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28 February 2021

Unspoken issues of Scotland's departure

Last week's spectacle in the Scottish parliament should serve as a reminder to be very careful with long-term forecasts about Scottish independence. It is quite possible that Nicola Sturgeon, Scotland's first minister and leader of the Scottish National Party, may have to resign if she misled the Scottish parliament in the Alex Salmond affair. Salmond is her predecessor in both jobs. The affair relates to events surrounding his trial on sexual assault charges, in which he was acquitted on all counts last year. The question is, to what extent did the Scottish government, and Sturgeon personally, intervene?

The two have been the most effective advocates of Scottish independence. The 2014 referendum took place nearly two years before the UK voted to leave the EU. A majority of Scottish voters rejected Brexit. The SNP argues, rightly in my view, that Brexit constitutes a change of circumstances that warrants a second referendum. Opinion polls show a strong degree of support for independence.

While I support the principle, I am not sure that the current strong rate of support for independence will hold up during a lengthy campaign. I am going to focus purely on the European aspects of the proposition, since Scottish independence only makes sense in the context of EU membership. What hasn't happened yet, and what did not happen during the last independence referendum, is a deep debate on Scotland in Europe. Because of Brexit, the choice is much starker now.

There are scenarios in which Scottish independence would make sense. For example, if Northern Ireland ever voted in favour Irish unity, the economic geography would change. The combination with Scottish independence would create a Celtic EU fringe, an almost contiguous land area from Cork in the southwest of Ireland to John O'Groats in the north-east of Scotland, separated by a small strip of sea. What connects Ireland and Scotland is a ferry from Belfast to Cairnryan in Galloway, in the south-west of Scotland. If Ireland unified and Scotland separated, England would be surrounded by EU territory in the south, the west and the north - and depending how you look at the North Sea - the east as well.

The probability of Irish unity, however, has fallen because the European Commission triggered Art. 16 of the Northern Ireland protocol during the vaccines procurement panic. It was a mistake of arrogance and ignorance, quickly realised as such, and quickly reversed. But it signalled to the Irish, north and south, that not everybody in the EU has Irish interests on their radar screen. It should also serve as a reminder that Europeans understand Irish history and politics much less than they claim. The same goes for Scottish politics.

Scottish independence would require a formidable degree of economic adjustment in Scotland. The existing EU/UK trade agreement would force a physical customs border between Scotland and England. There is no Scottish protocol in the withdrawal treaty to fall back on. By then, regulatory divergence between the EU and the UK will have proceeded a good distance. On joining the EU, Scotland would have to reverse everything that had been reversed.

One issue that will come up next time, and that didn't last time, is the euro. Salmond based his 2015 campaign on the premise that Scotland would not have to join the single currency. But post-Brexit, it would make no sense whatsoever for Scotland to maintain its currency union with England, when the two are no longer linked through a customs union and a single market. Membership of the euro would necessitate that Scotland delinks the Scottish pound, floats it, and later joins the exchange-rate mechanism.

The case for EU membership thus becomes a case for a new economic model. Ireland is an example of a country that used EU membership to modernise its economy. Ireland is part of all the main areas of European integration, having secured opt-outs only in relation to the Schengen passport-free travel zone because of Northern Ireland, as well as justice policy.

Ireland's two large political parties, Fine Gael and Fianna Fáil, are members of two of the EU's centrist political groups, the European People's Party and Renew Europe. Now ask yourself: where does Scottish politics fit into the European mainstream? And is there anyone in Scotland arguing the case for independence on the basis of economic renewal?

These kinds of issues were not addressed during the 2015 referendum. At that time, the UK had not left the EU, and few people believed that Brexit would happen. At the next referendum, the Scots would not only be asked whether to separate from England and Wales, but to join an economic region which they are no longer part of. The case for Scottish independence and ensuing EU membership was based on the notion of perfect and continued regulatory alignment.

The EU would, of course, accept a Scottish membership application. But don't draw the conclusion that the EU would give Scotland a sweetheart accession deal. The EU will dictate terms when confronted with a country that has no strategic alternative.

A successful case for Scottish independence can be made, but it would need to be made in terms of a political or an economic strategy, not merely disdain for England and Brexit. And if the case is not made, and Scotland joins nevertheless, the EU may find that it is once again confronted with a narrative of European integration that is very distinct from its own. There is no reason to think that an independent Scotland would behave differently in the EU than the UK did during its 47 years of membership. That, too, started with a lack of honest debate of what the EU is about, a debate that reduced the EU to a common market.

I don't know whether the life-and-death fight between Sturgeon and Salmond will reduce Scotland's appetite for independence. But what I do know is that neither of them has ever made a coherent case for an independent Scotland in the EU, and I don't think that is going to happen now.

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