Category Archives: postindependence

The EU must respect new countries

Arc of Prosperity’s third guest blogger is James Chalmers. He’s a Scot originally from West Fife who has spent the last 40 or so years trying (and occasionally succeeding) to find oil in various areas around the North Atlantic — North Sea, both Scottish and Norwegian, West of Shetland and Greenland. He has lived in Denmark since the late eighties, is now retired and happily living in Copenhagen with his Danish wife.

European Parliament Buildings
European Parliament Buildings, a photo by stevecadman on Flickr.
Jens-Peter Bonde (a Danish writer and former member of the European Parliament) has written an article on the rights and relationships of an independent Scotland and Catalonia in the EU. The article was published in the Danish newspaper Jyllands-Posten on March 5th (in Danish, registration required).

A number of Bonde’s points are very important in the context of the rumours emanating from the both the Spanish and British governments that both Catalonia and Scotland will be thrown out of the EU in the event of independence.

Bonde points out that the EU treaties contain no provisions whereby a people could be thrown out of the EU. That could happen legally only with a change in the treaties that requires unanimous agreement of all 28 member states. Nor are there any treaty terms about assigning rights to regions that become nations. That also requires unanimous changes in the treaties.

There are, however, very strong legal bases for solving new situations like these. The treaties say, after all, that every European country has the right to be a member of the EU, whether or not it is a member already, if it satisfies various criteria. Catalonia and Scotland naturally satisfy these criteria because EU law already applies to the two regions and that has priority over all regional and national law. All of this means that an acceptable solution will be found about how to deal with parts of member states becoming independent.

The most important question that will require negotiation will be the new nations’ representation in the EU’s agencies. Will they be treated as independent nations and have their own members in the Commission, Council of Ministers and the European Parliament? When Czechoslovakia divided into the Czech Republic and Slovakia in 1993, the two countries were treated as independent nations. They later got representation equivalent to that of other counties with the same population. They were not punished for having separated. Quite the opposite, the two countries got a combined representation greater than they would have had if they had applied for membership as Czechoslovakia.

If Catalonia and Scotland receive a less favourable treatment, they can appeal to the EU Court and plead that they are being discriminated against compared with other nations. It will not be easy to find legal grounds for rejecting such an appeal. National discrimination is specifically forbidden in the treaties. The right of self-determination is an international legal principle that is also recognised by the EU.

Bonde claims that Scotland and Catalonia will be forced to accept the euro as their currency. Great Britain and Denmark have exceptions; the new countries don’t. Catalonia already uses the euro and has no plans on a new independent currency. Scotland uses British pounds and, the current SG proposal is a currency union with Great Britain. In that case, Scotland would not comply with the precursor conditions for joining the euro; its own currency that is stable against the euro for two years. Even in the event of an independent Scottish currency, Scotland could take the Swedish route end simply let its currency float against the euro, again meaning that it would not satisfy the pre-joining criteria.

Scotland can become a nation like Denmark, take part in the Nordic cooperation and be represented in the EU in the same way as Denmark in the EU and UN. With a commissioner, and place in the Council of Ministers and 13 members in the European Parliament, compared 6 today as part of the UK. These changes will require changes to the treaties as with every new land, and the changes have to be agreed unanimously. But with this difference; these new lands are already in the EU.

There is no authority to exclude Catalonia and Scotland from the EU if they vote for independence from Spain and Great Britain. Their relationships to Spain and the rUK are a Spanish and British affair, where the EU has no competence. The Spanish and British competence does not stretch far enough to exclude the two countries from the EU because they have voted for independence from Spain and Britain.

The two motherlands will therefore also be forced to find a solution if Scotland and Catalonia vote for independence. If independence infects the Basques and other peoples there will be many small nations in the EU, which will probably lead to a general revision of how the countries are represented in the EU. There has already been opposition in the big nations for every member country having a commissioner.

There will probably be an EU conference in 2015 for other reasons. The European Parliament will again try to get the treaties changed to a constitution. Germany will continue their influence in the various countries’ finance laws as a condition of continuing German contributions to the Euro’s survival. If Scotland and Catalonia vote for independence, this can lead to a general discussion about the future arrangements of the Europe of the Nations and the Europe of the Regions.

