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Thursday, October 17, 2013

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.


jon livesey said...

EU membership is the least of the problems that Scotland would face if it became independent from the UK.

Scotland is a nation that depends on the rest of the UK in three important ways. It receives a sizable fiscal transfer each year. It depends heavily on public sector employment that a much smaller Scottish State could not replace. Its industry depends quite heavily on UK defence spending.

These could be replaced over a longish period of time, but during that time Scotland would barely be a viable economy.

Rik said...

This is not only the view of London and Madrid, but also of the by far largest part of the legal world.

Rik said...

This is not only the view of London and Madrid, but also of the by far largest part of the legal world.

Denis Cooper said...

Jon Livesey -

When everything is taken into account, as far as that is possible, it turns out not to be true that Scotland "receives a sizable fiscal transfer each year" from the rest of the UK; in some years the net transfer is in the opposite direction, but in any case the net sums involved are relatively minor.

Rollo said...

Think how much better off the English will be when we get rid of this parasite state.

Denis Cooper said...

This discussion is becoming rather tiresome.

When the Scotsman reports the professor saying:

“The legal position taken by Barroso, Reding and van Rompuy has no basis in the European treaties. Nor is there a precedent in EU law. Nor does the UN Charter envisage dispositions with regard to secession."

then that is correct.

And in particular that there is no precedent, and so the EU member state governments would have to decide how they would deal with that novel situation which was not anticipated when they agreed their treaties.

Some other potential new situations were envisaged, for example it is still there in Article 350 TFEU, carried over from Article 233 in the 1957 Treaty of Rome, that:

"The provisions of the Treaties shall not preclude the existence or completion of regional unions between Belgium and Luxembourg, or between Belgium, Luxembourg and the Netherlands, to the extent that the objectives of these regional unions are not attained by application of the Treaties."

But the reverse, the break up of Belgium or the Netherlands or any other member state into two or more new sovereign states was not and is still not envisaged in the treaties.

So when he says:

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

that is clearly incorrect as far as the present EU treaties are concerned, because there are no treaty provisions which the member state governments could invoke to allow "automatic" succession.

Then again when he asks:

“Why do Barroso, Reding and van Rompuy prefer the exclusion and re-accession of Scotland?"

and offers this answer:

“the EU institutions want to renegotiate the terms of Scottish membership: Scotland would be asked to join the euro and the Schengen Agreement, and it would have to give up its part of the ‘Thatcher rebate’.”

then that is obviously correct; but he should have added that probably it would not only be the EU institutions which wanted that, but much more importantly also the governments of some of the other EU member states, all of whom would have to agree to the required EU treaty changes.

Denis Cooper said...

I see no reason why I should not simply repeat the comment I made in February, as nothing has changed since then to invalidate any part of it:


As I very much want the UK to stay together perhaps it would be more politic for me not to challenge any of the myths that the Unionist side will propagate in their attempts to frighten the Scots into voting against separation, but in the interests of truthfulness I have to repeat my prediction that in the event of a "yes" vote in the referendum Cameron and Salmond would collaborate very closely in efforts to ensure a seamless transition from the present UK being one EU member state to Scotland and the rest of the UK being two separate EU member states.

Both Cameron and Salmond would do whatever they could to avoid the situation arising whereby Scotland was no longer part of the EU Single Market, even for a microsecond, and therefore as the Prime Minister of the present EU member state Cameron would propose the use of Article 48 TEU to make the necessary changes to the EU treaties.

That there would have to be changes to the EU treaties is in my view beyond question, given that the word "Scotland" does not even appear anywhere in the present treaties and obviously Scotland could not become an EU member state in its own sovereign right without its name appearing in the EU treaties, above all in the list of High Contracting Parties to the treaties, where it would be inserted between Portugal and (what would then be the rest of) the UK.

However some of the other EU member states might well try to extract a price for their agreement to those necessary treaty changes, and it's unlikely that the outcome would be welcome to anybody in the UK either side of the border, apart from the very small eurofederalist minority.

Denis Cooper said...

Rollo - dream on. If you think that England would benefit from Scotland becoming independent then I'm afraid you'd be disappointed.

