Bitter truths in Brussels

“Scotland is going to leave on January 31 and, assuming no extension to the transition period, Scotland will be out, out, out by the end of the year.”

These blunt words from a senior European official, said without rancour or regret, encapsulate a harsh reality in the week that the UK quits the EU after 47 years, dragging Scotland with it, as Nicola Sturgeon says, against its will.

Another harsh reality is that there will be no quick nor easy route back for the Scots. Many assume it will be relatively plain sailing to (re)join the EU given that Scotland, unlike, say, Albania or, frankly, Bulgaria, already meets most of the accession criteria. But this is either disingenuous or ignorant. Or, maybe, wishful thinking.

Scotland will miss out from the day we leave the EU as a powerless part of the UK until the day we re-enter as a vigorous, upbeat independent state and its newest member. (Lesley Riddoch, The National)

We may have voted 62% Remain in 2016 and, arguably, 75% pro-EU in #GE2019 three-and-a-half years later but a national debate on an independent Scotland in Europe/EU has barely begun. Pace Sturgeon, the currency issue is far from settled. Do we need to or want to join the euro? What will be the relationship between any Scottish central bank and the Bank of England’s monetary policy committee in rate-setting? It’s convenient now to blame “the Tories” for a decade of austerity (tell that to the 32 local authorities!) but how much of a spending squeeze will be required and/or politically feasible post-independence? What debt-to-GDP ratio is the target? Not forgetting our old friend, the budget deficit?

All of these issues and more need a more extensive and profounder discussion than so far. But there’s another side to this complex story that was raised time and again during the recent – and final as such – visit by 15 Scottish journalists to the European Commission: divergence.

America – or Europe?

That visit coincided with Davos where Steve Mnuchin, US treasury secretary, made crystal clear that the UK will have to pivot to America if it is to get the full-scale free trade agreement (FTA) it seeks with the US. That means regulatory de-alignment with the EU. Equally, Phil Hogan, EU trade commissioner, and his team, including Sabine Weyand, the director-general for trade who was deputy to Michel Barnier in the Brexit negotiations, insist there can be no such pivot to US standards without serious consequences for the future relationship.

None of this transatlantic tug-of-war/love is without consequences. One is that the more the UK opts for de-alignment from the EU – as in Chancellor Sajid Javid’s FT interview – the more rudimentary or “bare bones” any EU-UK FTA will be. Or, as Ursula von der Leyen, Commission president, has put it pithily: “no quotas, no tariffs – and no dumping.” That means sticking to rules on environment, labour and state aid.

Ironically, two days after the Javid comments, Boris Johnson’s negotiating team, led by David Frost, delivered reassurances at complete variance with what the Chancellor had said. Once again, what Johnson and his Cabinet say in public – getting both an EU and a US deal in place this year – is at odds with what the real negotiators are saying and doing. The sheer scope of the future EU-UK relationship goes far wider than an FTA: it is, senior Brussels officials say, unprecedented, covering 30 separate work streams such as security and fisheries. And, the more comprehensive the parties wish it to be, the more likely there will be an extension agreed (before July 1).

Another consequence is that, if indeed there is a bare bones agreement with a great deal of divergence from the EU acquis, the economic consequences for the UK will be extremely serious. What remains of the manufacturing base, especially foreign-owned companies in the auto and./or aerospace sector, will be severely eroded. If not wiped out.

For Scotland and any future plans it may have to re-join the EU as an independent member state in its own right the outlook is stark. The more any future EU-UK relationship is based on divergence the harder it will be for Scotland to prove it meets the EU’s acquis and, obviously, that will be even truer if the period between leaving and re-joining is prolonged.

And, as discussions in Brussels underlined, there may well be sympathy for the Scottish case but it is, for now, entirely irrelevant to what’s at stake now. As we know from the last 43 months, that’s even more true of Westminster and Whitehall.

Further reading: No way back, David Martin in The Scotsman

Would Scotland want to rejoin? Iain Macwhirter, The Herald

Irish cousins will continue flourishing, Lesley Riddoch, The National

Scotland’s European choices, Kirsty Hughes, SCER

Flexibility does not come free, Sam Lowe, CER