Dividing up the Bank of England like a CD collection

The Bank of England is avilable to rent...
The Bank of England is avilable to rent…, a photo by aminorjourney on Flickr.
During his brief visit to Edinburgh, George Osborne said that the pound is not a CD collection that can be divided up.

It was a bit misleading to talk about the pound when what he really meant was the Bank of England — what people commonly refer to as the pound is just the name of the currency it issues.

But why exactly can’t we divide up the Bank of England like a CD collection?

Let’s have a wee look at the BoE’s Annual Report from 2013 (PDF). On page 99 it states that the total assets are worth £58,022m (58 billion pounds), and the bank has put exactly the same amount into circulation as banknotes. This means that Scotland’s 8.3% population share last year was worth £4816m.

Now, obviously we can’t magically turn £4816m worth of banknotes into Scottish ones, so I guess what would happen is that the BoE would withdraw this amount of money from circulation and transfer the corresponding assets to a brand new Central Bank of Scotland, which would then be able to issue a corresponding amount of Pound Scots.

The amounts mentioned above don’t include the UK’s currency reserves (PDF), which belong to the Treasury (although they’re administered by the BoE). In August 2013 the gross currency reserves (including gold and all that) were worth $103,418m, and the net reserves had a value of $44,862m. I’m not an economist, but I presume it’s the latter that are of interest to us here. Scotland would in other words be due currency reserves (including gold) worth $3724m (or roughly £2232m).

Of course, it would hardly be great news for the stability of the Pound Sterling to lose such a great parts of the assets underpinning it from one day to the next, which is why it’s very likely the rUK politicians will start begging Scotland to accept a formal currency union soon after a Yes vote.

If the rUK politicians veto both a currency union and an asset transfer of Scotland’s share of the Bank of England’s assets and the currency reserves, then Scotland will definitely be entitled to refuse to accept any liabilities (in other words, Scotland will start out life as an independent country without a national debt).

Barroso does an Osborne

EC President José Manuel Barroso taking the floor
EC President José Manuel Barroso taking the floor, a photo by European Parliament on Flickr.
In my recent post about Osborne’s bullying session in Edinburgh, I wrote:

By ignoring [the alternatives to a currency union] and by failing to explain why rUK politicians would opt for a solution that might harm rUK businesses, he shows that his sole purpose is scaremongering. He didn’t make this speech to provide visibility for rUK businesses (which would have been prudent), but to bully Scottish voters into voting No.

This morning the President of the European Commission, José Manuel Barroso, opted for a very similar approach when he was interviewed on the Andrew Marr Show:

Of course it will be extremely difficult to get the approval of all the other member states to have a new member coming from one member state… I believe it’s going to be extremely difficult, if not impossible, a new member state coming out of one of our countries getting the agreement of the others.

As many EU experts have discussed at length in the past, there is no precedent for this type of situation, and there are many options available to the EU in order to reach a pragmatic compromise that everybody can live with — see for instance Yves Gounin’s article, either my summary or the full translation.

Indeed, as Yves Gounin writes, the EU has a lot to lose too:

As soon as the Rubicon of independence has been crossed Europe would have everything to lose by putting these states into quarantine: its entrepreneurs could no longer invest there; its young people could no longer study there; its workers could no longer travel freely there; its fishing fleet could no longer fish in their waters, etc…

Barroso is a spokesman for the governments of the EU member states. He’s not elected to represent the European Parliament nor the EU Court of Justice. It’s therefore hardly a big surprise that he finds it hard to resist when he gets asked by David Cameron or Mariano Rajoy to lend them a wee hand, especially given that his stint as Commission President comes to an end in early summer, so dealing with a Scottish Yes vote will be somebody else’s problem anyway.

It’s therefore very clear that Barroso has done an Osborne, trying to bully the Scottish (and Catalan) voters to reject independence rather than expressing an informed opinion about what actually will happen after a Yes vote.

Actually excluding Scotland from the EU would not just go completely against the Union’s founding principles, it would also deeply harm the EU and its citizens, as well as quite possibly being illegal according to EU law. In the past, the EU has always found a pragmatic solution when needed rather than adopting a legalistic approach.

