Tag Archives: EU

The EU welcomes Montenegro, but rejects Scotland!

The above is not a headline you are likely to see anywhere today. Instead we are treated to almost blanket coverage of Barroso’s assertion that Scottish membership of the EU would be very difficult, if not impossible. Which merely confirms that most of our print journalists are just as biased and ignorant as their fellow journalists in the BBC. For even a moment’s reflection on Barroso’s rather weird assertion would expose it for the partisan scaremongering that it is.

The Montenegro precedent
It is interesting that Barroso chose to talk, unchallenged, about the independence of Kosovo and Spain’s continued refusal to recognize this independence. However a much more relevant precedent is Montenegro, which unlike Kosovo, attained independence in almost exactly the same way as Scotland will, if there is a Yes vote.

After the break-up of Yugoslavia, Montenegro remained in a union with Serbia. However there was a growing demand for independence which led to a referendum which was held on 21st May 2006. This resulted in a Yes vote and Montenegro declared its independence on 3rd June 2006. Just 13 days after the referendum! Which surely must have resulted in all sorts of international problems. Getting stuck in a dark room, left in a limbo etc. But no, in a matter of weeks the newly independent country of Montenegro had been recognized by most countries around the world. The key to this was that Serbia accepted the result of the referendum. Which meant that there were no grounds for any other country to refuse to recognize Montenegro’s independence. This included Spain, which recognized Montenegro on 16th June 2006. Just 13 days after Montenegro’s declaration of independence! Now I wonder why Barroso failed to mention this example, and more importantly why Andrew Marr and all the other distinguished BBC journalists also failed to mention this. Ignorance or bias!

So, given the precedent of Montenegro, it is pretty much inconceivable that Spain or any other country would refuse to recognize Scotland as an independent country. There would simply be no grounds for them to do so. If Spain really was terrified of setting a precedent, it would not have recognized Montenegro.

Montenegro and the EU
Shortly after its independence Montenegro formally applied to join the EU. This application was unanimously accepted by all the then member states at a meeting of the European Council. In the case of Montenegro the application process is quite lengthy as the country is starting from scratch and has the additional burden of adapting its economy and laws to a market economy. Nevertheless the application is progressing. In passing it should be pointed out that Montenegro has no currency of its own. It has decided to unilaterally use the Euro as its currency. A point which Britnats and Unionists should note. An independent Scotland could continue to use sterling if we chose to do so.

Scotland and the EU
Barroso’s intervention was to assert that Scotland was most unlikely to be accepted as a full member of the EU. Some, unspecified countries would object. Yet as we have seen all members states have unanimously welcomed Montenegro, another newly independent state, into the EU family. Somehow, according to Barroso, the EU would welcome Montenegro, but reject Scotland. This is just plain nonsense. Membership of the EU since 1993 is based on an applicant country meeting a set of criteria, known as the Copenhagen Criteria. The criteria are:

  • the political criteria: stability of institutions guaranteeing democracy, the rule of law, human rights, and respect for and protection of minorities;
  • the economic criteria: the existence of a functioning market economy as well as the capacity to cope with competitive pressures and market forces within the Union;
  • the institutional criteria: the ability to take on the obligations of membership including adherence to the aims of political, economic and monetary union.

The European Council identified the above criteria as the economic and political requirements candidate countries will need to fulfil to join the EU. It also concluded that accession could take place as soon as they were capable of fulfilling them.

These criteria are to be found on the European Commission’s own website, which can be found here. Perhaps Sr Barroso would be better employed reading and understanding his own Commission instead of going around trying to bully Scotland. In particular he should note the phrase – as soon as they were capable of fulfilling these criteria. For Scotland already meets all the criteria, and has done so for more than 40 years. It will only take the Commission a few weeks to confirm this. Once independent Scotland will be warmly welcomed into the EU as a full member state. Just imagine the damage that would be done to the EU if they did come out with a headline that said EU welcomes Montenegro, but rejects Scotland!

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Why did Swiss vote to restrict immigration?

In Sunday’s referendum voters in Switzerland narrowly voted, 50.3%, in favour of imposing strict quotas for immigration from EU countries. It is not easy to make a great deal of sense about this vote. Previous attempts to restrict immigration, going back to 1968, have all failed. In particular the Swiss have voted four times since 2000 in favour of the free movement of people from the EU. So why the difference this time around? Though the referendum was sponsored by the right wing Swiss People’s Party (SVP) the support for the proposal does not seem to fit into the usual right wing, anti-foreigner campaigns to be found elsewhere. To try and understand the vote, here is a bit of context.

