Scotland and the EU: Sturgeon's myth and the EU reality

Scotland and the EU: Sturgeon's myth and the EU reality

by Jill Stephenson
article from Tuesday 3, December, 2019

THE SNP IS BIG ON OUTRAGE, and nothing has ostensibly outraged it more than “Scotland being dragged out of the EU against its will”. Certainly, 62 per cent of Scots (including me) voted Remain in 2016, but that leaves well over a third of Scots who voted Leave. Scottish Leavers are chiefly, but by no means exclusively, to be found in rural areas and particularly among fishing communities, whose hatred of the EU’s Common Fisheries Policy (CFP) has not abated in forty-four years. This presents a problem for the SNP in its role of championing EU membership, not merely for the UK but also for any putative separate Scotland.

It was different in the 1970s, when the SNP opposed Britain’s membership of the European Economic Community (EEC), as it then was, and its leaders campaigned against EEC membership in the referendum of 1975. This attitude changed in the 1980s, as the EEC expanded its membership to take in former dictatorships turned democracies, in Spain, Portugal and Greece. As Scots benefited from EEC regional funding, and as the EEC increasingly came to be seen as a capitalist club with a social conscience, the SNP saw its opportunity. Having spent the 1970s proclaiming “It’s Scotland’s oil”, from 1988 the SNP supported Jim Sillars’ proposal to adopt the slogan “Independence in Europe”.

“Independence in Europe” was attractive because it suggested that a separate Scotland would not be on its own in a big, cold world; rather, it would have allies to turn to when it was buffeted by storms. This policy was fleshed out in 2013-14, during the referendum campaign, with claims of various kinds – from iScotland simply “retaining” EU membership to iScotland easily and quickly applying for membership in its own right. The SNP’s preference for Scotland “remaining” in the EU was asserted in its White Paper Summary in 2013: “It is our policy… that an independent Scotland will continue as a member of the EU” [emphasis in the original] (p. 24). The plan was that all necessary negotiations to facilitate membership would be concluded within the eighteen-month period between the referendum and ‘independence day’ on 24 March 2016. To say this was optimistic is not to do its lack of realism justice. The intention was that there should be complete continuity of Scotland’s participation in EU affairs, without any rupture caused by Scotland leaving the UK. The aim was for Scotland to join the EU by treaty amendment, as provided by Article 48 of the Treaty on European Union (TEU).

The SNP convener of the Scottish parliament’s European and External Relations Committee, Christina McElvie MSP, wrote to the EU Commission to ask for confirmation that this would be possible. She received the following answer from EU Vice-President Viviane Reding on 20 March 2014:

The [EU] Treaties apply to the Member States. When part of the territory of a Member State ceases to be a part of that State, e.g., because that territory becomes an independent state, the treaties will no longer apply to that territory. In other words, a new independent region would, by the fact of its independence, become a third country with respect to the Union and the Treaties would, from the day of its independence, not apply any more on its territory.

Vice-President Reding added that any European state may apply for membership of the EU under Article 49 of the TEU. She could not have been clearer: a vote to leave the UK in 2014 was also a vote to leave the EU.

Fast forward to 2019. The SNP once again campaigns on the basis of leaving the UK and joining the EU. Ms Sturgeon, as well as the Westminster SNP leaders Ian Blackford and Kirsty Blackman, have stated that their intention is for a separate Scotland to ‘remain’ in the EU. Blackford and Blackman explicitly stated on BBC TV in October 2019 that iScotland would ‘remain’ in the EU. Blackman said on 24 October on Newsnight that the choice before Scotland was between being “in Brexit Britain or an independent country in the EU”. Indeed, not only would iScotland seamlessly become an EU member, but, according to the SNP, it would “sit at the top table of the EU”. This is confidently predicted in order to persuade Scots that voting SNP is their escape route from Brexit. It is, in fact, nothing more than a dishonest electoral gambit designed to win over Remain voters to support the SNP’s one clear objective: leaving the UK.

This is spite of the fact that Scotland does almost four times as much trade (by value) with the rest of the UK than it does with the EU. Further, Ms Sturgeon reminds us frequently that 80,000 Scottish jobs depend on EU membership. She does not give a similar estimate for Scottish jobs dependent on Scotland’s belonging to the UK. Two years ago, the independent Fraser of Allander Institute showed that almost one in four of all Scottish jobs are supported by demand for goods and services in the rest of the UK, amounting to a total of some 560,000 jobs.

Scotland joining the EU is an even trickier proposition in 2019 than it was in 2014, given that the UK is leaving the EU imminently (as far as we know). No-one in the SNP has offered any evidence of a formal guarantee by the EU Commission that Scotland ‘remaining’ would be possible.

Guy Verhofstadt, the European Parliament’s chief Brexit negotiator, said, in June 2018, that, much as he regrets it, Scotland has to leave the EU as part of the UK: “because of the institutional structure of your country, you are obliged to go with the decision of the majority”.

