Kirsty Hughes and Tobias Lock
In-Depth Analysis
In the event of independence, how might Scotland pursue EU membership? Kirsty Hughes and Tobias Lock explore the principal options, arguing that ensuring Scotland’s continuity with EU laws and policy would ultimately be more important than attempting to secure a fast-tracked route to membership, which would be completed in any case after Brexit.
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With speculation increasing over a possible second Scottish independence referendum in 2018, before the UK leaves the EU, there is now much debate as to how and whether an independent Scotland could stay in or re-join the EU.
If Scotland holds a legally and constitutionally agreed independence referendum in, say, September 2018, and votes for independence, what might then unfold? Here we look at potential routes, timing and challenges.
Brexit for the UK, Independence for Scotland?
If the UK triggers Article 50 to start Brexit talks with the EU27 this March, then – unless there are unexpected developments – the UK will leave the EU in March 2019.
The most likely route is that by early autumn 2018, the UK and EU27 will agree a divorce deal (including an agreement on outstanding budget liabilities, EU citizens in the UK and UK citizens in the EU and the transfer of EU agencies in the UK to the EU27). The UK and EU27 are also likely to agree a transition deal that might last 2-4 years while negotiating a long-term EU-UK trade deal.
If talks break down irretrievably, the UK would leave with no deal and fall back on World Trade Organisation (WTO) rules. If – which seems unlikely for now – the UK changed its mind on Brexit, then it could withdraw its Article 50 notification (this would be a political and legal question – many EU lawyers consider withdrawing notification is possible).
If Scotland votes for independence in autumn 2018, then there is an open question as to how long it would take to separate from the rest of the UK (rUK). The Scottish National Party (SNP) has suggested as little as 18 months, while Patrick Harvie, Co-Convenor of the Scottish Greens, has suggested that an independent currency could take 10 years to establish fully. Whether a shorter or longer timetable, there would be a gap between the UK leaving the EU and Scotland becoming independent.
If the UK leaves the EU in March 2019, and Scotland votes for independence in September 2018, then what would be the best approach for Scotland’s future EU status – assuming Scotland does want to remain in or re-join the EU (leaving EFTA membership or other options to one side)?
A ‘Normal’ Accession Process
Assuming Scotland formally separated from rUK by mid-2020, then, under the normal accession procedure (Article 49 TEU), it could immediately apply to re-join the EU as a full Member State.
The European Commission would then assess Scotland’s application, make a non-binding recommendation to the European Council on whether to proceed and – if a green light is given – start the talks. This preliminary stage could take up to a year, but could be significantly shorter if there is a political will to accommodate Scotland quickly. This would then be followed by a phase of negotiations which would result in an accession treaty to be agreed upon by the Council with unanimity; by the European Parliament with a majority of its members; and to be ratified by all Member States according to their constitutional requirements.
Talks would probably be swift. When the three then-EFTA countries, Austria, Sweden and Finland, joined the EU, their accession talks took 13 months (to complete ‘politically’), and 17 months in total (from February 1993 to June 1994) to negotiate and sign the accession treaties. There was then a further six months for ratification – so they joined in January 1995.
Scotland already meets almost all of the EU’s acquis – from the Single Market and the Common Agricultural Policy, to the Common Foreign and Security Policy and the Customs Union. So it would already meet most of the EU’s current 35 chapters that have to be negotiated for the accession process.
Key issues to negotiate would include Scotland’s budget contribution, Schengen, justice and home affairs, and the euro. It is unlikely that Scotland would be able to keep the UK’s budget rebate but, given its receipts from EU structural and agricultural funds, it would probably face being a very small net contributor to the EU’s budget.
Scotland – like Ireland – would be likely to keep the Schengen opt-out (and so stay in the Common Travel Area). It would probably have to commit to eventual euro membership, but would not meet the criteria yet, and would, like Sweden, be able to postpone this (probably indefinitely). The UK currently has an ‘opt-in’ deal for justice and home affairs, so Scotland would need to sign up fully to this, and comply with those elements that the UK has opted-out of.