Switzerland is and probably always has been a country with a high proportion of migrants. Even before the First World War the percentage of immigrants was around 15%. Today is stands at around 23%, defined as those who do not have a Swiss passport. This compares to the EU average of 10%. However even this apparently high figure may not tell the whole story. Some 35% of Swiss come from a migrant background and given the difficulties and cost of acquiring Swiss citizenship many people born in Switzerland to migrant parents never take out Swiss citizenship. I know this from personal experience. My son-in-law was born in Switzerland to Italian born parents, but he only acquired Swiss citizenship a few years ago, after the birth of his son. This son, my grandson has both an Italian and UK passport, but as yet, no Swiss passport. I am not sure where either of them now appear in the statistics, but it illustrates how difficult it can be to determine just how many foreigners are living in Switzerland. Almost certainly less than 23%.

As regards the opposition to further immigration it is unlikely to have been based on the fear of unemployment and the threat of losing jobs. Switzerland has one of the lowest rates of unemployment in the world. Currently it stands at 3.5%. If anything Switzerland still needs immigrants to power its industries and tourism. It is also noticeable that, with the exception of Ticino, the Kantons with the lowest rate of unemployment, less than 2%, were the ones most in favour of quotas. On the other hand, the Kantons with the highest rate of unemployment, over 5%, voted against the proposal.

Though there has been a steady increase in immigration over the last decades, this has not translated into the kind of social and economic breakdown and violence that has from time to time disfigured countries such as the UK, France, the Netherlands for example. By and large the Swiss have managed to accommodate this large scale immigration quite remarkably well. Another curious aspect of the referendum vote is that, again with the exception of Ticino, on the whole Kantons with above average levels of immigration, Zürich, Geneva etc voted against restrictions. While Kantons such as Uri, Obwalden, Aargau etc with below average levels of immigration, all voted strongly in favour of quotas. An illustration of this voting pattern can be found here.

So what did cause the vote in favour of quotas for migrants from EU countries? One clue may come from the countries of origin of most immigrants. Two countries stand out as sources of immigrants – Italy and Germany. As noted above, the highest votes in favour of restrictions was found in Ticino, the one Italian speaking Kanton in Switzerland. While many Italians will have migrated to other parts of Switzerland, a significant number will have settled in Ticino, just across the border. Add in that Ticino has an above average level of unemployment and we may be discovering one of the factors in the vote. It is also worth noting that Ticino has always voted in favour of restricting immigration. The other fact to note is that apart from Zürich, Zug and Basel Stadt, all German speaking Kantons voted in favour of quotas. The reason for this may be similar to Ticino. The overwhelming majority of immigrants from Germany will have settled in German speaking Kantons. It is also a fact that in recent years the largest influx of migrants have come from Germany. This is a relatively recent, post 2000 experience for Switzerland and one that a lot of German speaking Swiss do not like. German language newspapers have regular articles on this issue. It has not gone unnoticed in Germany. The German online magazine Die Zeit entitled one of their reports on the referendum vote thus: Fuck you, Deutschland. It is a fascinating read which you can find here.

That headline perhaps best sums up the referendum result, though it should be matched by a smaller one reading Fuck you, Italy. Despite the best efforts of the anti EU brigade this was not in essence a vote about the EU. The result was massively influenced by anti German and anti Italian feeling. But, and this is the most fascinating aspect of the vote, the most anti German were Swiss Germans and the most anti Italian were Swiss Italians. For one reason or another a majority of Swiss Germans and Swiss Italians feel more threatened by their fellow language speakers than by other immigrants. This aspect of the result deserves a post on its own, but alas it will have to be by someone with more knowledge of this subject than I.

A few words about what will happen next. The short answer is nothing, as it seems there is a three year period before any changes to the current regulations need to be enacted. What these might be are completely unknown. Even the SVP had no answers to questions about how these quotas might be constructed. Will there be separate quotas for different sectors of the economy? for different regions of the country? Who will determine how high to set the quota? And most important of all, how can any quota system be compatible with the various Bilateral Agreements with the EU? By substantial majorities Swiss voters have approved these Bilateral Agreements, which enable Switzerland to participate in the Single Market. This includes the Free Movement of People. It is almost inconceivable that Switzerland can have one without the other. Perhaps someone should have pointed this out first. In any case I would not be surprised if a new Bilateral Agreement between Switzerland and the EU was to be negotiated, one which again included the Free Movement of People. This will then be put to the voters in another referendum in say two years time. It will be very interesting to see if those who voted to restrict immigration would do so again if it meant leaving the Single Market.

