The Scottish Government published its White Paper on Scotland’s Future: Your Guide to an Independent Scotland on Tuesday 26th November 2013 and the next day it published Scotland in the European Union. The headlines of these documents are:
1) The Scottish Government is fully committed to Scotland remaining a member of the EU and points out that voting “Yes” in the Scottish referendum is a safer way of ensuring continued membership of the EU for Scotland than voting “No” because of the real risk of a UK referendum on membership of the EU some time after the next UK general election (possibly 2017) in which a majority of the UK may vote against EU membership leading to Scotland’s withdrawal from the EU even if a majority of people in Scotland vote for EU membership.
2) The Scottish Government believes that EU membership for Scotland will follow on from UK membership of the EU without a break. It has set a target for Scottish independence of March 2016 and believes that the necessary negotiations for the terms and conditions of Scottish membership of the EU can be concluded and ratified by all the relevant parties between the date of the independence referendum on 18 September 2014 and Scotland becoming an independent State in March 2016.
3) The Scottish Government believes that the terms of Scottish membership of the EU should be based on the principle of “continuity of effects”. On this basis the Scottish Government expects to be able to negotiate with the EU for the continuation of the opt out from the Euro, the opt out of the Schengen Area and the flexible opt in arrangements in justice and home affairs. It does not seem to think it is necessary to negotiate with the EU a share of the UK budget rebate. Instead it believes that it can simply negotiate a deal with the rest of the UK as the share of the budget rebate in the current EU financial framework agreed up to 2020. The implication is that in EU law terms rUK will keep the budget rebate and Scotland will have to negotiate with rUK for its share of that rebate as part of the overall financial negotiations between Scotland and rUK on the share of assets and liabilities of the UK that Scotland and rUK would inherit.
4) The Scottish Government believes that it can justify the retention of University fees for rUK students (up to £9000 per year) after independence even though it will retain free University tuition for Scottish students and for students from other parts of the EU apart from rUK. It only addresses this issue in the main White Paper when addressing education on pages 199-200. There is no discussion of this matter in the separate White Paper on Scotland in the European Union. Therefore, there is no worked up case as to how this clear discrimination against the citizens of another EU Member State (rUK) can be justified under EU law. Prohibition on discrimination against nationals of other EU Member States in tuition fees in higher education has been found to be in breach of EU law at least since Case 24/86 Blaizot v University of Liège  ECR 379 (see the discussion in Craig and de Burca, EU Law Text, Cases and Materials, 5th ed, OUP, 2011 at 836-841). It is hard to see the Court of Justice of the EU accepting the Scottish Government’s arguments as to how this overt discrimination against students from rUK can be justified. There is therefore a substantial hole in the Scottish Government’s plans for funding higher education in Scotland. Scottish Universities rely on the fee income from rUK students (4,800 of them were accepted into Scottish Universities in the first year of operation of charging them up to £9000 per year in 2012-13).
Timescale and Legal Basis for Scotland’s membership of the EU
The Scottish Government believes that Scotland’s membership of the EU as an independent State should be brought about by a Treaty amendment under the Ordinary Revision Procedure in Article 48 of the Treaty on European Union (TEU) rather than by the procedure in Article 49 TEU by which “Any European State … may apply to become a member of the Union”. The Scottish Government believes Scotland is already a member of the Union as part of the UK and wants to conclude the necessary EU Treaty changes before it becomes a “European State” and therefore it is inappropriate for it to use Article 49 to apply for membership. This is a clever argument. However, the problem the Scottish Government faces is first of all to convince the UK Government to propose this solution to the rest of the EU after the independence referendum (as the Scottish Government acknowledges it requires the Government of a Member State, the Commission or the European Parliament to initiate the Treaty revision process in Article 48 TEU and immediately after the referendum the Scottish Government will not be a Government of a Member State). At present the UK Government may well regard Article 49 TEU as the correct process for the negotiations of Scottish membership of the EU while insisting that rUK automatically remains a Member State of the EU in an unaltered way as the UK. However, UK politics may intervene to assist the Scottish Government but only after the next UK general election on 7 May 2015. After that time if the Conservatives win (and who knows what happens if Labour wins or there is a coalition but it is not unlikely that the consequence might be similar) the UK Government will want to open Article 48 Treaty negotiations to revise the Treaties (at least to remove the commitment to an “ever closer union” from Article 1 of the TEU or to disapply it to rUK) in preparation for an in/out referendum on rUK membership of the EU. This would combine with the necessary treaty changes for Scotland’s membership of the EU and avoid a separate accession treaty negotiation and ratification under Article 49 TEU. However, even if the UK Government initiates the negotiations under Article 48 TEU (in October 2014 or June 2015) the problem remains that all the other EU Member States must accept the amendments required to make Scotland a Member State of the EU before this can happen. The Spanish Prime Minister is unlikely to allow the negotiations concerning Scottish EU membership to proceed quickly for fear of sending a message to Catalonia that an independence referendum there could lead to continuity of membership of the EU. Therefore, it seems highly unlikely that Scotland’s membership of the EU would be wrapped up in a Treaty revision process under Article 48 (or 49) TEU in time for all the Member States to ratify the Treaty amendments by March 2016. The Scottish Government should acknowledge that this timescale is incredibly optimistic and be prepared to push back the date of independence if this is necessary to secure continuity of membership of the EU for the people of Scotland.
