Breakaway Scotland could forge new EU alliances

Scottish Souvenirs are sold on the Royal Mile in Edinburgh
Image caption Would Scotland have less clout in Europe if it left the UK?

If Scotland voted for independence, what might its future be as a small new European Union member state?

Eurosceptics might say Scottish interests would be drowned out in an EU of 29 or more member states. Or could Scotland punch above its weight?

Some argue an independent Scotland would have to negotiate to join the EU.

But Andrew Scott, Professor of EU Studies at Edinburgh University, calls that scaremongering. "The EU is infinitely creative when dealt a constitutional hand it's never played before - it managed East Germany, Cyprus."

Scotland as a separate EU member state would face big challenges, including agreeing its budget contribution, and negotiating over some of the UK's current opt-outs, not least on the euro.

Another option would be to follow Norway and stay outside the EU but in the single market.

No existing EU member state has split into two new states. But Norway and several EU member states are similar in population size to Scotland, including Denmark, Finland, Ireland and Slovakia. Much can be learnt from their experiences.

Independent voice

Having a seat among the EU's 27 leaders in the European Council is a big plus for smaller countries.

"A clear positive is you're at the table," says Tony Brown, founder member of Dublin's Institute of European Affairs.

Image caption EU policy on fishing is vital for Scotland's economy

"It changed [Ireland's] relationship with the UK overnight. You are constitutional equals - you don't have to take months to arrange a meeting with the British prime minister, you just pick up the phone."

Vladimir Bilcik, EU expert at the Slovak Foreign Policy Association, agrees: "By far the most important is actually being in the club, at the table where they take decisions - you have a say, you have officials in key positions."

But, he adds, "there are clear limits to voice and power". Larger countries, like France, Germany and the UK, have more power and more votes.

From 2014 the EU will introduce a new "double-majority" system, where EU laws will need 55% of member states (all counted as equal) and 65% of the EU's population to pass. The new system gives smaller states more power than if voting were by population alone.

Fishing is a sensitive policy area for Scotland - and EU fisheries decisions are taken by qualified majority vote, so an independent Scotland would have no veto and fewer votes than the UK.

The euro - in or out?

The EU treaty says new member states must join the euro - and that may not seem very attractive in the current crisis.

Of the current 10 EU members not in the euro, only the UK and Denmark have formal opt-outs. But Sweden, with no official opt-out, has effectively ruled out joining the euro since its referendum in 2003. And the other seven, including Poland, Hungary and the Czechs, are not in a hurry.

Prof Scott in Edinburgh thinks Scotland would not be dragged into the euro against its will, "but you need a currency and a central bank… and you have to choose whether or not to join the EU's Exchange Rate Mechanism".

Image caption The woes of some smaller states in the eurozone like Ireland may put Scots off joining the currency

Despite the eurozone crisis, Vladimir Bilcik says the euro has "served Slovakia really well" and "it would be a virtual reality for us to talk of an independent currency policy".

"We are a small, open economy and 90% of our exports go to the EU, mostly to the eurozone."

But the crisis is leading to growing Euroscepticism in some eurozone countries, such as Finland.

Scotland would probably be a net contributor to the EU budget - like the UK, Denmark and Finland.

But could Scotland bargain to keep some of the UK's budget rebate? The UK itself will fight for the rebate in the upcoming negotiations on the EU's 2014-2020 budget. But other member states may fight back hard.

Other opt-outs may be easier. The UK chose not to join Schengen - the border-free zone embracing most EU countries, where passport checks are minimal. Ireland opted out of Schengen too, keeping its border with Northern Ireland open. Scotland could probably do the same.

Norwegian model?

There is another option: Scotland could follow Norway and join the European Economic Area (EEA), giving it access to the EU's single market without EU membership.

"We have greatly benefited from it in the last 20 years," says Professor Fredrik Sejersted of Oslo University, an expert on Norway's EEA experience.

Image caption Scotland's borders with the rest of the UK would probably remain open

But, he warns, "there is a great democratic deficit in the EEA".

"We do not participate in decision-making, since we are not EU members.

"I would say the main lesson for Scotland is that there is no alternative to the EU - we are almost as deeply integrated into Europe as the UK," he says.

Making the EU work in your interests depends crucially on building alliances with other countries. Some think Scotland would naturally be part of a Nordic group of countries.

But Professor Marlene Wind at Copenhagen University says that, while Denmark has similar values to Sweden and Finland, "we are very pragmatic - we align with countries where we agree".

In Dublin, Tony Brown agrees. "Avoid getting into cliques, build coalitions topic by topic, be quick on your feet… and you need a very good diplomatic service," he says.

So a host of policy challenges would keep an independent Scotland in the EU very busy indeed.

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