Scottish fast-track to the EU

With speculation increasing over a possible second Scottish independence referendum in 2018, before the UK leaves the EU, there is now much debate as to how and whether an independent Scotland could stay in or re-join the EU.

If Scotland holds a legally and constitutionally agreed independence referendum in, say, September 2018, and votes for independence, what might then unfold? Here we look at potential routes, timing and challenges.

Brexit for the UK, Independence for Scotland?

If the UK triggers Article 50 to start Brexit talks with the EU-27 this March, then – unless there are unexpected developments – the UK will leave the EU in March 2019.

The most likely route is that by early autumn 2018, the UK and EU-27 will agree a divorce deal (including an agreement on outstanding budget liabilities, EU citizens in the UK and UK citizens in the EU and the transfer of EU agencies in the UK to the EU-27). The UK and EU-27 are also likely to agree a transition deal that might last 2-4 years while negotiating a long-term EU-UK trade deal.

If talks break down irretrievably, the UK would leave with no deal and fall back on World Trade Organisation (WTO) rules. If – which seems unlikely for now – the UK changed its mind on Brexit, then it could withdraw its Article 50 notification (this would be a political and legal question – many EU lawyers consider withdrawing notification is possible).

If Scotland votes for independence in autumn 2018, then there is an open question as to how long it would take to separate from the rest of the UK (rUK). The Scottish National Party (SNP) has suggested as little as 18 months, while Patrick Harvie, Co-Convenor of the Scottish Greens, has suggested that an independent currency could take ten years to establish fully. Whether a shorter or longer timetable, there would be a gap between the UK leaving the EU and Scotland becoming independent.

If the UK leaves the EU in March 2019, and Scotland votes for independence in September 2018, then what would be the best approach for Scotland’s future EU status – assuming Scotland does want to remain in or re-join the EU (leaving EFTA membership or other options to one side)?

A ‘Normal’ Accession Process

Assuming Scotland formally separated from rUK by mid-2020, then, under the normal accession procedure (Article 49 TEU), it could immediately apply to re-join the EU as a full Member State.

The European Commission would then assess Scotland’s application, make a non-binding recommendation to the European Council on whether to proceed and – if a green light is given – start the talks. This preliminary stage could take up to a year, but could be significantly shorter if there is a political will to accommodate Scotland quickly. This would then be followed by a phase of negotiations which would result in an accession treaty to be agreed upon by the Council with unanimity; by the European Parliament with a majority of its members; and to be ratified by all Member States according to their constitutional requirements.

Talks would probably be swift. When the three then-EFTA countries, Austria, Sweden and Finland, joined the EU, their accession talks took 13 months (to complete ‘politically’), and 17 months in total (from February 1993 to June 1994) to negotiate and sign the accession treaties. There was then a further six months for ratification – so they joined in January 1995.

Scotland already meets almost all of the EU’s acquis – from the Single Market and the Common Agricultural Policy, to the Common Foreign and Security Policy and the Customs Union. So it would already meet most of the EU’s current 35 chapters that have to be negotiated for the accession process.

Key issues to negotiate would include Scotland’s budget contribution, Schengen, justice and home affairs, and the euro. It is unlikely that Scotland would be able to keep the UK’s budget rebate but, given its receipts from EU structural and agricultural funds, it would probably face being a very small net contributor to the EU’s budget.

Scotland – like Ireland – would be likely to keep the Schengen opt-out (and so stay in the Common Travel Area). It would probably have to commit to eventual euro membership, but would not meet the criteria yet, and would, like Sweden, be able to postpone this (probably indefinitely). The UK currently has an ‘opt-in’ deal for justice and home affairs, so Scotland would need to sign up fully to this, and comply with those elements that the UK has opted-out of.

Scotland would also have to take into its own law much of the current EU laws and rules made at UK level (eg employment law), and show the EU that it had done this fully and appropriately. Given that an independent Scotland would have to add laws and rules in areas currently reserved to the UK level to its legal system anyway, this should not prove too difficult in practice.