Osborne and Barroso both want us to believe that they’ll cut off their noses to spite their faces after a Yes vote. In reality, they’re just trying to bully us into voting No.

Forget asylum seekers — what about the expats?

This is the first ever guest blog on Arc of Prosperity, written by Ed “The Guero”.

Ed is a thirty-something professional from Hamilton who has been travelling for the better part of 15 years in pursuit of work, love and life — though not necessarily in that order! He is a proponent of assisted healthy living for children and improved social welfare. He tweets as @EdTheGuero.

Border Sign
Border Sign, a photo by Dunnock_D on Flickr.
Case studies, case studies, case studies. As an expat it pays to pay attention to case studies especially when preparing to return home accompanied by your foreign-born spouse and/or children. I say “foreign-born” in reference to those not of the EEA (European Economic Area) or the EU. One has to be mindful of the rules ensuring we dot all of the i’s, cross all of the t’s and, after what we assume should be a relatively straight forward process, we can expect our spouse to be granted a visa and welcomed to the UK as a well received extension of ourselves. After all — this is what we should expect from ‘Team GB’ right?

Not so fast!

This piece is not an attempt to vilify Westminster nor is it an effort to sway a vote in the referendum, but my own situation grants me insight into what we might do better should Scotland be free from the overriding control of a Westminster, so out of touch that it leaves many of its citizens yearning to simply come home with the person they love.

Much has been said lately in the mainstream media and social networks regarding UK immigration policy. In recent years policies have been pushed, pulled and contorted in an effort to protect the UK from an influx of “benefit tourists” and relationships of convenience whilst at the same time providing an avenue for asylum seekers in their pursuit of security. The UK, in the latest policy change, seems to have adopted a rather elitist approach and in Westminster’s efforts to “protect” they have cast a net so fine that British expats find themselves wrongfully affected, unable to feasibly come home with their family in tow.

Evidently, we are of secondary importance, an issue being missed in the haste to close Britain’s doors to immigrants. Statistics, explanatory documents filled with tables, appendices, diagrams and equations can all be readily found should you feel the need, but as a Scottish expat married to a beautiful lady from some unspecified Latin American country, I can tell you that it comes down to nothing other than money.

There are minimum requirements to be met regarding finances and accommodation as you would expect. What irks me are the countless stipulations and the unrealistically high-set bar which take no account of economic relativity and engineers a scenario in which families are separated indefinitely. In the most common type of family member application, £18,600 is the magic number. As my wife’s sponsor I must earn in the months prior to and after my wife’s application £18,600 gross annual salary or have savings which supplement my income, have worked for my employer abroad for 6 months minimum and have a contract on the table back home. If I have savings – subtract £16,000, divide by 2.5 and that gives you the number I can add to my gross annual income to meet the minimum requirement. Who has enough savings to subtract £16,000 then… Never mind.

Basically you need a lot of money and now is a good time to point out the cost of application — a whopping £851. When you struggle to meet a minimum requirement of £18,600 and face set-up costs back home, who has £851 (non-refundable on refusal)? You had best be certain your case is clad in iron.

There are two approaches here — have your spouse apply whilst you are both overseas or whilst separated with you in the UK. I know it may be an arbitrary number to some but I earn a good salary and live comfortably abroad — I still earn less than £18,600 per year! My wife earns similarly to myself, but that is not considered a factor in her application, and that leaves us with only one option.

If I want to come home I need to find a job in the UK and then have my wife apply for her visa from overseas when conditions are right. There is a golden ticket which we do not have, £62,500 in savings (subtract the £16,000, divide by 2.5 = £18,600) so it falls to me to accept that we may be apart a minimum of 6 months, realistically up to a year for some.

Are we to believe that this approach is suitable for a country with such disparity, where in London I can expect to earn X% more than in Glasgow or Y% more than in Inverness? Worth noting is of the 422 occupations listed in the 2011 UK Earnings Index, only 301 were above the £18,600 threshold. That’s a lot of discrimination and one should consider the fact that Scotland traditionally has a lower average income than the South-East of England. According to the 2012 salary survey by the Guardian, care workers, hairdressers, bar staff, pharmacists, chefs, travel agents, florists, beauticians, cooks, fitness instructors, butchers, bakers and candlestick makers all earn less than the £18,600 minimum and that’s before filtering by region.