Anonymous said...

Well - if I were a nationalistic Scot who dreamt that my country could become independent, and then I discovered on reading this blog that my country would automatically become tied up in the EU's Political Union Project (with all the fees that involves) I would be sick as a dog.

Denis Cooper said...

Anonymous -

Yes, except that it couldn't and wouldn't happen "automatically", instead it would be negotiated by the pro-EU Cameron and the pro-EU Salmond during the interval of maybe two years between a "yes" vote and the final separation of Scotland from the UK, and some of the other EU member states might demand a price for their agreement.

Anonymous said...

Scotland does not exist as an independent nation, and as such devoloution would lead to the creation of a new Nation, this nation is not in the Eussr, and there is no provision to let any nation into the corruption ridden democratically deficient eussr club without it meeting the stringent requirements that nations like Turkey are currently undergoing which would mean a considerable amount of years. There is also the fact that the rUK would not be the same nation either so its continued membership could also become a legal problem.

jon livesey said...

It's fashionable to say that "it turns out not to be true" that Scotland receives a fiscal transfer each year, without offering any evidence. People who already want to believe that will of course accept that as a fact.

However, there are bland assurance and there are facts, and the fact is that while taxation across the UK is uniform, public spending is ten percent higher per person in Scotland than in the rest of the UK. And that's what a fiscal transfer is.

An independent Scotland would have to find that ten percent difference through sharply high taxation, or it would face a roughly ten percent cut in public spending.

You can argue that this would be worth it, but to deny the facts amounts to misleading the voter. As they say, you can have your own opinions, but you can't have your own facts. If Scots want to face these costs, then good luck to them, but don't pretend they are not there.

The full analysis is in the URL below. Sorry it's so long, but that's Google for you.


jon livesey said...

One of the problems with this column is that it is based on a single comment from one person, Roland Vaubel.

There have been quite a range of issue around Scottish Independence and EU membership.

For example, it has been the habit in the SNP to claim that they have legal advice saying that an independent Scotland's membership of the EU would be automatic, but the SNP recently had to admit that such legal advice simply didn't exist, after spending L20k trying to suppress the fact.


In any case, as I said in my first comment above, treating EU membership as if it's the one and only problem to solve is foolish.

An independent Scotland's real problems would be fiscal and economic. Where do you get the current ten percent extra per person fiscal spending? How do you replace the current UK public sector employment. What do you use for a currency. What excess interest rate would Scotland have to pay for sovereign debt. How do you replace UK defence spending.

Independence may be "worth" all these extra costs, but the SNP's current policy seems to be the deny they exist, or simply wish them away.

And in case it's not clear, I have no opinion one way or another on Scottish Independence. I just wish the issue could be debated honestly, and not in a false and sentimental way.

Geoff said...


Denis Cooper said...

"However, there are bland assurance and there are facts, and the fact is that while taxation across the UK is uniform ... "

The contrary fact is that some tax revenues generated in Scotland are not attributed to Scotland.

In fact under the Eurostat system offshore oil and gas revenues are attributed to nowhere, or at least no part of the land; they are deemed to be "Extra-Regio".

So, just a few days ago:


"GDP in Cash Terms: Scottish Gross Domestic Product in 2012 (excluding extra-regio)¹ was £127 billion.

Including a population share of UK extra-regio activity, GDP in 2012 was £130 billion.

Including the share of UK extra-regio activity occuring offshore from Scotland, GDP in 2012 was £150 billion."

That's 15% of the GDP of Scotland wrongly ascribed to the UK as a whole.

Denis Cooper said...

jon livesey -

Looking at your link, which in somewhat shorter form is here:


it specifically says that your ten percent difference relates only to Scotland's ONSHORE position:

"Scotland’s notional onshore fiscal balance is considerably weaker than the UK’s onshore public finances. This reflects a slightly lower level of onshore tax revenue and public spending that is consistently 10 per cent higher than the UK average. In the event of independence, the allocation of North Sea oil and gas revenues would be subject to negotiation. If North Sea oil and gas revenues are allocated on a geographical basis, Scotland’s notional fiscal balance since devolution is very similar to the UK’s public finances."