Scotland would also have to take into its own law much of the current EU laws and rules made at UK level (eg employment law), and show the EU that it had done this fully and appropriately. Given that an independent Scotland would have to add laws and rules in areas currently reserved to the UK level to its legal system anyway, this should not prove too difficult in practice.
There would also be the possibility – as in other typical accessions – for Scotland to agree some transition periods before it fully adopted EU rules that it currently does not (in justice and home affairs) or in other areas such as budget deficits (where it might well argue that, as a new state, it should have longer transition periods).
Accession talks could be completed well within one year (given that Scotland is arguably much more fully compliant with EU rules than Austria, Sweden and Finland were in 1993). If Scotland chose to hold a referendum on the accession deal, this would be seen as normal practice, as many other accession countries have done the same. Ratification across 27 Member States does now take longer than it did twenty years ago, and could well last two years. While waiting for ratification, after signing the accession treaty, Scotland could take part in EU Council meetings as an observer, but not vote.
So, on a ‘normal’ accession process, Scotland might take up to four years from becoming independent to joining – but, for the last two years, it would fully meet EU criteria and have observer status within the EU. Its formal membership date might be in July 2024.
A ‘Fast-Track’ Accession
Could the above process be sped up? Formal talks on Scotland joining the EU couldn’t start until it was independent, but there might be informal talks and assessments, if the EU27 agreed – and if rUK agreed for that period where Scotland was still part of the UK. If the EU27 were willing to move quickly, and to have some informal assessments ahead of the informal process, then membership talks might start before the end of 2020.
If talks concluded within say nine months, then the accession treaty could be signed by autumn 2021, and ratification could conclude by mid-2023 (unless EU Member States could speed this process up – but the EU27 have to follow their own constitutional processes for this, so it may be unlikely). Scotland would be an observer in the EU from the end of 2021 in this case.
So whether ‘normal’ or ‘fast-track’, Scotland could be an independent Member State by 2023 or 2024, if it became independent from the UK by 2020.
Special Status?
Since Scotland is currently part of the EU, is there any way it could get a ‘special status’ and somehow stay in the EU when the UK leaves in March 2019?
This looks unlikely in a formal sense. The EU has a long track-record of different types of flexibility (the East German example being almost a mirror image of what Scotland would face – with German reunification in 1990, the former East Germany became a part of an EU Member State without meeting EU laws and rules for some time). But legally, Scotland would be part of the EU inside the UK, then part of the UK outside the EU, and then independent outside the EU. This is unprecedented.
If there was political will – amongst the EU27 and rUK – perhaps lawyers could be tasked with finding a route and status for Scotland temporarily, but there is no obvious existing legal route. Could Scotland take over the UK’s membership – and so not even leave? The Scottish Government, having won an independence referendum, might well want to explore this, but it looks very unlikely.
Firstly, Scotland would still be part of the UK in March 2019. Secondly, under the Article 50 talks, the UK will be agreeing the terms to end its membership – ending membership and transferring it could be contradictory. Nor would the EU27 accept Scotland taking over the UK’s current opt-outs.
Thirdly, the process for doing this is unclear. Article 48 – the provision on treaty changes – has been suggested. It would be legally plausible to use it if Scotland were allowed to simply ‘take over’ UK membership on the day the UK leaves the EU. However, due to the timeframe indicated above, Scotland is likely to first leave the EU with the UK, so Article 49 would be the appropriate legal basis.
In addition, Article 48 would not only mean similar procedural hurdles to the accession procedure requiring ratification by all Member States. The simplified procedure wouldn’t work because it is restricted to changes to Part III of the Treaty on the Functioning of the EU, so the Article 48 route would potentially open up the whole package of EU law to renegotiation, which is something key actors in the EU will want to avoid.