The obvious conclusion is this: The further South & East you live, the more savings you have and the higher profile your profession, the easier it is for your spouse to obtain a visa.

Accommodation is a similar story, unfortunately. You are expected to either a) have a place set up and ready to accommodate your family or b) have someone provide you with accommodation. I don’t know about anyone else but I am short on friends with a spare room, a letting agreement which allows them to sub-let, or an owned property with enough space so as not to constitute overcrowding.

So that’s the crux of the thing. A British citizen’s difficulty in obtaining a family visa from within the UK or without is long and arduous but the fun doesn’t end there. We have the added anxiety in knowing we must do it again 2.5 years down the line because the road to a permanent visa is a 5 year process. Who can plan so far ahead as to know their circumstances will match those at time of original approval and what of a failed application? Is it acceptable that if already in the country many families find themselves separated due to the UK’s insistence upon a refused applicant applying from outwith the UK? How does my partner support herself back home in such circumstances? What if she is the sole provider? It goes without saying that money spent on sending my wife to her country of origin only compounds the issue by pushing us farther from the minimum requirements. Then there is the frankly ridiculous “Life in the UK” test which, if the mock test is anything to go by, is as relevant to living in the UK as a Tunnock’s tea-cake in France.

The UK immigration system is convoluted, irrelevant, discriminatory and not fit for purpose. The system in place seems to be upside down — devised to inconvenience those “undesirables” who may not qualify to settle in the UK before serving those with a right to.

There is currently a legal challenge in progress concerning the minimum income threshold which has resulted on all applications that do not immediately meet the criteria to be put on hold indefinitely pending the outcome of legalities. Right now there are hundreds, possibly thousands, of families separated by British immigration policies and the best response on offer is: “I am prepared to consider whether we can put in place some rules that are not vulnerable to abuse” (Mark Harper, until recently Minister for Immigration). I propose that the level of abuse and method of controlling it should not take precedent over the rights of British Citizens and their families!

In my opinion there can be no abuse of such significance that keeping families apart for indefinite periods of time is justifiable collateral. Isn’t it our right to return home, to bring with us our loved ones? I cannot accept that the abuse of a few should weigh so heavily against the rights of the many and it seems straight forward to me than even if I come home, my partner and I face an uncertain 5 years where we cannot feasibly plan for a settled life.

So what then?

Scots are travellers by nature and we ought to be allowed to return home, our families treated to the same rights and privileges as ourselves, not assessed on the basis of net burden! Perhaps an independent Scotland can see a future in which common sense and versatility are the tools used to sculpt a system whose primary objective is to protect the rights of its own whilst, secondarily, providing for the well-being of those who wish to join us. Perhaps through inclusion we may deter the “abuse” Westminster fears so diligently.

To restrict the movements of a spouse is to restrict the movements of a British citizen. The result of such a hard handed approach to international couples is simply that many expats who wish to return home are forced to consider alternative destinations. We have for instance considered returning instead to the Republic of Ireland where we would be free of the stress the UK immigration system causes.

If we want this country to be a progressive, modern and caring place to live, surely it would serve to pay attention to the welcome mat we present at the door, especially when it is a member of our family who comes calling.

Taking the long view

How will Scottish independence be seen by future generations?
How will Scottish independence be seen by future generations?
I get really annoyed at the way the No side constantly try to make people think that voting Yes is the equivalent of making Alex Salmond dictator for life. They also moan that it’ll cost a lot of money to buy a navy and duplicate certain shared institutions.

I just wish they would take the long view more often. How many people today are able to remember the names of England’s and Scotland’s leading politicians at the time the Act of Union was signed, more than three hundred years ago? And more to the point, do they actually care? Should people in 1707 have decided on the merits of creating the Union on the basis of whether they liked the political leaders of the day or not?