No direct democratic control on Scotland’s membership of the EU or the terms of its membership
From a democratic perspective it seems odd that a newly independent Scotland is prepared to surrender a large amount of sovereignty to the EU without holding a referendum on whether the people of Scotland want Scotland to be a Member State of the EU. There is no doubt that the present Scottish Government advocates reform of the EU from within (but does not indicate any Treaty changes it thinks are necessary to achieve that reform) but makes a virtue of not threatening to leave the EU if it does not get the reform it wants and a virtue of the fact that there will not be an opportunity for the people of Scotland to decide on EU membership. The people of Scotland are deemed to favour a currency union with the rest of the UK rather than a new Scottish currency or moving towards the adoption of the Euro. The people may not want this and of course, even if they do, they may not get it because the Government of rUK may not be willing to negotiate a sterling currency union with Scotland (they are certainly not legally obliged to do so). The Scottish Government therefore seems to be rather reckless in not having a plan B if the rUK Government refuses to negotiate a sterling currency union or, perhaps more likely, talks eventually fail because the Scottish Government, or indeed the rUK Government, cannot accept the restrictions on fiscal sovereignty that such a union would almost inevitably entail (see the increased limits on the fiscal autonomy of Member States of the Eurozone that have been created to try to make that currency zone work).
No guarantee that the other EU Member States will agree to Scotland retaining the UK’s special opt out protocols
The principle of “continuity of effects” is one that I agree with. However, there is no guarantee that all the other EU Member States will agree to it. Some of them, perhaps even a majority, may well start the negotiations from the perspective that Scotland should accept all the obligations of EU membership that an acceding State has to accept. This would mean no application of Protocols 15, 19, 20 and 21 to Scotland but only to rUK as the successor State to UK. Thus Scotland would not have a clear legal right not to aspire to membership of the Eurozone (Protocol 15), would not be allowed to opt out of Schengen (Protocol 19), would be denied the right to continue to opt in to the British Isles Common Travel Area (Protocol 20) and would not have the flexibility to chose when to opt in to legislation in the justice and home affairs area on certain cross-border criminal and civil matters (Protocol 21). Therefore the Scottish Government should admit that in all these matters they are relying on what they can negotiate with the other EU Member States.
The Scottish Government is clearly most concerned about the prospect of having to join Schengen and abandon the British Isles Common Travel Area because it creates the spectre of the erection of border controls at the Scottish-English border. The Scottish Government may well be creating a sine qua non for Scotland’s membership of the EU that is not so very different from Mr Cameron saying he wants some renegotiation of the present terms of membership of the UK in the EU before he will recommend to the British people that they stay in the UK in a referendum. If Scotland is not allowed to retain the Common Travel Area the Scottish people have every right to expect a future Scottish Government to cease to be part of the EU given the following statement in Scotland in the European Union at p.96:
“There are no circumstances in which the Scottish Government would countenance any measure being taken that jeopardized the ability of citizens across the rUK and Ireland to move freely across the borders as they are presently able to do. It is for this reason that following independence Scotland will remain part of the Common Travel Area (CTA).”
