The European economic situation has been diverted from the possible economic catastrophe owing to the perseverance efforts by the European Central Bank (ECB) and the national governments. The ECB has kept imposing the tight monetary policy in order to avoid the high inflation which can be the fundamental cause of the European economic breakdown. Almost all Eurozone nations have kept electing the governmental party which support their countries remaining in the Eurozone. So, these national governments have kept their fiscal austerity. Thanks to their determined policy, European Union (EU) has avoided collapse of the Eurozone and the entire EU economy.
However, the tight monetary and fiscal policy represses the market multiplier. This aspect remains the unemployment rate high, and various public services provided are reduced. Due to this negative side effect of the tight economic policy, there are still a lot of the European citizens who are against the European economic union. Even though their economy is stablised, their economic standard has been kept low since the crisis occurred.
Those countries which have already joined the European Monetary Union (EMU) will remain to be in the EMU so that they will keep following the guide line provided by the ECB and the fiscal agreement. The rest of European countries which do not join the EMU involves a big dilemma. Even though these countries do not join the EMU, they still have to follow the strict guide line provided by the EU central political authority. Nowadays in particular, these countries have to decide whether they become more integrated into the European economic union or they become independent from the EU itself to become free from the restriction of the economic policy making.
This short article shows the trend of British political parties regarding to the diplomacy with the EU and their economic policy. There are two indices, Pro-EU index and Economic Liberalism index, which are created by the subjective assumption of this article writer (me). The former index indicates that the higher number means more pro-Europeanist. The latter index indicates that the higher number means more liberal (Free market) their economic policy is (The lower number means more socialistic). These assumptions are created by the writer's observation of British politics. So, this is an unofficial statistics. But, these graphs are created to graphically present this author's prediction of British politics and their attitude toward Europe.
The graph below is the index summerising the 2 indices above. This index is calculated as follows:
ln_(Pro-EU index + 0.1) x ln_(Economic Liberalism index + 0.1)
British Conservative party has been famous for its economic liberal policy as same as its relatively Euro-Sceptic policy. The Conservatives have been divided into two political factions: Stark Euro-Sceptic British Unionist and Pro-Europeanist free-marketist. Recently, many of the former division switched their party membership to the UK independence party (UKIP). So, although there are some sufficient number of the Euro-Sceptic members remaining to be in the Conservative party, the Conservatives have become more Pro-Europeanists than before especially since they formed coalition government with the Liberal Democratic party which is well known as a stark pro-Europeanist political party.
The prediction is that the size of the Conservative party will be shrinking little by little because many members will move to the UKIP. The majority (more than 50% but less than 60%) of the Conservatives prefer keeping their liberal economic policy, and know there is a benefit to join the European economic union. These Conservatives are happy to follow the tight monetary policy and the fiscal austerity plan restricting the freedom of economic policy making. The Conservatives think highly of the low volume of fiscal stimulus and put priority on controlling the price inflation. Therefore, the interest of economic liberalism and the interest of the European integration match each other.
The Liberal Democratic party (Lib-Dem) also will shrink its size. Until the Lib-Dem agreed to become an ally of British Conservative party, the Lib-Dem was considered as a center-left socialist party as an alternative of the Old Labour. So, there used to be many socialist electors who voted for the Lib-Dem. Nonetheless, after the Lib-Dem formed the coalition with their arch-enemy the Conservative party, they got highly disappointed by the Lib-Dem. Therefore, not only these electors but also some Lib-Dem party members have abandoned the Lib-Dem since the coalition was formed.
This forecast predicts that British Labour party will become less Liberal (More Socialistic) party. The Labour party once succeeded in gaining both a popularity and a successful economic policy by liberalising their policy when Mr. Tony Blair came into the power. The Labour was a very pro-EU political party even before Mr. Blair became the political leader. So, when this party became the new labour, the major policy change was their economic policy, and their diplomatic policy with Europe remained to be same.
Nevertheless, the Labour is still in favour of the interventionist economic policy (Flexibly changing fiscal stimulus volume and the public sector size). So, the restriction of economic policy freedom imposed by the EU is still an obstacle for the Labour's economic policy.
The Labour has gained a lot of support from not only the socialists electors but also the pro-Europeanist electors. But, because the Conservative party is becoming more pro-Europe and the Scottish Nationalist party (SNP) expands its party size and influence, the pro-Euorpeanist characteristics of the Labour is becoming less and less significant.
Then, the Labour inevitably need to recall their traditional socialist policy. If they decide to do so, then they have to gain their own sovereign fiscal independence from the European fiscal austerity. Therefore, the Labour will not be a pro-Europeanist party like they used to be up to recently.
The remarkable phenomenon taking place nowadays is that many deprived working class citizens started supporting a nationalistic political party which promises them to emancipate them from the negative side effect by the austerity plan imposed by the EU. This is one of the main aspects that British Nationalist Party (BNP) is gaining the popularity. The BNP manifestos their very intense socialist policy in order to attract the working class citizens, especially those who are unemployed.
The UKIP also claim for the complete independence from the EU for the different reason from the BNP. The UKIP retains the traditional Conservatives' policy which regards highly of both Liberal-Economism and British national sovereignty. This UKIP's policy will not change for a while. But, this forecast predicts that the UKPI will inevitably shift their economic policy to the more interventionist one. Before the world economy was globased, the national sovereignty was one of the key factor to protect the liberty of the national economy. In the past, the nationalism and its expansion implied the expansion of their economic scale and protecting the citizens' property right from the oppressive invaders from outside their nation. By contrast, after the world economy became globalised, and so the effort of nations became less significant for their economic scale expansion, the national sovereignty has become no longer important for encouraging the economic liberalism. Thus, if the UKIP is planning to stick to their nationalism, it will be difficult to attract the votes from economic liberalists.
All in all, as the last graph shows, there will be a new political division in British politics. It used to be based on Nationalistic Economic Liberalist v.s. Pro-Europeanistic Socialists. But, the new division will be based on Pro-Europeanistic Economic Liberalist v.s. Nationalistic Socialists. The former group insists on the fiscally restricted private sector economy with a big economic scale. The latter groups claims for the protective public sector economy which is well looked after by a central national government's flexible fiscal policy.