Category Archives: EU

EFTA is not a stepping stone to EU membership

EFTA-logo
EFTA-logo.
Before the UK joined the EU (or rather the EEC as it was called at the time), it was a member of EFTA, and when Norway twice voted No to joining, they remained in EFTA. Because of this, I think many people think that it would be easier for Scotland to join EFTA than the EU after independence. It’s not as simple as that, however.

Let’s define a few terms before we start:

  • EFTA consists of four countries: Iceland, Liechtenstein, Norway and Switzerland. EFTA was originally a rival to the EEC, but today it basically contains a few countries that never joined the EU for various reasons.
  • The EEA (the European Economic Area) consists of all EU countries plus Iceland, Liechtenstein and Norway. It is the area in which the Agreement on the EEA provides for the free movement of persons, goods, services and capital within the European Single Market. All EEA countries adopt most EU legislation concerning the single market, however with notable exclusions including laws regarding agriculture and fisheries.
  • The EU Customs Union (the EUCU) is a customs union which consists of all the member states of the European Union (EU) as well as Turkey (apart from agricultural goods) and a few micro-states. The EFTA countries do not form part of the EUCU.

When people talk about joining EFTA, they probably mean joining the EEA, too (like Norway) – I don’t believe there are many fans of the Swiss solution in Scotland.

It makes sense to think of EFTA + EEA (the Norwegian/Icelandic solution) as being a reduced version of the EU – it basically means being part of the Internal Market, but being in charge of trade agreements, agriculture and fisheries yourself. Also, EFTA/EEA countries don’t take direct part in the EU’s decision-making processes (no members of the European Parliament, no European Commissioner, no EU employees, and so on).

If Scotland were currently a fully independent country, it would make perfect sense to join EFTA/EEA as a stepping stone to full EU membership. It would basically mean joining in two rounds instead of one, which might be easier for people to adjust to.

However, Scotland is not a fully independent country, and neither is the UK. We have been part of the EEC/EU for fully 44 years, and that changes everything.

If Scotland went for a Norwegian/Icelandic solution after independence, we would need to develop policies for agriculture and fisheries from scratch, and we’d need to set up trade deals, customs schedules, WTO membership, and many more things. Many of those things would take a very long time to set up – the standard assumption is that new trade deals take about a decade to negotiate. Incidentally, this is one of the reasons why Brexit is likely to become such a disaster — Westminster simply cannot set up these things quickly enough, so without a ten-year-long transitional period in place (which they’re refusing), the UK will fall back on the WTO’s standard terms, which will be disastrous, not least for agriculture.

In other words, if the people of Scotland wanted a proper Norwegian solution, it would probably take about a decade to set up after independence. During that decade, it would be really important for Scotland to remain inside the EU’s Customs Union.

By the way, it might be worth pointing out in this connexion that most Norwegian and Icelandic politicians don’t really like the EFTA/EEA solution. They can live with it, but they’d rather be in the EU. The main reason why Norway never joined the EU is because they’ve decided to spend a lot of their oil money on keeping their villages full of people, which implies subsidising their farmers (and keeping food prices higher) than the EU would allow. Iceland is so dependent on fisheries that it overshadows everything else; however, they’re now talking again about joining.

Anyway, back to Scotland. It’s quite possible that the EU will require us to apply for membership formally after independence, and although this is likely to be the fastest application process ever (because Scotland already ticks all the boxes for membership), it could still take a year or two. If Brexit happens a few months after the Scottish Referendum, we cannot be in limbo for that long. So Scotland should aim to to get membership of the EEA and of the EU Customs Union as a matter of priority after independence (hopefully it can be pre-negotiated informally beforehand).

Membership of the EEA and of the EUCU is not the same as the Norwegian solution, and it doesn’t really require membership of EFTA, either.

Once Scotland is a member of both the EEA and the EUCU, time is not of the essence any longer. We can afford to discuss membership terms with the EU in great detail, including getting a much better deal for the Scottish fishermen than what Westminster got, and if the deal on the table isn’t good, Scotland can look at negotiating its own trade deals and eventually leave the EUCU a decade or more after independence.

I’m perfectly happy for us to aim for EEA + EUCU membership as a stepping stone to EU membership, but we shouldn’t call it EFTA membership or a Norwegian solution, because it wouldn’t be.

