Eurozone could not be forced on Scots
However, it is quite incorrect to assert, as some have done, this means that membership of the Euro thereafter can be imposed on an unwilling Scotland. The central issue which those asserting the opposite fail to appreciate is that a new EU member state is always able to avoid placing itself in a position under which it would be subject to the Treaty provision (Article 140 TFEU) on which their assertion rests.
While it is legally possible – though in my view inconceivable – for the Council of the EU to vote to end a member state’s derogation from its obligation to join the Eurozone, under EU law this only can occur where that member state has met the preconditions set out in the treaty for such membership – including the requirement that its currency has been in the EU Exchange Rate Mechanism (ERM) for at least two years.
Advertisement
Hide AdAdvertisement
Hide AdHowever, the monetary and exchange rate strategy of a new member on joining the EU, including whether or not to join the ERM, are entirely the responsibility and prerogative of the member state concerned. Membership of the ERM is, indisputably, a voluntary arrangement.
As I understand it, a post-independence SNP government would retain sterling (which is not inside the ERM) as Scotland’s currency, as it is perfectly entitled to do.
Self-evidently, therefore, Scotland would not comply with this (far less any other) pre-condition for Eurozone entry. And any subsequent decision to break with sterling and pursue Eurozone membership could, if wished, be decided by a national referendum.
The upshot is that it simply is not the case that an independent Scotland can be dragooned under EU law into membership of the Eurozone against its wishes – even if for some unfathomable reason the European Commission wished to initiate such a course of action thus far it never has contemplated.
Ultimately, it falls entirely to the new member state to decide whether or not it wishes to pursue a strategy leading to membership of the Eurozone.
Drew Scott
Professor of European Union Studies
Co-Director, Europa Institute
School of Law
University of Edinburgh
Old College
Edinburgh