Senior European economist confirms that Scotland would not have to join euro


  By a Newsnet reporter

Giving evidence to the Scottish Parliament’s Europe and External Relations Committee, Dr Fabian Zuleeg, Chief Economist of the European Policy Centre, has given a definitive “no” in response to the question of whether an independent Scotland would be forced to join the eurozone. 

Claims that an independent Scotland would be forced to accept the euro have been widely made by the anti-independence parties and media.

Dr Zuleeg pointed to the example of Sweden which has opted not to move towards adopting the euro, to show that even new EU members could not be compelled into euro membership.

As an existing part of the EU, Scotland would be in a position of negotiating its status from within the EU rather than as an external applicant. What Dr Zuleeg’s evidence makes clear is that regardless of how a country becomes a member-state, membership of the euro could not be forced upon anyone.

Dr Zuleeg noted that stringent criteria must be met in order for a country to adopt the euro – one of which being that they have been members of the Exchange Rate Mechanism for two years – membership which is itself entirely voluntary.

Dr Zuleeg said:

“To actually join the euro you have to fulfil a number of conditions and unless those conditions are fulfilled you cannot join the euro…”

“One of the provisions is about being in the Exchange Rate Mechanism, which is entirely voluntary.

“There is no way of forcing a country to join the Exchange Rate Mechanism and you have to have your country stable in the Exchange Rate Mechanism for at least two years.

“So, what we’ve seen in the past is that countries like Sweden just simply are not part of the Exchange Rate Mechanism, so they cannot be forced to introduce the euro.

“So, no country in the European Union can be forced to introduce the euro.”

Unlike the United Kingdom and Denmark, which have opt-outs in European treaties allowing them to remain outside the eurozone, Sweden has no opt-out.  However in a referendum in September 2003, 56.1% of Swedes voted against joining the single currency.  

Public opposition to euro membership has grown in Sweden since the referendum.  In an opinion poll carried out by Sweden’s office for statistics in June 2012, over 77% were opposed to joining the euro.  The country has not signed up to the ERM, and has no plans to do so.

The experience of Sweden is paralleled by that of a number of new EU states which are also reluctant to join the euro, in particular the Czech Republic, Bulgaria, and Poland.  

In January 2012, Czech Prime Minister Petr Nečas stated that his country did not require a special opt-out in order to retain the koruna as its currency.  

Mr Nečas said: “No one can force us into joining the euro … We have a de facto opt-out.”  

Mr Nečas was referring to the freedom of EU member states to decide if or when they signed up to the European Exchange Rate Mechanism.  Mr Nečas also stated that the country will not join the ERM during his government’s term in office, which is due to expire in 2014.  In an opinion poll carried out in 2011, 78% of Czechs were opposed to joining the single currency.

In September this year, Bulgaria announced it was indefinitely freezing its plans to join the eurozone.  The country had been due to start using the euro as its currency in 2013, and the country’s euro coinage has already been minted.  However due to the eurozone crisis, the country’s Prime Minister Boyko Borisov and Finance Minister Simeon Djankov have now put the plans on indefinite hold.  

Poland has also delayed its plans to join the eurozone.  There is currently no official or binding target date for Polish euro adoption, and no fixed date for when the country will join the ERM.  Speaking in May 2011, Polish Finance Minister Jan Vincent-Rostowski said that Poland would not be joining the eurozone in the foreseeable future.

In September 2012 the Monetary Policy Council of the Polish National Bank confirmed that Poland will only enter the ERM when existing eurozone countries have overcome the current debt-crisis.

Commenting, SNP MSP Roderick Campbell, who sits on the Europe and External Relations Committee said:

“Dr Zuleeg’s evidence simply confirms what everyone has always known; that there is no mechanism that can force an EU country to adopt the euro against its will.

“That will continue to be the case for an independent Scotland that gains its own voice as an EU member-state in its own right.

“The ludicrous suggestions to the contrary by politicians in the anti-independence camp have been exposed as nothing more than mischief-making and it is time to put this myth to bed once and for all.

“It is becoming clearer by the day that the anti-independence camp is incapable of offering Scotland a positive vision of the future and is reliant upon distortions and scaremongering to try and scare people in Scotland into submission.”