I’m not saying the Yes side never uses short-term arguments, but I do think the No side are the worst sinners in this regard. Focusing so much on Salmond is ridiculous — for all we know, he might decide to step down shortly after the independence referendum, and even if he doesn’t, it’s quite likely a revitalised Scottish Labour will win the 2020 Scottish General Election (or even the one in 2016).

It’s also silly to talk so much about the one-off costs associated with setting up an independent country. After a few years nobody will evaluate the decision to become independent based on these transitional costs; instead, they’ll look at how Scottish GDP developed over time after the referendum.

Whereas short-termism permeates the No campaign (probably because they know they have a very weak case when it comes to the longer view), it’s relatively sporadic on the Yes side. Of course we do get a lot of stories about how an independent Scotland will abolish the Bedroom Tax and such things, but that’s because they provide both a tangible benefit of independence and an example of how Scotland will do things differently, not because the short-term case is more compelling.

Next time I’m talking to a youngish undecided voter who says they’ll probably vote No because they don’t like Alex Salmond, I think I’ll ask them what they think their grandchildren will think of that in fifty years’ time.

How to keep Scottish universities free after independence

Foam Fight_3946
Foam Fight_3946, a photo by Sarah Ross photography on Flickr.
The following is a reworked and updated version of this old blog post:

At the moment, the main reason why English students are not all going to university in Scotland (where university tuition is free, compared to English universities that will typically charge £27,000 for a 3-year degree) is that Scottish universities charge them up to £27,000 for their degree. This is only possible because the EU rule about not discriminating against EU students only applies to students from other EU countries (such as Ireland, Denmark or Bulgaria) and not to students from other parts of the UK (England, Wales and Northern Ireland).

As soon as Scotland regains her independence, rUK students become EU students and will have to be treated in the same way as students from Scotland.

This is an area where the Scottish Government’s White Paper is a bit vague, and many unionists have now started claiming that Scotland will have no choice but to introduce tuition fees after independence (see this article by Severin Carrell for details).

However, some lessons can be learnt from Scandinavia, where the closely related languages in theory make it easy for students to study in the other Nordic countries, and EU rules mean these foreign students can’t be discriminated against based on citizenship.

Denmark used to have great problems in this area. For instance, large numbers of Swedes used to study medicine in Copenhagen and then go home straight after graduation. In 2007, Denmark therefore did two things (link in Danish): (1) They changed the number of advanced highers (“højniveaufag”) a student needs to pass to get a grade top-up, which benefited Danes in comparison with Swedes. (2) They changed the way they translated Swedish grades into Danes ones (that is, they made it harder for them to get in).

Apart from this, Denmark pays generous grants (typically £7616 per year) to university students who were living in Denmark prior to starting university. (Denmark used to require students to have lived there for at least five years in order to qualify, but this is an area that the EU is currently clamping down on.)

Scotland could copy some of these policies after independence.

There are already plenty of differences between A Levels and Scottish Highers and Advanced Highers, so it would be easy to tweak the entry requirements to make it harder for rUK students to get into Scottish universities. Scotland could also introduce a new grading system different from the one used in the rUK, which would then need to be converted. The very best rUK students would of course still get in, but that would be to Scotland’s advantage anyway. (The rUK might retaliate and make it harder for Scottish students to get into their universities, but you can’t have your cake and eat it, too.)

Scotland could also introduce tuition fees for everybody, but cancel out the effect by creating grants for Scottish citizens and residents. However, as I wrote above, the EU is not too happy about creating too many restrictions in this area.

In an ideal world such measures shouldn’t be necessary, but until it dawns on the English that they’re shooting themselves in the foot by pricing bright young people out of universities, I fear that Scotland will have to take a leaf out of Denmark’s book.

Finally, England is the odd man out in the EU when it comes to tuition fees. Most EU countries have either no fees or very low ones. Scotland might be able to convince the other countries that England’s sky-high fees are distorting the free movement of students and that restrictions have to be placed on English students until England lowers its fees. This would be an ideal solution.

The most realistic answer

L'Assemblée Nationale Européenne
L’Assemblée Nationale Européenne, a photo by CedEm photographies on Flickr.
A short while ago, Yves Gounin (who is a high-ranking government official in France) wrote a very interesting article in the journal Politique étrangère.

