Tag Archives: Independence

(In)Dependence Day – what if Scotland says yes.

‘Scotland’s Future’ – SNP’s blueprint for independence was only published few days ago and the media are already filled with different interpretations, summaries and comments on. Most of the experts’ opinions I read so far seem to agree that the document is very speculative – e.g there’s no certainty that the EU will instantly allow Scotland to join its rank, not to mention agreeing to let Scotland continue to benefit from UK’s rebate. Likewise, it’s possible that the EU will insist that the independent Scotland accepts the Euro or that UK (in the person of George Osborne) won’t agree to sustain monetary union. However, as analyses of these issues have already been made, I wanted to take a different view on Scottish plans. One of the most important and recurring arguments for the independence is that Scottish nation will finally be able to speak for itself, will be officially and directly represented internationally, and will benefit from policies tailored to its needs and problems.

However, no one has presented a real and practical outline of HOW exactly it is supposed to happen .The document presents Scotland’s future in dichotomous and simplified (if not openly naïve) terms – as if the UK was only possible reason for dependence. It seems that being part of the UK generates a number of costs and problems for Scotland and brings no profits. It is somehow forgotten that no country exists in a vacuum. To make every single political decision Scotland, as every other state, will have to take into account such forces as global economy, EU policies, and pressures from big international companies. By becoming independent, Scotland will give up its place (as part of the UK) amongst the key players and decision makers in international affairs. It will no longer have access to the G8 or UN Security Council, and while its GPD per capita will be in world’s top 8, the economy as a whole will be around 40th place. I am afraid Scotland will soon find out what is the difference between being the 3rd (current position of the UK) and 16th economy of the EU. While the voice of the UK cannot be ignored and even special demands, e.g. rebates, are fulfilled, Scotland will have to accept its spot as one amongst many others. I think the words of Spanish PM Mr Rajoy portray best how difficult it will be for Scotland to establish a beneficial relationship with the rest of the EU: “The only thing that I would like is that Scots are realistic about the consequences of secession. It is clear to me that a region which asks for independence from a state within the European Union, will be left outside the EU. It is good thing that the citizens, the Scottish people know this, along with other Europeans”. (The Telegraph http://www.telegraph.co.uk/news/politics/10479461/Spanish-PM-Independent-Scotland-would-be-out-of-the-EU.html)”.

The strangest of all is the decision to sustain monetary union with the rest of the UK. The results of economies of different strengths and sizes having the same currency can be very well observed in Greece or Spain. By retaining sterling Scotland will deprive itself of the natural defence mechanism against economic downturn. Since UK economy will be around 5 times bigger than Scottish, the price of its currency will mostly be dependent on the decisions made in London. Unlike most other countries, in times of economic downturn Scotland will not be able to count on prices of its currency to go down what would boost export and lower the entry costs for international investors.

Finally, the authors of ‘Scotland’s Future’ often repeat that Scottish finances will be as strong as UK’s even without offshore tax receipts. However, as you can see in the Estimates of Scotland financial position for 2016/17, the entire revenue generated by the oil industry will be spent the same year. Moreover, offshore tax receipts will constitute between 10.5 and 12% of Scotland’s budget, resulting in a huge dependency on oil prices.

My aim here is not to depreciate Scotland’s efforts. But the country’s best interest will depend on the ability of its citizens to make a fully informed and conscious decision regarding the independence. I am afraid the SNP chose to present solely the advantages of being a separate country, leaving any downsides or doubts out of the ‘Scotland’s Future’ manifest. The part of the blueprint regarding international policy is devoted to Britain’s and Scotland’s relationship to the EU – Scotland, just as the rest of the UK, is said to recognise the flaws of the EU but believes it is in its best interest to work on changing the union instead of leaving it altogether. I really wish the same approach could be applied to its relationship with the UK.