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Who wants to leave the EU?

One of the key battlegrounds of the campaign for Scottish independence is the EU. Mostly this is about whether an independent Scotland would remain in the EU or somehow be forced out and have to re-apply. On the whole this issue has generated more fiction than fact, especially from the NO side. But one by one their scare stories dissolve into thin air. The latest is the confirmation, yet again, by the Spanish Foreign Minister that Spain would not oppose Scotland’s membership of the EU. However below the surface there is an interesting array of groups on both the right and the left advocating that either the UK as a whole or an independent Scotland should leave the EU. Though they come from widely different perspectives, they both agree that the EU is unreformable and that its regulations are an unsurmountable obstacle to progress.

The right has done most of the running on promoting an anti-EU agenda. They have operated primarily in England and advocate that the UK leave the EU. Though they will have some support in Scotland, this right wing opposition to the EU is based on UKIP and a significant part of the Tory party. Neither of which has much representation in Scotland. There seems to be two strands to their opposition. One is to oppose immigration, in large part due to a populist fear of foreigners, which is one of the key planks of UKIP. The other strand comes from a segment of the business community. Here the claim is that EU regulations are a millstone round the neck of British firms. According to a recent article by John Longworth of the British Chambers of Commerce in the Daily Mail, they want changes in employment law, health and safety, regional development, justice and home affairs. If not they would want the UK to leave the EU. Now it is not clear just why these unnamed EU regulations are holding back British firms. After all EU regulations apply to all 28 member states and German firms for example seem to have no problem in competing in world markets. The opposition to the EU from the right tends to be based on the desire to do away with what little safeguards the EU provides for workers. No doubt why they have relatively little support in Scotland.

On the other hand there is also significant opposition to the EU from the left, or perhaps more accurately the radical left. Last year’s Radical Independence Conference had a session devoted to the EU, with the general consensus that Scotland would be better off by leaving the EU. This has been followed up more recently by a paper from the Jimmy Reid Foundation on Common Weal approaches to international organizations and trade agreement. You can download the paper here. While this paper deals with all international organizations the key argument also applies to the EU. In summary this view is: “All of these underpin the approach to economic development known as neoliberalism. These are often in conflict with other models of economic development which favour social as well as economic outcomes (such as the Common Weal project in Scotland). While membership of these institutions may well be seen as necessary, it must be understood that they are also immediately limiting when it comes to pursuing a number of economic development strategies, strategies which might greatly benefit Scotland.” Now this is undoubtedly true. However a number of caveats need to be raised. Firstly as this report itself recognizes some progressive reforms are possible within the EU. The Common Weal project advocates many of the principles of what it describes as the Coordinated Market Economies found in Nordic countries. As all the Nordic countries are either full members of the EU or are in the Single Market, this approach at least is compatible with remaining in the EU. The second and to my mind more serious caveat is that what is immediately and most limiting to the pursuit of Common Weal type social and economic reforms is not the EU, but the electorate in Scotland. One does not need to be John Curtice to point out that the prospects for the radical left winning power in the Scottish Parliament are at the moment pretty slim. If we in the left can start creating in Scotland our own version of the Nordic model, many of us will be well pleased. Achieving this kind of transformation change will be hard enough and will take more than two parliamentary terms to embed. If we can then go on to develop a coherent set of policy proposals for further social and economic change, proposals which can then win majority support in a future general election, we can then, and only then, start to seriously think about whether leaving the EU is necessary or not.

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Will Catalunya force the EU to come clean?

131212-catalonia-vote-hmed-620p.photoblog600Last week’s agreement in the Catalan parliament to hold a referendum on independence may prove to be a bit of a game changer. While there is still a long way to go before a referendum can be held in Catalunya, the fact that a clear majority of MPs in the parliament, coming from five different parties -Liberals, Christian Democrats, Greens, Left Republicans and Popular Unity – is a fact that cannot be dismissed out of hand. The Madrid government and its socialist allies will huff and puff and do everything they can to stop the referendum, but the main interest from a Scottish perspective is how will the EU respond?

