Brexit, laws, currency, deficits, borders, passports and trade Kirsty Hughes examines some of the key hurdles an independent Scotland would have to overcome to rejoin the EU as part of our Scotland's Future series.


Whether and how quickly an independent Scotland could join the European Union frequently provokes intense debate between the pro- and anti-independence sides.

The pro-Union side rush to argue Scotland won’t meet the EU’s criteria, it will take forever, it’s a bad idea, while independence supporters argue, after Brexit, Scotland would be rapidly welcomed back in the EU.

Certainly, looking back over the EU’s 64-year history, accession to the EU appears in many ways rather straight-forward. Twenty-two states joined the EU after the original six member states launched their project back in 1957 – and just one state, the UK, has subsequently left. It’s not obvious why an independent Scotland would look more problematic, as an EU candidate country, than, say, Greece after its dictatorship, the divided island of Cyprus or Latvia and Lithuania after decades in the Soviet bloc.

Yet joining the EU is both a political and technical process. It doesn’t happen over-night. Candidate countries have to face up to taking on board a huge range of diverse, complex laws, institutional arrangements and policy approaches. And, since starting and ending talks to join the EU depend on all 27 current member states agreeing, high politics can easily intervene.

But what is remarkable is not so much the times when a country’s application has been stalled or blocked – France’s President de Gaulle blocking the UK in the 1960s or Turkey’s talks foundering soon after their launch in 2005 – but how flexible the EU has been in bringing in a very diverse range of countries. An independent Scotland, in this broad picture, looks well placed to re-join as a full member state, not least having been in the EU for 47 years as part of the UK.

But now Brexit has happened, an independent Scotland applying to join the EU would have to face a full, normal accession process with all the detailed technical scrutiny and political dynamics that would entail. Even to start talks, Brussels must be convinced that a state is a fully-functioning democracy and market economy and has the capacity to take on all the EU’s rules and laws.

Scotland is already a democracy and market economy today but as an independent state it will have to establish many new institutions, laws and policies – whether a second chamber of parliament, a constitution or a central bank. That will take time and would be scrutinised by Brussels. Yet, if independence happened in the next few years, Scotland would surely have a big advantage over many earlier EU applicants since many, perhaps most, of its laws would still be aligned with EU ones.

Even so, the European Commission lists 35 policy areas for accession talks – from public procurement to tax, trade and foreign policy. It is an intense process and not for the faint-hearted.


READ MORE SCOTLAND'S FUTURE:


And what of the high politics? Some argue Spain would probably veto a Scottish membership application not to encourage Catalan independence supporters. Yet central to EU governments, and not only Spain, is rather that Scottish independence should be a legal, constitutional process and that Scotland is an internationally recognised state.

Certainly, there is considerable sympathy for pro-European Scotland post-Brexit across the EU. But the potential fragmentation of the UK is also viewed by many governments with concern – the UK has been trouble enough in recent years. So EU governments will remain neutral in the face of Scotland’s constitutional debate.

But if Scotland chose independence, then as a European state it would be fully eligible to apply to join the EU. And EU observers, asked to comment on such a scenario, frequently suggest that an independent Scotland would be welcome and face a rather swifter accession process than the more complex path facing current western Balkans candidates. Another small, northern European country as an EU member state is not a highly problematic enlargement. And, given the central and east European candidate countries completed talks and ratification in five to six years, it’s not obvious why Scotland would take longer.

Yet there are obvious hurdles on the way. And it’s not surprising that questions of currency, borders and deficits keep recurring in this discussion. From an EU perspective, if an independent Scotland was using the pound when it applied to join this would be unprecedented: an accession candidate using the currency of a third country, the UK, its commitments to price stability and exchange rate concerns all dependent on London. Nor could an independent Scotland commit, as it would have to, to eventually joining the euro if it didn’t have its own currency.

HeraldScotland:

But within the vagaries of SNP currency policy, the intention is at some point to introduce a Scottish currency. If that happened before EU accession – likely, after all, to take at least five years from the day of independence – then there would be no problem. If, though, Scotland asked to join the EU while still using the pound, then one of two things would happen. Either this request would be rejected or it might be accepted on a temporary basis for a small number of years with a clear transition plan to a Scottish currency agreed.

What is also clear is that Scotland would not get a euro opt-out as the UK had – and Denmark has. So while it is unlikely to meet the criteria for being in the euro at the time of joining the EU, it would need to commit to doing so in the future (as all member states must – albeit eight member states are still not in the euro).

A bigger challenge in joining the EU is likely to be meeting the Union’s deficit criteria. EU member states are meant to keep their fiscal deficits within a three per cent limit. True, these limits are currently suspended due to the economic impact of the Covid crisis. And debate is already under way about changing those criteria to reflect new economic realities, including potentially encouraging climate-friendly investment. But it will be a tough debate and change may be a long time coming. So, for now, an independent Scotland’s deficit would need to be on a clear path towards the 3% limit by the time it joined the EU.

Once in the EU, Scotland’s border with the rest of the UK would be an external border of the EU governed substantially by the EU-UK trade agreement. The challenge of the border is a core one in the independence debate. But viewed from Brussels establishing a new external border would be essentially a technical task. Arguments over the pros and cons of being in the EU’s single market versus Scotland’s larger dependence, most of all in services, on the UK market are not an issue for EU accession but for Scottish politics.

But Brussels will have a say over one crucial part of a future England-Scotland border. The Scottish Government is clear that an independent Scotland would expect to be part of the UK-Ireland Common Travel Area – ensuring passport-free travel and the right to live and work across Scotland, the rest of the UK and Ireland.

This looks potentially straightforward but it will require the agreement of the then UK and Irish governments, and the agreement of Brussels to Scotland opting-out, like Ireland, from the Schengen passport-free zone.

Lurking behind all these debates, and not often given the attention they deserve, are questions on three key transition paths – disentangling from the UK, establishing an independent state, and rejoining the EU. Transition options from the UK to the EU, especially on borders, need setting out. As Brexit has shown, setting up a hard trade border is technically and politically challenging and economically damaging. Although there will be benefits of opening Scotland’s border to the EU27.

For instance, an independent Scotland could ask to stay in the EU-UK trade agreement for a short time while it agreed with the EU a temporary trade agreement ahead of membership, helping to smooth the transition to new borders. Of course, in 10 years’ time – given the huge problems the UK Government is finding on borders post-Brexit – it may be a better, more open trade deal will have been agreed between the UK and EU which would lessen the border challenge. But, for now, the reality is the current trade and co-operation agreement which will determine the border Scotland will finally face to England and Wales.

Some, including the Alba party, argue an independent Scotland should aim instead to join Norway in the European Economic Area (EEA). Yet Norway is a rule-taker – without a seat, vote and voice at the EU’s top tables.

And being outside the EU’s customs union would cause many of the problems seen today in UK-EU trade due to Brexit. At the same time, being in the EEA would mean a major regulatory border to England and Wales.

In the end, an independent Scotland could surely join the EU as a full member state. But it will face political and policy challenges and choices on that path – and it is time to spell out how those challenges would be managed.


Kirsty Hughes is the director of the Scottish Centre on European Relations