Scotland’s £8bn bill to join the eurozone

SCOTLAND would be liable for almost €10 billion (£8.4bn) of the eurozone bail-out fund if it were to be allowed into the European Union as an independent country, a new report has claimed.

The independent study has also warned that Scotland could end up paying more per head to the EU because if it has to negotiate new membership it may lose out on the UK rebate won by Margaret Thatcher.

In what could be a damaging revelation for Nationalists, the report – Scotland, Independence and the EU, written by Europe specialists Arabella Thorp and Gavin Thompson – has warned that an independent Scotland may be liable for €9.8bn in the stability fund as the eurozone seeks to stave off the collapse of member states’ economies and the currency itself.

While the SNP argues that this only applies if Scotland were to join the euro, under current rules an independent Scotland seeking to apply for membership would have no choice but to belong to the beleaguered currency.

On the cost, the report notes: “Were Scotland to join the euro, it is likely that it would become party to the European Stability Mechanism, providing funding guarantees in proportion to its capital share in the European Central Bank. Based on its present proposed size, this would amount to roughly 1.4 per cent of €700bn, or €9.8bn.”

The report, drawn up for the Commons library, goes on to point out that membership to the EU would not be automatic if the country becomes independent, which could see Scots paying far more into the EU budget.

The Scottish affairs select committee has launched a double inquiry into the “referendum on separation”, looking in detail at the issues, such as EU membership, which may guide the choice of voters.

The issues raised are likely to feed into one of its two reports on a referendum.

The report also raises the prospect that states in the EU, such as Spain, which are opposing independence movements in their own countries, may veto Scotland’s membership.

There has been some debate over whether Scotland would have an automatic right to accession to the EU.

The report, however, is clear that it would not.

It states: “Whatever the position under general international law, a decision on Scotland’s status within the European Union is likely to be a political one.

“If all the EU member states agreed, then Scotland could continue automatically as a member state (pending negotiations with the other member states on details of membership, including the number of MEPs to represent Scotland).”

However, it adds: “On the other hand, member states with their own domestic concerns about separatist movements might argue that Scotland should lose its membership on independence, and hold up or even veto its accession.”

The report also says it is likely Scotland would be a net contributor rather than receiving extra funds from the EU.

It says: “Scotland is likely to be a net contributor to the EU budget (in other words it will pay out more than it receives in structural funding and payments under the Common Agricultural Policy), but the size of this contribution will depend critically on whether it benefits from an abatement (rebate) on the same terms as does the UK currently.”

And report also warns that the country would struggle to obtain opt-outs on issues such as the common fisheries policy, something the SNP opposes, as well as being forced to join the euro, even though there are continuing concerns over the currency’s stability.

It criticises the Scottish Government for consistently refusing to disclose legal advice it has received on EU accession, an issue picked up on by Conservative Scotland Office minister David Mundell.

Mr Mundell said: “This report provides precisely the sort of detailed information that the Scottish people need if they are to make an informed choice in a referendum on independence.

“Yet this is also precisely the sort of information that the SNP in government are trying to suppress.”

He went on: “I hope that there will be many reports like this which spell out the difficult choices that Scots need to make on independence. There are many other issues, like independence and pension payments, which the SNP would prefer to avoid providing detailed answers about, where detailed reports would probably produce similar negative outcomes for an independent Scotland.”

Labour’s shadow Scottish secretary Margaret Curran said the report “fatally undermines” the case for separation.

She said: “This report spells out the profound risks of separation for Scottish families and businesses, and reinforces Labour’s argument that we are stronger together.

“Scotland’s national interest is to be part the EU but out of the euro, and the report shows this can only be done using the UK’s historic opt-outs.”

Scottish Liberal Democrat leader Willie Rennie said: “This raises some big serious questions which the Scottish Government needs to answer.

“These respected researchers have no political axe to grind, but they are clearly raising issues that could be a serious problem if Scotland was to decide to go independent.”

Last night, however, the report was dismissed by the SNP, which pointed out that the former Labour foreign secretary, the late Robin Cook, had said there would be no problem in an independent Scotland being accepted in the EU.

The party also said that the €9.8bn for the stability fund would only apply if Scotland dropped sterling and joined the euro.

However, experts have recently warned that new member states to the EU are given no option but to join the euro.

A spokesman for the SNP said: “This is an ‘on-the-one-hand, on-the-other-hand’ paper by Westminster researchers, and the position on Scotland’s European Union membership has been crystal clear for 20 years.

“Scotland is already an integral part of the EU – and as an independent state will be in exactly the same position as the rest of the UK as a successor state.

“Legal and constitutional experts, as well as the late Robin Cook, have all confirmed that an independent Scotland would continue in EU membership. And how could it be otherwise, when Scotland has the lion’s share of the EU’s energy reserves, including oil and renewables?”

The spokesman added: “The fact is that the last major EU expansion in 2004 saw ten new countries join – six of them smaller than Scotland, and six of which have become independent since 1990.

“Because Scotland would not be a new part of the EU, the issue of the euro would be decided by a referendum of the people of Scotland, and only when the economic circumstances were right – until such a point, an independent Scotland will retain sterling as at present.”