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Selasa, 28 Juni 2016

The Disunited Kingdom - Scotland votes to stay in the EU—but is dragged out by England



Brexit has sparkled calls or another independence referendum, but also made it trickier for Scotland to go it alone.


AGAINST the Brexit tide that swept Britain, 62% of Scots voted to stay in the European Union on June 23rd, presenting the first minister of Scotland’s devolved government, Nicola Sturgeon, with a difficult question: whether to push for a second independence referendum.

Speaking to journalists this morning, Ms Sturgeon said that it was “democratically unacceptable” for Scotland to be yanked out of the EU against its will. Britain’s departure represented the kind of “significant and material change in circumstances” which her Scottish National Party said in its election manifesto in May could trigger demands for a new independence referendum, following an unsuccessful effort in 2014. The first minister indicated that she would first speak to EU leaders, to see if Scotland could secure any sort of deal. But a second referendum, she said, was now “highly likely”.

Yet it is not immediately clear that Scots would reverse their 55% vote two years ago to stay part of Britain, as Scotland would now face very different economic conditions. One big change is the slump in the oil price, which has reduced tax revenues and widened Scotland’s deficit to an unhealthy £14.9 billion ($22 billion) or 9.7% of GDP in 2014-15.
In any EU accession negotiations following a pro-independence vote, agreement to reduce that deficit, implying tax rises or public-spending cuts, would be demanded by Brussels. How severe that austerity would be, compared with what Britain’s government may now be contemplating following its departure from the EU, is a question that Ms Sturgeon would need to answer.

Also unknown is what currency Scotland would use. Although the EU may insist on eventual adoption of the euro, Scotland would first have to establish a track record of managing its own currency. That would seem to rule out any sharing of sterling, as Alex Salmond, Scotland's former first minister, claimed would happen (but Britain’s Treasury rejected) two years ago, and point to the need to establish a Scottish currency, perhaps initially linked to sterling or the euro.

Independence would also create an external EU border between England and Scotland. Since controlling the migration of EU nationals emerged as the deciding factor in the Brexit vote south of the border, it looks unlikely that a British government would leave open any back door to England.

That raises the possibility of border controls between Gretna Green and Berwick-upon-Tweed, across which £48.5 billion of Scottish goods and services are estimated to have flowed in 2014, more than four times the £11.6 billion of annual Scottish exports to the EU. Ms Sturgeon will want to be sure she would win a second independence referendum before seeking one. Until she has answers to these questions, she has no such certainty.

source The Economist, Friday, June 24, 2016

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