Brexit discussion thread XII (Please read OP before posting)

First Up

Bambi wrote:

The UK might pop its clogs but I wouldnt be too sure about GB, If I was a betting man I'd bet on Sterling outliving the Euro and I think the markets will bet the same way.

If the UK pops its clogs, what currency do you expect the departing bits to use?

Sam Russell

First Up wrote: »

If the UK pops its clogs, what currency do you expect the departing bits to use?

When we left the British Empire we adopted our own currency - pegged to GBP for a long while. I would expect Scotland to use their own currency - either pegged to GBP or the Euro. It would be the only way to go.

First Up

Sam Russell wrote:

When we left the British Empire we adopted our own currency - pegged to GBP for a long while. I would expect Scotland to use their own currency - either pegged to GBP or the Euro. It would be the only way to go.

If Scotland (or Wales or NI) leave the UK, what trading arrangements do you think they will seek?
Can you envisage them leaving the UK for any reason other than to return to the EU?

Sam Russell

First Up wrote: »

If Scotland (or Wales or NI) leave the UK, what trading arrangements do you think they will seek?
Can you envisage them leaving the UK for any reason other than to return to the EU?

If the EU grants them fast track admission on the basis that they were formally full members for such a long time, then they would of course accept that offer. Otherwise, they might join EFTA, while applying for EU membership.

They want to leave the UK to gain independence.

Look at how they have been treated for many years, even as recently as this month when HMG announced that the UK would not be looking for an extension to the transition period just hours before a discussion with the devolved assemblies to discuss it.

NI is more complex.

First Up

Sam Russell wrote:

If the EU grants them fast track admission on the basis that they were formally full members for such a long time, then they would of course accept that offer. Otherwise, they might join EFTA, while applying for EU membership.

They want to leave the UK to gain independence.

There's a bit more to it than that but getting back to the question, if Scotland or Wales become fully independent nations, there is no set of circumstances in which it makes sense for them to stay in the sterling area any longer than absolutely necessary.

Capt'n Midnight

Sam Russell wrote: »

When we left the British Empire we adopted our own currency - pegged to GBP for a long while. I would expect Scotland to use their own currency - either pegged to GBP or the Euro. It would be the only way to go.

Scotland will peg to the Pound simply because the rest of the UK is by far and away the main trading partner. When that changes they can change too.


The Baltic countries each took a different route.

The Lithuania Litas was pegged 4:1 to the US dollar.

The Estonian kroon was pegged to the Deutsche Mark at a rate of 8 krooni to 1 DM. Which made it automatically pegged to the Euro later on.

The Latvian Lat was pegged to the SDR basket of currencies defined by the IMF. This was a middle ground as the DM and Dollar were the main currencies.

The UK pound is still on the list but if their currency keeps dropping relative to the others that may change. The pricing of Brent Crude Oil in the UK currency also helps. As oil becomes less important or if a Euro market for oil starts up then there's another shock for sterling waiting in the wings.

reslfj

Sam Russell wrote: »

If the EU grants them fast track admission
...
Otherwise, they might join EFTA, while applying for EU membership.
...
NI is more complex.

NI can very easily join the EU. It just requires winning a border poll and a UI.

The EU has already accepted that Ireland can unite with NI and continue with its membership unchanged.

There are now 705 MEPs (out of a Lisbon maximum of 751) and likely Ireland will get a few extra MEPs sometime after the unification.

Lars

Capt'n Midnight

Enzokk wrote: »

Again, the sliminess of Gove is creepy.

More vague* promises two days ago. No details. And the existing rules limit how much aid can be give. Couldn't or wouldn't say if paperwork would be needed for goods crossing between GB and NI.
The government is to reimburse Northern Irish businesses if they are hit by tariffs due to a collapse in Brexit talks, Michael Gove has said.

He added that trying to get firm information out of Gove and the Northern Ireland secretary, Brandon Lewis, made him feel like “Alice through the looking glass [trying to divine] what words mean”.

Sam Russell

reslfj wrote: »

NI can very easily join the EU. It just requires winning a border poll and a UI.

The EU has already accepted that Ireland can unite with NI and continue with its membership unchanged.

There are now 705 MEPs (out of a Lisbon maximum of 751) and likely Ireland will get a few extra MEPs sometime after the unification.

Lars

NI would follow the precedent of German unification.

Scotland could ask to be considered under the same precedent, but it would depend on when the independence was gained and under which terms they leave the UK and the terms - if any - that the UK finally ends its transition.