The first signs are not promising. Mr Van Rompuy, President of the European Council has already spoken out against Catalan independence, with the usual scaremongering about being thrown out of the EU. However others in the vast edifice that is the EU may find it harder to stick to this line. As long as it was just Scotland, the implications of independence from within the EU could be just about ignored or kicked down the road with vague threats in the form of vague generalities. However now there is the realistic prospect of two new independent states emerging democratically from within the EU. Not so easy to dismiss out of hand. Particularly when Catalunya is such a significant part of the EU. Sharing a border with both France and Spain and the main transit route between these two countries, the prospect of a Catalunya outwith the EU must send shivers down the spine of the political and business world in not just France but Italy and Germany. Catalunya is just too rich and too important to be conveniently ignored.

Or bullied, which is what the Spanish government would like to do and what the Van Rompuys of the EU would no doubt like to do as well. But I very much doubt if this tactic will go down well in the rest of the EU. To simply deny the Catalans the right to self-determination would in all likelihood bring down the whole EU project. The EU cannot preach the virtues and values of democracy to Ukrainians and Russians and then deny it to their own citizens. The EU has enough credibility problems as it is, without adding to them by taking a stance against democracy in Catalunya.

The import of all this is that we may soon see the first signs of a break in the EU’s position of “no comment”, but nudge nudge, wink wink, we don’t want independence from within. The demand for clarity from not just Scotland, but from Catalunya will only grow stronger and stronger. Already some Commissioners have spoken out of turn and been forced to recant. But more and more are likely to break ranks. Sooner or later the EU will have to face up to this prospect of new states emerging from within. There are two other groups within the EU which might prove willing to open up this issue to genuine discussion. The first is the EU parliament, which could pressure the Commission into preparing a full legal position. The other is the Liberal group in the EU, or to give them their Sunday name, the Alliance of Liberals and Democrats for Europe(ALDE). They are the third largest political group in the EU parliament and still carry some weight. Members of this group are also to be found in the Commission and in the governments of member states. The UK LibDems and the Catalan Liberals are both member parties in this Alliance. As one is against Scottish independence, while the other is leading the campaign for Catalan independence, it may be difficult for ALDE to remain silent for much longer.

Nothing is likely to happen soon, the EU does not do soon very well. But pressure on the EU institutions will only grow and grow as a result of the Catalan decision to hold a referendum in the same year as Scotland. For a Catalan view on this the Catalan magazine Ara has published a supplement on the issues surrounding their referendum – The Moment of Truth. It is mainly in catalan, but has the key points translated into Spanish and English. You can read it here. For a good summary of how it will not just be Scotland or Catalunya that will be affected by a Yes vote, Brandon Malone, a member of the Law Society of Scotland’s Constitutional Law Sub-committee, expresses his personal view here.

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Mariano Rajoy – New Saviour of the Union?

Mariano-Rajo-GettyNewslines were all abuzz last night with the apparently breathtaking news that Mariano Rajoy, Prime Minister of Spain, had stated that an independent Scotland would automatically be outwith the EU. This “news” was picked up with alacrity by assorted Unionists and blasted around the airwaves as yet another blow to Scottish independence. Now this might, just might have been newsworthy if it had in fact been new. This is after all the basis of news – something we didn’t know about before. However Sr Rajoy’s assertion is anything but new. He has made this claim for well over a year now. All he did in essence was repeat his view that a region which obtained independence would be outside of the EU, and would have to apply for membership.

However if we dig a little deeper and read or listen to what was said, things are not quite as straightforward as our Unionist friends would like to make them. The first point is that at no stage did Sr Rajoy say anything about vetoing Scottish membership of the EU. All he said was that a newly independent country would have to apply for membership. If he wanted to say he would oppose such an application he could have done so. And the press conference was the perfect opportunity for him to have done so.

Secondly, Sr Rajoy admitted that he knew nothing about the Scottish government’s White Paper on Independence. Starting from a position of ignorance is hardly a convincing or trustworthy place to start. He did recognize that the referendum in Scotland is taking place with the official and legal support of the UK government. Which effectively means that he will be in no position to challenge the outcome, particularly if it is Yes. The key point here is that in the White Paper the Scottish government makes it clear that the negotiations for Scotland’s continuing membership of the EU will take place during the period between the referendum and the date of independence, which will not be till March 2016. During this time Scotland will still be part of the UK. As such there would be no grounds for Sr Rajoy, or anyone else in the EU to refuse to participate in these negotiations. After all there will have to be negotiations, if for no other reason than to agree a new settlement for the rest of the UK. I would like someone to explain on what grounds the EU would negotiate the change in the rUK’s status during this period, but would refuse to negotiate Scotland’s changed status. It is also worth pointing out that Sr Rajoy was not asked about what he would do during this time period between a Yes vote and actual independence. No doubt because he has not read the White Paper.

