Three EU challenges for Scotland

Assuming the opinion polls are right and there will be a pro-independence majority in the Scottish Parliament after the elections in May, the new Scottish government is likely to want to pursue a policy of an independent Scotland in the EU, writes Tobias Lock.

This blog post identifies three key challenges that the government would face if it wants to convince voters that it can realistically secure quick accession to the EU following an independence vote.

If an independent Scotland wanted to become an EU member state, it would need to fulfil the so-called Copenhagen criteria. Apart from fulfilling certain political and economic requirements (e.g. democratic governance, respect for the rule of law and human rights, a market economy), Scotland would need to adopt the entirety of EU law. Even before an independence vote, there are a number of things Scotland can do and a number of questions, the Scottish government – or anyone else advocating independence – should try to answer.

Keeping on top of EU law

The hard Brexit negotiated by the UK government means that Scotland no longer has to keep up with EU legal developments. Over time, Scots law will therefore deviate from EU law either because Scotland or the UK change existing EU-based rules or because the EU adopts new legislation. Depending on how much time will pass between the end of 2020, when Brexit took full effect, and an independent Scotland being awarded the status of accession candidate by the EU, this divergence will be bigger or smaller. In any event, divergence will happen, and anyone interested in keeping the duration of accession negotiations short, should make sure that Scotland stays abreast of developments at EU level.

The Scottish EU Continuity Act 2021 can help to achieve this, albeit only imperfectly. The ‘keeping pace’ power in section 1 of the Act is limited in a number of ways: first, it is in the discretion of the Scottish government whether it chooses to replicate new EU legal developments in Scots law or not; secondly, the government’s powers in the Act are limited to devolved matters, i.e. notably environmental law, but do not cover reserved matters (e.g. employment law, consumer law, social policy); thirdly, the powers in the Continuity Act only cover legislative developments, but not developments that occur due to treaty change or in case law; and fourthly, the power is time-limited to six years initially, which may be extended up to ten.

To prepare Scotland as well as possible for future accession to the EU, it will thus be necessary to retain ample EU law expertise in the Scottish government and beyond. The Scottish government should thus systematically monitor legal and policy developments at the EU level. The Scottish government’s efforts to create and maintain close relations with key European partners could be usefully exploited in this regard. A similar challenge goes out to professional bodies (e.g. the Law Society of Scotland) and civil society more broadly. Otherwise it may take Scotland longer to catch up on EU law developments than one might assume.

Answering the currency question

As previously noted, EU membership requires prospective member states to commit to the entire EU acquis, including economic and monetary union, the final stage of which would mean the introduction of the Euro as the Scottish currency. Denmark is the only current Member State which has an opt-out from the Euro as it never agreed to adopting it when the Treaty of Maastricht was negotiated. All other Member States whose currency is not the Euro are under an obligation to adopt it. No accession country has ever managed to secure an opt-out from it.

During the first independence campaign, the pro-independence side insisted that Scotland would be entitled to keep the UK’s then opt-outs from various EU policies, notably the Euro. Instead, the Scottish government’s White Paper suggested that Scotland would retain the pound sterling as part of a monetary union with the rest-of-the-UK. The pro-union side, by contrast, insisted that this would not be possible and that Scotland would have to leave the pound. SNP policy is now ‘sterlingisation’ i.e. using the pound for a transition period but without an agreed monetary union.

Now that Brexit has happened, this argument will have to be re-visited as there is no longer a reason why Scotland should be granted an opt-out from the Euro. Different questions will emerge, however. For instance, even if Scotland continued to use the pound sterling for a time after independence, how would Scotland be able to partake in the European Exchange Rate Mechanism II with its central exchange rate, which is one of the steps towards the adoption of the Euro? Would it have to adopt a Scottish currency in the mean time? How long would it take for Scotland to transition out of the UK’s economic sphere (including its currency)? Might Scotland ask the EU – as floated by Kirsty Hughes – for a transition period during which it could become a member state, but would be given extra time to establish its own currency?

These are questions that will be asked during any future independence campaign. It would be advisable if the Scottish government worked on providing realistic answers to them.

Answering the Border Question

Finally, those in favour of independence will need to consider what the Anglo-Scottish border would look like after independence if Scotland is in the EU and the UK outside. It is assumed here that there will be a desire to keep this border as open as it is now, i.e. as far as possible traffic and persons should cross without interruption. It is further assumed that the Trade and Cooperation Agreement (TCA) between the EU and the UK is unlikely to develop beyond a free trade agreement any time soon.

Typically, there are two types of checks happening at land borders: checks on persons and checks on goods.

As far as checks on persons are concerned, EU membership normally means membership of the Schengen zone. If Scotland were in Schengen, then passport checks would need to be conducted at that border. It would thus be of the utmost importance for Scotland to try and secure an opt-out. Ireland currently enjoys such an opt-out as it forms part of the Common Travel Area with the UK. In order to have realistic chances of an opt-out from Schengen, an independent Scotland would need to secure continued membership of the Common Travel Area, which can only happen with the consent of the rest-UK and Ireland. If that happens, Scotland would need to try and convince the other EU member states to agree to an opt-out, again something not granted to any candidate country in the past. Whether this would be possible or not, is an open question, but given Scotland’s geographic location it is not entirely unrealistic.

As far as checks on goods are concerned, opt-outs are not an option. Free movement of goods between the EU member states, including Scotland, is at the core of the single market. The Anglo-Scottish border would thus become an EU customs and regulatory border. As Katy Hayward explained, the EU has historically shown very little flexibility towards accession states when it comes to the preservation of the single market and customs union.

The political drama around the Protocol on Ireland/Northern Ireland, which delayed Brexit by almost a year, shows that avoiding checks on goods can be legally and politically difficult. However, one needs to appreciate important differences between Scotland and Northern Ireland. In the latter case, the aim was to avoid the erection of all border infrastructure. Not even camera surveillance at an otherwise open border would have been an option as surveillance cameras would have been a target for violent attacks.

If the TCA applied to trade between Scotland and England, the need for customs checks would largely be reduced to checks concerning compliance with rules of origin. Optimistically, both sides could reduce these to spot checks as all consignments crossing the border would require the necessary paperwork, and camera technology at the border could be sufficient to identify those traders who did not fill in their paperwork. Regulatory as well as sanitary and phytosanitary checks would still be necessary, but these would not necessarily have to take place at the border itself. That said, the practical reality of the UK’s two sea borders in the Irish Sea and in the Channel will continue to be a case study of whether this rather optimistic account is also realistic. With current good-will between the EU and the UK at record low levels, only time will tell. In other words, if the political will was there, traffic up and down the main arteries connecting the Scotland and England could much flow as normal.

This shows that there are answers to the border question. However, to secure an open border Scotland will need to use much diplomatic effort in particular with regard to securing a Schengen opt-out and must hope for a good overall EU-UK relationship with sufficient levels of trust to sustain an open border.

In conclusion, there are some big questions that need answering on how and when an independent Scotland would join the EU and the impact on rUK-Scottish trade. But there is also much that can be done now to provide serious points and answers on these issues.

First published by the Scottish Centre on European Relations CC NC-ND 4.0