This post first appeared on Scots Gazette on 6 December
Today Angela Merkel and Nicolas Sarkozy met for make or break talks
to save the Euro. If they implement what they have agreed the Eurozone
will become essentially both a monetary and a fiscal union. If they
fail, the enormous debt mountains threaten to bury the currency, along
with several countries and with it perhaps the EU itself!
And what of Britain? What is the future in an outer ring of nations
outside a core of 17 nations joined fiscally and monetarily?
In trying to answer this question I am conscious that I have always
been, and remain, a pro European. The EU supports trade and commerce
and an incredibly positive cultural exchange. True, it costs a lot but
that is more than made up for by what we gain in trade and contracts.
I am also conscious that post globalisation the EU is an invaluable
supra-national body, vital for international co-operation on issues like
climate control and scientific projects.
But, most importantly I believe the EU (and its predecessors) is an
absolutely crucial building block in what has kept the peace in Europe
since World War II and what makes war seem almost unthinkable amongst
these close knit neighbouring nations.
So what of the Euro?
I have always held the view that we were right to not enter into the
Euro. Oh, the principle seemed fine enough but only if monetary and
fiscal policy was a good fit with our economy – which across so many
countries and based heavily on Germany always seemed unlikely. I
thought Gordon Brown got it about right setting five tests to see if it
was right to join, the first and most important of which said, ” are our
business cycles and economic structures compatible so that we could
live comfortably with Euro interest rates”.
Also, while I am a passionate believer in Europe and see it as far
more than just a Common Market, I do not believe in a united states of
Europe. Nationalism is too potent a force to pull that one off
peace-ably. A close knit supra-national body and community of nations
is how I see the EU.
This means I am glad we have not been part of the Euro. I could
never have foreseen this malarkey but it did not seem in our interests
before. Today, I think it is best we continue to keep out of it.
I suspect if the untangling can be done without excessive pain, one
or two countries curently in the currency are best finding a controlled
way to extract themselves. This may be the best thing for all, not
least the Greek people for example!
As it is these are interesting times for Europe and we must be careful that the EU itself does not unravel – which is a danger.
The Scottish angle in this is interesting.
If Scotland were to become independent the SNP’s currency of choice
would be Sterling. Going into the Euro would be even more untenable now
than when this policy was first made. However, if we were to be part
of a Sterling zone would it not be better if we got the vote for the
body that decides fiscal policy that affects the currency – namely
Westminster? Does this not recognise we are part of a Sterling
economy? Is this not an indicator that we are a natural part of the UK
rather than separate from it? I would argue this helps to indicate that
devolution within the UK is the most natural and the right
constitutional arrangement for Scotland!
Independence in Europe, since the 1980s has been central to making
Scottish independence seem more credible and less scary than outright
independence maybe seemed in years gone by. If the future shape of
Europe seems more uncertain, as I think is the case currently, then this
strengthens the logic of being part of the UK. Again, being an
autonomous part of the United Kingdom is the way forward – Home Rule
within the UK makes more and more sense to me.
I think in the current period Europe and the Global Financial Crisis
are difficult ones for the SNP administration at Holyrood as they
emphasise how they are in fact marginal to issues such as those crises
and the the Sterling economic zone!