Once we’re independent, it will be right and proper for the Scottish Parliament to discuss the pros and cons of EU membership versus mimicking Norway, and perhaps we should even have a referendum to settle the question. However, we need EEA + EUCU membership in the meantime.

Doing the same as Norway might be possible eventually, but it wouldn’t be a quick and easy solution, because we would need to develop policies for trade, agriculture and fisheries first.

I believe full EU membership would be much better for Scotland, but I’m quite happy to postpone this discussion till after #ScotRef. What is important at the moment is not to start aiming for a Norwegian solution already because we think it will be easy. Negotiating trade deals is extremely complex, and we shouldn’t leave the EU Customs Union without a full and frank discussion of the consequences.

What we should do is to aim to remain inside both the EEA and the EU Customs Union from Day 1, and then decide what we want to do. I hope and expect the EU will offer such a good membership deal that the choice will be obvious, even for Scotland’s farmers and fishermen.

UK vs EU

People who voted Yes and then Leave (the Yellow Tribe, as I’ve described them in the past) often talk of the UK and the EU as if they were almost the same, and they’re thus often keen to postpone Indyref2 till Brexit is done and dusted. “Why leave one union just to join another?” as they like to say.

However, is this fair? To what extent are the two unions alike? I thought it’d be useful to compare them topic by topic:

UK EU
The Houses of Parliament consist of two chambers. In the House of Commons, 59 out of 650 MPs are representing Scotland (9%). It’s hard to calculate the equivalent for the House of Lords because they don’t represent constituencies, but the Scotsman put the number at 61 out of 760 (8%) in 2015. This should be seen against the fact that Scotland makes up slightly more than 8% of the population of the UK. The European Parliament consists of 571 members. As an independent country, Scotland would probably have 13 MEPs (like Denmark), rather than the current 6, because small countries are over-represented. That would mean that Scotland would have 1.7% of MEPs on a population share of 1%. In the European Council, Scotland would have equal representation with all other member states (1 out of 28), so the same as Malta, Denmark and Germany.
There isn’t a specific number of Scottish ministers in the UK government. At the moment there is only one (David Mundell), but even that isn’t guaranteed (for instance, the Secretary of State for Northern Ireland isn’t Irish). The European Commission consists of one commissioner from each member state, so Scotland would always have one.
Westminster is sovereign, so if they want to change Holyrood’s powers, they can do so without consulting Scotland, although in the past they have done so. For instance, abolishing Holyrood altogether would be entirely within their powers if they thought that would be a good idea. The powers of the EU are described in the Treaty of Lisbon, and it requires unanimity to change it. This means that Scotland as a member state would have to agree before handing over any more powers to Brussels. There is absolutely no way that the EU could get rid of Holyrood.
Using the Pound Sterling is obligatory. In theory, Scotland would be required to adopt the Euro, but in practice it would be easy not to fulfil the criteria and thus stay out indefinitely, like Poland and Sweden.
It would be politically difficult for Westminster to refuse a new Scottish independence referendum, but they would be entitled to do so. The EU allows any member state to leave using Article 50. As we’re finding out at the moment, this is not easy, but at least it’s a guaranteed right.
The UK has one single foreign policy, and Scotland is not allowed to have its own. EU member states have their own foreign policy, but they have lots of meetings to coordinate their efforts. The EU has a nascent foreign policy, too, but this is in addition to the member states’ own policies, not instead of them.
The UK hasn’t negotiated its own trade agreements for many years and will have to do this from scratch after Brexit. The EU has great trade agreements with most of the world, and these apply automatically to all member states.
Westminster raises most taxes in the UK and then sends block grants to the devolved administrations. Each member state raises its own taxes and pays a membership fee to the EU.
The military is a British institution, and it’s completely controlled by Westminster. NATO membership is very important to the UK. As an EU member state, Scotland would be responsible for its own military forces. EU countries cooperate a bit. NATO membership is not obligatory.
The Tories are talking about walking away from the European Declaration of Human Rights and the jurisdiction of the ECHR. EU countries have to sign up to the ECHR, and the European Declaration of Human Rights forms part of the EU treaties.
The UK has over the centuries invaded most countries of the World. The EU hasn’t invaded any countries at all.
The UK used to do its best to get rid of Welsh, Gaelic, Scots and the other indigenous languages of the British Isles. It seems to have been mainly European influence that has led to improved support for minority languages. Linguistic diversity is in the EU’s DNA. As a full member state, Scotland will be able to designate either Scots or Gaelic as a full working language of the EU with translation of all texts and interpretation of all speeches in the European Parliament.
All oil revenues go straight to Westminster. EU member states keep their own energy revenues, and the EU might help member states build energy infrastructure, such as pipelines between member states.
British citizenship completely replaced Scottish citizenship in 1707. EU citizenship is additional to citizenship of a member state.
Anthem: God Save the Queen. Anthem: Ode to Joy.

