Scottish first minister Alex Salmond argues that, should his country gain independence, it would be able to keep the pound and would automatically become a member of the EU. However, Jo Murkens points out that membership status would not be a given and would need to be applied for, with the attendant implication that Scotland would be obliged to adopt the euro.
What would Scotland’s place in the European Union be as an independent Member State? Would it automatically continue to be a member? Would Scotland inherit the UK’s opt-out from the Euro and keep sterling as its currency? The SNP’s position on these matters is clear and decisive: Yes.
The clarity of the SNP’s position is based on the assumption that an independent Scotland would be fully sovereign, i.e. have the political ability to make unilateral policy choices. This stance is especially bizarre in relation to the European Union. The SNP leadership used to argue that an independent Scotland would automatically continue to be an EU member. Now, somewhat confusingly, it asserts a choice whether to join the EU or EFTA (or neither, one presumes). It also claims freedom of choice over its currency and that it will choose sterling unless and until the Scottish people decide to adopt the Euro in a referendum (Jason Allardyce, Scots ‘must use euro’ if union ends, Sunday Times, 30 October 2011).
We need to deal with these claims in turn. First of all, there is no automatic right to membership of the European Union. Continued membership would only be possible with the approval of all 27+ Member States. The process of accession is laid out in Article 49 TEU and requires an application to the Council which, having consulted the Commission, must act unanimously. An absolute majority in the European Parliament must also agree to the new accession. But it is the second paragraph of Article 49 TEC that causes additional difficulty for an independent Scotland. According to this sub-clause:
The conditions of admission and the adjustments to the treaties on which the Union is founded, which such admission entails, shall be the subject of an agreement between the Member-States and the applicant state. This shall be submitted for ratification by all the contracting states in accordance with their respective constitutional requirement.
There may be some Member States who will be supportive of Scottish independence, especially if clear support for it was demonstrated in a referendum. There is also, obviously, no problem with Scotland meeting the formal criteria for membership: the Scots have enjoyed EU rights and obligations for almost four decades. But other Member States may oppose independence as secession, and as a dangerous precedent which should not be encouraged in Europe. In any event, an independent Scotland would have to join the EU as a new accession state, a process that could take many years. Scotland could keep a low profile and go for smooth and rapid acceptance by the EU, or it could enter negotiations in a spirit of confrontation and re-negotiate the terms of membership.
If it chose to re-negotiate membership, an independent Scotland could put the currency issue on the agenda. The loss of membership status following separation means that Scotland would no longer benefit from the UK’s derogation from the single currency. An independent Scotland would not inherit the opt-out the UK negotiated for the Treaty of Maastricht. Of course, the politics of the Euro might have changed dramatically by the time Scotland becomes independent. But, currently, the formal position is as follows. All (old and new) Member States (except UK and Denmark, who secured opt-outs in the Maastricht Treaty) are expected eventually to join the Mechanism and to adopt the Euro. All the new Member States (after 2004) are legally obliged to adopt the Euro at some future point (with no opt-out clauses).
Formal EU law can at times appear unduly rigid: under the terms of the EU’s Treaties, Greece and Italy, for instance, would have to leave the EU if they chose to leave the Eurozone – a result that defies the ‘spirit’ of the Treaties. But even if there suddenly was room for manoeuvre for an independent Scotland on the currency, the Euro would become another factor in the raft of negotiations (following a positive independence referendum outcome in Scotland) with the Commission and the 27+ Member States, meaning that Scotland would have to negotiate a formal opt-out (which no other new Member State has secured).
None of the above suggests a true policy choice for the SNP. An independent Scotland will not automatically join the European Union, but will have to apply. EEA/EFTA membership is neither attractive nor realistic: its members have to adopt and implement EU law, but do not enjoy participation rights, and no one believes that the framework is open to new members. Both EU membership and the issue of the Euro will not be decided by the SNP or by the people of Scotland, but will be regulated (in principle) by the EU Treaties and (on the detail) by the Commission and the other Member States in negotiations with an independent Scotland.
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Dara, HOW can this new entity be called the United Kingdom of Anything? Who was the Monarch of Ireland in 1801 whos crown was tied to that of the English monarch. The original United Kingdom involved the CROWN of two countries being taken by one monarch. Was Ireland a kingdom at that time? England before 1603 was not called the United Kingdom of England and Wales, was it?
What the writer fails to comprehend is that the Treaty of Union was undertaken by two sovereign nations, England and Scotland. Should it be dissolved, to say that Scotland could not continue in the E.U also applies to England, that is the legal position.