Hence any temporary ‘fix’ for Scotland would need to consist of an individually-negotiated solution to cover the period when it is in the UK and outside of the EU, and independent but outside of the EU (or not a full EU Member State).
Transition for rUK to Third Country Status, for Scotland to EU Member State
The real challenge for Scotland will be not to diverge from existing and future EU policies between Brexit in March 2019 and its potential accession in 2023 or 2024. Given that it could have signed its accession treaty by 2021 or 2022, there is effectively a two-to-three year post-Brexit period prior to that where Scotland needs to stay within EU policies (and converge in those few areas where it currently doesn’t meet EU law).
The most difficult stage of this transition for Scotland is likely to be while it is still within the UK (ie from March 2019 to mid- or late 2020). Unless talks break down and the UK moves to WTO rules, there will be some transition deal for the UK with the EU27 as it moves to third country status. In the face of an independence vote, Scotland, rUK and the EU27 would need to look at a differentiated transition process for Scotland. In order to ensure a smooth transition for Scotland, this process ought to allow Scotland to remain as far as possible compliant with the EU acquis in all policy areas, and within the Single Market. This would necessitate internal and external measures.
Internally, the differentiated path for Scotland would need to be reflected in legislation to ensure that, if rUK starts to introduce new and different regulations, those regulations do not apply to Scotland. This could be done as part of the Great Repeal Bill – for instance, by allowing changes to EU law enacted by it to be made with effect to rUK only, or by devolving all policy areas covered by it to Scotland for the period of transition to independence.
Alternatively, the same outcome could be achieved in an ad hoc manner by expressly excluding Scotland from modifications to EU law in each and every case. Scotland, through both Westminster and Holyrood, would also need to continue updating its laws to ensure it keeps up with the evolving acquis once the UK leaves the EU.
Externally, the closer that rUK stays to the EU’s Single Market and Customs Union in the first 18 months after Brexit, the simpler Scotland’s own process would be. The more rUK diverges, the more Scotland will need a differentiated transition path. While the Scottish Government paper, Scotland’s Place in Europe –setting out a differentiated route for Scotland to stay in the UK and in the EU Single Market – looks unlikely to be achieved, the paper does outline a number of the challenges and potential solutions to rUK-Scotland trade and border issues. These issues will need exploring in considerably greater depth.
Given the EU’s experience with accession talks and the path to membership – and its expertise in dealing with different needs of differing acceding countries (Sweden’s accession compared to that of Bulgaria or Croatia being a very different process) – finding the simplest and most effective path for Scotland should not be too challenging.
One possible route would involve two stages. Firstly, Scotland would have a differentiated transition than rUK (while still part of the UK) enabling it to stay within all EU policies, including the Single Market and Customs Union. Secondly, once independent, it could ask for temporary membership of the EEA and EFTA, with an exemption from EFTA’s trade deals, so that it could remain within the EU’s Customs Union. In this second stage, Scotland would also continue to fully align its policies with all EU policies beyond the Single Market as well.
Overall, focusing on a particular ‘special status’ or whether Scotland is formally within or outside of the EU may be a distraction. The real focus would need to be on Scotland maintaining its current engagement with all EU policies during its transition to independence, and then its transition back into the EU. The combination of a UK-EU27 Brexit transition deal, and an agreed EU-Scotland accession path, should ensure Scotland does not start to unravel EU policies, but rather adds those few policy areas where the UK currently has opt-outs.
Political Will
At the time of the 2014 independence referendum, the Brussels mood music towards Scotland was negative and discouraging. European Commission President José Manuel Barroso suggested it would be ‘extremely difficult’ for Scotland to join the EU. Now, the head of the European Commission office in London talks of a ‘normal’ accession process for Scotland.
There is considerable political goodwill to Scotland in EU capitals since it is facing Brexit despite having voted to remain. That political goodwill, on current trends, is likely to feed into an effort to fast-track Scotland’s EU membership in the event of a successful independence vote.