If I’ve forgotten anything, please leave a comment underneath, and I’ll add it.

Scottish independence can still happen before Brexit

Scottish euro coin
Scottish euro coin.

During the first independence referendum campaign, the Scottish Government announced that Scotland would become independent 553 days after the referendum (on 24th March 2016). This was widely criticised at the time for leaving too little time for all the negotiations.

Most people seem to assume that would be the case this time as well. For instance, in an article by STV News about fast-tracking Scotland’s EU membership application, they suggested the following possible EU membership timeline:

  • Autumn 2018 – Scotland votes Yes to independence
  • March 2019 – Scotland, along with the rest of the UK, leaves the European Union
  • 2020 – Scotland becomes an independent nation
  • 2020 – Scotland applies to join the EU
  • 2021 – The European Commission and the Council give the green light and negotiations begin
  • 2023 or 2024 – Majority of MEPs, all EU member states and Scotland ratify the treaty of ascension and the country joins the EU

And yet, if we look at other countries that have gained their independence recently, they have invariably become independent much more rapidly. As Alister Rutherford has pointed out, “Slovenia held a referendum on 23rd December 1990 and declared independence on 25th June 1991. Montenegro needed even less time. The referendum was held on 21st May 2006 and independence was declared on 3rd June of the same year. Some countries moved to independence without a referendum. Slovakia for example passed an act of independence in their parliament on 17th July 1992. There followed five months of negotiations which ended with the dissolution of Czechoslovakia on 31st December 1992. Slovakia then became formally independent on 1st January 1993.” The longest delay I’ve found so far was the 260 days it took Georgia to gain independence from the Soviet Union.

Of course it’s impossible to sort out very much during such a small amount of time. Lots of questions would remain unresolved for a while and would get settled later. The time before independence would be spent putting in place sensible transitional arrangements. For instance, Scotland and the rUK might decide that Scotland will continue to use the Pound Sterling for two years after independence day, and the EU might agree that we’ll remain within the EU’s Customs Union until EU membership has been agreed on (or rejected).

It actually makes sense if you think about it. Why should Scotland be dragged out of the EU for a year only to join immediately afterwards? Potentially this would involve setting up a new customs regime only to revert to the previous on as soon as it’s been implemented. It’s much more straightforward to become independent sooner rather than later and then sort out the details afterwards. It’s just like a divorce: People normally separate first and then sort out the details of the divorce afterwards, rather than staying together until they’ve divorced.

I therefore imagine a more sensible and realistic timescale would be as follows:

31 March 2017 Theresa May triggers Article 50
30 August 2018 Second independence referendum
28 February 2019 Scottish independence day
4 March 2019 Scotland sends a membership application to the EU and asks to remain within the Internal Market and the Customs Union in the interim.
4 March 2019 Scotland sends a letter to the Secretary General of the United Nations expressing the intent to remain a party to all treaties signed and ratified by the United Kingdom.
14 March 2019 The European Commission and the European Council agree that Scotland can remain within the Internal Market and the Customs Union without voting rights while the membership application is processed.
31 March 2019 Brexit takes place – the rUK leaves the EU. Scotland is not yet a member state but remains within the Internal Market and the Customs Union.
26 September 2019 Formal EU membership negotiations begin.
28 February 2021 The new Scottish currency is launched, linked to a basket of Euro and Pound Sterling.
9 May 2021 (Europe Day) A majority of MEPs, all EU member states and Scotland ratify the treaty of ascension and the country joins the EU. Alex Salmond becomes Scotland’s first ever EU Commissioner, and 13 Scots are elected to the European Parliament (not 6 as before independence, but the same as Denmark).
28 February 2024 The rUK leaves Faslane, taking their nuclear weapons with them.
28 February 2034 The last of many independence treaties between Scotland and the rUK is signed (this one finalising the maritime border).

