Strange Times And Constitutional Politics: Lessons from the breakup of Czechoslovakia

A thoroughly fascinating and enlightening Medium post from January 26, 2015 by Gordon Guthrie, former SNP parliamentary candidate, and author of Winning The Second Independence Referendum—a manifesto for Scotland and the EU after Brexit:

I thought it might be appropriate to publish a long analytical document that I circulated amongst some SNP chums way back in 2007.

It was written in the dog days of the Scottish General Election when it was clear we might be in Government — which would bring the whole question of an IndyRef came into play.

It looks at the breakup of the Czechoslovak Federation. The Velvet Divorce was very interesting for a number of reasons:

  • it was velvet, no violence, no ethnic cleansing
  • Czechoslovakia broke up despite the fact that 85% of the population favoured the continuation of the Federation
  • the split was driven by the Czechs and not the Slovaks — the nominal ‘oppressed’ minority
  • the Czechoslovak Federation, like the United Kingdom, was an instrumental union — a union for a purpose

This memorandum was written to explain the circumstances of the Velvet Divorce and to draw out some lessons for the conduct and positioning of the Independence Campaign.

Friday roundup

Scottish independence: SNP’s economic case ‘should not include oil’

BBC, 6 March:

The economic case for independence should not include North Sea oil revenues, the chairman of the SNP’s growth commission has said.

The commission, headed by former MSP Andrew Wilson, was set up by the SNP to help shape its future economic policy.

“… I can say with some certainty in terms of our own work that we’ll assume for the purposes of our projections that oil is producing zero revenues and therefore treat any revenues that we get from oil as a proper windfall to be used on intergenerational projects rather than spent on spending today.”

First solid bit of information to come out of the growth commission. Delivery of report said to be “in the coming weeks”. We await it with eagerness.

Roundup

Friday roundup

Scotland’s deficit and joining the EU

Some commentators have suggested that an independent Scotland could not join the EU with its current budget deficit, which – based on the Government Expenditure and Revenue Scotland (GERS) 2015-16 report – was 9.4% in 20151. This was the biggest in the EU, 1.9% worse than the next country, Greece, and 7% greater than the EU28 deficit of 2.4%.

But is it the case that Scotland’s ascension to EU statehood would be prevented by its current fiscal position? Regardless of your opinion on the validity of the GERS figures (which only really show how Scotland is performing as part of the UK, with limited control over economic policy2), you might reasonably expect the EU to look at these figures when considering Scotland’s membership, since they’re the only ones that exist.

The deficit would almost certainly exclude Scotland from joining the euro (a condition of which is a deficit of no more than 3% of Gross Domestic Product (GDP) and government debt of no more than 60%). But what about the Stability and Growth Pact (SGP), which some commentators cite? The EU describes the SGP as “…a set of rules designed to ensure that countries in the European Union pursue sound public finances and coordinate their fiscal policies.” Its criteria also demand a 3% deficit limit and debt-to-GDP ratio of no more than 60%3.

“It’s a myth that Scotland will have to meet the deficit criteria to join the EU.”

Discourse.scot contacted Steve Peers, Professor of EU, Human Rights and World Trade Law at Essex University, and asked how – given the deficit – he thought the SGP would play into Scotland’s EU ascension should it vote for independence. He told us: “It’s a myth that Scotland will have to meet the deficit criteria to join the EU,” adding: “The Pact isn’t binding, although some EU legislation on reducing deficits would apply. However, those laws are applied quite flexibly.”

When Croatia become the 28th member state in 2013, its deficit was over 3%.

For context, based on the latest (2015) Eurostat figures, six EU countries had a deficit of over 3% of GDP in 2015: Croatia, France, the UK, Portugal, Spain, and Greece. In 2014, 13 countries exceeded the 3% ceiling. Perhaps most interestingly, when Croatia become the 28th member state in 2013, its deficit was over 3% (6.2% in 2010, 7.8% in 2011, 5.3% in both 2012 and 2013) and has remained over 3% since (although they have since been striving to meet the 3% limit).

We also looked at the Fiscal Stability Treaty, an accord signed in 2012 to “reinforce the budget discipline of euro area governments following the sovereign debt crisis that started in 2010.” It covers euro area countries, but other EU states can join if they wish to do so4. We reached out on Twitter to Dr Kirsty Hughes – writer and commentator on international and European politics, and former senior political adviser in the European Commission – and asked whether she thought Scotland would have to sign up to the treaty. She said it wouldn’t have to, as it’s an intergovernmental treaty (as opposed to being written into existing EU treaties5) – though there would probably be pressure to do so. Dr Hughes also said that a key question would be whether the treaty would be brought into the EU on Brexit, adding that there would “equally be a reluctance at [the] moment to re-open EU treaties.”

Discourse.scot believes Scotland should aim for a balanced budget within a sensible timeframe in the event of independence. But from what we’ve learned in the process of researching and writing this post, it seems that having to cut the deficit in a rush in order to be accepted into the EU won’t be necessary. We hope this post helps bring some clarity to the issue.

Reuters: Scottish government believes it can call, win new independence vote

Reuters:

The Scottish government is increasingly confident it can win a new independence referendum and is considering calling one next year as Britain exits the European Union, sources close to the Edinburgh administration say.

“I believe the Scottish government is thinking very, very seriously about going for an independence referendum next year,” Charles Grant, an adviser to the Scottish government’s Standing Council on Europe, said on Thursday.

One Scottish lawmaker, speaking on condition of anonymity, said: “If you don’t call (an independence vote) now, it’s off the cards for a generation,” because economic damage from Brexit would make voters nervous of more change.

Has the Scottish Government budget increased or decreased since 2010?

Full Fact, a UK fact checking charity, has posted an analysis of whether the Scottish Government budget has been cut since 2010.

It also has posts on the attainment gap (“…actually a slightly smaller gap than is the case in England and compared to the average of the mainly wealthy countries covered by the PISA figures”), and whether there is demand in Scotland for a second independence referendum.