Vetoed by Spain or Forced in the Euro?

Borders at Gretna and forced in the Euro – that’s as good as the European argument gets for the unionist parties – assuming of course, that Jose Manuel Garcia Margallo, the Spanish Foreign Minister agrees to open the gates of the European Union. If he doesn’t, Scotland would be expelled from the club we are already part of, its people stripped of their EU citizenship and Edinburgh forced to reapply. Needless to say, their rhetoric couldn’t be any further from the truth.

The House of Commons Library recently produced a document entitled “Scotland, Independence and the EU” – a feeble attempt to examine how independence will impact on Scotland’s EU membership. What it does do however, is make three significant concessions. Firstly, that membership will be a matter of political consideration (of the Member States) rather than a legal one, on the basis that no provision exists in the Treaties that sets out what would happen in the event of part of a Member State becoming independent. The Greenland case demonstrates that EU institutions respond pragmatically to political events rather than rigorously applying legal theory. Indeed the European Commission responded to the political, economic and geographic realities of Greenland, despite the lack of provisions in the Treaties for changing Greenland’s status.

Greenland of course also demonstrates that it’s impossible for a part of a Member State to be kicked out of the EU without going through lengthy negotiations. The country secured autonomy from Denmark in 1979, it voted to withdraw from the EU in 1982 but didn’t formally leave until 1985.

Secondly, it acknowledges that the Lisbon Treaty makes automatic membership easier by removing the need to amend voting rights from new Treaty texts. When Ireland narrowly voted against the Lisbon Treaty in 2008 it was feared the decision would put Croatia’s EU accession in jeopardy, as its membership depended on the ratification of the Treaty and its reform of voting procedures. From 2014 every Member State will have only one vote in the Council of Ministers. Weighted voting will disappear but double majority will remain – thus giving smaller Member States a louder voice.And thirdly, it recognises that Scotland could well be recognised as one of two successor states, thereby retaining the opt-outs negotiated by the UK. It concedes that whilst Sweden is legally obliged to join the single currency, as agreed by the Maastricht Treaty it signed up to, it seems unlikely that it will join in the near future.

The truth is that the EU has never forced a Member State to sign up to anything that is against the will of its people. Sweden voted against Euro membership in 2003 and the EU has accepted that political reality. Scotland will not be forced to join the Euro. But even if, hypothetically, it decided to sign up to it, the people of Scotland would be the ultimate decision makers. If Scotland rejected Euro membership in a referendum the case would be closed.

The anti-independence voices are also blind to recent electoral developments in continental Europe. The comeback of the French socialists and the struggle of the Greek pro-austerity parties to form a coalition are already sending chills down spines in Brussels.

If the euro is to survive, Europe will need to have an honest rethink about euro membership, entry processes and deficit regulation. Countries will no longer be able to swan in the Eurozone and it's likely that the bloc will review its compulsory entry requirement.

The Treaty on the Functioning of the European Union states quite explicitly that any country wishing to join the euro must join the Exchange Rate Mechanism for at least two years. For Scotland to join, its currency would need to be pegged to the euro and would therefore require the co-operation of the Bank of England. Sterling would need to operate within the normal fluctuation margins without severe tensions for a minimum two-year period.

Given that there is no prospect of the UK ditching the pound in the near or distant future, it's difficult to see how such a requirement could be fulfilled. A new process of transition would need to be formulated at European level to allow Scotland to join the currency directly from sterling. Would the classic EU fudge do it? Quite possibly – but it would take time to agree and achieve.

Moreover, an independent Scotland would need its own central bank – another requirement for euro entry – to work alongside the European Central Bank. So, on a technical level it would arguably be a greater challenge to get an independent Scotland to join the euro than to keep out of it.

The Commons paper also dwells on whether Scotland and the UK would be considered two successor states. In a recent response to a question by a Catalan MEP about Scottish independence the European Commission described a future independent Scotland and the remaining parts of the UK as "the parties concerned", implying that both Scotland and the rump UK are being treated equally. While the Commission continues to give very little away, their use of language is very significant.

The Spanish Foreign Minister has stated time and time again that Scottish independence is not a matter for Spain and that the latter would not veto its continuing membership. The idea that Scotland would be expelled from Europe upon independence is not only politically ludicrous, it is legally impossible. The acquis communautaire would only give the EU and its Member States three possible grounds to object to Scotland remaining in the EU: that it is not a democracy, that it is financially insolvent; and that it violates the European convention on human rights. 

The truth is that the Unionists are running out of arguments and running out of steam. Their only option is to make things up - as they do on Europe - therefore destroying their own case and credibility.

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