Aiming for a Norwegian solution for Scotland would be disastrous

Røros - Sleggvegen
Røros - Sleggvegen.
Some people within the SNP are apparently thinking about aiming for EFTA membership instead of being a full member of the EU, according to The Times:

Senior [SNP] party figures want to adopt a Norway-style model under which an independent Scotland would stay inside the single market, but outside the EU, after Brexit, according to sources. They believe that this would allow Scotland to retain the benefits of the European single market while continuing to trade within the UK as it does now.

A poll published yesterday found that more than a third of people who voted for an independent Scotland in the 2014 referendum want to stay outside the EU. SNP strategists believe that this new approach would keep these voters behind their independence cause.

I think this would be a pretty bad idea for three reasons: (1) It would send the wrong message to the World; (2) it would prevent us from building a majority for Scottish independence; and (3) it would be an economic disaster.

Fortunately it seems the official position of the SNP hasn’t changed:


However, just in case anybody still thinks it sounds cool, here are the reasons why I’m firmly against it:

1. It would send the wrong message to the World

The nations of the World are currently having to choose between being part of the free world, headed by the EU and Canada, or being part of Trump’s and Putin’s alt-right-fascist dystopia that Theresa May wants to be a lapdog in. This is not the right time to be sitting on the fence.

Also, Scotland’s clear rejection of Brexit and Nicola Sturgeon’s clear message in favour of the EU have impressed and inspired governments in other EU countries, and there is a strong desire to help Scotland at the moment. Suddenly going lukewarm would send entirely the wrong signals.

2. It would prevent us from building a majority for Scottish independence

As I’ve argued before, the SNP traditionally had many members that were anti-EU (for instance in the fishing communities), and although they now form a small minority in the party, some of them are still prominent within the party (because they’ve been there for so long). They clearly don’t want to remain within the EU and I’m imagining they’re behind this story.

However, from an electoral point of view, there simply aren’t that many Yes-Leave voters left in the Yes camp (many of them have already drifted away and will now vote No), and promising an EFTA deal is unlikely to win them back.

There are many, many more No-Remain voters that could be convinced by a Scotland-in-the-EU campaign, and suddenly turning our back to the EU would make it much harder to win them round.

A Scotland-in-EFTA campaign would therefore be likely to limit our appeal to those who voted Yes last time, and we would lose again.

3. It would be an economic disaster

In many ways Scotland could live well with Norway’s current set-up, but the crucial problem is that we can’t get there without going through hell first.

The reason has to do with WTO membership, tariffs and all that.

As anybody who has read Ian Dunt’s excellent wee book about Brexit will know, becoming a full WTO member is a very hard process that can take years. You basically need to draw up a lot of schedules (lists of tariffs) and get unanimous agreement from all current WTO members. Also, you need to enter into a lot of bilateral trade agreements.

Ian Dunt argues convincingly that this will be almost impossible for the UK to do quickly, so it must be even worse for Scotland. To take but one example, do we really expect that Trump’s America will offer Scotland a trade deal that is in our interest?

If Scotland is a full member of the EU, we remain part of the EU’s customs union, which means that everything will work just like before.

In theory, we could form a customs union with the rUK after independence, but we would then depend on the deals they make (with Trump and assorted dictators from all over the World) – and although these might be better than the deals we can make ourselves, they’re likely to be worse than the very good agreements that the EU has negotiated over the years. Also, forming such a customs union would mean that we might not be able to tick the boxes for EEA membership.

This is because EEA countries have zero tariffs internally, but there are no guarantees that Westminster will achieve such a deal. The only way ensure that we fulfil the EEA rules is by having our own deal, but as I argued above, that would most likely be disastrous.

