Transition from the UK and to the EU

Fabian Zuleeg | 17 March 2020

© 2019 SCER

In case Scotland becomes independent, the question of EU membership would arise. The overarching goal for an independent Scotland is likely to be membership of the European Union as soon as possible, with transition/interim arrangements to minimise the economic disruption in the transition from the UK via independence to being an EU member state. As the UK has left the EU, an independent Scotland would need to apply to become a member of the European Union under Article 49 Treaty on European Union (TEU), like any other aspirant accession country. This would only be possible if Scottish independence is achieved in a constitutional manner and Scotland is internationally recognised as an independent country; if there was any doubt on the legitimacy of the independence process, the doors of the EU are likely to be closed for an independent Scotland for the foreseeable future.

To become a member of the European Union, the applicant country has to fulfill the Copenhagen Criteria, which include commitment to democracy, a functioning market economy and the ability and commitment to take on the body of law of the European Union. If Scotland were to leave the United Kingdom, it is likely to be close to fulfilling these criteria but with two caveats. Firstly, the more Scotland has diverged from the EU, which is likely to be determined by Westminster and the length of the period of the UK being outside the EU before Scotland becomes independent, the bigger the necessary readjustment will be. Secondly, there are a number of independent institutions that will be required for EU membership, which Scotland would have to set up before joining.

In addition to being a technical and legal process, accession is clearly a political process. The starting point of this process is an unequivocal commitment by the accession country to EU membership, including a willingness to fulfill the conditions for accession. While there might be the possibility of temporary derogations in some areas (if and only if a clear case can be made why this is in the EU’s interest), the expectation would be that EU membership for an independent Scotland would include all rights and obligations of the Treaties; the exceptions the UK negotiated as a member would not be on offer. If Scotland commits to EU membership and the associated conditions, it is likely that an independent Scotland could join the EU rather quickly, given the path to independence via Brexit and the close alignment of Scotland with the EU body of law.

A Transition Phase to Exit the UK?

Nevertheless, the implication is that there will be a time period between independence and EU membership. Becoming an EU member will take time. It is not feasible or credible that EU membership will immediately follow from independence. In particular, there will potentially be a gap between an independent Scotland being inside the UK economic framework and entering into the EU’s single market and customs union. Such transitions impose adjustments and uncertainty, which implies economic disruption and thus costs. It is thus in the interest of Scotland to minimise the number of transitions and the period of uncertainty. But it is also in the interest of the EU to make the accession process as smooth as possible, not least to ensure that the Scottish commitment to the EU is maintained.

One way of bridging the gap between independence and EU membership is to extend the period Scotland remains in the UK economic framework beyond the point of de jure independence; economically, there could be transition agreements that imply that de facto economic independence comes after de jure independence. This would need to be a time-limited arrangement, not dissimilar to the transition period the EU and the UK agreed upon within the Withdrawal Agreement, dependent on the agreement of both an independent Scotland and the rest of the UK.

Transition to the EU

While some make the argument for full European Free Trade Association/ European Economic Area (EFTA/EEA) membership to bridge the period until an independent Scotland joins the EU, this carries the danger of being stuck in this state forever, not realising the ambition of EU membership, and not achieving the power and influence an EU member has. In addition, for many EU member states, it would confirm, in their view, that Brexit was only a convenient vehicle to achieve independence but that Scotland is not committed to EU membership and values. EFTA is also technically different from EU membership, for example in terms of governance and with regard to international trade. Joining the EEA – with EFTA countries Iceland, Liechtenstein and Norway and the EU27 as members – entails that Scotland would first have to join EFTA. That would require the agreement of the EFTA/EEA 3 and Switzerland (being in EFTA but not the EEA). Scotland could then apply to join the EEA. The EFTA countries would be reluctant to amend their arrangements for a temporary member, on the way through to EU membership, only being in EFTA and the EEA for a limited amount of time. Most likely for an independent Scotland to join EEA would require negotiating a new pillar (i.e. separate arrangements that take into account the specificities of the Scottish situation), which could be as tricky and lengthy as negotiating EU accession.

One feasible route to bridge from de facto independence to EU accession might be a comprehensive and ambitious pre-accession agreement, coming into force as early as possible. In terms of economic arrangements, it could contain a provision for associate EEA membership, essentially ensuring that an independent Scotland would be within the single market from the moment the pre-accession agreement comes into force, offering a mechanism of dynamic alignment that would minimise divergence between Scotland and the EU even if the time period until membership is longer than expected. A temporary docking on to the EEA (rather than permanent membership) could be an economically, technically and politically feasible economic ‘bridge’ to membership. Such an ambitious pre-accession agreement would be a clear signal that an independent Scotland is committed to EU membership, and that this aspiration is recognised and supported by the EU. It would open the door to further cooperation, including potentially the participation in EU programmes, in areas such as research and education.

A comprehensive pre-accession agreement would provide an independent Scotland with a ‘safe harbour’, no matter how long the delay to membership. While it is likely that this period is comparatively short, it is an effective insurance mechanism that provides continuity and minimises disruption. But it would require a real commitment by Scotland to EU membership and its obligations. What implications such an arrangement would have for the Scotland-UK relationship will depend not only on Scotland’s separation process from the United Kingdom but also on where the EU-UK relationship is at that point. Potentially it could be a win-win, with Scotland helping to bridge the gap between the EU and the UK, including in relation to Northern Ireland, but this will depend on the cooperation and good will of all parties involved.

Leaving the UK and joining the EU for an independent Scotland will inevitably imply economic changes, raising new challenges and opportunities. Scottish independence implies making different choices, including on EU membership. If an independent Scotland aspires to become a member of the European Union, a pre-accession agreement promises to minimise uncertainty, making the process as smooth as possible, which would be in the interests of Scotland and of the European Union.

 

 

 

Fabian Zuleeg | Twitter

European  Policy Centre

Dr Fabian Zuleeg is Chief Executive and Chief Economist of the European Policy Centre. He has worked as an economic analyst in academia and the public and private sectors. He is Honorary Fellow of the Edinburgh Europa Institute and Honorary Professor at Heriot-Watt University.