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By George Kerevan, originally published on Friday 7 December 
  
LET’S think the unthinkable and consider an independent Scotland choosing to remain outside the EU. Would it be draughty outside, or the making of the nation?

I’m prompted to consider this option after yesterday’s story in The Scotsman, that someone inside the European Commission has drafted a letter to a House of Lords Committee to the effect that an independent Scotland would have to apply for membership of the European Union.

As the European Constitutional Treaty says absolutely nothing about what happens if a member state voluntarily breaks up, the opinion of this European civil servant is just that – an opinion. If there were a move to eject Scotland from the EU against its wishes, the matter could only be settled by the European Court of Justice, which is the arbiter of constitutional questions. Besides, I’d like to see this EU civil servant get to work in Brussels if independent Flanders is also thrown out.

However, let’s be sporting and consider the case of Scotland having to apply to join. For starters, this inevitably means holding a referendum to see if Scots actually want to continue as members. They might not. Unionists fondly imagine that telling Scots they could be kicked out of Europe will frighten them into voting No in 2014. It could have the opposite result.

What do Scots think about EU membership? Once upon a time, in pre-Thatcher days, they were highly sceptical. In the 1975 Common Market referendum, only 58.4 per cent of Scots voted to join compared to 68.7 per cent in England and 64.8 per cent in Wales. Matters changed when Mrs T arrived and the Scots started to see the EU as a bulwark against her right-wing policies.

However, the eurozone crisis and the prospect of European political union seems to have led to a resurgance of the old Euro-scepticism. Several UK-wide polls conducted this year by YouGov suggest that 19 per cent of Scottish voters want to leave the EU, while another 36 per cent want a return of powers from Brussels. That makes a majority. (Caveat: these findings are based on a very tiny sample culled from UK data.)

Staying out of the EU would not consign Scotland to isolation. The latest poll in Iceland shows that 59.5 per cent of its people want to scrap their country’s EU application for membership. But what is the alternative to Brussels?

Gordon Wilson, former SNP leader, and Jim Sillars, the party’s former deputy leader, suggest Scotland should open negotiations to join the European Free Trade Area (Efta). There are four countries presently in Efta: Norway, Switzerland, Liechtenstein and Iceland. They share an “internal market” with the EU, giving the advantages of free trade without the burdens of membership.

Discussions with Efta would give Scotland some leverage in any negotiations for EU membership, which I think is what Messers Wilson and Sillers are after. On the other hand, no-one should think that Efta membership is a “get out of jail free” card. In return for giving Efta countries access to its internal market, Brussels demands that they acccept EU legislation and contribute financially – without having a vote.

Efta membership has attractions, in that it avoids being committed to joining the wobbly eurozone or to eventual political union. I’ve never understood the point of fighting for freedom from London control only to end up being run from Berlin. But Efta would be a way of structuring Scotland’s relations with the EU, not avoiding them.

Another alternative is joining the North American Free Trade Agreement (Nafta), which links Canada, the US and Mexico. Nafta operates more like an ordinary free trade zone than a blueprint for political union, but the huge size of the American economy versus tiny Scotland should give enthusiasts cause for thought. A US company is currently using Nafta to sue the Canadian government for $250m over Quebec’s moratorium on hydraulic fracturing.

Yet there is a kernel of sense in the idea of relations with Nafta. For many years the best argument for being inside the EU was that it was the main driver of global economic expansion. Not any longer. The gap between growth in the US (+2.2) and the EU (-0.4) is 2.6 per cent – the widest since 1993. This differential will grow to 3.4 percentage points in 2014 (if America does not fall off the fiscal cliff) and stay at that way through the decade. Economically speaking, being in the EU is like tying a lead weight to your leg and jumping in the river.

Let’s take this argument in an even bolder direction. Just how does Scotland reboot its manufacturing? The weakness in the Scottish economy is an absence of medium-sized companies (50-500 workers) to generate exports and jobs. To grow such a sector quickly may require a degree of public support and trade protection that is incompatible with EU regulations.

I’m not talking heavy-duty trade protection, which could result in sanctions. But an independent Scotland outside the EU would find it easier to provide direct aid, export subsidies and cheap credit for its companies. It could also ring-fence public orders and regulate our labour market better.

If all that is too rich for your blood, there remains the “half-way house” option of embracing EU membership but demanding opt-outs from rules that do not suit us. Denmark – though an EU member – has far more opt-outs from EU legislation than does the UK. Danish soldiers who took part in Nato missions in Bosnia immediately withdrew when the EU took control.

The counter argument is that Scotland would not be offered such opt-outs. In which case we could take our oil, our fisheries, and our net contributions to the EU budget and keep them. Yes, it would be windy in the outside world, but bracing winds are healthy.


Courtesy of George Kerevan and the Scotsman newspaper

Comments  

 
# Breeks 2012-12-08 10:20
Scotland has a first class global brand to it's produce and people, and if we continue to invest in renewable technologies, then we will have more global opportunities than we have ever had before, - but they're only opportunities. To take advantage means investing in research, production and education, - and doing it soon.

