The Christopher Lee of currency scares

Source: Wee Ginger Dug The Christopher Lee of currency scares

There’s a Unionist myth from the first independence referendum which is still being aired and which will feature prominently in the second. It’s a myth that’s propagated by people who really ought to know better, and who in many cases actually do. They just keep repeating the story because they hope that people in Scotland don’t know any better. It’s a myth that keeps being repeated even though it’s been killed off more times than Christopher Lee in the Dracula movies, and just like Christopher Lee in the Dracula movies it keeps on coming back for the sequel. That myth is that an independent Scotland would be forced to join the Euro.

It says in the EU treaties that, unless a country has a specific opt-out from membership of the Eurozone, membership of the EU implies that state should eventually join the single currency. However the EU treaties impose no time scale on when a member state needs to join the Euro and impose no penalties for not doing so.  If a member state decides that it’s not in its interests to adopt the common currency, then no one in Brussels is going to insist that they do.

What this means is that no country can be forced into the euro. No, really. No more than a Rangers fan can be forced to wear a green and white scarf and sing along enthusiastically to a ditty about a fitba team that doesn’t realise it died.  Joining the euro is not like being conscripted into Angela Merkel’s army and then having to invade the Central Bank of Greece and blag all the deckchairs with a towel printed with the image of the EU flag. Joining the single currency is a process with several steps to it. Each one of those steps is at the discretion of the member state. That means the steps don’t have to be taken, and if the member state doesn’t take the steps, they don’t join the euro. It’s really that simple.

Step number one is starting off with a currency of your own. As Unionists are very fond of telling us, Scotland doesn’t have a currency of its own, and apparently is the only country in the world which is incapable of having any money at all. Not even those big stone coins that they used to use as currency on the Pacific island of Yap which would be a bit of a bugger in the check out queue at Morrison’s. So before we could even think about joining the euro, we’d first of all have to set up our own currency. Even if, as seems likely, an independent Scotland will set up its own currency, it will take a number of years for this to come into effect. When Ireland became independent in 1922, it continued to use the pound sterling until issuing its own currency, the punt, in 1928.

Step number two is reducing your budget deficit to within certain pre-determined parameters. Since the Unionists are very fond of telling us that Scotland has a bigger deficit than a shoe fetishist on a spending spree in Foot Asylum with nothing more in his pocket than a book of second class stamps, Scotland wouldn’t meet the requirements for joining the euro anyway. “You’ve got a deficit greater than Greece” and “you’ll be forced to join the euro” are mutually exclusive scare stories. But that doesn’t prevent the same people making them both simultaneously.

Of course, it’s highly debatable just how much Scotland’s real deficit is. The true figure will be determined in the negotiations after a Yes vote.  Whatever it is, it’s certainly not the figure bandied about by the Unionists and based on the GERS figures. The deficit in GERS is based on UK figures which show that almost one quarter of the entire Scottish budget is spent outside Scotland. This is spending attributed to Scotland by the UK. There is no independent nation on Earth which spends that proportion of its budget outside its own borders. In an independent Scotland, other than debt interest repayments which will be subject to negotiation in independence talks in order to determine how much if any of the UK national debt iScotland takes on, the budget will overwhelmingly be spent within Scotland and thus will increase Scottish revenues by generating increased economic activity within Scotland. However for the purposes of this discussion about the euro, what is relevant is that it’s for an individual member state to decide when and how to reduce its deficit. If a country which isn’t using the euro decides that its deficit is sustainable, the EU isn’t going to force it to reduce it.

The third step is joining the ERM-II, the European Exchange Rate Mechanism. The Czech Republic joined the EU in 2004, after the euro had been adopted as the common currency of the original 11 members of the Eurozone. The Czechs won’t be bounced into the euro, and have consistently refused to make moves to adopt it. In January 2010, Czech Prime Minister Petr Nečas stated that the country did not require a special opt-out in order to retain the koruna as its currency. Nečas said: “No one can force us into joining the euro … We have a de facto opt-out.”

Candidates for euro membership must sign up to ERM II for at least two years
before adopting the euro as currency, however it is entirely up to the discretion of each individual member state when to sign up to ERM II and member countries can legitimately delay this indefinitely.  That’s what the Czech PM meant by a de facto opt-out.  But Mr Nečas said all this in Czech, which is a language with way too many consonants, so it wasn’t reported in the Anglocentric Unionist media.

A whole lot has happened in the intervening seven years. Admittedly some things are just the same. Like the Unionist project fear and attempts to browbeat Scotland into staying a part of the UK. So we’re still going to get the UK chancellor coming to Scotland and making threats about currency. It’s just that the second time around with the arse having fallen out of the Brexit pound he’ll be coming to Scotland to warn us that after independence we’ll be forced to keep it. And the Unionists are still claiming that an independent Scotland would be forced to adopt the euro even though this myth has been debunked more often than the myth that Donald Trump’s hairstyle is a fashion statement and not a poor attempt to cover up a receding hairline.

In the past seven years Nečas was forced to resign in a corruption scandal. Brexit and Donald Trump happened. We’ve had one independence referendum in Scotland and are now faced with another. Yet here we are, seven years later, and the Czech Republic still has no plans to join the Eurozone, is no further forward in steps to joining it, and the EU has made no attempts to force the issue. That’s what Nečas meant by a de facto opt-out. It’s not a legal right in the sense that it’s explicitly spelled out in the treaties, but it’s an effective right. It’s a real right that an independent Scotland could use to refrain from joining the euro. It’s a right that several EU member states make use of.

This approach has also been adopted by the government of Sweden which has likewise declined to join the Eurozone but has no negotiated opt-out. Sweden says nej to the euro. Poland, Romania, Bulgaria and Croatia likewise are not eurozone members and none of them have formal opt outs. They will join the euro as and when they decide it is in their interests to do so, and they may very well decide to postpone that decision indefinitely. The EU isn’t going to force them to do otherwise. It wouldn’t force an independent Scotland either. But nothing I’ve said here will stop the Unionists from claiming that Scotland will be forced to adopt the euro. Like Christopher Lee, it will be back for the sequel. But next time, we’re ready with the garlic and wooden stake of facts and we’ll open the curtains and let the light flood in.

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