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^ I was curious about the same issue, but couldn't quite find enough evidence to hit either theory.
The only idea I can come up with is the loss Britannia suffered in the Geass timeline's Battle of Trafalgar (ep. 9, classroom scene?), which in our time was Britain's greatest naval victory in history. This would support a theory that Britain actually might have relinquished control of the British Isles in the Geass timeline to the EU, and only control the Americas and the rest of their colonies.
Granted I'm no expert in history, fictional or otherwise, so there's bound to be holes in all these different theories until the writers of Geass give us more to chew on.
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