Sunday, 10 February 2013

Scotland's Place In Europe - and the Euro

In 1997, the newly-elected Labour government in the spirit of progressivity and energy which so characterised the early days of post-Tory Britain finally accepted the Yes vote in the 1979 referendum, and legislated to give Scotland a measure of internal democracy. 

It was one of what transpired to be only three radical pieces of legislation piloted by the British government, joining the national minimum wage (incredible, now, to think that in the 1990s, it was legal to pay an employee less than £3,60 per hour) and the implementation of the Kyoto Protocols.

I always ascribed the halt of progressive Labour to the sacking of the late Robin Cook, and the loss of Mo Mowlam, Chris Smith and the late Donald Dewar within the early stages of the Labour government, and the gradual replacement of left-wing Labour MPs and ministers by increasingly right-wing Labour figures who gradually became effectively indistinguishable from the Conservative Party. 

The belated establishment of limited democracy in Scotland wasn't all down to altruistic reasons, however. George Robertson, the Secretary for War, and himself a Scotsman, believed that the creation of a Scottish Parliament would "kill nationalism stone dead". 

The New Parliament

Donald Dewar, who was most responsible for shaping the new democratic settlement, moulded the new Parliament in such a way that there could never be a nationalist majority, and that Labour would permanently have a say in the administration. 

The British government viewed the new Parliament as a way to ensure that British Labour policies would be implemented in Scotland, regardless of interstitial Conservative administrations in the UK, and behaved towards the new Parliament accordingly. 

The administration was to be termed the "executive", and it was to be led by a "first secretary", subservient to the Secretary of State. The Labour Party, in office in London, didn't send their A-Listers (and Scottish Labour, at that time, had genuine A-List politicians) to Holyrood. The likes of Robertson, Helen Liddell, George Foulkes, Gordon Brown, Alistair Darling, George Galloway and Robin Cook - heavy hitting Labour politicians - looked down their noses at the fledgling Parliament. 

Labour's opinion was clear. The new Parliament wasn't good enough for the big boys - and sure, wouldn't it always return a Labour "executive" regardless?

The Parliament was stunted, partially because the same party was in power in both London and Edinburgh, so there was no opportunity for the Parliament to flex its muscles; partially because the Labour/Liberal administration was one of nonentities, a situation which worsened with the sudden death of First Minister Donald Dewar, and his replacement by the well-meaning, but little-known, Henry McLeish. 

Labour sent 56 deputies to the First Parliament, and has been on a downward spiral ever since. It sends its proper politicians to Westminster, and the Scottish people are increasingly reluctant to elect a second-rater. Labour have gone backwards at every election to the Scottish Parliament.

Change of Government - Change of Status

It wasn't until the National Party won the third General Election, in 2007, that the Parliament became worthy of the name. The Scottish Parliament executive became the Scottish Government. It began to develop distinctly Scottish policies. It became clear that the Scottish Government, and the Scottish Parliament, were in control of Scotland. 

In all fundamentals, Scotland bore, in the post-2007 period, all the characteristics and quasi-legal status of a Free State, in external association with the United Kingdom. It was Holyrood which was in control of all domestic policies in Scotland, and with a strong, visible First Minister who viewed himself and his country as the equal of Tony Blair and his. 

This status of the Scottish Government as the sole legitimate representative of the Scottish State was tacitly accepted by the British Government in negotiating and signing a bilateral, Government-to-Government Treaty, the Treaty of Edinburgh. That treaty was, for all intents and purposes, the first international treaty signed by a Scottish state in more than three hundred years. 

The Treaty was the surrender of the British Government to Holyrood of all power over Scotland's constitutional relationship with the United Kingdom. In May 2012, the Scottish Parliament voted for Scotland to be a fully independent state within the European Union, gaining the foreign affairs and defence powers which were hitherto retained by London. Next year, the Parliament will ask the Scottish people to endorse Scotland's full independence in a referendum. 

Our European Union

The Scottish people are citizens, first and foremost of the European Union. The first two words to appear on the passports Scots hold are "European Union". We hold European Union passports issued by the UK Border Agency. 

