It’s becoming clear that there is a far more ambitious strategy behind Great Britain’s exit from the European Union, the so-called Brexit. Far from a reluctant government led by Prime Minister Theresa May, forced to listen to the Vox Populi of the majority of voters in 2016 who voted to exit the European Union, signs emerge of a far more devious well-planned strategy at the highest levels of British power, including the House of Windsor and the powers of the formidable City of London financial institutions. Britain is ditching the EU as a failed option, and seems to be intent on building a new English-speaking Union together with the United States and with the nations of the Commonwealth–the former colonies of the British Empire prior to 1914.
The British have a long and varied history, emerging from their surprising defeat of the mighty Spanish Armada in 1588 to go on over the course of three centuries to become the most powerful empire on earth, until a Great Depression of 1873 followed by two devastating world wars in the 20th Century, forced her patriarchs to swallow hard and accept a junior partner role with the 1945 dominant power, the United States.
Their decision to join the European Monetary Union in 1992 went against that tradition of staying outside the Continental European fray, a tradition of remaining an Atlantic power, utilizing their Anglo-American “special relationship” that had been built during the war years by Churchill with Roosevelt. When the US circles deliberately destroyed the British possibility to join the emerging Euro through the agency of a “lone assassin” hedge fund operator named George Soros in 1992, it was a clear signal that Wall Street and Washington would not permit the enormous financial power of the City of London, fused with that of Germany, France and the Continental economies, to challenge the hegemony of the US dollar and of Wall Street.
Now the Brexit negotiations between the EU Commission and the British government have taken on an air of bitter acrimony from the side of the EU, if not outright sabotage. Not the least because the British precedent is giving others the notion that an exit might be an option. However it seems that Brussels smells a deeper agenda afoot from London, one that could easily spell the end of the misbegotten Euro project and with it, the EU as we know it pre-Brexit.
Stock Exchange Merger Dead
On March 29, symbolically the same day that Prime Minister Therese May formally presented her government’s plan for Brexit, the European Commission in Brussels announced that the planned $31 billion merger of Frankfurt’s Deutsche Boerse and the London Stock Exchange was dead. There is a huge power struggle here as well. The real issue in the merger was where the ultimate control would lie—London or Frankfurt– of what in trading volumes would become a financial trading goliath of a world dimension. The merger would have created a mega-exchange. The Global Financial Centres Index (GFCI), which is produced twice a year on behalf of the Qatar Financial Centre Authority, currently ranks London as number one, ahead of New York. Frankfurt is the largest EU financial center on the Continent.
The proposed merger collapsed in effect when the EU put severe conditions for London in order to allow approval, terms which London refused. The real issue, however, was not that London sell off part of its business in France. It was where the control would reside, and London insisted it be clearly based in London.
Whether by coincidence, the same day Brussels vetoed the London-Frankfurt merger, Britain formally presented its Brexit plan. The EU is making it clear they will make it as onerous for Britain as possible. EU officials suggest Britain may be forced to pay as much as 60 billion Euros on leaving the EU and will be forced to continue accepting EU tax, environmental and labor laws if it wants to have an eventual free trade pact with the EU. The combined volume of the other EU economies comprise by far Britain’s largest trade partner, taking 46% of British exports last year.
I want to suggest there is a far more threatening geopolitical background to the Brexit that’s not being talked about, and that that’s what is really behind a de facto guerilla war going on between Britain and the remaining EU, a war which could decide the future of the Euro single currency itself in the next several years as well as the shape of our geopolitical world power “balance” to use a favored British expression.
The German online newspaper, Deutsche Wirtschafts Nachrichten (DWN), presents an intriguing argument that the Brexit was not only pure democracy at work. Rather, they point out that the most powerful factions within the British establishment were quietly exercising their influence via British media and elsewhere to shape that Brexit vote. They argue, convincingly, that British leading circles had reached a consensus before Brexit to exit the failing EU that was forcing Britain, once the world hegemon, to become an inconsequential player in a drama being shaped in Brussels. Now, argues DWN, Britain will seek to rebuild itself anew as a World Power using its historical British Commonwealth network of nations to be the foundation.
It’s not as far-fetched as it sounds. Britain’s Royal Commonwealth Society is planning to open a branch in the United States, with a view to one day bringing America into the multi-nation group as an “associate member.” According to a report on February 23 in the conservative British Telegraph newspaper, Michael Lake, Director of the Royal Commonwealth Society said he had written a formal letter last December to then-President-elect Trump, hand-delivered by British Brexit leading voice, Nigel Farage, former leader of the UKIP party. Lake told the Telegraph that opening a branch in the US, “would further Britain’s ties with America, developing new connections between two countries who already share a common language.” Lake said that Britain seeks to reinvigorate the British Commonwealth as an alternative to the top-down, supranational EU structure. The aim of the Commonwealth is to promote “mutually advantageous” links with “reliable friends” around the world on everything from business to defense.
By leaving the EU, Britain is free to negotiate bilateral free trade agreements with Commonwealth partners such as Australia or the USA free from the constraints of agreements approved by the 28 (then) member states of the EU.
With this new freedom of maneuver, British banks will not be bound by the EU bank legislation such as the onerous bank “Bail-in” law passed last year that could require bank depositors and shareholders rather than taxpayers to bear costs of a new (and inevitable) new EU banking crisis. Further, the British Pound, which is a member of the select IMF Five of major reserve currencies along with the US dollar and Euro, Japan Yen and China Renminbi, will be free to join efforts of Washington and Wall Street to attack and ultimately bring down the highly-vulnerable Euro. Britain’s Pound is the third largest global payments currency after the dollar and the Euro. If Britain, free from the restraints can bring down the Euro, the Pound could become a major gainer–currency war with Britain on the side of Washington against the fragile Eurozone with their Italian, Greek, Spanish and other problems.
Britain, in collusion with the United States, formally or informal, could well present a formidable challenge to world peace. Britain is a nuclear power with full intelligence-sharing cooperation with Washington, something denied Germany. Britain deploys its military around the world in concert with the USA. Britain is historically the geopolitical opponent, in two world wars, of Germany and of Russia and of China going back to the 1840s Opium Wars.
The current machinations of Britain call to mind their project, put forward by one of the more strategic thinkers of the British Empire prior to outbreak of World War II, H.G. Wells. In the late 1930s when the smell of world war was unavoidable, Wells and his friends in the highly influential British Round Table, notably Lord Lothian who went on to become Britain’s Ambassador to Washington, put forward a radical strategy. Wells termed it, an order dominated by a “great English-speaking English-thinking synthesis, leading mankind by sheer force of numbers, wealth, equipment and scope.”
Agreeing with Cecil Rhodes, the founder of the Round Table’s fraternity, H.G. Wells stressed that the coming world order must be based on cooperation, “between all the western peoples and, more particularly, between all the Nordic peoples,” by which he meant Anglo-Saxon and racially kindred peoples. He insisted that “The British Empire had to be the precursor of a world-state or nothing,” and that that world state must also be one in which, “Britain must draw the United States into a closer accord,” into a new great English-speaking union. Will it work in 2017? Not likely given the hollowed-out state of both the British and US economies, the hollowed-out quality of the respective national politicians. That doesn’t mean the British won’t give it a go. Maybe boosting US designs in Yemen with SAS and other special UK forces as an appetizer, then on to Putin’s Russia and China?
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook.”