The Catalan website VilaWeb has provided a useful summary, as has Wee Ginger Dug, and the article itself is here in PDF format.

It’s an excellent article, and I highly recommend reading it if you have any French (Google Translate will help you to a certain extent, but it will get confused in some places).

I decided to provide a summary of my own, maintaining the author’s section headings, and focusing on the bits that are most directly relevant for Scotland.

However, I very much hope somebody will soon provide a full translation into English — it’s an essential document in the Scottish independence debate.

Anyway, let’s get started! After a short introduction the article is divided into the following sections:

Longing for independence and European integration [p. 12]
The independence movements in at least Scotland and Catalonia are united by their desire to remain in the EU, not least because doing so reassures the voters that the countries won’t be internationally isolated after independence.

It’s therefore important to explore whether these new states will become EU member states automatically, or whether they will be placed in the same situation as the applicant countries of Eastern Europe, obliged to follow the long and risky process of accession negotiations.

A political gamble [p. 12f]
The independence supporters are therefore keen to assert that continued membership of the EU is practically automatic, while opponents claim that independence would lead to applying for EU membership from scratch.
The answers from public international law: succession of states [p. 13ff]
The author briefly explains how states can succeed states. It’s likely the remaning parts of the UK and Spain will try to claim continuing state status, whereas it’s unlikely either Flanders or Wallonia could do this if Belgium is dissolved.
Succession of states and international treaties [p. 15f]
After looking at how the succession of states affects international treaties, the author concludes one has to look at the rules of each international organisation separately — one cannot conclude anything about EU accession by looking solely at international law.
An unprecedented situation [p. 17]
Looking at the EU itself, it quickly becomes clear that there aren’t any clear precedents.
A brief detour via the UN [p.17f]
While there are no precedents within the EU, that’s not the case in the UN. Here the rules are clear: The new state has to apply for membership from scratch.
The EU hostile to the splitting of states [p. 18ff]
There are good reasons why the EU is against member states splitting up.

On the one hand, the EU promotes its own regional agenda but does not want to be accused of getting involved in the internal affairs of member states at the same time.

On the other hand, many member states are worried about their own independence movements and believe they can hold back these by obstructing the accession to the EU of new states forming from other EU member states.

Common sense arguments in support of automatic membership [p. 20f]
However, is it reasonable and realistic to expel parts of existing member states from the EU? Can one imagine border posts on the Catalan border? The reintroduction of a national currency in Flanders? Scots deprived of their rights derived from the EU Charter of Fundamental Rights?

Also, a legal argument can be taken from Article 50 of the TEU, which outlines the procedure by which a member state can leave the EU. It could be argued that expelling these states and refusing to readmit them would be in breach of this explicit procedure.

Another argument stems from the EU’s founding principles: freedom, democracy, equality and the rule of law. It would be ironic if the Union denied the populations of Scotland, Catalonia or Flanders the right to self-determination, and this would undoubtedly constitute a democratic regression.

Europe of the citizens [p. 21]
An even more powerful argument can be drawn from the link established over time between the European Union and its citizens. The EU constitutes “a new legal order of international law whose subjects are not only States but also their nationals”. That means that unlike other international organisations, the EU is not only composed of states but also of citizens.

The question here is whether by losing their British, Spanish and Belgian nationality, the Scots, Catalans and Flemings will ipso facto also lose their EU citizenship.

A negotiation in good faith would be in everybody’s interest [p. 22]
It’s fair play for opponents of independence to raise obstacles to continued EU membership, but one might ask whether it’s in the EU’s own interest to complicate the (re-)admission of these states. Once the Rubicon of independence has been crossed, Europe would have everything to lose by putting these states into quarantine: its businesspeople couldn’t invest there any more, nor could its young people study there, its travellers move there freely, its fishermen sail there, etc.

A practical solution must be found.

The most reasonable solution would be to negotiate independence and EU membership simultaneously. It would thus be neither automatic membership nor going through the full procedures of Article 49. The absence of relevant precedents, legal uncertainty and the magnitude of the challenge will require the parties to negotiate. This is not the most illuminating answer to the question, but without a doubt it is the most realistic.