All EU Member States pay attention though to their own interests – whether in trade, accession or other talks. Spain is repeatedly raised as a Member State that could veto Scotland’s accession. Accession is agreed unanimously, so a veto could occur. But if Scotland’s independence process is legally and constitutionally sound, then despite Spain’s political concerns over Catalonian independence demands, it is not obvious that Spain would block membership (and after all, Spain is not anticipating leaving the EU, so a parallel situation to the UK and Scotland is not about to occur).
Scotland as an EU Member State
If Scotland becomes an independent EU Member State, it will need to have a strategy for its place in Europe. It will need to form good alliances and networks across the current EU27 and take positions on issues from Russian sanctions and hosting refugees, to austerity, climate change and sustainable energy.
For now, the debate is on Brexit, independence and routes to staying in the EU. If Scotland chooses independence in the EU as its goal, it will need to move on and focus on how to play its role in Europe.
This article expands on a related piece published in the Herald.
Kirsty Hughes
Friends of Europe
Dr Kirsty Hughes is Senior Fellow at Friends of Europe, Brussels and a writer and commentator on European and international politics and policy. She has worked for organisations including Chatham House, the Centre for European Policy Studies, Oxfam GB and the European Commission.
Tobias Lock
University of Edinburgh
Dr Tobias Lock is Senior Lecturer in European Union Law and Co-Director of the Edinburgh Europa Institute at the University of Edinburgh. His research focuses on the EU’s multilevel relations with other legal orders, including the European Convention on Human Rights.
Shortlink: edin.ac/2lYVViS | Republication guidance
Please note that this article represents the view of the author(s) alone and not European Futures, the Edinburgh Europa Institute or the University of Edinburgh.
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There seems to be a failure to understand the difference between compliance with the EU acquis in the sense of a body of laws and the established institutions required to enforce it. An independent Scotland would need to create a wide range of regulatory authorities and systems of appeal essential to applying the EU acquis. For example, counterparts to the Competition and Markets Authority (CMA), Office of Communications (OFCOM), Competition Appeal Tribunal (CAT), etc. etc. plus parliamentary oversight committees. Examination of the EC reports on accession and candidate countries will show these are far from trivial. The case of Iceland is illustrative, with the EC having called for significant changes before making progress on chapter negotiations, despite it being legally closely aligned through EEA membership. None of this is insuperable, but it requires planning and it is disruptive to markets and greatly increases the workload of the Scottish legislature and parliament.
The countries you hold up – Austria, Sweden and Finland – all had their own currencies and central banks, and therefore complied with Chapter 17 of the accession criteria. Scotland has neither of those, and it seems impossible that Chapter 17 would even be opened until these have been set up.
You then say that Scotland meets ‘almost all’ of the accession criteria. ‘Almost all’ is meaningless in an academic context. Worse, it is meaningless to the point of deception when the chapter that Scotland does not meet in any way, shape or form – the said Chapter 17 – is the one that will give an independent Scotland most difficulties, and is the one that could postpone Scotland’s full membership for decades while she tries to set up a stable currency and central bank.
You make the bold assertion that ‘Scotland…would be likely to keep the Schengen opt-out’. Where is your evidence for this? Have you got a Commission or Council ruling that has not been made public, for example?
You say that Scotland will be able to postpone joining the euro ‘probably indefinitely’. First, where is your evidence? Second, what, exactly, are you meaning here? Are you suggesting that the Scottish Government pledge to join the euro in bad faith? Or are you suggesting that the Scottish economy will never be in a decent enough shape to join? Putting in a politically incendiary statement such as this without backing it up with any evidence, or, at least, your view of how this can be achieved, is irresponsible.
You say that, ‘There is considerable political goodwill to Scotland in EU capitals…’ Evidence? References?
‘…it is not obvious that Spain would block membership.’ Evidence? Maybe the Spanish Prime Minister saying he wouldn’t veto, for example?
