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Britain, the EU, and Reverse Integration

In 2007, James Mann published a book called The China Fantasy, about American leaders downplaying Chinese human rights violations in the interest of integrating China into the global economy. The aim of “integration” was to involve China in world affairs and force it to play by certain rules, which would hopefully be habit-forming and result in more domestic freedom. It didn’t exactly happen that way, and Mann offered an explanation why: reverse integration. As he wrote:

The fundamental problem with this strategy of integration is that it raises the obvious question “Who’s integrating whom?” Is the United States now integrating China into a new international economic order based upon free market principles? Or, on the other hand, is China now integrating the United States into a new international political order where democracy is no longer favored and where a government’s continuing eradication of all organized political opposition is accepted or ignored?

Needless to say, the United States itself doesn’t have to become more like China for reverse integration to take place; it merely needs to accept that China’s existing values are welcome in the international community. It’s worth keeping this concept of reverse integration in mind when examining the thorny question of Britain’s membership in the European Union. Not only does there seem to be a case of reverse integration taking place, but in contrast with the U.S./China analogy Britain is actually at risk of becoming more like the rest of the EU through its participation–even if it holds on to its sovereign currency.

In January, the Obama administration sought to pressure Britain to resist calls to leave the European Union, and then at a joint press conference with British Prime Minister Cameron a week ago, President Obama reiterated the message. The Obama administration’s logic has been simple: Britain can be a voice for the Anglosphere from within the EU and help counteract European anti-Americanism. Outside the EU, Britain’s influence–and thus its use to the current U.S. administration–would fade to near-irrelevancy. From Obama’s perspective–and it is not without its merit–Britain has far more to offer American interests by working the system from the inside.

But what if Britain falls victim to reverse integration and instead of improving America’s standing inside the EU its dissent is stifled and conformity is thoroughly enforced? That’s where the relationship seems to be heading, if recent stories are any indication. Heading into the weekend the Financial Times reported that once the EU passed its cap on financial-sector bonuses for all member countries, it began to make some changes: “Europe’s banking regulator has this week significantly widened the definition of staff who will be affected by the incoming bonus cap.” But the actual pay cap amount was never the point. As Daniel Hannan explained after the initial bonus cap was passed:

In any event, what has any of this to do with Brussels? When we talk about bankers’ remuneration in the EU, we really mean bankers’ remuneration in London. Again and again, the effect of anti-London regulation is to disadvantage Europe’s only major financial centre. The business driven away from the City is not going to Frankfurt or Milan, but to New York and Hong Kong.

Last night’s vote neatly symbolised Britain’s weakness within the EU. We were outvoted 26-to-1 on an issue that was, fundamentally, no one’s business but ours. The Treasury will lose billions in tax revenue. My constituency, which surrounds London, and benefits from the knock-on impact of the financial services industry, will suffer. Britain will fall behind in one of the few sectors where it enjoys a global lead. The EU will pile on regulations which, paradoxically, make a future crash more likely (see here). All to satisfy the prejudices of people who dislike the whole notion of capitalism.

Of course, that actually does advance American financial interests to a certain extent, but it’s doubtful that’s what Obama had in mind. And while class warfare will always find plenty of supporters in Europe, perhaps more audacious has been the EU’s efforts to crack down on press freedom across the continent. To that end, in January an EU-commissioned report advocated that EU countries establish media watchdogs to be monitored by the European Commission. A group of publishers pronounced themselves horrified.

A few months later, it was revealed that the EU has been spending millions to fund groups advocating for more press restrictions, and that Britain’s feisty euroskeptic press was the target. And yet in March of this year, the three major British parties–Cameron’s Tories among them, of course–seemed to agree, coming together on a proposal to crack down on that feisty press. That’s not to say there wasn’t plenty of opposition to the proposal, which began building right away. But you would think the prime minister and leader of the Conservatives would know better.

When the EU strikes at what it sees as the symbol of capitalism on the continent, Britain is powerless to stop it. And when the EU seeks to chip away at basic freedoms, like that of the press, Cameron is a step ahead of even the EU. The U.S. may want Britain in the EU to be an advocate for Western values, but the administration may be surprised to see just how fast the EU can integrate its member states.



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