Even the Scottish Government in Scotland in the European Union accepts that there is no certainty that other EU Member States will accept Scotland’s continued membership of the CTA noting that it is “unlikely that the Commission will use the moment of Scotland’s independent membership of the EU to insist that a new internal border is created between Scotland and the rest of the CTA.” (p.99) It may be “unlikely” that the Commission will suggest this but it is certainly not impossible that some Member States will use this as a bargaining chip with Scotland to prolong the Treaty negotiations and to extract some other concessions from Scotland. The language of the White Paper is much less strong on the opt out in justice and home affairs in Protocol 21 (“the Scottish Government will seek to retain the current flexibility to opt into new measures on Justice and Home Affairs” at p.224) and one can imagine a scenario where the Scottish Government trades that off in order to secure the Common Travel Area opt out. This risks Scotland having to opt in to new legislation in civil and criminal cross-border cooperation that is not well suited to Scotland and which it would not be able to block because (in many cases) qualified majority voting applies in the Council. The lack of care of the Scottish Government to protect its position in the civil aspects of Justice and Home Affairs can be inferred from the carelessness of the glossary entry for “Justice and Home Affairs (JHA)” in Scotland in the European Union at p.103: “The EU policy area dealing with criminal matters. Its purpose is to [sic] improve police and judicial cooperation across EU Member States to combat and prevent crime, racism and xenophobia.” To be fair at p.13 of Scotland in the European Union the Scottish Government defends its desire to retain the opt out in Protocol 21 even though it would generally opt in to new measures on the basis that “There may, however, be instances where the specific characteristics of Scots law mean that it would not be in Scotland’s best interests to do so.” It is to be hoped that the Scottish Government recognises that this statement can apply to civil law as well as criminal law.
The Scottish Government also seems to be preparing the ground for Scotland not retaining the opt out Protocol on the Euro (even though it will seek to) by arguing in Annex 6 to Scotland in the European Union that even without the opt out Protocol Scotland could not be forced to join the Euro. The reason for this is that stable membership of the Exchange Rate Mechanism (ERM) for 2 years is one of the convergence criteria that EU Member States which are not in the Eurozone (in EU Treaty speak these are Member States with a derogation) must meet before they can be accepted into the Eurozone (see Article 140(1) Treaty on the Functioning of the European Union (TFEU) and Article 3 of Protocol 13 on the Convergence Criteria). The Scottish Government asserts that there is no legal obligation on EU Member States that are not in the Euro zone to join the ERM and therefore if the Scottish Government were not to join the ERM it could not be forced to join the euro. However, Article 3(4) TEU says that the currency of the “union is the euro” and Article 140(1) TFEU requires the Commission to report on the “progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union”. The political reality is that new Member States to the EU are not offered a Protocol allowing an opt out from the obligation to adopt the euro and they are instead expected to aim to achieve that membership. The only Member State that is deliberately setting out its stall against euro membership without such a Protocol is Sweden (Denmark and the UK have Protocols). It would be difficult, and rather hypocritical, for Scotland to become like Sweden and be a member of the EU with no Protocol categorically asserting that it is “under no obligation” to adopt the euro.
Over optimistic assertions about Scotland’s membership of the EU and continued cooperation with rUK
The White Paper may be guilty of exaggerating an independent Scotland’s potential influence in the EU by overstating the extent to which the EU operates by “consensus” (see pages 212 and 217 of Scotland’s Future Your Guide to an Independent Scotland). Although consensus decision making in the Council is encouraged, my own personal experience of EU legislation in the relatively non-political field of private international law over the last 14 years shows that increasingly measures are adopted on the basis of what has been agreed by qualified majority in the Council Working Party (even though no formal votes are taken).
The Scottish Government might also be said to be slightly selective in the information that it chooses to highlight about the economic case for Scottish membership of the EU. For example, on page 56, by using 2006 as the base line, it gives the impression that Scotland’s exports to the EU are increasing a lot faster than its international exports to non-EU States, but if the base line chosen had been 2002 a very different picture would emerge.
The Scottish people have to be aware that if they are attracted to the idea of Scottish independence by reasserting Scottish sovereignty over decision making they should know that Scotland intends to lose some of that sovereignty to decision making in Brussels and to joint decision making in the British Isles. The vision of “independence” offered by the Scottish Government is of course one that is really very “interdependent” with the rest of the UK (notably in the common travel area, common currency, common research councils, etc) and therefore dependent on agreement with the rest of the UK. That agreement with the rest of the UK cannot be guaranteed just because the Scottish Government says that it wants it. The vision of Scotland’s relationship with the EU is one where Scotland will not be troubled by things that it does not like because it can assert the principle of “continuity of effects” in terms of the basis of its EU membership and emphasise the principle of consensus for future lawmaking. However, the reality is that all the other EU Member States may not accept the continuity of effects so Scotland may not get the terms of membership of the EU it wants (and is very unlikely to get the terms it wants in the time scale it suggests with significant consequences for when Scotland can become an independent State), and that an independent Scotland will find itself in a minority in some future EU legislation and have to accept something it does not like as the price to be paid to be part of a supranational union.
Paul Beaumont is a Fellow of the Royal Society of Edinburgh and Professor of European Union and Private International Law at the University of Aberdeen