmetry between British romance and American pragmatism

The leaks expose the asymmetry between the world super power and a middle size European country trying to hang on to an old glorious heritage. On the British side, the leaks reveal the declarations of love made by the Conservatives to the US before the election. William Hague, now Foreign Secretary told the US representative of his "staunch atlanticism", he said that he "has a sister who is American, spends his own vacations in America, and, like many similar to him, considers America the 'other country to turn to.' His advisor added "America is the essential country.", and Hague "we want a pro-American regime. We need it. The world needs it." Another cable reveals how Liam Fox, now Defence Secretary, vowed to buy more American arms, saying "we (Conservatives) intend to follow a much more pro-American profile in procurement."

These touching declarations give a new light to the statement by William Hague that he wanted a "solid but not slavish" relationship with the USA.

On the other side, the US seems to judge the relationship with much less sentiments. The UK is a key ally in the world and in particular in Europe. It is the country which provides the biggest military support to the US in Afghanistan and Iraq. However, the Americans visibly see this ally with very pragmatic eyes. It is with irony that the anxiety about a possible lack of interest from the US in the special relationship is related in the cables: "This period of excessive UK speculation about the relationship is more paranoid than usual … This over-reading would often be humorous, if it were not so corrosive." The cable states that it would be tempting to take advantage of the British insecurity: "keeping HMG (Her Majesty Government=the British government) off balance about its current standing with us might make London more willing to respond favorably when pressed for assistance, Though the cable rejects this strategy as short termist, having a British public believing in the "special relationship" is more valuable to the US in the long term: "a UK public confident that the USG (US Government) values those contributions and our relationship matters to U.S. national security."

This very pragmatic approach to the relationship is also revealed in what the US grants to the UK: not much. When Gordon Brown went the extra mile to make a personal request as a British PM for a British hacker (Gary McKinnon) to be imprisoned in Britain, his plea was spurned by the Obama administration. Another cable shows American commercial backstabbing: the US lobbied Zapatero to overrule the Spanish military which had chosen the British company Rolls Royce for a £90millions helicopter engine contract. Rolls Royce lost the contract to the American company General Electric.

Time to review aspirations downwards?

The leaks show that for the US their relationship with the UK is primarily pragmatic and driven by what they see as their best interest. As Paul Reynolds, BBC World Affair correspondent states " if, or probably more likely when, the day arrives when the Brits cannot or will not offer so much, they will find that the relationship they still regard as "special" will be very much more ordinary."

In that context the prospect of the UK in the special relationship are not too encouraging. The cables reveal what the US really think of the UK military help in Afghanistan. It is well known that the British army is "low tech" relative the US and for this reason faces more casualties on the field of battle. As a consequence British armies in Afghanistan have often chosen to stay in their bases, losing the control of the main part of the area they are expected to pacify. US cables condemn this strategy and describe situations which are getting worse and not better in places were British troops are located. With severe budget cuts in Defence, Britain is unlikely to be able to support a full size operation like the Iraq invasion or Afghanistan in the future. This key element which makes the UK an important ally to the US is therefore fading.

At the same time, the cables reflect the rising importance of China for the USA. One cable states that "In the first two G-20 Financial Summits, U.S. and Chinese positions had been close, closer even than the United States and Europe". Another cable from the American ambassador in China describes how "China's growing position as a nation increasingly distinct from the less-developed world may expand our common interests". With this emerging G-2, the position of the UK on the sidelines of the EU may affect negatively its strategic importance for the USA.

Most British people with common sense understand that the UK cannot have the status of an equal partner in the relationship. In 2009 several MPs even asked to ditch the use of the word in international relations, branding it as misleading. At a time when the UK is slowly losing its strategic importance for the US, choosing to stay on the sidelines of the European Union and placing a renewed emphasis on an idealised "crucial" "special relationship" may not be the best bet for Britain.

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"An exclusive poll conducted on the first day of our crusade showed an astonishing 99 per cent of people agree we should quit the European Union."

The Daily Express has launched a “crusade” to get Britain out of "Europe" (sic). These kinds of campaigns are common in tabloids who always boast incredible support. In this case The Daily Mail claimed a support of 99% from a poll. Gosh! we all know UK is the most eurosceptic country in Europe but 99%, really? Well reading a tabloid is like entering the Twilight Zone where the notion of truth becomes incredibly fuzzy. So let’s read the Express to find out the “polling methodology”.

We learn that it is a “Daily Express phone survey”. It is not a poll carried out by a private polling company, like the YouGov polls for the Sun, but the Daily Express taking care of it on its own. Fine, why not?

Then we learn that “tens of thousands of people swamping our switchboards”. Well that is weird, in a phone survey, you call people, you do not receive their phone calls. Things get clearer when the paper fully describes its rigorous methodology: “The newspaper’s phone lines and website were flooded with people backing our pioneering decision to become the first national newspaper in the country to call for British independence from the EU. “ So here we are, there was never any poll really, the paper just counted the proportion of supportive phone calls. Given that the Daily Express is a highly conservative and eurosceptic newspaper it is not surprising that they did not receive many contradicting phone calls.

Leaving the Daily Mail and its Kim Il Young polling numbers, the real proportion of British people wanting to leave the EU (and not "Europe" as this would prove to be a tad harder) is unclear. In official polls, depending on how the question is asked, the number of people saying they want the UK to leave goes from 16% to 55%. Why such a discrepancy between these numbers? Well it is likely to be due to the fact that people are not giving much attention to this question. Europe is now at the bottom of people's priorities with less than 1% of British people saying Europe is the most important issue for Britain.

A somewhat different picture than the one The Daily Mail is giving to its readers...

Eurosceptics hate the euro per se and with the Irish crisis, they found another opportunity to blame it. This time it is accused of being the cause of the current Irish woes. Here is the argument put against the euro: the low interest rates of the Eurozone fostered the housing bubble which is at the root of the Irish crisis. Without the euro, Ireland could have had higher interest rates and prevented the crisis.

Where to find such statements:

Evening Standard Daily Telegraph Guardian

This is pretty interesting stuff. As often, this kind of eurosceptic argument starts with one once of truth which is twisted so much that the final statement is blatantly wrong.

The housing bubble in Ireland is not due to the euro per se. It has occurred in several countries, the US and the UK included. In these countries, as in Ireland, the bubble was primarily driven by a fall in the standard of lending practices from banks and mortgage brokers. With the continuous rise in house prices lenders became more and more sloppy, accepting loan applicants with higher risks of default. In the US higher risk households were given loans thanks to the now famous “subprime” system. In the UK, lenders became very lenient with the rules to grant loans and often found hidden ways to bypass them. Household accumulated large debts (often more than 5 times their income) and an increasing proportion of these households were presenting a significant risk of default.

As long as house prices kept growing, these higher risks looked innocuous, but when house prices started decreasing, banks found themselves with a large amount of households unable to repay their loan. As a consequence, several banks ended up in a difficult situation, like Northern Rock in the UK.

Interest rates play a role in a housing bubble, the lower they are the more households can borrow and therefore buy. Being in the Eurozone, Ireland benefited from low interest rates. A low interest rate is generally good for the economy as it fosters investment and growth. But in the case of Ireland, with a dysfunctional borrowing and housing market, it certainly made the bubble worse. However, in Ireland as in other countries, the problem lied primarily in the borrowing market, not in the euro.

With an official interest rate of 0.5% and newly revamped drastic conditions imposed to households to get a mortgage, the UK shows that an economy can benefit from a low interest rate when it manages properly its borrowing market.