The most favourable wold be rapid join wit no transition, but more likely a transition while the damage of Brexit is reversed.

Enzokk

Remember the Russia Report that was ready to be released before the election late last year? Well it seems like it will be delayed again as the Committee responsible for its release will be delayed further. Also, it seems like Johnson is trying to get Chris Grayling appointed as chair for the committee. Yes, Failing Grayling who leaves disaster after disaster whichever department he works in will be the chair of the committee. We aren't going to see that report are we? Not unless it is leaked.

Theresa Villiers axed from intelligence committee for disloyalty

Boris Johnson has delayed the formation of parliament’s intelligence watchdog after removing a provisional member for disloyalty.

The government has been questioned over why the intelligence and security select committee has yet to be reconvened more than six months after the election. Other committees that scrutinise departments have been working for months.

Its formation has been delayed after Theresa Villiers, the former environment secretary, was barred from joining after defying the Tory whip in a vote on food standards.

Ms Villiers, who was one of the prime minister’s appointments to the panel, was blocked after she rebelled to vote for an amendment that would have banned the import of chlorinated chicken in any trade deal with the United States.

Committee members must be vetted so replacing her is expected to prolong the delay.

...

Mr Johnson has picked Sir John Hayes and Chris Grayling, the former transport secretary, whom he wants to install as chairman. It is understood that Sir Mike Penning, the former defence minister, removed his name from consideration in protest at being asked to vote for Mr Grayling as chairman.

CelticRambler

I wonder if the lasting damage of the Covid crisis in the UK will, as is the way of curious quirks of fate, have given both Scotland and Wales the enthusiasm and (arguable) moral authority to impose soft border controls with England, e.g. refusing to allow import and distribution of chlorinated chicken or hormoney beef within their regions on the grounds of the risk to public health and "science" ?

At the time of the referendum, I don't think any of us - no matter how much chaos we might have envisaged in a post-Brexit Britain - would ever have expected to see TV clips of an English tourist being reminded by Welsh police that she was walking on a Welsh beach, subject to Welsh law, and she should take herself back to England!

The British government was blathering on about precedents in EU deals; well, due to Johnson's incompetence, Covid-19 has allowed the provincial governments to create an uncomfortable precedent within their own jurisdiction.

First Up

Capt'n Midnight wrote:

Scotland will peg to the Pound simply because the rest of the UK is by far and away the main trading partner. When that changes they can change too.

If Scotland leaves the UK, it will be to join the EU. No other reason makes sense.

There will be a transition period but as an EU applicant or member, it has to adopt the Euro.

reslfj

First Up wrote: »

If Scotland leaves the UK
....
...it has to adopt the Euro.

Sweden should join the Euro, but it's not happening. Denmark having a formal opt-out from the Euro is very much more locked into the Euro.
A united Ireland will (continue) to be member of the Eurozone.

Scotland will have to qualify to join the Eurozone.
This is unlike to happen for a good many years.

Lars

PS! A hard currency is a good thing for a well run country.

First Up

reslfj wrote:

Sweden should join the Euro, but it's not happening. Denmark having a formal opt-out from the Euro is very much more locked into the Euro. A united Ireland will (continue) to be member of the Eurozone.

Sweden and Denmark were in the EU before the Euro was introduced.

reslfj wrote:

Scotland will have to qualify to join the Eurozone. This is unlike to happen for a good many years.

Scotland's entry to the EU will take time too. A break up of the UK would involve quite a few loose ends; currency being one, border controls another. But if Scotland or any part of the former UK is joining the EU, a move from sterling to the Euro is a political and commercial certainty.

fash

Peregrinus wrote: »

All to be negotiated. I'm guessing, in the first instance the EU would take the position that the UK was not complying, and would complain to the Joint Committee. If the Joint Committee couldn't resolve the issue, it would be passed on to an arbitration tribunal (which would be provided for in the FTA).


The EU gets to impose tariffs on the UK - the same tariffs that they would have imposed, had there been no FTA. In other words, the UK loses the benefit of the FTA, at least as far as tariff concessions go.