Thirdly, there is the unreported deafening silence from François Hollande, the President of France. For this was a joint press conference after one the regular Franco-Hispano summits. M Hollande was asked to comment on Sr Rajoy’s claims and refused point blank to say anything. Well, to be precise, he said “this is an internal Spanish matter and I have nothing else to say.” Wow, I would have thought that this refusal by the President of France to back up Sr Rajoy’s assertions was “news”. After all this was a wonderful opportunity for M Hollande to show solidarity with the Spanish position. If Sr Rajoy’s claim is so sound and clear why would the French President not offer his support? One can only assume that the President of France does not agree with Sr Rajoy. I wonder why the news media in Scotland have not reported this fact?

Fourthly, let us ponder on the implications of the remarks by the President of France, namely that this is an internal Spanish matter. Now I do not for a moment think that M Hollande believes that Scotland is part of Spain or that Scottish independence is an internal Spanish matter. However by using these words – an internal Spanish matter, the President of France was giving Sr Rajoy a bit of a dressing down. In effect he was dismissing Sr Rajoy’s claims as merely internal politicking and not worthy of comment. Oh that out Unionist friends were so wise!

For this is the rub of the matter, Sr Rajoy and the rest of his Spanish Unionist allies are terrified of the prospect of Catalan independence. And just like their Unionist buddies in the UK their only weapon is fear and scaremongering. It is no surprise that Unionists here would grasp at anything that might conceivably stoke this fear factor. I am though just a little surprised at the glee with which so many Scottish Unionists welcome the prospect, however faint, that Scotland would be cast adrift from the EU. Should they not be advocating for Scotland? However it is pleasing to note that the President of France has refused to join in this particular bout of scaremongering. There may yet be life in the Auld Alliance. The Wee ginger Dug has another take on this little non-event which you can read here.

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Are Austria and Denmark Independent Countries?

Flag-Pins-Denmark-AustriaThe currency question has once again reared its ugly head during the past week. An assortment of Unionists have asserted that the rest of the UK would not, most definitely would not, agree to a currency union with an independent Scotland. There are arguments for and against such a currency union as proposed by the SNP. I have posted before on this matter, here, while Iain Macwhirter has a typically robust article on this issue here. This post will focus on a slightly different aspect of the currency debate – the link between currencies and independence.

The question posed above is really for those, mainly Unionists, who claim a Scotland that continued to use the pound sterling would not be fully independent. Particularly if Scotland were to form a currency union with the rest of the UK. The argument is that to secure the agreement of the rUK, Scotland would have to agree to very onerous conditions regarding borrowing, taxation and spending. These conditions would be so restrictive as to make independence worthless.

This whole claim of course is based on a very narrow, indeed restrictive view of what independence means. At one end of the spectrum independence can mean the complete freedom to do whatever you want, without any restraint whatsoever on the part of others. Now it is hard to find an example of any country in the world which has this degree of independence. Even the mighty USA has discovered limits to its freedom of action.

This is even more so in Europe, where just about all countries are either members of the EU, the EEA, or are planning to become members. Thus one could claim that no country in Europe is really independent, not even the UK. So to move the question from a theoretical level to a more practical one, I have posed the question at the top of this post. I would imagine that most people regard both Austria and Denmark as independent countries. Most people will realize that this independence is qualified but that qualified independence is what all countries have. So Austria and Denmark are neither more nor less independent than any other country in the EU/EEA.

I have chosen these two countries as both are medium sized countries and thus in many ways comparable to Scotland. The other reason is that one, Austria, is part of the Eurozone, while Denmark is not, and continues to have its own currency – the krone. Thus Austria provides some lessons on what can happen when part of a currency union, while Denmark provides some lesson on what we might expect if Scotland were to establish its own currency.

