George Kerevan: European crisis could pay off for Nationalists

Europe in crisis. It is – but it always has been. The history of the post-war project to unite Europe has been a long succession of political mishaps, squabbles and threatened divorce, only to end in compromise at the last possible second.

Remember General de Gaulle in 1967 threatening to break up the EEC (as it was called) if other members let the UK join. Then there was the “empty chair” crisis of 1965, when France (again) refused to take part in EEC meetings, paralysing the Community’s machinery, after a clash over agricultural subsidies.

The project to create a United States of Europe – it is a conscious project – has always proceeded via a series of diplomatic and economic crises. The original architects of the project, Robert Schuman and Jean Monnet, understood this. They viewed European integration – necessary to end the continent’s suicidal national rivalries – as a gradual process, proceeding like a railway journey from station to station. Each leg of the journey would be difficult, but as long as the next station along the route was identified, journey’s end was inevitable.

Today’s euro crisis is deadly serious but no more than Europe has faced before. For integrationists, the next station has already been announced: a fiscal union of the 17 eurozone members. You can’t have that without political union. Yesterday, Chancellor Merkel announced: “We need a political union first and foremost, that means we must, step by step, cede responsibilities to Europe.”

The difference this time is that the goal of European political unity is very close. You could say that the final line between co-operation and integration has almost been reached. The clock is ticking loudly: unless the Spanish debt crisis is resolved quickly, it could see banks failing across Europe, a deeper recession, and enough political retribution to set back the European project for a decade or more.

However, not all of Europe wants to take the final step to political union. In Britain, Chancellor Osborne is plotting to restore his personal credibility by proposing an “in-out” referendum on EU membership – a referendum in which 70 per cent of Tory members would vote to leave, according to a Channel 4 poll. Jon Cruddas MP, Labour’s new policy supremo, also wants an in-out vote. Such a referendum could see the UK out of Europe altogether plus a realignment of anti-Brussels Tories and Ukip in a Little England alliance. Leaving the EU would cut off Northern Ireland from its European subsidies – with who knows what political repercussions?

At a pinch, Europe could do without Britain. But countries such as Sweden and Denmark are not members of the euro and don’t want to be in an EU dominated by a new country called The Eurozone Federation (capital: Frankfurt).

Enter the mischievous Lord David Owen, former Labour Foreign Secretary and still intellectually virile at 73. In a new book, Owen proposes the deliberate creation of a two-tier Europe. The eurozone members, or most of them at any rate, could proceed to fiscal union – “to all intents and purposes, though not in name, a single government”, says Owen. At the same time there would be a wider “European Community”, with separate institutions, dedicated to promoting a free trade area.

Here’s the novel part of Owen’s idea: to stop the eurozone entity becoming too dominant in the new free trade community, membership would be expanded to countries currently outside the present EU, eg Turkey and Norway. Voters in Britain could then be presented with a multi-question referendum (ironic given the Scottish debate): whether to join either group, or none. Lord Owen, a moderate Europhile, predicts a Yes vote to staying in the single market, an outcome that would see off the Little Englanders and please the City.

I doubt that Lord Owen, or anyone at Westminster, has the ear of Europe. France and Germany don’t want Turkey in the European system in any form, and Turkey has too much pride to accept Lord Owen’s scraps. Equally, there is no doubt after Angela Merkel’s pronouncements on Thursday that Berlin is bent on political integration of the eurozone, leaving the rest of the EU as bit players.

This could be a problem for the SNP. More pro-Europe than Tory England, the SNP has always viewed EU membership as proof that independence would not lead to a Brigadoon cul-de-sac. Nationalist MEPs from Winnie Ewing to Alyn Smith, have used their Brussels platform to make Scotland a player in Europe – no-one knows what Labour and Tory MEPs do.

However, why would you seek independence from London only to join Merkel’s super state? And if Scotland is not going to join the eurozone union, what is its strategy towards Europe after independence? Lord Owen has a point. Scotland needs to remain in a free trade relationship with Europe. But more is involved. Strategically and culturally, Scotland is part of Europe and needs to exert influence in European councils.

Europe’s crisis could be to the SNP’s advantage. Most Scots, including the business community, do not want to be stuck in a parochial Little England outside the EU. Equally, a majority, including nationalists, don’t want to be a province of Euroland. Which points to Scotland opting for a Scandinavian model, retaining sovereignty while seeking as close a working relationship with Europe as can be negotiated. That could be popular with electors across the independence divide. An independent Scotland willing to engage with Europe also might be in a better position than England to win allies in counter-balancing the power of the eurozone – Lord Owen please note.

Recently on the BBC’s independence debate, I watched Scottish Conservative leader Ruth Davidson tell Nicola Sturgeon that an independent Scotland would be outside the EU, renegotiating entry. Ms Davidson thought she was scoring a point. But Europe as we know it is about to change. If the SNP seizes the initiative, I can see lots of folk unhappy with the current drive to full integration, including Scots Tories, pondering a Yes vote in 2014.