Europe break-up gives Scots choice


By George Kerevan
Another day, another independence scare story. This time we are warned (courtesy of a Strathclyde University academic) that an independent Scotland would be required to join the Europe-wide free-travel zone as a condition of EU membership. Cue stories about passport controls at Berwick and a barbed wire border along Hadrian’s Wall.

True, the Strathclyde paper pointed out the possible economic benefits of freer movement with the rest of Europe, though – predictably – that did not figure in the headlines. Nor did anyone point out that the EU member states spend much of their time bending their formal rules if it suits them. Since Scotland isn’t in the Schengen area now, continued non-compliance would be a cheap concession for Brussels to offer up in return for whatever it really wanted out of the Scots.

So, a non-story, then. And one that is so long in the tooth it has become fossilised: I first heard the “independence means passport controls” canard at least 40 years ago. Yet there is an interesting point lost in this retelling of a whiskery old tale. Why should an independent Scotland be expected to do Europe’s bidding, anyway? Why trade London’s yoke for that of Brussels, especially now?

Here is the real European news: the great, post-war plan to unite Europe has finally stalled. With the euro crisis, Project Europe is officially dead. Across the EU, parties which are dedicated to opposing the EU, or to scrapping the euro as a common currency, are gaining ground. Even in Germany, the Eurosceptic Alternative for Germany Party – founded only this year – came from nowhere to grab nearly five million votes in September’s federal elections, thus effectively knocking the Free Democrats (equivalent to our own Lib Dems) out of the Bundestag.

There has always been domestic opposition to the plan to create a federal Europe. However, the current economic crisis has proved a watershed. The austerity imposed by Berlin and the European Central Bank, coupled with the straitjacket imposed on national economies through adherence to the common currency, has led many people to think Project Europe has gone too far.

The crisis of the euro has little to do with national governments running excessive budget deficits – that was true only of Greece. Rather, the euro system locked in its members at exchange rates favourable to German exporters – something German politicians want to keep. Without the possibility of domestic currency devaluation, southern Europe finds itself with a built-in productivity disadvantage vis-à-vis Germany. The only recourse is to slash wages and public spending – spurred on by Berlin.

Beyond the current budget and currency problems lies a deeper European productivity malaise. As a result of “green” energy policies imposed by Brussels – code for subsidising French and German energy firms at the consumer’s expense – European industry pays twice as much for electricity, and four times as much for gas, as in the United States. That is a crippling cost disadvantage, as we’ve already seen at Grangemouth. All the wage freezes in the world won’t stop the European petrochemicals industry being hammered by cheap US shale gas.

As a result, revolt is brewing, especially in France, once the EU’s main cheerleader. After the war, the French political elite saw the EU as a vehicle to keep Germany in check, and to give Paris equal billing in the world with Washington. But Berlin no longer needs Paris as a passport to political legitimacy and has imposed its own economic policy on Europe, leaving the battered French economy struggling.

Result: Marine Le Pen’s right-wing, anti-EU National Front has just won a crucial by-election, knocking the ruling Socialists into third place. The Front is now the most popular party in France with 24 per cent of the vote – a timely warning to British Labour that they can’t assume a split on the right will automatically favour the left.

What is Le Pen doing with her newfound popularity among the French white, working class? She wants to use next year’s EU elections to create an anti-EU, anti-common currency bloc across the European Parliament. If, as is very possible, anti-EU parties do well in these elections, such a bloc could dominate the European Parliament for the first time.

Here’s my point: sometime soon growing anti-EU and anti-common currency feeling in Europe will coalesce to kill the euro. The EU won’t disappear, but it will revert to something more like the loose “Europe of the (Sovereign) Nations” favoured by General de Gaulle.

Germany and a few of its satellite economies might keep the euro but France and southern Europe will revive their own currencies.

I expect the UK will distance itself from this project, hoping to cosy up to the US. However, Washington’s growing interest in the Pacific suggests Britain will be left out in the Atlantic cold.

Where does this leave Scotland? We can choose to be a region of (essentially) Little England. Or we can defend our own economic interests – which includes telling Berlin and Brussels where to get off.

I suspect that Scotland could do well inside a looser European arrangement provided we kept our own currency. Co-operation with other like-minded countries will be easier in a non-federal Europe of the Nations. Otherwise we should consider emulating Norway and retaining our economic independence.

The SNP government in Scotland is – remarkably–- the most successful anti-austerity political movement in Europe, having won a spectacular majority in 2011 on the basis of opposing the cuts proposed (and implemented) by Labour’s chancellor Alistair Darling and the subsequent Tory-Lib Dem coalition. It would be ridiculous now for Scotland to vote for independence only to accept austerity imposed by Berlin and Brussels.

Courtesy of George Kerevan and the Scotsman