Wednesday, August 22, 2007

Yet more Tory Euro-tosh

Oh dear, here we go again. Ill informed drivel coupled with wilful mischief making by politically reactionary forces in Scotland - a combination certain to get RRR irritated. I am referring to this report from "the Tories" which is headlined: "An independent Scotland would be forced to use the Euro if it wanted to join the European Union as a sovereign country, according to the Scottish Conservatives." The content is cited in the following terms:
“It is now clear that we (i.e. Scotland) would have no choice in the matter and that membership of the Euro would be an automatic consequence of independence. There is absolutely no guarantee that the special status enjoyed by the UK would automatically transfer to an independent Scotland. This would create a very damaging situation for Scottish businesses, where they would be operating with a different currency from their major markets in the rest of the UK. Alex Salmond needs to stop misleading the Scottish people and now come clean, admitting that as an independent Scotland, we would have no choice but to join the Euro.”

It is, in fact, the Scottish Tories who should stop misleading the Scottish people.

First: the facts. It is entirely true that all countries acceding to the EU since, and including, those who joined in 1995 have been obliged to sign up for eventual membership of the euro - the EU´s single currency - this being an integral part of the EU Treaties. The opt-out from the requirement to participate in the EU single currency which both the UK and Denmark secured in the run-up to the signing of the Treaty on European Union (TEU) back in 1992 has not been available to any country subsequently joining the EU. It was only agreed back then because of the particular circumstances of the day. It is highly unlikely (though not impossible - we are back in "successor state??" territory) that a comparable opt-out will ever again be available to a prospective EU member state (if that is the position in which an independent Scotland finds itself). However, even although obliged by the EU treaties to become a member of the euro-zone, a member state will only be permitted to adopt the euro if it meets the so-called convergence criteria as set out in the TEU, the most difficult of which traditionally has been reducing its budget deficit to below 3% of Gross Domestic Product. For the record, Slovenia became the 13th member of the euro-zone from January 1st this year, and Malta and Cyprus will take the number participating in the euro-zone to 15 from January 1st, 2008.

Second: the actual position for non-members of the euro-zone as we know it to be. The UK and Denmark retain the opt-out and so are under no legal obligation ever to join the euro-zone. Both countries currently hold to the position that whilst in no sense ruling it out, they will not join unless this is supported in a national referendum. For the rest, and this includes Sweden where just such a referendum held in September 2003 went against joining the euro-zone (despite the fact that Sweden met the convergence criteria), there is simply no question that any country can be - or ever will be - forced into joining the euro-zone. Any suggestion to the contrary (including that made by Scotland´s Tories) is arrant nonsense and reveals a truly worrying degree of economic, political and legal illiteracy. The question as to whether an independent Scotland should exercise its right to join the euro-zone (subject to meeting the convergence criteria) is, of course, quite a different matter and (for the record) one on which RRR remains agnostic, this being a matter requiring further research.

The apparent content of this report truly is bewildering and deeply troubling, and suggests that one or more of the following propositions must be true;

ONE; that the Scottish Tories collectively are sufficiently stupid and ill-informed to have been duped into believing that an independent Scotland would be dragooned into the euro-zone against the wishes of either or both the Scottish government and its electorate;

TWO; that the Scottish Tories´policy-ideas cupboard is so bereft of constructive policy proposals that might help Scotland that they are reduced to wilfully misleading the Scottish public of the true situation vis-a-vis the Euro;

THREE; that the Scottish Tories have just discovered that all new member states (and not only those joining since 2004 but also those who joined in 1995) have had to sign an accession treaty committing them to eventual membership of the euro-zone. (Hell, if the Tories think that the SNP Government could have saved some money by not publishing the White Paper on Scotland´s constitutional future, RRR could have saved them a few pounds in consultant´s fees if only they had phoned him on this matter.)

Fit to govern...?? Scotland needs an independent think tank on EU policy so that the type of rubbish coming out of this so-called "investigation" can be debunked as soon as it´s published!