These are matters for negotiation. They'd be negotiated as part of the FTA - not later, when the EU complains about a breach of LPF. In the negotiations, UK will take a minimalist position - EU can only apply tariffs to specified goods which are shown to directly benefit from the breach of LPF. EU will take a maximalist position - EU can apply tariffs to any classes of goods which might benefit from breach of LPF, or can apply tariffs calculated to offset all benefit to the UK or detriment to the EU from the breach of LPF, or can apply tariffs set at a level designed to make sure that UK is worse off from breaching LPF than it would be from complying with it. EU will want tariffs to kick in immediately breach is complained of; UK only after all avenues for resolving the dispute have been exhauseted; etc, etc.


That would be the EU's fear, and they will make the point in negotiations that if this system is to be stable the tariff consequences of breaching LPF have to be sufficiently immediate, and sufficiently severe, to disincentivise breaching LPF.

Presumably a consequence of such an arrangement would remain the economic and political instability of it? Presumably it would suck capital intensive investment out of the UK and into the EU? As in the EU at least if things go pear-shaped in the relationship, you still have the single market - but from the UK you are suddenly facing large tariff walls (so a repeat of the story of the Japanese and their car factory investments into the UK and the Brexit "betrayal" from their perspective).

reslfj

First Up wrote: »

Sweden and Denmark were in the EU before the Euro was introduced.

The Euro as a reqirement is from the Delores report and the 1992 Maastricht treaty.
Sweden joined in 1995 i.e later than the Maastricht treaty and should have joined the Eurozone, but has not been forced.

Denmark joined in 1973 and has in addition a formal opt-out in The Edinburgh Agreement (1992).

First Up wrote: »

But if Scotland or any part of the former UK is joining the EU, a move from sterling to the Euro is a political and commercial certainty.

'Certainty' about Eurozone membership is nowhere but in your head. There are many requirements that a member state must fulfil before being allowed to join the Eurozone. And even then there is a local democratic requirement too.

Note the three Baltic states, Malta, Cyprus, Slovakia and Slovenia are in the Eurozone. Poland, Hungary and Czech Republic are however not.

Lars

Capt'n Midnight

First Up wrote: »

If Scotland leaves the UK, it will be to join the EU. No other reason makes sense.

There will be a transition period but as an EU applicant or member, it has to adopt the Euro.

Scotland could use EFTA as a stepping stone to EU membership.

Very similar to Norway because they export fish, fuel and electricity. Full EU membership is not essential.

Euro opt-out is probably grandfathered in because of UK.

As an aside.
If fisheries and other niggles could be sorted out then Greenland could rejoin the EU. Unlikely but Trump is about the only person who could make it happen. The UK need to realise that they aren't the centre of attention.

bob mcbob

Capt'n Midnight wrote: »

Scotland could use EFTA as a stepping stone to EU membership.

Very similar to Norway because they export fish, fuel and electricity. Full EU membership is not essential.

Euro opt-out is probably grandfathered in because of UK.

As an aside.
If fisheries and other niggles could be sorted out then Greenland could rejoin the EU. Unlikely but Trump is about the only person who could make it happen. The UK need to realise that they aren't the centre of attention.

Yes when independent, Scotland will be looking across the North Sea as an example to follow. There is even talk of an independent Scotland joining the Nordic Council.

https://www.highnorthnews.com/en/danish-historian-welcomes-scotland-back-scandinavia

The latest poll also puts support for independence at 54%

https://www.heraldscotland.com/news/18531565.latest-poll-finds-support-scottish-independence-54/

First Up

reslfj wrote:

'Certainty' about Eurozone membership is nowhere but in your head. There are many requirements that a member state must fulfil before being allowed to join the Eurozone. And even then there is a local democratic requirement too.

Adopting the euro as a requirement for joining the EU is as close to a certainty as anything I can think of. Conformity with one is effectively conformity with both.

There is zero possibility of any bit of the UK joining the EU and being allowed retain sterling as their currency. Of course there would be transition periods but they would be limited and specific.

Bit cynical

First Up wrote: »

Adopting the euro as a requirement for joining the EU is as close to a certainty as anything I can think of. Conformity with one is effectively conformity with both.

There is zero possibility of any bit of the UK joining the EU and being allowed retain sterling as their currency. Of course there would be transition periods but they would be limited and specific.

They would have to "commit" to join the Euro but actually joining is another matter.

eire4

bob mcbob wrote: »

Yes when independent, Scotland will be looking across the North Sea as an example to follow. There is even talk of an independent Scotland joining the Nordic Council.

https://www.highnorthnews.com/en/danish-historian-welcomes-scotland-back-scandinavia

The latest poll also puts support for independence at 54%

https://www.heraldscotland.com/news/18531565.latest-poll-finds-support-scottish-independence-54/

I tend to agree with the argument in the second article there that the hardline stance against a second independence referendum from London is only increasing support for independence in Scotland.