Here are some more details about it from a factsheet about the EEA produced by EFTA (PDF):

The EEA Agreement provides for a free trade area covering all the EEA States. However, the EEA Agreement does not extend the EU Customs Union to the EEA EFTA States. The aim of both the free trade area and the EU Customs Union is to abolish tariffs on trade between the parties. However, whereas in the EU Customs Union, the EU Member States have abolished customs borders and procedures between each other, these are still in place in trade between the EEA EFTA States and the EU, as well as in trade between the three EEA EFTA States. Furthermore, the common customs tariff on imports to the EU from third countries is not harmonised with the customs tariffs of the EEA EFTA States.

The EEA Agreement prohibits tariffs on trade between the Contracting Parties. Therefore, all products, except certain fish and agricultural products, may be traded free of tariffs within the EEA. In order for a product to obtain preferential treatment under the EEA Agreement, it has to originate in the EEA. The EEA Agreement therefore contains rules of origin that determine to what extent a product must be produced or processed within the EEA in order to obtain status as a product of EEA preferential origin.

It’s clearly a better option to remain within the EU’s customs union. (Norway has had a hundred years to enter various trade deals, so we cannot simply expect to get the same deal as a new country.) It wouldn’t even be good stepping stone to full EU membership – it would be insane to spend a decade negotiating trade deals just to bin them immediately afterwards.

Also, I simply don’t believe that staying outside the EU’s fisheries policies is really that important to most Scots. The problem at the moment is that Westminster haven’t represented Scotland’s fishermen well in Brussels (they’ve prioritised the interests of the financial industry instead), and once we get a seat at the table there, we can negotiate better terms and conditions.

Conclusion

Going for continued full EU membership after independence is clearly a much better solution that aiming for EFTA membership for a lot of reasons. Of course we must hope that the EU negotiates a great trade deal with the rUK, but it’s much better to emphasise that from the inside (together with Ireland) than to try to create a bespoke solution that will please no-one and ruin Scotland along the way.

In EFTA while part of the UK?

Today there have been rumours on Twitter that the Scottish Government is investigating whether Scotland can join EFTA (and thus the Internal Market) while being part of the UK:

It's a bit like the Reverse Greenland solution, but joining EFTA instead of the EU. However, as far as I can tell, the obstacles are the same:

  1. EFTA and the EU cover a lot of policy areas that aren't currently devolved to Scotland, so Westminster will either have to devolve a lot more to Holyrood very quickly, or they'll have to represent Scotland and EFTA/EU meetings. (See also this blog post by Kirsty Hughes on some of the potential complications.)
  2. It's not clear at all that EFTA and/or the EU are interested in having a non-sovereign member.

As I wrote in my old blog post above Reverse Greenland, I think it's fine Nicola Sturgeon is looking into this, but I really don't think anything will come of it.

Scottish independence is a better and much more straightforward solution for everybody involved. I don't see what we'd gain by jumping through ludicrous hoops simply to postpone the next Indyref. Let's just get on with it!

The walled city state of London

London
London.
I've been really puzzled by recent reports that the UK government is thinking about "making future payments worth several billion pounds to the EU to secure privileged access to the single market for City firms to continue trading across the continent."

It's all a bit vague, but as far as I know, the City of London depends on many parts of the Internal Market, such as financial passporting, the free movement of people (to allow key personel to move around the EU easily), the free movement of capital, and probably also being within the Customs Union. In other words, we'd probably be talking about something approaching full EU membership (albeit without voting rights) for the City of London – which is, of course, also why they're expecting to pay a lot of money for it.

I can see several problems with it, however.

Firstly, I'm not entirely sure why the EU would agree to it. Most of the member states are probably already salivating at the thought of poaching valuable financial companies from London.

Secondly, I'm not entirely sure where they would draw the border. Many financial companies are located outwith the boundaries of the historical City of London, so surely they'd want to pick a larger area – perhaps even the entire Greater London area.

Thirdly, this only makes sense if the government is expecting the rest of the UK to be outside the Internal Market – otherwise there wouldn't be any point in going through a lot of hassle setting this up. However, how is this going to work? If EU citizens can freely move to the City of London but need to go through passport controls to travel to the rest of the UK, how will this happen? Will the government build a wall around London?

I really cannot for the life of me see how this can possibly work. Are they perhaps just trying to calm down the City of London while they figure out how hard a Brexit they want?