All we have otherwise is anecdotal – or wishful thinking – claims by Scottish separatists that the EU has made it clear that it would “warmly welcome Scotland with open arms”. The ‘evidence’ offered to sustain these claims consists of off-the-cuff responses by people, like the former German MEP, Elmar Brok, who are not in a position to decide. Ms Sturgeon’s version, responding to Nicky Campbell on Radio 5 on 2nd December 2019, is:

Everything I have gathered from conversations and discussions I’ve had across Europe is that Scotland would be welcomed with open arms…. In fact there’s people within the European Union are on record, people who are expert on these things are saying it would not be a lengthy process.

It would be interesting to know who ‘within the European Union are on record’. You can be sure that if any EU Commissioner was on record as having said that, Ms Sturgeon would have told us, loudly and repeatedly.

So what would the SNP have to do to equip an iScotland for EU membership?

The EU is a rules-based organisation, and the chances of it waiving the rules for Scotland are purely wishful thinking. Take the SNP candidate in the Scottish parliament by-election in Shetland in August 2019, Tom Wills, who claimed that “the SNP is the only party that has prioritised fishing” and that “we need to scrap or fundamentally reform the CFP”. An iScotland as an applicant for EU admission, would, the SNP claims, be in a position to negotiate away aspects of the EU that they dislike, including the CFP and a commitment to join the euro. These claims are delusional and are marshalled only to try to convince Scots that Scotland can leave the UK but remain within the warm embrace of the EU, on its own terms. This is chicanery.

Instead, the SNP ignores the conditions for new members that are prescribed by the EU, as laid out in chapter 17 of the Acquis Communautaire, such as “requiring the independence of central banks in Member States”. A central bank manages the currency, money supply and interest rates of a country, and acts as its lender of last resort. This is a major stumbling block for the SNP’s EU policy. Scotland is currently a part of the UK’s banking system, with its currency, money supply and interest rates managed by the UK’s central bank, the Bank of England.

According to the SNP’s current prospectus for an iScotland, the Growth Commission Report (GCR), Scotland would continue to ‘use the pound’ after leaving the UK, for several years. Ms Sturgeon admitted this in her interview with Andrew Neil last week. There would not be a currency union, as is currently the case; rather, it would mean iScotland *using* the pound much as Ecuador and Panama use the US dollar. The SNP is caught in a bind: it wants the reassuring familiarity of using the pound sterling as Scotland’s currency, but, if it does so, it cannot join the EU.

This is because, contrary to EU requirements, iScotland would not have a currency of its own and would depend on another country, the UK, to manage its money supply and interest rates. As Dr Kirsty Hughes, Director of the Scottish Centre for European Relations, puts it: “You can’t join EU and meet treaty requirements if you don’t control your own monetary policy. There’s nothing to negotiate, you just have to show you conform to the treaty”. Yet Ms Sturgeon insisted to Andrew Neil that Scotland would not require to have its own currency and central bank in order to join the EU. Surely it is inconceivable that she is unaware of the EU’s rules?

It is true that the SNP hopes eventually to establish its own currency and found a central bank – after six tests have been met. This raises questions about how a central bank would be funded, with large reserves – of tens of billions of pounds - required. Former SNP MP, George Kerevan, tweeted a solution: “Scot central bank would convert private sterling deposits to Scot currency on change-over, inheriting circa £50bn rUK pounds as a reserve” (26 May 2018). Thus, Scots’ personal bank deposits would be used to underwrite the new central bank, in a new and untested currency which would be at the mercy of international currency speculators. It is highly likely that it would depreciate in value against the pound sterling. This would be disastrous for anyone who had taken out a mortgage or a loan in pounds sterling – to say nothing of those with sequestrated bank deposits.

Another major consideration is the deficit. Scotland’s deficit has been reduced from around 10 per cent to 7 per cent in recent years. The EU, however, has a rule requiring member countries to have a deficit of no more than 3 per cent. The UK currently easily fulfils that qualification, and that protects Scotland, as part of the UK. However, if an iScotland were to apply to the EU, it would be required to impose eye-watering austerity in order to reduce its deficit to 3 per cent. This is not speculation: look at what the EU has done to some of its members – Greece, Spain, Portugal, Italy – in recent years.

At the forthcoming election, the SNP poses as a champion of EU membership for the UK and of a second referendum on that subject. Ms Sturgeon has told us that a vote on December 12 for the SNP will be a vote for a referendum on leaving the UK. She needs to be honest, for once, and tell the Scottish people that, if they choose to leave the UK, they will be outside both the UK and the EU, and on their own for the foreseeable future. iScotland would not meet the conditions for entry to the EU, and would not do so for as long as it used the pound sterling. The problems of and requirements for establishing a new currency, including the six tests set out in the GCR, suggest that it would be decades before a new currency would be a feasible proposition. That would be good news for Scots with mortgages and loans denominated in sterling. But it would defer into the medium or long term any prospect of Scotland joining the EU, far less dictating its conditions for doing so or sitting at any ‘top table’.

The SNP is campaigning on a false prospectus.

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