Even in the decades after it lost its empire, Britain strode the world like a pocket superpower. Its economic strength and cultural heft, its nuclear-backed military might, its extraordinary relationship with America—all these things helped this small island nation to punch well above its weight class. Now all that is changing as the bills come due on Britain's role in last year's financial meltdown, the rescue of the banks, and the ensuing recession. Suddenly, the sun that once never set on the British Empire is casting long shadows over what's left of Britain's imperial ambitions, and the country is having to rethink its role in the world—perhaps as Little Britain, certainly as a lesser Britain.
This is a watershed moment for the United Kingdom. The country's public debt is soaring, possibly doubling to a record high of 100 percent of GDP over the next five years, according to the International Monetary Fund. The National Institute for Economic and Social Research forecasts that it will take six years for per capita income to reach early-2008 levels again. The effects will cascade across government. Budgets will be slashed at the Ministry of Defense and the Foreign and Commonwealth Office, affecting Britain's ability to project power, hard and soft. And there's little that can be done to reverse the trend, either by Prime Minister Gordon Brown or by the incoming government of David Cameron's Conservatives, assuming they win a general election that must be held within the next 10 months. As William Hague, Cameron's deputy and shadow foreign secretary, said in a recent speech: "It will become more difficult over time for Britain to exert on world affairs the influence which we are used to."
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