Nicola Sturgeon sends message to EU citizens in Scotland
The SNP has seen its support grow as Nicola Sturgeon appears to have a strong command in Holyrood. This has coincided with polls indicating a sustained wave of pro-independence feeling in Scotland, with every major poll since March putting a Yes vote ahead. In October, an IPSOS/MORI survey had Yes at 55 percent compared to 45 percent for No – a reversal of the 2014 result.
But this hasn’t prevented concerns over what Scottish independence would bring in the immediate aftermath of the referendum.
Ms Sturgeon and co want to take Scotland back into the EU, however, Brussel’s rules could create a stumbling block.
All new members of the EU are formally required to work towards membership of the Euro and to reduce budget deficits to three per cent or less as part of the rules set out in the Maastricht Convergence Criteria.
Data released in August this year showed that Scotland’s fiscal deficit rose to £15billion in 2019-20, nearly £2000 per person.
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The annual government expenditure and revenue Scotland report (GERS) found Scotland’s fiscal deficit for 2019-20 was 8.6 percent of GDP, up from 7.4 percent the previous year.
As Croatia proved, a deficit above three percent doesn’t necessarily stop a country from joining the EU.
However, the country had to endure austerity in order to do so, something which will not ease fears in Scotland.
Croatia joined the EU in 2013 after applying for membership back in 2003.
In 2014, then EU commissioner for economic and monetary affairs Ollie Rehn warned Croatia about its economic responsibilities.
He said: “It will be essential for Croatia to take decisive action in order to achieve this in order to restore confidence in the economy.
“This means that by April, Croatia is asked to undertake adequate and specifically specified [sic] measures to ensure progress towards the correction of its excessive deficit and debt.”
When the country agreed to join the bloc, its external debt stood at about £40billion, close to 100 percent of the country’s GDP at the time.
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In 2015, the European Commission was asked why it “insists on and demands the application of an austerity policy in the case of Croatia?”
Brussels responded: “Persistently high general government deficits (well above 5 percent of GDP at least since 2011) have put the general government debt in Croatia on an unsustainable path: from below 40 percent of GDP in 2008, debt was at 85 percent of GDP in 2014, and is forecast to rise further to almost 94 percent of GDP by 2016.
“In combination with weak competitiveness, large external liabilities and weak public sector governance, this poses risks to macroeconomic stability.
“The Commission has transmitted to the Council a proposal for country specific recommendations to Croatia, calling for continued fiscal consolidation in combination with a renewed commitment to structural reforms, in line with the Commission’s jobs and growth agenda.:”
Croatia’s economic challenges at the time were far more severe than those facing Scotland today, but this hasn’t prevented warnings of austerity from some in Edinburgh.
After the SNP’s sustainable growth commission report in 2018, Scottish Labour warned of decades of austerity – a claim which the SNP denied, saying only “sensible budgeting” would be needed.
David Gow, editor of Social Europe and a former European Business Editor at The Guardian, warned in an essay this year that Croatia proves why Scotland may have to endure a “squeeze”.
He said: “Croatia was rapidly, after its first six months only, put under the EU’s Excessive Deficit Procedure (EDP) and then carried out a fiscal squeeze to comply with the deficit conditions.
“Here the question is whether the Scottish polity, let alone populace, is aware of how severe the spending squeeze might have to be – coming not that long after a decade of austerity.
“Would an independent Scottish government and civil society be both able and willing to accept strict spending controls/cuts?.”
In December last year, David Phillips, associate director of the Institute for Fiscal Studies, said the SNP’s promise to reduce Scotland’s significant deficit would mean austerity for some parts of the government – and said this was “inconsistent” with the party’s criticism of Tory cuts.
But Kirsty Blackman, the SNP’s economy spokesperson, defended the plans as “an ambitious and wide-ranging plan to end austerity, invest in our NHS and increase household incomes”.
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