I could go on like this, paragraph by paragraph, but time, alas, is against me! (Incidentally, you use the words ‘likely’ and ‘unlikely’ twelve times in the article, and the word ‘probably’ four times – meaning, in the absence of any relevant evidence backing up your assertions, that the associated statements are all simply conjecture and not fact.)
Oh, and you omit any reference to France’s constitution binding it to holding a referendum on any future EU expansion (and Scotland’s accession would, technically, be an expansion, as the EU would be down to 27 states from the date of the UK’s leaving). When would it be held, pray tell?
The Glasgow Herald called this a ‘landmark report’. I had been expecting a rigorous academic work that was fully referenced, preferably peer-reviewed, and gave hard evidence of what the Herald was claiming. Instead, this is nothing more than an exercise in wishful-thinking. While I can’t blame you for the way the Herald presented this, I am very angry that I have been misled.
Hi Caius,
It’s good of you to attempt to explain to a senior lecturer in European Law and co-director of Edinburgh’s Europa Institute and to someone who has worked for Chatham House, the Centre for European Policy Studies and the European Commission what terms mean in an academic context, the frequency of certain word choices, the value (none) you place on assessments they have made on the basis of the experience they have accumulated over their careers and your expectations as to what boxes they have to tick before you can take their writing seriously.
I’m sure they’ll give your comments due appreciation over the course of developing any future contributions.
In the meantime, you demand evidence. Evidence, evidence and evidence. It is interesting to observe the range of things you demand evidence for. They range from quotidian ignorance, for example:
• You demand evidence that Scotland will be able to postpone joining the eurozone indefinitely. Setting aside your apparent ignorance of Denmark, Sweden, Poland, the Czech Republic, Romania, Croatia and the United Kingdom, Europa — the European Union’s official web portal — provides handy substantiation for such an ‘incendiary claim’. There you will find, if you look, an explanation of how joining the eurozone is a series of voluntary decisions made by EU member states at the time of their choosing.
(It is interesting to observe that you provide no evidence, reason, or substantiation for your claim that postponing eurozone implementation would be incendiary. Or for that matter, any of the other claims you advance in your post.)
• An ignorance of statements from Guy Verhofstadt, Manfred Weber, Sigmar Gabriel, Jacek Saryusz-Wolski, Gunther Krichbaum, Jean-Christophe Lagarde, David McAllister, Joschka Fischer, Markus Rinderspucher, Ska Keller and the list goes on; or of polling of the attitudes amongst EU states for Scottish membership…
• Ignorance about why and how the United Kingdom and Ireland have exemptions from Schengen, the process of Schengen implementation and why Scotland would likely be exempted.
And then there’s the great game of pretend where you:
• Expect that the unevidenced claim that Spain would block Scotland’s EU accession should stand until it is explicitly ruled out — an argument from ignorance in both senses of the term. As attempts to shift the burden of proof go, I think I’d rate that as pretty pathetic. Meanwhile, Spanish foreign ministers like José-Manuel García-Margallo have repeatedly said that if Scotland’s independence is consistent with UK’s constitution order, ‘Spain would have nothing to say’ and that their local politics and Scotland’s situation were ‘fundamentally different’.
I wish you well with your manifest dyspepsia and hope your attitude improves with the weather as we move into spring.
Having worked on east European accession I’d say Ewan, and to a degree Caius, have it right. It’s the institution building that would be key, the economic and monetary chapter most obviously. Establishing a central bank (private provider?), currency and reserves can be done – others have – but Scotland will still have its business and domestic debt denominated in sterling and vulnerable to adverse shifts.
What might be called the Salmond alternative, relying on sterling and BoE, now controlled by a non-EU entity would not see iScotland meeting all the EU tests of fiscal and monetary competence.
And there are more obscure ones, such as each country’s independent statistical office that the Commission puts great store in (despite Eurostat!). Given the SG’s current capacity, I would guess it would take 2-3 years to develop this and the required datasets.
