Row over country's debt raises doubts over EU future; but britain keen on strong china ties

The recent wrestling match between Greece and the European Union over the Mediterranean country's massive debts was watched at first with a certain detachment by Britons, mostly reassured by official data showing British banks had very little exposure to the battered euro.

This, they reasoned, was happening "abroad" and didn't really have a major impact on the UK, with its island mentality. Something along the lines of, "It's OK, we have our own currency, and the austerity measures taken by the government over the past six years are slowly having an effect."

For many people here, there was an air of "I told you it would never work", as they watched Greece, with its struggling economy and massive debt load, try to wrest a deal from what they saw as the "merciless" German government and its allies with the EU, as well as the cold, financial reality offered by the International Monetary Fund and the European Central Bank.

But as the crisis dragged on, many people started to wonder what effect it would have on the UK's still-evolving foreign policy.

The UK faces a referendum on future membership of the EU, and until now the parameters of that debate had seemed pretty well-defined. Polls showed a majority wanted to continue EU membership, albeit with changes being sought by British Prime Minister David Cameron and his Conservative government.

The consistently pro-EU British press has been harsh on Nigel Farage and his minority UK Independence Party, which wants out of the EU, although some of its members are more than happy to ride the Brussels gravy train as members of the European Parliament with their large salaries and huge expenses allowances.

The EU-Greece fracas has, however, started to raise doubts in British minds.

The EU, people reason, is all about unity, strong nations pulling together to help the weaker ones. That perception went out of the window as it became obvious German Chancellor Angela Merkel and her government wouldn't budge an inch, demanding terms that will leave Greece a pauper nation for years to come.

That may, just may, persuade many people to change their minds about British participation in the EU.

What will be fascinating is how any changed relationship between Britain and its European partners will affect the bigger international picture.

After years of tension, Britain and China are embarking on what Chinese officials are privately referring to as a "golden era", now the British fears about Hong Kong in a post-1997 era have been allayed. People's Liberation Army's tanks haven't been rolling through Central District, and economic activity in Hong Kong's freewheeling financial markets has continued untouched.

Chinese and UK officials both point to China's growing investment in the UK as well as Britain's prompt decision to sign up as a founder member of the China-inspired Asian Infrastructure Investment Bank.

This relationship will be cemented by the forthcoming state visit of President Xi Jinping to the UK in October.

China is keen to see Britain remain a key member of the EU, with officials believing British influence, combined with the power of France and Germany, can help boost a China-EU relationship that on a global basis will balance the influence of the US, which even now has a cautious relationship with China.

Chinese officials also believe that Britain's relationship with China over the years, with its ups and downs, would give it an edge in helping develop EU policy on the Asian power beyond the bland words of friendship and into a more constructive stage.

The EU reaction, or nonreaction, to both the AIIB and China's plans for a new Silk Road linking China with Europe are areas which Beijing believes London can help.

We live in interesting times.

The author is managing editor of China Daily Europe, based in London. Contact the writer at chris@mail.chinadailyuk.com

(China Daily European Weekly 07/31/2015 page12)