We also have whatever residual debt we have to bear from the Union to sort out before we can really start ploughing our own furrow.

Before we make decisions about which market we should cosy up to, we need to work out what kind of economy Scotland is going to have before we can assess which market partners suit us best. In EFTA, would our economy compliment Norway's or compete with it?

Personally, I think Scotland's economy is going to have pretty unique profile, and that will be a great strength, if we can master it.

Stage 1 however, which we shouldn't take for granted, is making the right decision in 2014.
 
 
# Wee-Scamp 2012-12-08 12:28
We don't invest in renewable technologies we invest in other people's renewable technologies.

In fact it's worse than that because it's mainly other country's companies that are investing in other country's renewable technologies to exploit our resources.
 
 
# Aplinal 2012-12-08 12:54
You are right, but what's the short term alternative? Do nothing? That's the Westminster approach.

We have great potential R&D in Scotland but we need more control over what we are able to promote and support. Most of the real incentives are controlled by Westminster as Reserved matters.

Independence will give us all the tools we need. It will then be up to the next Scottish government to enact them. Although, God help us if for some reason the Scottish voters decide that once independence is won, they can vote in the neo-con-liberal-Labour party. Our first government post-Independence HAS to be one that is first and foremost a Scottish centred government. The Unionist-Dependency parties need a few more years of hard thinking to realign themselves with the needs of Scotland and the Scottish people first and only.
 
 
# Breeks 2012-12-08 13:30
Investment in partnerships can bear unexpected fruit, spawn innovations, strengthen links, and develop boardroom influence.
But yes, to a large extent I agree with you, but these technologies are in their infancy, and we need to encourage their development here so these industries consider Scotland a worthwhile place to invest.
If the technology is working here, it can be studied here, and can attract our kids into the industry, and encourage compatible innovations from near and far to come to Scotland.
In many respects it's no different from the oil industry, but unlike the UK handing out licences for no return, if we can integrate the new technologies at grassroots level with Scottish engineers and ingenuity, then there is a lot to be gained.

I repeat, these are opportunities, but they're not open goals. However it does us no good whatsoever when Westminster can't even decide if it's pro or anti wind turbine.
 
 
# Mad Jock McMad 2012-12-08 13:33
An outbreak of commonsense ..... I am with George on this one especially as the EU's powerhouse economy, Germany, has now dipped into recession. Neoliberalist capitalism has failed and with it the current Eu economic model.
 
 
# ButeHouse 2012-12-08 14:08
I would bet that the minute the SNP Government begins looking at Efta and/or even Nafta those in Europe who think they can control and divert our efforts to become Independent will begin to change their tune to neutral and then positive to get us and our huge resources on board.

I love the European people and the countries, especially Italy but at the same time Scotland and the needs of her people come first.

This excellent article by SNP economist George Kerevan reminds us and the Party that their are alternatives and it's about time we began to look seriously at them.

VOTE YES
 
 
# xyz 2012-12-08 19:19
Great stuff .. Nobody I know cares about being in the EU. Most are inclined to get out.

That's not surprising since the arguments for staying in are rarely reported by our media.
 
 
# J Gordon 2012-12-09 10:40
I like George's inputs very much, but I think this is seriously off the mark. Scotland is not an isolationist culture and we can't afford to be far away from EU. We have to be in there making changes and influencing policy on a global level through trade negotiations, climate discussions, transport cooperation. The EU is not the UK.
 
 
# NConway 2012-12-09 16:37
Im pro EU in fact im pro federal EU with a similar set up to Canada with Scotland being a full member the EU has its faults but I would prefer sorting them from within.
 
 
# NConway 2012-12-10 10:14
Interesting article re EU economist.com/.../...
 
 
# McGillicuddy Dreams 2012-12-10 14:01
Nice article. I liked"Officials and lobbyists would frequently be unaware of discussions about legislation that could affect British industry, except at second hand, through officials in a friendly nation. “We take our Scandinavian colleagues out to lunch and ask them what happened,” explains Petter Brubakk of NHO, Norway’s main business lobby. It would depend on other countries to fight its corner, as Norway now relies on Britain to resist proposed EU legislation on offshore oil-drilling. It would be as though Britain maintained a golden fax machine linked to Brussels, which cost billions of pounds a year to run and from which regulations issued ceaselessly. It could ignore the faxes about farming and fishing: members of the EEA are allowed to run their own agriculture policies. But it would have to obey the others."
a priveledge Scotland is soon to inherit.
 
 
# Teri 2012-12-11 20:23
I've never cared about an independent Scotland being in the EU. Whilst the unionist think this is a victory for them and will scare us all away from voting YES, I dont think many people will really be bothered.

This excellent article from George sets out clearly the alternatives and they are not in the least scary.

I'd have to say I agree with George on this issue. In fact I find it much more exciting than being in the EU
 

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