There would also be the possibility – as in other typical accessions – for Scotland to agree some transition periods before it fully adopted EU rules that it currently does not (in justice and home affairs) or in other areas such as budget deficits (where it might well argue that, as a new state, it should have longer transition periods).

Accession talks could be completed well within one year (given that Scotland is arguably much more fully compliant with EU rules than Austria, Sweden and Finland were in 1993). If Scotland chose to hold a referendum on the accession deal, this would be seen as normal practice, as many other accession countries have done the same. Ratification across 27 Member States does now take longer than it did twenty years ago, and could well last two years. While waiting for ratification, after signing the accession treaty, Scotland could take part in EU Council meetings as an observer, but not vote.

So, on a ‘normal’ accession process, Scotland might take up to four years from becoming independent to joining – but, for the last two years, it would fully meet EU criteria and have observer status within the EU. Its formal membership date might be in July 2024.

A ‘Fast-Track’ Accession

Could the above process be sped up? Formal talks on Scotland joining the EU couldn’t start until it was independent, but there might be informal talks and assessments, if the EU-27 agreed – and if rUK agreed for that period where Scotland was still part of the UK. If the EU-27 were willing to move quickly, and to have some informal assessments ahead of the informal process, then membership talks might start before the end of 2020.

If talks concluded within say nine months, then the accession treaty could be signed by autumn 2021, and ratification could conclude by mid-2023 (unless EU Member States could speed this process up – but the EU-27 have to follow their own constitutional processes for this, so it may be unlikely). Scotland would be an observer in the EU from the end of 2021 in this case.

So whether ‘normal’ or ‘fast-track’, Scotland could be an independent Member State by 2023 or 2024, if it became independent from the UK by 2020.

Special Status?

Since Scotland is currently part of the EU, is there any way it could get a ‘special status’ and somehow stay in the EU when the UK leaves in March 2019?

This looks unlikely in a formal sense. The EU has a long track-record of different types of flexibility (the East German example being almost a mirror image of what Scotland would face – with German reunification in 1990, the former East Germany became a part of an EU Member State without meeting EU laws and rules for some time). But legally, Scotland would be part of the EU inside the UK, then part of the UK outside the EU, and then independent outside the EU. This is unprecedented.

If there was political will – amongst the EU-27 and rUK – perhaps lawyers could be tasked with finding a route and status for Scotland temporarily, but there is no obvious existing legal route. Could Scotland take over the UK’s membership – and so not even leave? The Scottish Government, having won an independence referendum, might well want to explore this, but it looks very unlikely.

Firstly, Scotland would still be part of the UK in March 2019. Secondly, under the Article 50 talks, the UK will be agreeing the terms to end its membership – ending membership and transferring it could be contradictory. Nor would the EU-27 accept Scotland taking over the UK’s current opt-outs.

Thirdly, the process for doing this is unclear. Article 48 – the provision on treaty changes – has been suggested. It would be legally plausible to use it if Scotland were allowed to simply ‘take over’ UK membership on the day the UK leaves the EU. However, due to the timeframe indicated above, Scotland is likely to first leave the EU with the UK, so Article 49 would be the appropriate legal basis.

In addition, Article 48 would not only mean similar procedural hurdles to the accession procedure requiring ratification by all Member States. The simplified procedure wouldn’t work because it is restricted to changes to Part III of the Treaty on the Functioning of the EU, so the Article 48 route would potentially open up the whole package of EU law to renegotiation, which is something key actors in the EU will want to avoid.

Hence any temporary ‘fix’ for Scotland would need to consist of an individually-negotiated solution to cover the period when it is in the UK and outside of the EU, and independent but outside of the EU (or not a full EU Member State).

