Blickpunkt Großbritannien Büro London March 2009 “Britain’s Way out of the crisis: Moving away from Washington and Wall Street and closer to its European allies? The economic crisis has deeply shattered British economy. Britain's strong bonds to US-American economy and stock markets, her enormous financial sector, and the comparatively isolated position Britain holds in the European Union, are only some factors that doom Britain in the current situation. It is without surprise that doubts concerning established structures of the political system arise. Are a more intervening state, a stronger integration into the European Union and a withdrawal from the US economic model the way out of the crisis…? Stephen Haseler* In January Britain’s economic position took a sudden turn for the worse. The country’s finan­cial establishment no longer seemed to be in control of the credit crisis; and this loss of confi­dence led to a fall in the British currency ­against both the dollar and the euro. Indeed, over the last year sterling had lost about 30% against the dollar, about 20% against the euro and about 40% against the yen. By month’s end it seemed that Britain was entering a full­blown old-fashioned sterling crisis- rather simi­lar to the 1976 crisis which led to the visit to Britain of the IMF. And the news that the pro­jected G7 talks in February were to place ster­* Stephen Haseler is the Director of the Global Policy Institute at London Metropolitan University. He is fur­thermore a well-known author and publicist. ling’s position at the top of its agenda only rein­forced the sense of gloom. This latest loss of confidence resulted from an awareness that Prime Minister Brown’s bank bail-out of September/October, had not worked, and that some kind of new state assistance for banks was needed. Yet when, in late January, the government announced a new state-backed insurance scheme for Britain’s banks it did little to revive confidence. And confidence was fur­ther eroded by an IMF report(published on the 27 th January) which predicted that the British economy would shrink by 2.8% and would be the hardest-hit in the developed world and in what is expected to be‘the deepest recession Friedrich-Ebert-Stiftung London Office 66 Great Russell Street London WC1B 3BN Phone:+44(0)20 7025 0990 Fax:+44(0)20 7242 9973 e-mail: info@feslondon.net website: www.feslondon.org.uk