But it is a political club – the question is if Brexit is not a disaster, would the political optics of an iScotland still view the EU in the same way? For instance, passing its newly acquired fishing rights back over to the EU (an exclusive competence)? It may then prefer a Norway option.
To give just one example of why Scotland will NEVER again EU membership if independent, you need only look at the budget deficit – rapidly heading towards 9%. To join, accession states need a deficit no greater than 3%. With separation from our biggest trading partner (England) and loss of the benefits of the Barnett formula, Scotland hasn’t a hope of achieving this.
Brexit will be a hard blow to the UK, but Scotland being out of the EU and UK will be disasterous. If we vote for Independence, this will happen. This article illustrates why it’s more important than ever to to resist this suicidal option, and we must campaign NOW to ensure it doesn’t.
…if I may make a comment…about the lose of the Barnett formula, I would say – from a purely accountancy viewpoint – that, although Scotland would no longer have the Barnett formula, that loss may be offset, as Scotland would get all tax revenues raised in Scotland (Scotland would no longer contribute to UK budget) which would be collected by a new Scottish tax authority, and it would get all the oil revenues corresponding to its share (one would need to know how much of such revenues currently goes to the UK budget..); additionally, all sales by Scottish companies, which currently reach the EU via England, could become Scottish export. In fact, in the event of independence, nothing would prevent Scots products – which are currently shipped to EU countries from English seaports, and which currentlly would not count as Scottish export toward the EU – from being sent to the EU direcly from Scotland.
I mean that any estimate would need to accurately take into account: a) at the level of a new Scottish State, both what Scotland would lose and what Scotland would earn, i.e. both side of a double-entry booking (therefore, it would not be accurate to assume that a Scottish State budget would start with a 9% deficit or more; here, a detailed estimate of all new revenue sources would be necessary to come to a reliable calculation); the latest estimate that I have read in a document of the UK Parliament (http://researchbriefings.files.parliament.uk/documents/SN06625/SN06625.pdf, at page 8) states that, even after all revenues raising power deriving from the Scotland Act 2016 come into force, the Scottish Parliament will only get 50% of its budget from devolved and assigned taxes, so that the Barnett formula is obviously important, but it is so in the context of the current constitutional framework, where all personal income tax and corporate income tax, even if raised in Scotland, are centrally collected by HMRC and not by a Scottish tax authority, and where the Scottish Government only gets, through HMRC, the portion corresponding to the “Scottish Rate of Income Tax”, not to mention VAT); b) at the level of trade accounts and thus of Scottish export (which would generate taxable profits of businesses having tax residence in Scotland), one would need to consider all duty-free export that would directly go from Scotland to the single market (without the need to cross England for transit).
In my view, all this would need to be considered – from a strictly accountancy viewpoint – to get an accurate estimate of what would be the “starting deficit” (if any) of a new Scottish State.
For the rest, the scenario of the UK divorce appears to be heading toward a “bad divorce” from the EU, and continued UK dutry-free access to the single market could not be taken for granted. E.g., in a hypothetical scenario where the financial passport would no longer be available to financial institutions based in the UK, but would be available to financial institutions based in a new indy Scotland (at least) within the EEA , it would be reasonable to expect substantial inward investments in Scotland. Admittedly, these are hypothesis, but asserting that a Scottish budget would start from a 9% deficit is also an hypothesis..for the reasons above indicated
The route must surely lie via initial EFTA membership but this has been left to one side. There are huge practical implications for the people of Scotland in this question. For example could Scotland never leave EFTA if it votes for independence in Autumn 2018? That means free movement of persons and recognition of professional qualifications (for example, European doctors in the NHS) remains intact in Scotland even as the rUK leaves both EU and EFTA (in event of a hard Brexit). Programs such as Erasmus and Horizon 2020 from which Scottish universities benefit might remain in place in Scotland but be lost in rUK. Scots require a lot more information about feasibility and timescale of EFTA as well as EU membership.