First Up

Bit cynical wrote:

They would have to "commit" to join the Euro but actually joining is another matter.

It would be a very clear roadmap. The EU doesn't play games.

CelticRambler

First Up wrote: »

It would be a very clear roadmap. The EU doesn't play games.

No, but they do a good fudge when it suits them. It would be very easy for a newly independent Scotland to argue that it inherited debts that were denominated in pounds sterling, and it would be detrimental to their economy if they were forced to unpeg their new currency from the pound until those debts had been paid.

Of course, if England's economy was going the way of Greece's, then the Scots might be quite happy to dump the pound in favour of a more stable currency.

First Up

CelticRambler wrote:

No, but they do a good fudge when it suits them. It would be very easy for a newly independent Scotland to argue that it inherited debts that were denominated in pounds sterling, and it would be detrimental to their economy if they were forced to unpeg their new currency from the pound until those debts had been paid.

Flexibility isn't "fudge". Scotland can argue its case and will get a fair hearing. But nobody is getting into the EU on vague promises. I think and hope that the Scottish government understands that better than Boris and his cohort of clowns.

CrabRevolution

CelticRambler wrote: »

No, but they do a good fudge when it suits them. It would be very easy for a newly independent Scotland to argue that it inherited debts that were denominated in pounds sterling, and it would be detrimental to their economy if they were forced to unpeg their new currency from the pound until those debts had been paid.

Of course, if England's economy was going the way of Greece's, then the Scots might be quite happy to dump the pound in favour of a more stable currency.

If Scotland try that, I can see the EU saying "Ok, you can join once you have those debts and currency issues under control so".

It's true that there are countries deliberately allowed go slow on aligning with the Eurozone requirements, but at least those countries' currencies are their own. I can't see how the EU could ever admit a member whose monetary policy is effectively under the control of a non-EU member.

First Up

CrabRevolution wrote:

I can't see how the EU could ever admit a member whose monetary policy is effectively under the control of a non-EU member.

Especially a former member

Sam Russell

CelticRambler wrote: »

No, but they do a good fudge when it suits them. It would be very easy for a newly independent Scotland to argue that it inherited debts that were denominated in pounds sterling, and it would be detrimental to their economy if they were forced to unpeg their new currency from the pound until those debts had been paid.

Of course, if England's economy was going the way of Greece's, then the Scots might be quite happy to dump the pound in favour of a more stable currency.

It would depend on the terms that they leave the UK. If they are saddled with huge debt, then they would need to peg the new Scottish Pound to GBP at least for a period while they get the economy under control.

It would also depend on the deal the UK gets from the EU, which is another unknown.

Let us assume they have their referendum in 2024, with an implementation date of 2026, they would hardly get an application approved to join before 2030.

The world could be a very different place by then.

Bit cynical

First Up wrote: »

It would be a very clear roadmap. The EU doesn't play games.

The problem is that they could not have any timescales on that roadmap as joining the Euro involves meeting a set of requirements and at the outset no one can predict when or if this might happen. This means that even if Scotland wanted to join the single currency as quickly as possible, they could not commit to doing so by a given date and, without timescales, any commitment is fairly meaningless.

They can be like Poland: technically committed but can't be held to joining. It is as good as a formal opt out.

Capt'n Midnight

Sam Russell wrote: »

It would depend on the terms that they leave the UK. If they are saddled with huge debt, then they would need to peg the new Scottish Pound to GBP at least for a period while they get the economy under control.

It would also depend on the deal the UK gets from the EU, which is another unknown.

Let us assume they have their referendum in 2024, with an implementation date of 2026, they would hardly get an application approved to join before 2030.

The world could be a very different place by then.

They need to use the pound until they don't. PDF link 60 per cent of all Scottish exports go to England, Wales and Northern Ireland, more than the rest of the world combined, Half of the rest goes to the EU.

Worst case they can stay in the EFTA while weaning themselves off the rest of the UK.

reslfj

Capt'n Midnight wrote: »

PDF link 60 per cent of all Scottish exports go to England, Wales and Northern Ireland, more than the rest of the world combined,

How are the export from Scotland grouped in different product/trade codes.

How much is oil/gas? how much electricity? how much ????

The link doesn't have any such figures.

Lars