Haste Ye Back! How Scotland could return to the EU

The election victory of pro-independence parties in Scotland is an urgent issue for one union — the U.K. — but it may also pose important questions down the line for another: the EU.

First Minister Nicola Sturgeon’s Scottish National Party (SNP) and the Scottish Greens, which together claimed an absolute majority of seats in the Scottish Parliament, both stood on a platform of an independent Scotland joining the European Union.

Sturgeon would have to overcome many hurdles before she could arrive in Brussels to present a membership application. She’d have to secure another legal independence vote — which the U.K. government has so far refused to grant — and win it. The independence camp lost the last referendum by more than 10 percentage points in 2014 and polls suggest Scots are currently evenly split on the issue.

But if that moment does arrive, how would the EU treat such an application? And what advantages and disadvantages would an independent Scotland have in seeking membership?

A membership bid from Edinburgh would present the EU with a unique case — a country that had already been inside the bloc as part of an ex-member state asking to rejoin the fold. But, in legal terms, that context wouldn’t matter: Scotland would have to follow the same procedure of applying for membership as any other country, as set out under Article 49 of the bloc’s treaties.

Although there are a number of countries already waiting in line — mainly Western Balkan nations that applied years ago — things could go much faster in the Scottish case.

“Scotland would be assessed like any other candidate country for the state of its democracy, the state of its economy. And in many ways that looks quite positive,” Kirsty Hughes, director of the Scottish Centre on European Relations think tank, told POLITICO’s EU Confidential podcast.

“You can compare it to the Western Balkans and say, ‘Look, a long-standing democracy … it’s got its own parliament, it’s got its own legal system, it’s got its own education system separate from that of the rest of the U.K.,’” Hughes said.

However, an independent Scotland would have to set up new institutions such as a central bank, a foreign ministry and various regulatory bodies — and the EU would have to be convinced they met the bloc’s standards and were robust and resilient.

Some of the most serious scrutiny an independent Scotland would face from the EU would be on economics and public finances.

A recent study by the U.K.-based Institute for Government think tank concluded an independent Scotland risks starting out with a much higher deficit than would normally be allowed under EU rules.

The SNP has suggested Scotland would continue to use the British pound, even without the permission of U.K. authorities. It’s at least questionable whether the EU would be happy with a member state using the currency of a non-member, particularly the U.K. (The EU requires new members to commit to joining the euro — even if some have yet to adopt it after many years of membership.)

“Of course, any instability, be it of political, economic or fiscal nature, would reduce the appetite for enlargement on the EU side,” said Fabian Zuleeg, chief executive of the European Policy Centre think tank in Brussels.

He added that Brussels would also want to make sure that Scotland becomes a net contributor to the EU budget instead of an economic or fiscal problem child.

“Here the Scottish government has some homework to do to make sure everything goes smoothly,” Zuleeg said. “However, in principle, there is no reason to believe that Scotland could not act independently economically and be financially stable.”

And on the political front, Zuleeg said there would be plenty of goodwill from the EU.

“We are talking here about a part of the United Kingdom that, also because of Brexit, seeks independence and wants to belong to the EU value community,” Zuleeg said. “And in this respect, I think the mood on the EU side is rather positive.”

He suggested an independent Scotland might be able to conclude membership negotiations in two to three years, similar to Finland’s accession process in the mid-1990s.

Everybody expects the Spanish inquisition

Despite that general goodwill, Scotland would first have to pass a crucial hurdle: winning the blessing of all EU countries, as approval to start membership talks requires unanimity from current members.

Spain, in particular, has long been wary of any treatment of Scotland that could encourage independence movements within its own borders, such as those in Catalonia or the Basque country.

Ignacio Molina, a senior analyst at the Elcano Royal Institute, a Madrid-based think tank, said it would be crucial for Spain that any Scottish secession is legal under U.K. law, and not declared unilaterally as Catalonia’s regional government tried to do in 2017.

Yet as long as this condition is respected, “there won’t be a veto” by Spain, Molina predicted. He added that a calming of the political situation in Catalonia as well as the composition of the current left-wing Spanish government, which is partially supported by moderate pro-independence Catalans, “helps to put the emphasis on these technical considerations without strong politicization of the issue.”

Madrid will, however, likely demand certain assurances: “What the Spanish diplomacy has always underlined is that Scotland would need to apply as any other candidate, with no shortcuts or privileges, such as for example an opt-out from the euro currency or the Schengen zone,” Molina said.

Part of this “no privileges” approach, Molina said, is that Spain wouldn’t accept the EU giving any assurances to Scotland ahead of an independence referendum that it has a guaranteed path to membership, as was recently demanded in an open letter by more than 170 cultural figures from across the EU.

Divergence difficulties

Another more technical hurdle for a swift accession to the EU is the U.K.’s desire post-Brexit to diverge from certain EU rules, for example on food safety and animal welfare, partly to have more flexibility to strike trade deals with countries such as the United States.

A potential independence date of 2026 floated by the SNP “is only five years away, but how much might Scotland and the rest of the U.K. have diverged in EU regulation by then?” asked Hughes. “And how long will it take to come back?”

The issue raises big questions about how a border between an independent Scotland — inside the EU — and the U.K. — which would remain outside — would work. The continuing wrangling over the border between the Republic of Ireland and Northern Ireland shows just how vexing those questions can be.

Scotland would also have to find a way to bridge the gap between leaving the U.K., and thereby the EU-U.K. trade deal, and joining the EU and its single market.

One temporary solution to avoid the imposition of crippling tariffs for Scottish businesses could be to negotiate a transition phase with both the EU and U.K., during which Scotland remains a member of the post-Brexit trade deal between London and Brussels despite having left the U.K.

However, there would be many technical challenges and potential trade frictions if the U.K., for example, diverges from EU standards while Scotland at the same time tries to converge as part of its membership bid. Ultimately, Scotland might have to rely on complicated patchwork solutions to try to preserve both its trade with the rest of the EU as well as across a future Scottish-British border.

David McAllister, a German Christian Democrat with Scottish roots who chairs the European Parliament’s foreign affairs committee, said there are “many uncertainties” about the conditions under which Scotland could potentially leave the United Kingdom.

“So, at the moment, this is a purely inner-Scottish and inner-U.K. matter” that EU officials are not keen to comment on, said McAllister, speaking a few days ahead of the Scottish election.

“But should they become an independent state, they could apply for membership like any European country that is committed to share and promote the EU’s values. And we would scrutinize all the challenging political, economic and juridical issues like with any other candidate country.”