Thursday, 27 December 2012

What if ...... ?

2016 - the RUK with its new sovereign parliament of England, Wales and Northern Ireland has to decide; does it stay within the EU or take the option created by Scottish independence to put its two year's notice to leave the EU, in to Brussels.

As the debate rages in Westminster there is a run on sterling as a reserve currency as its potential as a safe home on the edge of the EU becomes uncertain to world markets coupled with what many saw as the major stupidity of kicking Scotland's petro and energy backed pound out of the sterling cartel. they are now increasingly worried about the debt bubble the City of London now sits on is unsustainable with sterling's loss of 40% ( in previous UK Government terms) of its export earning capacity and the increasing cost of cross border trade with the Scottish pound zone as sterling weakens.

The pound Scots in 2016 is already attracting inward investment and major foreign currency holdings as first quarter figures for 2016-17 indicate in the first year the newly independent Scotland will achieve a cash surplus, like its near neighbour Norway. The decision of the Scots to negotiate a new accession treaty with Brussels is a further attraction as it is clear the Scottish economy will not meet ERM and Euro alignment factors as the new Scottish economy is too strong for a weakened Euro to absorb without further fiscal crisis in its weaker economies. Making the pound Scots even more attractive to world investors
This is a potential reality Cameron and his coalition government are not even planning for. A current House of Lords Committee looking at the impact of Scottish independence on the rUK has called the coalitions current planning for a 'yes' result in the 2014 referendum as niave and failing the UK electorate as a whole with its assumption the 'Yes' campaign will lose in 2014. There are no current plans to reposition Trident at Plymouth for a start nor any serious analysis on the impact on sterling if rUK were daft enough to kick the energy backed Scottish pound out of sterling nor, it appears, do they have any real idea of the impact on rUK of an independent Scotland staying in the EU whilst the rUK leaves and what the cost to rUK as a member of EFTA will be in cash terms versus loss of influence in Europe - rebate or no rebate. There is the further problem of the impact on Northern Ireland of trying to enforce border controls between it and Eire which is an EU member.

Further what will the Government of rUK do during the two years it takes to disengage as its electorate will remain EU citizens, with the associated human rights that come with the Lisbon Treaty. What will be the impact on the City of London when overnight many of its key players are instantly turned in aliens. How will that work with visa's and new passports - who will be eligible, how will that be defined by 2018, who will run the necessary bureacracy when currently the UK Borders Agency is as effective as a sieve in preventing illegal immigration?

What agencies will be created to prevent smuggling and black marketeering between Northern Ireland and Eire and Scotland and England? What will be the impact on food imports that flow from Scotland to England and multinationals like Tesco or Sainsbury who rely on 'just in time' delivery to keep their English stores stocked when imports from Scotland or the EU are delayed for even 12 hours at border crossings by rUK customs?

We Scottish 'yes' supporters are thinking long and hard about EU membership but we are doing so from a better informed postion than offered by the Daliy Mail or the Telegraph in England. EU membership will be decided on what is best for Scotland's long term future both political and economic. The current advice from the Norwegian Foreign Minister (as an EU outsider) is Scotland should stay as EU members because the overall benefits outweigh the short term costs. Politically Scotland's left of centre political leanings makes us less fearful of the EU's social contract than the UK neoliberals at Westminster but we do have this innate stubborn streak which leads us to cut off our neb to spite our face.

If it were just as simple as waving two fingers to the EU then the UK could have been away years ago, it is clearly far more involved than that - we need to think carefully about what we may well be wishing for with Scotland in EFTA rather than the EU. My rethink on EFTA vs the EU started when I read Sir David Edward's piece on the Scottish Constitutional Future blog, recently reprinted by Newsnet Scotland

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