Getting permanent residency as an EU citizen

I've been thinking about getting a leave-to-remain certificate and perhaps eventually a UK passport, but I've been put off by the paperwork (and the intrusiveness of some of the questions). I never actually worked out exactly what would be required and what it would cost, though. Fortunately, Olaya De la Iglesia (an EU citizen who's married to a local and has kids with them, just like me) has done just that on Facebook:

The paperwork needed to get a permanent residence card.
The paperwork needed to get a permanent residence card.

So as an EU immigrant that has lived here for 16 years and is married to a Brit and has 2 British born children this is the amount of paperwork I have to provide to prove to the Home Office I have lived here for 5 years (nevermind the other 11!).

Some people are wondering why I am doing this. No, at this particular point I do not NEED to have this to stay here, but I have British children and I am worried of what is going to happen to us if I do not secure 'right to remain' before Brexit actually happens. Additionally if I become naturalised I get to vote in any future elections, and if we leave we have our options open to come back, for example to visit my husband's family without the need for me to arrange extra paperwork because I am the only non-Brit.... hope that clarifies it.

This is to get a 'residence certificate', NOT an application of citizenship, and this step was introduced only in March 2016, prior to that you did not have to do this. I shall give you a list of the things I must send, they all have to be originals and cover the whole 5 year period.

  • Application form - 85 pages!!
  • Passport (current and any previous passports held)
  • Payslips
  • P60s
  • Employment contracts
  • Letters from employers confirming dates and wage
  • If self employed at any point bank statements
  • Proof of address – *at least* 2 documents for each year evenly spread throughout the year
  • Child benefit letters
  • Tax credit letters
  • Evidence of every trip abroad
  • Marriage certificate
  • Photos
  • Special delivery signed for self addressed envelope (if you want to ensure you get all this stuff back)

The kicker is I ALREADY DID ALL THIS IN 2004!! I have a residence permit that entitles me to indefinite right to remain, but apparently it is of no use now. I have to do this again... and after this I have to;

  • Do the 'Life in the UK' test – £50 + book £10
  • Apply for naturalisation – £1236 (+ £80 if you want to use the checking service)
  • Attend the citizenship ceremony – £80
  • Apply for a passport – £82.25
  • Add to that postage costs, time taken, possibly transport to council and checking offices.... Oh, and if you get naturalisation application wrong, they reject it, keep the £1.2k and don't even have to tell you why it was rejected!

Someone might say they have tried to make this difficult... I wonder what you have to do if you have £5mil in the bank?

She's also very helpfully has created a petition (although it's currently getting checked).

I pointed out in my article on Bella straight after the referendum that the hassle associated with getting a leave-to-remain certificate was a major stress factor for EU nationals here, and that vague reassurances from the Scottish Government are less useful than getting some help with the process (given that Holyrood won't be in charge of residency requirement till after independence).

Nothing happened, so I asked the same question in writing at Nicola Sturgeon's meeting with EU nationals in Edinburgh. Here's the answer I got:

You ask if the Scottish Government could establish a helpline or advice bureau to help EU citizens secure a right to reside. You will wish to note that the Scottish Government funds the provision of an Immigration and Visa Support Service (IVSS) through TalentScotland. The main focus of this service is on providing guidance, support and information on business immigration for Scottish based businesses and inward investors. In addition, their website also offers general information aimed at both EEA and non-EEA nationals.

The information provided by IVSS includes links to Home Office guidance about how EEA nationals can obtain residency documentation, permanent residency documentation and citizenship. This is available at: www.talentscotland.com/....

To be honest, I was rather underwhelmed by this answer. The problem is not finding the form you need to fill out, but getting help with the process. For instance, what to do if you – like me – haven't kept a record of your trips abroad. Or getting your application pre-checked to ensure it doesn't fail because of a typo.

Of course the very best solution (apart from Scottish independence happening before Brexit) would be for the UK government to issue permanent leave-to-remain certificates to all EU citizens who were resident here on the day of the Brexit referendum. If they've already realised they cannot chuck us out, I don't see what they'd lose. Surely processing all these huge applications must be extremely time-consuming, and it'd be more rational to spend that time negotiating a better Brexit deal. Fortunately, some EU citizens have started lobbying MPs for this. Let's hope they succeed.