Memo

Skotland could become the 29th EU country

Skotland could become the 29th EU country

Summary What will happen if the Scots vote ‘yes’ to forming their own self-governing nation, separate from the United Kingdom, when they go to the polls on 18 September for the Scottish independence referendum? What will the consequences be for the EU, and can Scotland become the union’s 29th member state and overtake other applicant countries?
 
There are many open questions waiting to be answered if the Scots vote in favour of independence. But the most recent opinion polls show that it is almost a dead heat between those for and against. In several polls the unionists, who want Scotland to remain part of the United Kingdom, have edged ahead by a few percentage points, but a new poll conducted by YouGov has roused attention because it suggests that 51 percent are ready to say ‘yes’ to Scottish independence.
 
The British unionists have done everything in their power in the lead-up to the referendum to convince the many doubters and silent voters that it is still in their and Scotland’s best interests to be part of the United Kingdom. And several financial institutions are threatening to pack up and move to England in the event of a ‘yes’ vote. There are forecasts of economic unrest if the public votes in favour.
 
Yet it is too early to say what the outcome of the referendum will be. Regardless of the result, the EU members states should already be considering how they will handle the situation if the majority of Scots put their necks out and tear Scotland away from the United Kingdom. In this brief comment, Think Tank EUROPA offers several assessments of the challenges face and how the EU countries can respond to them.

Main conclusion
  • Regardless of the outcome of the Scottish independence referendum on 18 September, it will not be possible to maintain the status quo: A yes-vote will result in Scottish independence, whereas a no-vote will lead to greater Scottish autonomy within the framework of the United Kingdom.
  • A yes-vote will create political turbulence and change in the rest of the United Kingdom. Prime Minister David Cameron may find it difficult to hold his post, but the Conservative Party could find it easier to stay in government without Scotland.
  •  A Scottish ‘yes’ will trigger financial turmoil with a depreciation of the pound and higher risk premiums for British government bonds. At the same time the Scots will be put to the test because many large financial institutions have threatened to leave Scotland in the case of a yes-vote.
  •  The Scottish referendum could have consequences for the forthcoming British referendum on the EU, which David Cameron has talked about calling after the next general election. Without the Scots, EU advocates will have a harder time winning a British all-or-nothing referendum. This could lead to postponement of the British referendum.
  • An independent Scotland should be admitted as the 29th EU member state immediately after the Scottish and British governments have reached an agreement on their division of assets and liabilities. The assumption is that the Scots will accept the EU’s common legislation without exception.
  • Scottish secession will fuel the push for independence among nationalists in Catalonia, the Basque Country, Flanders, Lombardy and other regions that dream of becoming independent states. The EU should insist that everyone abides by their constitutional rules.
  • A United Kingdom diminished without Scotland will have less muscle in the EU and become smaller than Italy in terms of population. But the Brits will fight to maintain their voting power in the Council of the European Union and their mandates in European Parliament.
  • Scotland, with its 5.3 million inhabitants, should be able to obtain just as much voting power in the Council of the European Union and just as many mandates as Denmark in the next EU Parliamentary elections. 
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