Catalan government calls off independence referendum, but it's not the end of the story

UPDATE (10:55am): 

Catalan President Artur Mas has just been speaking to the press. His remarks were broadly in line with the blog analysis we published earlier (see below).

Two key points from the presser:

• The planned independence referendum will not take place on 9 November. However, somewhat confusingly, Mas said "there will be polling stations and ballot papers" available to hold a "preliminary" vote on the same day. In other words, a purely symbolic, informal referendum (as opposed to the formal, non-binding one previously planned). It remains to be seen how this offer will go down with Catalan voters.

• As we expected, the Catalan leader said he is "at the disposal of the other [Catalan] parties" to call early regional elections. However, he suggested that these elections could only be credible as a proxy for a "definitive" referendum if all the pro-independence parties were to run "as a joint list and on a single programme". Therefore, Mas is clearly using the prospect of early elections to put pressure on the Spanish government, while at the same time trying to hedge his CiU party against the risk of being outflanked by the strongly pro-independence ERC (as we explained below) and taking a beating. 

Meanwhile, Spanish Prime Minister Mariano Rajoy has hailed the cancellation of the Catalan referendum as "excellent news" and reiterated that he's open to dialogue with the Catalan government.

ORIGINAL POST (9:15am):  

The Catalan government has called off the non-binding independence referendum planned for 9 November. It was really just a matter of time. Catalan President Artur Mas had repeatedly stressed that he wanted the consulta to be legal, so that the outcome of the independence vote could be recognised as valid in Spain and beyond. However, the Catalan law used by Mas to call the independence referendum has been temporarily suspended by the Spanish Constitutional Court after the Spanish government lodged a legal challenge against it. Hence, going ahead with the referendum would have meant breaching the law - something the Catalan leader wants to avoid.

Clearly, though, this is not the end of the story. Mas will reportedly set out an alternative 'participative process' (proceso participativo) in a press conference this morning - but his new proposal is unlikely to be welcomed by the other pro-independence parties.

As we noted in previous blog posts, the 'Catalan question' seems to have got to a point where the option of going back to business as usual is not on the table anymore. The decision to call off the 9 November referendum may have opened a window of opportunity for the Spanish and the Catalan governments to engage in real talks.

Spanish Prime Minister Mariano Rajoy may be tempted to shut the door and just ignore Catalan demands, especially after Mas has backed down. However, the Catalan leader still has an ace up his sleeve: he can put further pressure on Madrid by threatening to step down and call early regional elections. A snap vote in Catalonia would very likely see a victory for the hardcore pro-independence Catalan Republican Left (ERC).

The party leader, Oriol Junqueras, said of the decision to cancel the independence referendum yesterday:

"We will have to build up a parliamentary majority to issue a declaration of independence and begin the constituent process of the Catalan Republic".

With a Spanish general election due in November 2015, Rajoy would probably want to avoid having to deal with an ERC-led Catalan government and would therefore be more willing to listen. On the other hand, Mas would be taking a huge gamble himself by threatening to call early elections. The Catalan leader fought the 2012 electoral campaign on the pledge of an independence referendum that he has failed to deliver. Hence, his moderate nationalist Convergence and Union (CiU) party would face the risk of harsh punishment by disappointed pro-independence voters.

One thing is certain: the time of political posturing on either side is coming to an end. The sooner the Spanish and the Catalan government agree to sit at the negotiating table, the better.

Braveheart: Aspiration or reality? Alex Salmond claims Scotland could join the EU in 18 months

Aspiration or reality?

Alex Salmond has today claimed that an independent Scotland's (iScotland) EU membership terms could "be finalised in 18 months" i.e by March 2016. There is an obvious political reason for wishing to play down the disruption caused by Scotland leaving the United Kingdom - Alex would not want to scare the Scottish horses - but even by the standards of political rhetoric this is quite a claim. Here is how it might or might not work.

Gordon Brown's is the only 
Scottish signature on the EU Treaties

We have explained before that an independent Scotland would have to rejoin the EU. For although Scotland is within the EU it is the UK that is the signatory to the Treaties - above the most recent UK signatory (Gordon Brown's) it clearly states "United Kingdom". (If in doubt see the definitive legal opinion supplied to the Scottish Government by Former EU legal Counsel Jean-Claude Piris here). So it is clear that an iScotland would have to join  (not even re-join) the EU. So how long would that take?

Well a lot more than 18 months if history is a guide. We have set it out before here but in brief Scotland would need to apply for EU membership, be independent to apply and then complete 35 chapters of accession negotiations. Once the Commission has cleared Scotland through that phase, Scotland would still need the unanimous approval of all 28 EU states (inc rUK) and the European Parliament's approval. This leaves a lot of unanswered questions. We have set some of them out here and again here but here is a recap of the more serious problems:

All in 18 Months?

