Scotland votes on independence on September 18 after centuries of being united with England. The referendum on devolution is being carried out in a constitutional and peaceful way, writes Prince Michael of Liechtenstein.
London agreed to the referendum realising that secession is better than forcing Scotland to remain in the union against the wishes of a majority of the Scottish population. A union is only strong if membership is voluntary.
London’s response is more reasonable than Madrid’s reaction to the demands of Catalonia. Madrid claims that a referendum on independence among Catalans would be unconstitutional and illegal.
It appears the Scottish referendum will be a close call with both sides neck-and-neck, but actual voting is often different to opinions given for a poll. Independence is also a road into the unknown.
Europe is worried by the possible outcome. A successful vote for independence appears dangerous and undesirable because it could set a precedent. But what are the consequences for Scotland, England and the EU?
If we remove national feelings in Scotland towards independence we can look at the following:
Scotland has benefitted from UK transfer payments. An independent Scotland is likely to run a fiscal deficit in excess of six per cent. Hopes of monopolising revenues from North Sea oil and gas will not compensate. If Scotland, as seems likely, has to assume its responsibility for its share of the UK’s sovereign debt, this would exceed 80 per cent of Scottish GDP.
Scotland, as part of the UK, is a member of the EU. Will an independent Scotland remain a member? Spain for one would veto it. But can the EU and its constitution, committed to the principle of self-determination and subsidiarity, deny membership to a region which is already a member and becomes independent? My guess is that there will be a lot of noise, some vetoes, but the EU will find a membership compromise. The EU does not need another headache.
The question of Scotland’s currency remains open: Will independent Scotland continue with the British pound?
This leads to what remains of the United Kingdom. It would be freed of transfer payments but England, Wales and Northern Ireland would be weaker in a European context. Geostrategically what is left of the union would lose some of its important naval bases in Scotland. The pound could strengthen mid-term and the changes would also help to keep the Conservative party in power.
So what does it mean for Europe? The secession of Scotland is likely to strengthen the eurosceptics in England. An EU without England would be weaker in many respects, and Germany would lose its ally in trying to keep EU member states on a path of not overspending. The north-south balance would be weakened.
All of this may not be good, but it is far from catastrophic.
But it could be a long-term positive for Europe. It could break up the sclerotic national state policy. Governments in all member states will have to be more attentive and give greater respect to the principle of subsidiarity, acknowledge the need for strong delegation of legislative and administrative powers to local authorities, improve their services and be closer to their people in order to avoid secession.
This could lead to healthier competition, forcing national and local governments to increase sustainable citizen satisfaction and productivity in these areas. This sustainable citizen satisfaction cannot be achieved through short-term welfare bribes in order to win the next election.
Europe will fail with harmonisation and only succeed on the principle of subsidiarity by recognising the economic, cultural and traditional differences and particularities of its regions. A common market creates open borders between its members but should also allow differences and competition on the way to economic, social and cultural excellence.
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