Scotland: Would Holyrood Pay for Independence in Euros?

By Professor Robert Hazell

Scots' hopes of automatic entry into the EU are misplaced

Alex Salmond has confidently asserted that, if Scotland becomes independent, it will automatically remain a member of the European Union. This will be a central issue in the Scottish independence debate, because the Scottish National Party would like to reassure voters that if they leave one union -- the United Kingdom -- they will retain the security blanket of remaining within another -- the EU.

Scotland's First Minister assumes that an independent Scotland would inherit all Britain's international rights and obligations as a successor state; and that, along with automatic membership of the EU, it would inherit the UK's current treaty opt-outs, on the euro and the Schengen Agreement, which allows passport-free travel among 26 European countries. Is that confident set of assumptions justified?

These questions are being explored in a new inquiry launched in the summer by the House of Commons Foreign Affairs Committee, into the foreign policy implications of a separate Scotland. Its first evidence session in October was largely devoted to whether an independent Scotland would remain within the EU. As the expert witnesses explained, this was partly a question of international law, but also one of European realpolitik. On both counts, Salmond's confidence seems misplaced.

In international law there are two forms of state succession in issue here:

Continuation If Scotland broke away from Britain and became an independent state, the remainder of the United Kingdom (rUK) would be the continuing state, retaining the rights and obligations of the UK. Scotland would be the successor state.

Dissolution The UK would dissolve into two independent states, of which neither would be a continuing state.

Dissolution is the argument favoured by some Scottish nationalists, but it faces three serious difficulties. First is precedent. Ireland joined the UK in 1801, and seceded in 1922, without dissolving the UK. If Ireland's secession did not dissolve the UK, why would the independence of Scotland do so? The second difficulty is constitutional. The UK is a union state, with a sovereign parliament in Westminster. An independent Scotland would not have the power to destroy the UK as a legal entity.

The third difficulty is that dissolution is not a realistic option. The rUK would assert itself, and be recognized by the international community, as the continuing state -- albeit with territory reduced by a third. For the rest of the world, that provides continuity.

All international treaties would maintain their legal force as between the rUK and the other contracting parties. The rUK would continue to be the member state represented in international organizations such as the UN, the WTO, NATO, the IMF -- and the EU.

The closest precedent is the dissolution of the Soviet Union in 1991. The Russian Federation asserted itself as the continuing state, which was accepted by the international community. As would be the case with rUK, the nuclear issue was a key factor. Russia wanted to remain a nuclear power, and keep its seat and veto power on the UN Security Council. So an independent Scotland would have to renegotiate all its international treaties: Britain is party to 3,000 multilateral and 10,000 bilateral treaties. And it would have to re-apply for membership of international organizations, including the EU.

The EU accession process typically takes years, but Scotland's application might be fast-tracked. Scotland easily meets the Copenhagen criteria, having fulfilled the EU's rights and obligations for 40 years. But since unanimity is required, a single state such as Spain could block Scotland's accession. Spain would not be alone in not wanting to encourage other secessionist movements. And an independent Scotland would not inherit the UK's opt-out from the euro: since 2004, all new member states are legally obliged to adopt the euro.

Of course, the politics of the euro might have changed by the time Scotland became independent. But one constant is going to be the attitude of Britain. If Scotland wants its application to be fast-tracked, and con-sideration given to renewed opt-outs, it will need friends. The most powerful in the Council of Ministers would be the UK.

The UK government has reached out to facilitate the independence referendum, leaving observers from Canada and Spain expressing amazement at the civilized way the negotiations have been conducted. That generosity could be stretched if the referendum turns nasty. The Scottish gov-ernment has a strong interest in running a decent campaign, to retain the goodwill of the British government and the goodwill of the international community.

Professor Robert Hazell is Director of the Constitution Unit, School of Public Policy, University College London. He gave evidence to the Foreign Affairs Committee in October

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