Anonymous Anonymous said...

I struggle to understand this. As far as I can understand RRR the legal position is that once convergenge criteria have been met then everyone acceding from 1995 has to join the Eurozone. The political position is that this would be unlikely to be enforced. This is a political judgement and almost certailly correct but it is not arrant nonsese to say that they would be forced, in the sense that they have a legal obligation to join since of course they do. This of course means that RR is obfuscating when he talks of a 'right' to join the Euro. He means an obligation it is the right to enforce that obligation which the Eu is unlikely to enforce

Monday, August 27, 2007  
Blogger RoadrunnerReturns said...

The EUropean Commission has no power (other than persuasion) to "force" a non-euro country to achieve the convergence criteria. That is, a member may decide deliberately not to fulfil one (or more) aspects of the convergence criteria (e.g. central bank independence, 2 years membership of the ERM, etc.) and the Commission has no power either under the Treaty or the Stability and Growth Pact to require it to meet those criteria; e.g. the UK is not currently a member of the ERM - and the convergence criteria stipulate that a prospective member of the zone has to be inside the ERM for a minimum of 2 years before being eligible to join. There is no provision to require a country to join the ERM. This means that the EU Institutions lack the legal power to insist that a non-member fulfils its Treaty obligation and join the euro. This is more than a matter of politics - it is the position under EU law. It is, therefore, arrant nonsense to suggest that an independent Scotland could legally be forced to join the euro-zone.

Tuesday, August 28, 2007  
Blogger Lord Stair said...

The current Scottish government has established an economic advisory council, no member of which has any links to the governing party and which is charged with conducting an objective analysis of the Scottish economy in order to identify weaknesses and advise how they might be eliminated. The analysis will measure the Scottish economy against the so-called ARC countries, which are considered reliable comparators. Productivity in Scotland seems lower than in the ARC countries on available figures. However, these figures make no allowance for the so-called “branch-office syndrom” whereby profits generated in Scotland are registered elsewhere and in particular in England. If the approriate allowance is made it may become apparent that the currrent productivity figures are distorted to the benefit of the English and to the detriment of the Scottish economy. In other words Scottish productivity may be higher and English productivity lower than the current figures suggest and Scotland might be compared more favourably to the ARC countries. It is perfectly possible that on an objective analysis the Scottish economy is robust enough to sustain statehood.

Now, no such study has ever been conducted before and in this respect the current opposition in Scotland has been wrong footed. They have no answers. In anticipation of results tending to support the economic viability of statehood they are, thus, reduced to spreading disinformation.

Of course the results may show such weaknesses as to indicate that statehood would not be economically viable. They would, however, indicate what would have to be done to render the economy more vibrant. Consequently, whatever the results, the opposition will remain on the defensive.

In any event having to trade with England with a different currency would make no difference. The entire Eurozone trades with the UK and the UK’s refusal to abandon its currency does not create any appreciable trade barriers.

Tuesday, December 04, 2007  
Anonymous Anonymous said...

Anyway, if Scotland were to leave the UK and become independant I think the EU would consider Scotland allready being an EU member and that Scotland would find itself being in the same position as the UK with regards to the EU and the single currency.

If all else fails then the Refomr Treaty or what ever name people want to give it allows for an EU member state to leave the EU and become independant.

Lets look at Ireland and Northern Ireland. There is no further argument for Northern Ireland to be given back to Ireland since they are both member states where people from either side have the right to live and work in either side under EU law.

The same would be for Scotland unless it intended to never be part of the EU which could be the only reason Scotland wants independance. Because when a country joins the EU that country surrenders its legal system to EU law.

Tuesday, February 24, 2009  
Blogger mewmewmew said...

Of course the results may show such weaknesses as to indicate that statehood would not be economically viable. They would, however, indicate what would have to be done to render the economy more vibrant. Consequently, whatever the results, the opposition will remain on the defensive.

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Sunday, February 13, 2011  

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