Europe is greatly admired by all countries in the world not only for its ability to tackle the repercussions of the global financial crisis, but also for its insistence on drawing lessons from the crisis, avoiding previous mistakes and strengthening the union.

The previous mistakes committed by the European Union (EU) are normal for the first global monetary union of this size and significance. The EU should not be blamed or criticised for such mistakes, which stand as lessons to be utilised in strengthening the union and shaping its own experience, thus enabling other economic blocs in the world, including the Gulf Cooperation Council (GCC) to benefit from its experience.

Some of these mistakes were discussed earlier, such as deficit in government budgets and ratios of sovereign loans to GDP. However, the most important matter — in focus now — is the absence of a single monetary policy and central financial control — important issues that were left to each state’s estimates, thus creating a serious contradiction between the financial policies of each country, which varied considerably between members in the Europe’s single currency, the euro.

So, the 17 member countries in the Eurozone believe that the continuation in the single currency and overcoming difficulties cannot be achieved in view of the absence of unified rules that can be applied by the European Central Bank to control monetary and financial activities — a move that was approved at the EU Summit held in Brussels last week.

The speed of implementing this resolution has been remarkably noticed despite its complications. In their recent meeting, European leaders agreed that there is no time to waste in Byzantine discussions. The resolution will come into effect after two months from now — in early 2013, and the remaining components will be completed by the end of 2013, and will be fully and comprehensively implemented by the beginning of 2014.

As per the resolution, the European Central Bank will control 6,000 banks and closely monitor the status of annual budgets and sovereign loans as well as all matters related to monetary and financial policies, which will be under the supervision of one authority in all member countries in the Eurozone.

This marks a tremendous development in international economic relations — which exemplifies the emergence of an economic and financial powerhouse in the world — that will surpass the US and China and will determine the nature of these relations during the current century.

It also indicates that the EU will continue to enact legislation and rules, which will constitute a model for the rest of the world and its economic blocs and alliances. The implications of which may lead to potential monetary and fiscal changes that will have its impact on the course of subsequent developments.

With the conviction of success of the new European approach, many countries around the world have begun their profit and loss calculations, particularly Great Britain, which will face two dangerous approaches after more than one year. First, the completion of the European monetary and financial Union with all its supervisory bodies, and secondly is Scotland’s referendum on independence. These two major developments may lead to significant political and economic repercussions on the old empire.

This is simply because the presence of Britain outside the financial and monetary union would weaken its position in European and global financial markets, despite staying as a member in the EU.

Also, London may lose its position as a global financial capital in Europe, as it stays away from the euro. This is because most financial transactions, including issuance of bonds, will shift into the Eurozone.

Second, in case of Scottish majority vote for independence from Britain, which is unlikely at present at least, an important territory will be removed from the British entity, especially since the Scottish Nationalist Party, which leads the process of breaking away, will leave the pound to join the euro.

British Prime Minister David Cameron said after the recent summit in Brussels that Britain intends to make the most of restructuring the governance of the Eurozone to renegotiate its EU membership to ease terms of membership. He earlier referred indirectly to the possibility of calling for a referendum on Britain’s membership of the European Union.

Due to its colonisation of the largest part of the Asian continent from China in the East to Palestine in the West through the Indian subcontinent, Britain seems to have been affected by eastern sentiments as a result of direct contact for hundreds of years, thus making it adhere to the pound sterling as part of its past when it was a great power.

But, no one can turn the clock back, and time indicates that there is no place for emotions in the world of business and finance. Hence, one must be positive and pragmatic in order to maintain and strengthen his gains in a rapidly changing world.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.