Wednesday, July 23, 2014

The EU and an independent Scotland

Scots living in Scotland vote on September 18th on whether to end their 300-year union with England. If they win, the nationalists aim for actual independence, and full EU membership, in March 2016. Opinion polls currently show a lead for the pro-Union side, but 15 or 20 per cent remain undecided. The debate is becoming heated, with arguments concentrating on the economic risks and opportunities of independence. The EU dimension has attracted less attention, with each side brusquely dismissing the other's assertions. Most Scots want to stay in the EU: the nationalists assert that this would be quick and easy; their opponents predict problems; impartial voices go largely unheard. Here are eight points which Scots might like to consider.

1. Beware those who say all is clear

 … it isn't. Anyone who says that it's certain the Scots could, or could not, have their own seat at the Council table from 2016 is driven more by advocacy than analysis. The fact is that the EU would be in uncharted waters. There is neither precedent nor treaty provision for a member-state splitting, with both parts wishing to stay in. Greenland chose to leave in 1985, with metropolitan Denmark negotiating its exit. The Czechs and Slovaks had split long before they joined in 2004. The EU is treaty-based: only independent states can negotiate and sign treaties. There would be concern in Brussels not to deprive EU citizens of EU rights because they live in Scotland; but the treaties are clear that EU citizenship is the corollary of citizenship of a member-state. And Scotland could not become a member-state until the relevant new treaty provisions came into force. Whether this circle can be squared is as yet uncertain. Don't believe anyone who says it definitely can or can't be.

2. Remember it isn't just up to the Scots

… or London, or even Brussels. All existing member-states would have to agree that Scotland could join, with their governments agreeing the terms, and their parliaments (or referendums) ratifying their decision. National governments have a natural aversion to secession: several EU countries that were ready to fight to stop Serbian ethnic cleansing in Kosovo can't yet bring themselves to recognise the fact of Kosovar independence from Belgrade. The oft-drawn parallel between Scottish and Catalan separatism is not exact: the Scots and English have always had different legal systems, and Scottish nationalists want to keep the Crown. Of course, the arguments for respecting the democratic will of the Scots would be strong; but so, in some EU capitals, might be the desire to demonstrate to domestic secessionists that the road to independent EU membership could be long and winding. Other countries could have other preoccupations; and nothing happens unless everyone signs up to everything.

3. Aim to settle the divorce terms first

… because the EU will adamantly refuse to mediate between London and Edinburgh. Getting involved in a domestic dispute between constituent parts of a member-state is off-limits for the Brussels institutions and would be anathema to other member-states. So full prior London/Edinburgh agreement on, for example, the division of UK assets and liabilities, and future currency and regulatory arrangements, would be a certain Brussels pre-condition for membership. Continuing disputes over an issue unrelated to EU membership could also cause knock-on delays if it meant that full UK government co-operation in Brussels was for a time withheld: the Trident nuclear submarines might be one such issue (the nationalists say they would insist on the Royal Navy vacating the Scottish bases that are essential for its strategic nuclear force). Unravelling the skein of the union would in any case take time, even with goodwill on both sides.

4. Negotiations should be easier

… with the EU than with London, provided Scottish negotiating aims are realistic. The Scots already respect all current EU laws, though discrimination against their English, Welsh and Northern Irish neighbours, for example on student fees, would become a breach of EU law when the two countries became separate member-states, and would have to cease. Those who argue that the Scots would be required to adopt the euro haven't noticed that Scotland would fail all the economic tests for candidates for eurozone membership: a declaration of intent to join at an appropriate unspecified future date would probably suffice. Equally implausible is the suggestion that the Scots would be obliged to join the Schengen area of passport-free travel, leaving the current UK/Ireland common travel area. Common sense would prevail, making it probably enough for Edinburgh to express a willingness to join Schengen whenever Dublin and London do. Voting weight in the Council is now determined automatically, by reference to population, and Scotland could expect to keep its six seats in the European Parliament (and might indeed be able to mount a case for an extra three, on grounds of parity with Denmark, whose population is also 5 million.) But on the price of membership, Scotland's net contribution to the EU budget, the nationalists would need to drop their current breezy claim that they would be due a rebate similar to that secured for the UK by Margaret Thatcher in 1984. Existing member-states, many much poorer in per capita terms than Scotland, would not agree to pay more to let the Scots pay less. Mrs Thatcher's success was the product of a long campaign, fought from inside: the chutzpah of simultaneously seeking to join the club and pay a reduced subscription would be an obvious deal-breaker. And, in EU legal terms, Scotland would be outside, knocking at the accession door, because Brussels is clear that…