I actually think the legal position is tricky. As Dara says above, the Treaty of Union in 1707 would be repealed but not the treaty of union between Great Britain & Ireland in 1801 to form the UK.
The UK entered the EU so if one of the treaties of Union was broken within that, it is very complicated, you could say that the 1801 Treaty is more important than the 1707 one so as long as the 1801 Treaty is in force then the UK stays part of the EU even if Scotland and/or Wales were to secede.
There is no precedent for this, no member state has split into two. Its particularly tricky I think because we have no written constitution and the Treaties that unite us are all over the place.
What we need is the European Commission and European Parliament to advocate what their view is of the legal situation and how they would treat an independent Scotland!
I’m surprised that anyone even seriously thought that Scotland could become independent while automatically remaining within the EU. The plain facts are that the EU is an international organization and in all cases of secession, the new country has to apply to any international organization it wishes to join. South Sudan had to apply to the United Nations and if it wanted to join the Arab League it would have to apply. The only cases where being part of a previous member has any bearing on membership in international organizations are with the Arab League (which said South Sudan would be eligible for membership by virtue of having been formerly part of Sudan despite the fact that South Sudan’s population is not Arab and the lingua franca is not Arabic) or with the Commonwealth. And contrary to what has been said there is a precedent of secession in the history of the EEC/EU: Algeria. Algeria used to be an integral part of France (it was divided into departments) and was no different than Guadeloupe or Scotland today in relation to the EEC. However upon Algerian independence France continued to be a member of the EEC and Algeria was not a member.
So Scotland would be leaving the EU with independence.
What is the legal basis for treating Scotland any differently from the rump UK after independence vis-a-vis EU membership?
As far I know, it would the 1707 Act between Scotland and England/Wales (unified in 1536) that would be a repealed; that is, the act that created ‘Great Britain’. The 1800 Act between Great Britain and Ireland that created the United Kingdom of Great Britain and Ireland would still be in existence (after its modification in 1921 for the secession of what is now the Irish Republic). So the 1801 act would be in force as the United Kingdom of England, Wales and Northern Ireland and, hence, still be a member of the EU as the entity known as the ‘United Kingdom’. It would require the secession of Northern Ireland to abolish the United Kingdom – something unlikely to happen any time soon, given the cherished British identity of the majority of NI’s population.
The argument that Scotland would have to join the euro is wrong: 1) Sweden has never received an opt-out, still after referendum it has not joined the euro – you are not discussing why this route is not available for Scotland; 2) Why could not Scotland negotiate an opt-out? Considering the UK’s behaviour, EU members would probably be too happy to accommodate anything the Scotland requests. 3) By the time it joins the EU, the euro might just become fashionable again 🙂
Presumably England would have the same obligations? Without Scotland the UK as previously defined ceases to exist, hence the UK derogation becomes a dead letter.
You haven’t actually explained why you believe that Scotland would need to undertake the admission process. There is no precedent for this either way. Scotland has been a part of the EU project for decades, as you acknowledge: it surely can’t be treated the same way as a brand new applicant?
Thank you both for your comments. My aim was to re-state the legal position. But you are right to add the political context (@ Jon: even Sweden is legally committed to adopting the Euro at some future point) and the economic context (@ Andrew: thank you for this important reference to Quebec; but I am not convinced that Scotland could i) join the EU and ii) opt-out of the Euro even if that would be in its best interest).
There was a post a few weeks ago by Stephen Gordon on the Toronto Globe and Mail’s Economy Lab blog (http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/why-a-monetary-union-would-have-failed-quebec/article2182923/) outlining why Quebec’s proposed currency union with Canada during the 1995 independence referendum would have been a disaster. Basically the argument was that if Quebec had to absorb its share of Canadian federal debt it would have produced a Greece-style debt to GDP ratio, resulting in significantly higher interest rates for Quebec and a financial crisis similar to the Greek experience. He argues that in the case of an independent Quebec there are few options for a bailout style rescue where the currency union could be maintained.
So even if Scotland was able to gain immediate admission to the EU, the difficulties associated with managing a high debt to GDP ratio (should it absorb it share of UK debt) may make adoption of the Euro impractical if the Greek experience is instructive. If accession were required in that situation I would suggest the outcome would be the same as Mr. Gordon predicted for an independent Quebec – there would be a financial crisis unless Scotland had its own currency.
Interesting, but I think you miss the realpolitik of the situation, especially regarding the Euro. Scotland could – as Sweden does – technically stay out of the Euro by not respecting the criteria of the Stability & Growth pact, or the independence of a central bank. Question would be how the SNP could communicate this.