Now without getting into a detailed analysis of both countries, it is pretty clear that both are economically and financially strong and successful countries. As a member of the Eurozone, Austria is formally bound by all the conditions and restrictions that come with that membership. Interest rates are set in Frankfurt by the ECB, the exchange rate is fixed and of course there are the famous Maastricht conditions which limit the national debt and the budget deficit. Despite these restrictions, or perhaps because of them, the Austrian economy continues to do well. The latest OECD report, 2013, on Austria has this to say: “Austria has strong material well-being and quality of life. Steady growth in GDP per capita has been combined with low income inequality, high environmental standards and rising life expectancy. Supportive conditions for a dynamic business sector, generous cash benefits allowing families to provide extensive “in-house” services, a wide supply of public services and a well functioning social partnership system have helped achieve this performance. The Austrian population has therefore combined preferences for stability and work-life balance (“wealth in time”) with a thriving economy pursuing an active globalisation strategy.” So the apparently severe restrictions of a currency union do not seem to have had an adverse affect on Austria.

When it comes to Denmark, we find that its economy too continues to do very well. The latest OECD report I could find for Denmark dates back to January 2012 and stated the following: “The economy displays a number of strengths. The fiscal position is relatively sound. The flexicurity system helps adjust to shocks while limiting the social cost of unemployment and the risk that it becomes entrenched. The welfare system ensures low poverty and inequality. However, competitiveness has deteriorated in the past decade and productivity growth has been weak, eroding potential growth.” So broadly similar to Austria, despite the supposed advantages of having the extra freedom that comes from having its own currency. The reality though is that Denmark has for decades voluntarily restricted its freedom for independent action on the economic and financial front. The main tool for this has been to tie the krone to the euro. The krone is part of the ERM-II mechanism, so its exchange rate is tied to within 2.25% of the euro. Prior to this the krone was tied to the Deutschmark. So in effect, Denmark is almost as bound by the eurozone conditions as Austria. Again without any obvious detrimental effect on its economic performance.

In fact I would contend most of the Unionist assertions on the currency are just a lot of hot air, with no basis in reality. In or out of a currency union all countries have to manage their economy and finances in a way which secures their long term stability. If both the national debt and the budget deficit get out of hand then it will be the global financial markets which will exert pressure on the governments of such countries. It might have been a good idea for the previous Labour government in Westminster to have followed some simple guidelines and to have stuck to them. An independent Scotland will want to pursue prudent financial policies whether it is in a currency union or not. Just like Austria and Denmark. Otherwise we face the prospect of another UK financial crisis.

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UK – Leaving the EU?

out-of-eu-expressThe politicking within the UK around our continuing membership of the EU continues to gain momentum. The latest contribution from Lord Lawson – let’s get out – has merely confirmed a growing trend. More and more people it seems want the UK to leave the EU. A referendum on this issue seems just a matter of time. Now, as someone who is strongly in favour of Scottish independence, I hope not to be able to participate in any such UK referendum. However this issue, that of the UK’s membership of the EU is relevant to the debate on Scottish independence. Will the recent developments have any effect on voting intentions in Scotland?

A first point is that all this talk of the UK leaving the EU merely shows up yet again how little influence Scotland currently has on UK policy. For all the talk of a partnership of equals, if a majority of the good people of England vote to leave the EU, then there is nothing that Scotland can do about it. For the UK is a most unequal construct. England dominates with over 85% of the population of the UK. Another related point is that this is not really a UK debate. All or nearly all the voices leading the charge to leave the EU come from England. UKIP, despite its name, is an almost wholly English party, as is pretty much the case with the Conservatives. So the first real lesson from the continuing rise of the anti-EU brigade is to bring out ever more starkly just how little power Scotland has in the UK.

The second lesson relates to the issue of the EU itself. A constant refrain from the NO camp is that Scotland will not automatically remain a member of the EU if we vote for independence. We will face very hard and difficult negotiations and might have to accept humiliating conditions. Why we might not even get to stay in the EU. And of course not being in the EU would be very, very damaging for Scotland. But, hey, wait a minute, aren’t some of the top Unionists advocating for the UK to leave the EU? And are they not saying that leaving the EU would be just wonderful? So according to some in the NO camp, leaving the EU would be terribly bad for Scotland, while according to others leaving the EU would be great for the UK. A tad confused? I await with interest how the Better Together team answer this one.