The only territory of the European Union ever to leave was Greenland, then and now part of the Kingdom of Denmark. The people and government of Greenland - a free state in external association with Denmark - chose to leave the European Union. It took six years to leave. 

This is a state which desired to leave, and the process took six years. Is it at all conceivable that a state which is already part of the European Union, its people already European Union citizens, sends MEPs to Strasbourg and Brussels, and fully desires to remain part of the European Union, will somehow be defenestrated when it takes six years for a country which wants to leave to get out?

Scotland, post-independence, will be a democracy. We are at peace. We are economically stable. We are good neighbours, and good Europeans. We are a rich nation, and will be a contributor to European community cohesion. 

It is in Scotland's interest to remain in the European Union (and with the British government's plans to rip the UK out of Europe, only independence can guarantee Scotland remains in the European Union), and it is in the European Union's interest that Scotland remains a member. 

European Union fishermen benefit from the use of Scottish waters. The reason the European Union was so desperate to fast-track bankrupt Iceland into EU membership was to have the use of Icelandic waters too. 

Consider a map of Europe. Look at the area of sea surrounding Scotland. This sea will be Scottish territorial waters: and with Scotland outside the European Union, these waters will be closed to European Union trawlers. 

It is not credible that i) having taken six years to negotiate a voluntary Greenlandic exit, it will take less to negotiate an expulsion of rich, stable, strategically important Scotland; and ii) that the European Union would not do all in its power to negotiate Scottish assumption of full member status in the 18-month interregnum between the referendum and the conferring of full independence. 


It is the policy of the current Government to retain Scotland's existing currency, managed independently through our shared Central Bank, a joint Caledo-British asset. 

My preference would be to join the Euro immediately upon independence, giving us the protection of the world's largest currency union whilst simultaneously making a gesture of our commitment to our European Union. However, many disagree, and this will be a matter for a future Government. 

What the currency will be is a policy matter, to be decided at elections post-independence. It is nothing to do with independence. 

What is certain, however, is that there cannot and will not be compulsion on the part of Brussels to force Scotland into the Euro.

It is a European Union requirement that all Member States except the United Kingdom and Denmark adopt the Euro when the convergence criteria relating to Exchange Rate Mechanism membership (ERM-II) are achieved, and it is most likely accurate to state that Scotland would not inherit the United Kingdom opt-out on the single currency. 

However, this requirement is explicitly designed to be able to be loopholed. 

Sweden, for instance, is legally required to join the single currency when the criteria are met to allow it to join ERM-II. It has deliberately chosen not to make the necessary restructuring to the Riksbank. The Czech Republic is in a similar position. 

These states are simultaneously legally required to adopt the Euro, and legally banned from doing so.

Should Scotland fail to inherit the United Kingdom opt-out (it will almost certainly take up to a decade to make a decision on this if appealed), then our government will still be able to keep us out of the Euro if it so desires. 

It's worth noting that even if the United Kingdom desired to join the Euro today, it would not meet the convergence criteria on Government debt and deficit as a ratio of Gross Domestic Product, and as a result would be excluded. 

Eurosystem is not in the business of kidnapping reluctant Central Banks: this is why a third of European Union member states are not members of the Euro.

There has also been an attempt by the anti-Independence movement, led by Alistair Darling, who was caught fraudulently claiming public money, to claim that Scotland would somehow "not be allowed" to retain the pound sterling.

This is a laughable claim, and I deal with it here only for the sake of completeness. The Pound Sterling, like the US Dollar, and the Euro, is a fully-convertible and tradeable currency. It can be used by anyone who desires to. 

Scottish pound sterling banknotes already have to be backed up £/£ at the UK Central Bank in London. This will continue to be the case post-independence. 

The decision here isn't what currency we will or won't use in the future. It is about taking the decision to take these decisions in Scotland, by the Scottish people, for the benefit of Scotland: not what benefits Tory millionaires in the Home Counties, or tax-dodging businesses in London. 

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