Transition for rUK to Third Country Status, for Scotland to EU Member State

The real challenge for Scotland will be not to diverge from existing and future EU policies between Brexit in March 2019 and its potential accession in 2023 or 2024. Given that it could have signed its accession treaty by 2021 or 2022, there is effectively a two-to-three year post-Brexit period prior to that where Scotland needs to stay within EU policies (and converge in those few areas where it currently doesn’t meet EU law).

The most difficult stage of this transition for Scotland is likely to be while it is still within the UK (ie from March 2019 to mid- or late 2020). Unless talks break down and the UK moves to WTO rules, there will be some transition deal for the UK with the EU-27 as it moves to third country status. In the face of an independence vote, Scotland, rUK and the EU-27 would need to look at a differentiated transition process for Scotland. In order to ensure a smooth transition for Scotland, this process ought to allow Scotland to remain as far as possible compliant with the EU acquis in all policy areas, and within the Single Market. This would necessitate internal and external measures.

Internally, the differentiated path for Scotland would need to be reflected in legislation to ensure that, if rUK starts to introduce new and different regulations, those regulations do not apply to Scotland. This could be done as part of the Great Repeal Bill – for instance, by allowing changes to EU law enacted by it to be made with effect to rUK only, or by devolving all policy areas covered by it to Scotland for the period of transition to independence.

Alternatively, the same outcome could be achieved in an ad hoc manner by expressly excluding Scotland from modifications to EU law in each and every case. Scotland, through both Westminster and Holyrood, would also need to continue updating its laws to ensure it keeps up with the evolving acquis once the UK leaves the EU.

Externally, the closer that rUK stays to the EU’s Single Market and Customs Union in the first 18 months after Brexit, the simpler Scotland’s own process would be. The more rUK diverges, the more Scotland will need a differentiated transition path. While the Scottish Government paper, Scotland’s Place in Europe – setting out a differentiated route for Scotland to stay in the UK and in the EU Single Market – looks unlikely to be achieved, the paper does outline a number of the challenges and potential solutions to rUK-Scotland trade and border issues. These issues will need exploring in considerably greater depth.

Given the EU’s experience with accession talks and the path to membership – and its expertise in dealing with different needs of differing acceding countries (Sweden’s accession compared to that of Bulgaria or Croatia being a very different process) – finding the simplest and most effective path for Scotland should not be too challenging.

One possible route would involve two stages. Firstly, Scotland would have a differentiated transition than rUK (while still part of the UK) enabling it to stay within all EU policies, including the Single Market and Customs Union. Secondly, once independent, it could ask for temporary membership of the EEA and EFTA, with an exemption from EFTA’s trade deals, so that it could remain within the EU’s Customs Union. In this second stage, Scotland would also continue to fully align its policies with all EU policies beyond the Single Market as well.

Overall, focusing on a particular ‘special status’ or whether Scotland is formally within or outside of the EU may be a distraction. The real focus would need to be on Scotland maintaining its current engagement with all EU policies during its transition to independence, and then its transition back into the EU. The combination of a UK-EU27 Brexit transition deal, and an agreed EU-Scotland accession path, should ensure Scotland does not start to unravel EU policies, but rather adds those few policy areas where the UK currently has opt-outs.

Political Will

At the time of the 2014 independence referendum, the Brussels mood music towards Scotland was negative and discouraging. European Commission President José Manuel Barroso suggested it would be ‘extremely difficult’ for Scotland to join the EU. Now, the head of the European Commission office in London talks of a ‘normal’ accession process for Scotland.

There is considerable political goodwill to Scotland in EU capitals since it is facing Brexit despite having voted to remain. That political goodwill, on current trends, is likely to feed into an effort to fast-track Scotland’s EU membership in the event of a successful independence vote.