Related to the above is the whole issue of negotiations with the EU. The standard NO camp assertion is that negotiations between an independent Scotland and the EU will be difficult, onerous and lengthy, with an uncertain outcome. But what about the negotiations between the UK and the EU? If the UK did vote to leave, there would need to be some kind of arrangement with the EU to allow for continuing trade and co-operation. Both Norway and Switzerland for example have quite detailed and complex agreements with the EU so that their citizens and companies can get the benefits from the single market. Yet the anti-EU brigade assure us these negotiations will be easy peasy. Once again we have some Unionists asserting different things for Scotland and for the UK. Negotiations will be really hard for Scotland but easy for the UK.

What all of the above does show is that in the balance of risks and uncertainties about the future, there is much greater risk and much greater uncertainty regarding the position of the UK in relation to the EU than that of Scotland. Negotiations for Scotland to simply change its institutional status within the EU is much less problematic and much less difficult than negotiations for the UK to leave and create a whole new set of arrangements. Just how long would that take and just how uncertain will the outcome be? Over to the Better Together team to enlighten us with some concrete answers.

This current rise to prominence in the London and UK media of the issue of the UK’s place in the EU does raise important questions about the NO campaign’s assertions regarding Scotland and the EU. However one wonders if our totally biased Scottish media will pick up on any of this and subject the likes of Alastair Darling to some serious questioning. I am not holding my breath.

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Cyprus and the Euro

Cyprus-BailoutAfter a week or so of protracted cliff hanging Cyprus seems to be receding from the media’s lens. Is it all over and Cyprus and the rest of us, including the Eurozone, can get back to what passes for normal? Most unlikely. Early indications are that Slovenia could shortly be the next in line for a rescue package, putting yet more strain on the ECB and the EU. As for Cyprus itself, the consensus is that the country and its citizens are in for a very long period of economic contraction with all that entails. The reputation of its banking and financial sector has taken a big, big hit and it is not clear that it can survive in anything likes its previous form or size. The austerity measures agreed by the Cypriot government will only add to this misery for ordinary Cypriots.

Why did all this come to pass? The media has been full of tales of corruption, over borrowing and tax havens for the Russian mafia. This has been very much the dominant narrative here in the UK, USA and most of the EU. But how accurate a picture is it of Cyprus and in particular of its financial sector? Not at all, by many accounts. While tax evasion no doubt exists in Cyprus, there is little evidence that it is greater than elsewhere in the EU. Nor is the relative size of the financial sector that out of line with other EU states – see Luxembourg for example. For a more detailed and positive view of the Cypriot economy see this article from Naked Capitalism. It is also known, but under reported that Cyprus and its banks were badly hit by last year’s restructuring of Greece’s debt. This involved large losses for Cyprus. So it was known for over a year that Cyprus would need some kind of help. Why has it taken so long to reach a deal? Why the attempt to destroy the Cypriot financial sector? Something fishy seems to be going on here, but it is not clear to me just what this is.

With the crisis has come the usual blame game. If it is not the fault of the Cypriots themselves then it must be those nasty Germans. Or at the very least it must have something to do with the Euro. As regards the Euro, there is so far, little evidence that it is the existence of the single currency per se which has caused this latest crisis. The Euro, like any other currency is a tool, and as such has to be managed. The management of the Euro by the ECB does of course leave a lot to be desired.

But the basic problem goes deeper than the ECB. What is killing recovery in the EU is the pig headed stubbornness of the leaders of almost all EU countries to pursue neo-liberal austerity measures come what may. Even the IMF is no longer convinced of this austerity promotes growth nonsense. Evidence that it does not work is to be seen everywhere. Yet almost all our national leaders continue to stick by this discredited policy. Note too that this is not some German plot. Though Germany does favour austerity it is not alone and there is no way in which Germany on its own could force the other member states to adopt these polices. Consider the fact that the leading figures in the Eurozone in charge of economic and monetary policy are Mario Drahi, the Italian President of the ECB; Olli Rehn from Finland, the European Commissioner for Economic and Monetary Affairs and the Euro; and Jeroen Dijsselbloem from the Netherlands, President of the Eurogroup, the body which co-ordinates economic policies within the Eurozone. Now it is theoretically possible that they are all German stooges, but I think this unlikely. Nor is this just a Eurozone matter. Our political masters in the UK are equally wedded to this austerity and more austerity nonsense. The only perceptible difference between Labour and the Coalition is that Labour would try to slow the pace of austerity, not change direction at all.

Quite why almost all EU political leaders are so completely wedded to this comprehensively failed economic experiment is beyond the scope of this post. Perhaps psychiatrists will be required to attempt to resolve this matter. For a brief introduction to this aspect, see this recent post by Paul Krugman.

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