George Kerevan: Still a place for Scotland in a Europe in turmoil

I’VE just had my fingers smacked by a fellow member of the SNP for implying, in this column, that George Papandreou was right to demand a referendum of the Greek people, before endorsing the latest diktat from France and Germany. It seems I’ve committed the sin of being anti-European or, as they say in Brussels, non communautaire.

I plead not guilty, though I do think that faced with a choice between the euro and democracy, I’ll stick with democracy. Scotland’s identity is bed-rocked on being one of the historic nation states of Europe. Equally, post-Tudor England is premised on being separate from the Continent. At a popular level, it still is. When the British Empire collapsed after 1945, the bankrupt British economy was faced with a need to integrate with European markets. The British establishment accepted this for reasons of self-preservation. Ordinary English people did not, and still don’t. That remains England’s political faultline.

But for the Scots, realigning with Europe was a return home. The adjustment was not without friction. Family ties remained strong with Canada, Australia and New Zealand, especially as thousands of working class Scots continued to emigrate to the old dominions during the 1960s.

Even inside the SNP there was a strong element that opposed joining the Common Market, as it then was. But this was less the anti-Europeanism found in England, and more a desire for an independent Scotland to emulate the small nation virtues of Scandinavia. Such views are far from dead inside the SNP, and have even gained ground since the crisis inside the eurozone.

However, the arrival of the English Gaullist Margaret Thatcher swung the SNP and most Scots towards embracing the EU. Jim Sillars, his political antenna acute as ever, summed up the changing mood with the slogan: “Scotland independent in Europe”. This won over young voters previously worried that independence meant being trapped in a tartan museum.

That is where the SNP remains today. Unfortunately there is a looming political problem that requires a fresh response. The eurozone is in meltdown. Worse, the response of Germany and France to the crisis has been to rob Europe of democracy.

Rather than use the European Central Bank to underwrite the euro, Berlin and Paris have bullied eurozone countries into absurd austerity programmes that collectively are pitching the Continent into recession. As a result, Europe risks a complete erosion of popular confidence in the democratic process. Unpalatable outcomes could be in the offing. A return of the colonels in southern Europe? A fiscal union in the eurozone that is essentially a Franco-German suzerainty?

Where does this leave the SNP? The last few weeks have seen a raft of scare stories in the eurosceptic London media suggesting that an independent Scotland would be chucked out of the EU. Or, if it re-applied for membership, be forced to join the eurozone at humungous cost.

I don’t deny that international legal precedent suggests the larger entity in the break-up – what’s left of the UK – would be the designated successor state. This could force Scotland to renegotiate certain international treaty obligations, including UN membership. On the other hand, it is moot whether anyone can expel me, as an existing EU citizen with the legal protection of the European Constitution, from that citizenship.

For the record, the much-quoted House of Commons Library paper on independence and the EU clearly states that “there is no clear answer” on whether Scotland would have to re-apply for membership. There is European Commission opinion from 2004 that suggests a seceding territory would have to reapply but the commission is not the EU’s constitutional arbiter. That remains the Court of Justice

My old mate, Tory MEP Struan Stevenson, claims that France and Spain would veto Scotland’s EU membership to discourage their local separatists. Funny how Struan never applies that argument to Flanders and Wallonia, if (rather when) Belgium dissolves.

Then there is the EU treaty requirement that implies any new member is expected to join the eurozone when it reaches the requisite economic criteria. Yet Sweden has quietly ignored this proviso, which tells you what it’s worth.

Claiming that an independent Scotland either would be expelled from the EU, or forced to pay zillions to support the euro, is a silly game played by the SNP’s opponents. The real question facing the SNP is not this diversion but rather how to frame new policies regarding the EU’s democratic deficit, economic sclerosis and monetary meltdown.

In England, Europe’s woes could give the populist, eurosceptic right the leverage it needs to break completely with the EU. This would unleash new right-wing forces and maroon the stagflating English economy for a long time. That’s not an appealing option for Scotland.

Instead, Scotland’s future – like its past – lies in Europe. But Europe is in flux. If, God forbid, it disintegrates into a northern Franco-German confederation and a southern banana belt, oil-rich Scotland’s best option would be to emulate Norway as a democratic, sovereign state.

With the euro hors de combat, the SNP is committed to keeping sterling. But as we’ve seen, monetary union without the necessary fiscal infrastructure is a ticking bomb. It is in England’s interest to agree a common monetary authority with Scotland, to set interest rates and act as a lender of last resort. Otherwise Scotland’s low inflation economy will suck capital out of England. But if England won’t play ball, independent Scotland would have no option but to adopt its own currency. The SNP has yet to plan for this.

Ultimately, however, oil-rich Scotland needs to use its influence to shepherd the EU back to democratic accountability and economic growth, rather than a Franco-German imposed austerity. That is the only way to stop Europe fragmenting. Europe’s crisis is Scotland’s opportunity.