All EU Member States pay attention though to their own interests – whether in trade, accession or other talks. Spain is repeatedly raised as a Member State that could veto Scotland’s accession. Accession is agreed unanimously, so a veto could occur. But if Scotland’s independence process is legally and constitutionally sound, then despite Spain’s political concerns over Catalonian independence demands, it is not obvious that Spain would block membership (and after all, Spain is not anticipating leaving the EU, so a parallel situation to the UK and Scotland is not about to occur).

Scotland as an EU Member State

If Scotland becomes an independent EU Member State, it will need to have a strategy for its place in Europe. It will need to form good alliances and networks across the current EU-27 and take positions on issues from Russian sanctions and hosting refugees, to austerity, climate change and sustainable energy.

For now, the debate is on Brexit, independence and routes to staying in the EU. If Scotland chooses independence in the EU as its goal, it will need to move on and focus on how to play its role in Europe.

First published by European Futures and reproduced with permission (CC BY NC-ND-4.0)

Image by TPCom via Flickr  CC BY-NC-ND 2.0

Comments

  1. Derick Tulloch says

    A number of things in the scenario presented require the active or passive assistance of the UK, and then rUK Government. Precisely the flaw in the currency union proposal included in the 2014 independence prospectus

    It would be simpler and a deal less risky and open to malign influence for Scotland to pre-negotiate EFTA/EEA membership and move directly to that, which takes the pressure off and, crucially, maintains single market membership between Brexit and any future accession to the EU. Essentially do what Austria, Finland and Sweden did

  2. says

    We have always been fixated with the EU but it just doesn’t seem to me that people are writing about why we should be in but little said about being out.

    We know that Scotland exports far more to the rUK and growing steadily whereas our exports to the rEU are well down and have pretty much flat lined over the past 15 years.

    No-one seems to be looking at how the EU is being seen from within the rEU countries. Italy is in a financial crisis so might have to leave the Euro, We have elections in the Netherlands, France and Germany this year and they have significant anti-EU parties who seem to be making headway.

    Then as our debt to GDP ratio is so high we’d have to come up with plans to reduce it to the 3% required by the EU. That’s going to be difficult but if we can’t come up with a realistic plan we might not be allowed into the EU.

    I well know that Politics can get around pure financial facts but it just seems to me that right now at least Scotland would be better in the UK than in the EU.

    For financial information see http://chokkablog.blogspot.ca/2017/02/nicola-sturgeons-right-scotlands-great.html

    All of this said I did appreciate your overview of the process on becoming a member of the EU.

    • Derick Tulloch says

      Given that Ireland’s exports to the UK are 19.5% of their total exports, and that Denmark’s to Germany are 17% of their total, it is somewhat stretching credibility to imagine that 64% of Scotland’s total exports are to rUK.

      More likely the bulk of that is simply passing through.

      In any case this is rather irrelevant, unless rUK was to decide to impose trading barriers with the entire EEA. Yes, Minister, that would be a rather courageous move

  3. Bob Tait says

    I share Alistair McIntyre’s appreciation of the very good overview of the process of becoming a member of the EU, granted – as you the authors no doubt would agree – that it is something of a best-case scenario.

    Two or three nasty obstacles loom up right away, however.

    Why would Theresa May, or any other British PM or government, permit a “legally and constitutionally agreed” indyref2? Especially with Cameron’s huge mistake with the EU ref still haunting their every night and day?

    Nonetheless, let’s suppose there COULD be an indyref2. What then? There MAY be, if Brexit looks increasingly unappealing, enough Scottish voters who would like to opt for membership of the EU instead of the UK. But . . .

    The pro-indy campaign wouldn’t be able to promise EU membership, even after an inevitable delay worth tolerating, because the EU can’t promise it at that stage or promise to deliver it either sooner or later. Ditto clarity and reasonable confidence about interim and longer term currency arrangements and commitments.

    That looks like a very tough double snooker. Either no move is possible at all or the only pro-indy and pro-EU moves possible are so risky and uncertain they put even those with independence/EU membership very high on their wish list off their stroke.

    Any suggestions as to how to get out of that fix?

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