1. Gain an opt-out from the Euro + Schengen border controls: All EU accession negotiations are based on accepting the full treaties. In iScotland's case Alex Salmond will come to the table asking for a UK-style opt-out from the euro, justice and policing laws and Schengen and the a share of the current UK rebate. These are all in the main body of the treaties. Without them iScotland would have passport controls on the English border, have to comply with rules governing the eurozone and be signed up to a growing body of EU criminal laws. Some EU members will object or want something in return.
2. Avoid a Spanish veto: Spain (and a number of other states listed in our table here) have an 'in principle' objection to secession. As Scotland would require their agreement to join this is a real problem, while not unsolvable has the potential to complicate matters. 
3. End negotiations with rUK: If Scotland were to opt to become independent it would enter into a long and fraught negotiation with rUK over the mountain of UK debt, assets, oil, currency, defence, passports and a whole range of other complicated issues. While this is going on the rUK will have want and be entitled to ensure that its negotiations with Scotland take precedence over iScotland's negotiations with the EU.

So could this all be done in 18 months of the referendum? Well as with so much of the independence debate, the reality is that all we have at this point are lots of 'known unknowns' and it is fair to say that if Scotland does vote for independence there will be a large item in Alex Salmond's inbox labelled EU membership...

An independent Scotland's forthcoming EU negotiations

The SNP has today published its White Paper on an independent Scotland. Amongst its other analysis it sets out a strategy towards the EU. It has always been clear that if Scotland votes for independence there will need to be a negotiation with the rest of the UK on the terms for divorce, but it is now clear the SNP have an EU negotiating agenda too. Here are the main points:

Firstly, the SNP assume Scotland will remain in the EU and have a smooth transition from corporate UK membership to individual membership. They argue that "discussions [on EU accession] will be held during the period in which Scotland remains part of the UK". These discussions will have to take in the following points:

• A Schengen opt-out: The SNP says it  would "plan to continue in the current Common Travel Area" with the rest of the UK.  As signing up to the Schengen travel area is incompatible with the UK/Ireland CTA and Schengen is a part of the EU treaties this will need a negotiation.
• A Scottish EU Budget rebate: The UK is a net contributor to the EU budget, but would contribute even more if it had not secured a UK rebate. The SNP recognise that "Scotland is likely to be a net financial contributor to the EU" but state they wish to have their own rebate saying they "consider that the division of the share of the UK rebate would be a matter for negotiation". This would obviously be a difficult negotiation as it was for Mrs Thatcher at Fontainebleau.
• A Euro opt-out: The SNP state that it is "our intention to retain Sterling as the currency of an independent Scotland". As well as discussions with the rest of the UK, Scotland will ideally need to gain a permanent opt-out from the Euro. The UK and Denmark are the only two states to have such a permanent opt-out but the SNP argue that the case of Sweden (which is meant to join but shows no signs of joining) shows that the EU can be flexible.
• A Justice and Home Affairs opt-in: The UK has a special deal whereby it can chose to opt in to new JHA (justice and home affairs) measures on a case-by-case basis. The SNP have said that they "will seek to retain the current flexibility to opt into new measures on Justice and Home Affairs" meaning they will ask for their own ability to opt in.

So in an independent Scotland's EU accession negotiations, the SNP will be asking for a number of special conditions already afforded to the UK. Firstly they would like their application to be considered while they remain a part of the UK, something they will also need UK approval for. They will then be asking for opt-outs from Schengen, the Euro, a JHA opt-in and perhaps most controversially a Scottish rebate.

Will the EU be a big deal in the Scottish referendum? The SNP seem to think it might be and are keen to defend themselves from accusations they might inadvertently leave the EU. Indeed they argue that “if we remain part of the UK, a referendum on future British membership of the EU could see Scotland taken out of the EU against the wishes of the people of Scotland.”

It is often thought that Scotland is less 'eurosceptic' than the rest of the UK. But is this true? One YouGov poll for instance suggests that 31% of Scots would vote to leave the EU against the UK average of 34% and that 55% would vote to stay in if David Cameron renegotiated and recommended a new deal the same as the UK average. Perhaps the SNP feel that if they were left inside the EU without a 'Scottish' rebate and their own version of the UK's existing opt-outs they might see a challenge from a tartan version of UKIP?

So at a time when disillusion with the EU is growing in the UK, the SNP is, like the UK parties, keen to demonstrate they will not be ceding more (Scottish) power or money to the EU. They even accept that there are, as in the UK at large, some Scots "arguing for a looser form of partnership" with the EU.

Not what London or Madrid want to hear

 

According to the Scotsman, Professor Dr Roland Vaubel, who is an adviser to Germany’s economics ministry, has written the following for the journal Economic Affairs:

The opinion of the European Union institutions that Catalonia and Scotland, after seceding, would have to reapply for EU membership has no basis in the European treaties.

Nor does the UN Charter envisage dispositions with regard to secession.

The treaties are also consistent with automatic succession of both the seceding state and the rump state.

 We don't have to point out that this isn't the view in London or Madrid.