5. Leaving the UK would mean leaving the EU

... in strict constitutional terms. This legal view has been spelt out by the president of the European Council and successive Commission presidents, now including president-designate Jean-Claude Juncker. The residual UK, minus Scotland, would be the ‘continuator’ state, and remain at the EU table. Scotland, as a new state, would need to ask, from outside, for a new seat: the relevant accession procedures are laid down in Article 49 of the Treaty on European Union. Nationalists in Scotland disagree, and claim that separate membership could be achieved seamlessly from within, using Article 48, which sets out how existing member-states can seek to change the treaties. It is not clear, however, how they envisage overturning established Brussels doctrine, and there are strong legal arguments against using a general article (48) for an issue (admitting a new member) that is covered by specific provisions (Article 49). The key point is that the Scots cannot make up the rules. They may claim that the referee is wrong, but it is he who runs the game. It follows that ...

6. Minimising disruption matters most

A more constructive aim for Edinburgh would be to focus on seeking transitional arrangements to maintain the EU status of Scottish citizens during the hiatus between secession from the UK and full membership of the EU. Even in the highly unlikely event that the Scots managed to persuade the referee to reverse his ruling, and turn to Article 48, facilitating pre-independence negotiations, such a gap looks unavoidable, for two reasons.
(i) Recognition. Only sovereign states can sign treaties. Scotland would not be sovereign until independent. And before the Scots could sign an EU accession treaty, all existing EU member-states would have to recognise that independence.
(ii) Ratification. EU treaties do not enter into force until ratified by all signatory states. This takes time: in Belgium, for example, seven separate legislatures have to approve. And the EU is a convoy, moving at the speed of the slowest ship.
Countries whose accession treaties have been agreed but not yet universally ratified are usually allowed an observer's seat in Council of Ministers, though the right to vote and to nominate a commissioner has to await full membership. What would be novel (though not necessarily unachievable, given that the situation itself is unprecedented) would be an agreement that, de facto while not yet de jure, Scottish enterprises, farmers, fishermen, workers and students should retain their EU rights. This is what matters most, because ...

7. It would all take longer than you think

Settling the intra-UK divorce terms, a pre-condition for any EU negotiation, won't be easy. Even when campaign tempers cool, actual secession by 2016 looks unrealistic. The 2015 UK election will supervene, and may be followed by the distraction of a UK EU renegotiation and 2017 referendum, occupying Brussels' attention, and perhaps tempting other member-states to adopt a policy of wait and see. Scotland's position in the EU would clearly be very different if the residual UK were to leave. Negotiation (or informal pre-negotiation) before independence could be obstructed by other member-states (point 2 above); or held up by intransigence in London or Edinburgh (point 3): by over-bidding by Edinburgh (point 4); or by constitutional quarrels over the rules (point 5). And even if substantive terms, and sensible transitional arrangements, had been informally agreed before Scottish secession, the twin hurdles of recognition and ratification (point 6) would still lie ahead. So don't hold your breath.

8. Anglo-Scottish teamwork would be critical

To maximise the chances of escaping from the constitutional catch-22 that Brussels institutions may negotiate only with states, pre-independence discussions with Brussels would have to be led, at least notionally, by the London government. Nationalists in Edinburgh now recoil at the idea; and so might bad losers in London if the nationalists win on September 18th. Yet co-operation would be essential to success in Brussels, and UK embassies across the EU would need to work to an agreed UK/Scottish brief. And, apart from considerations of duty and equity, it would be in London's self-interest to help the Scots: if no transitional arrangements for Scotland were in place when the UK broke up, the task of manning the EU customs union's new frontier on the England/Scotland Border would fall to those south of Hadrian's Wall.

9. Remember point 1: No-one really knows

… for sure what a Yes on 18th September would mean for Scotland and the EU. I certainly don't, though I know the EU quite well. Sir David Edward, a Scotsman who served with distinction as a judge in the European Court of Justice, is right to ask Scots to question – in an article earlier this month – the purpose of "launching ourselves on this sea of uncertainty."

Full disclosure. I admit that, as a diaspora Scot disenfranchised by David Cameron's casual concessions to Alex Salmond, I hate the idea of my countrymen being obliged to choose between being Scottish and being British. I think the dichotomy as false as that between being British and European. Wider horizons create greater opportunities; and just as EU membership has greatly benefitted the British, so the 1707 Union has hugely benefitted the Scots. Long may both last.

Lord Kerr of Kinlochard is a former permanent under-secretary in the Foreign and Commonwealth Office and is chairman of the Centre for European Reform.

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