Can the union be saved? Report on the Federal Union AGM

Federal Union held its AGM and annual conference on 17 March 2012.  The morning session, entitled “Can the European Union be saved?”, looked at the European treaty agreed at the summit earlier this month, and asked whether it embodied the right model for the future of the Europe.

Gerald Wolf, from the economic affairs department of the German embassy (but speaking in a personal capacity), outlined the thinking behind the treaty and need for fiscal restraint that it implies.  Germany, he said, had reformed its labour markets and economic structure over the past 10 years, reforms that had been difficult and controversial at the time and which had cost the previous Chancellor his job, and was now to see the benefit of them.  This was an important lesson for Germany and for the rest of Europe.  The Germans should not be criticised for their policies but, in some senses, emulated.

Philip Whyte (picture CER)

Philip Whyte, senior research fellow at the Centre of European Reform, spoke of his doubts that the German model could be emulated generally in Europe.  It rested not merely on domestic economic reforms but also on an external current account surplus.  Germany was a net exporter, both inside the eurozone and outside it.  It was not possible, he said, for every eurozone country to run surpluses – there was not sufficient absorptive capacity elsewhere in the world – which meant that adjustments in Europe needed to be undertaken by all parties and not merely by the periphery.  His optimistic scenario was that this would be understood and that economic growth could return; his pessimistic scenario was that it would not, and that much of Europe would be condemned to economic depression.  If so, what would be the future of the European Union then?

(Read a more comprehensive account of Philip Whyte’s argument here.)

The discussion that followed highlighted the fact that different eurozone countries were in difficulty for different reasons – in Greece, it might be government profligacy, but in Spain or Ireland, the crisis had its origins in the private sector – and that expecting the same economic medicine to work in every case might not be correct.  Some hope was expressed that the European elections in 2014 might crystallise the options in front of Europe – austerity or investment for growth – and that a party political contest, led by candidates for Commission president, could give the people of Europe the choice (and the awareness that they had to make that choice together).

The afternoon session of the conference turned to the Anglo-Scottish union.  With the prospect of a Scottish referendum on independence in 2014, what could be done by the English to persuade the Scots to vote No, and how would that affect the United Kingdom as it is today?

Sir Brian Barder (picture Owen Barder)

Sir Brian Barder, a former diplomat, now writing and blogging about politics, constitutional and other current issues, opened the session with a call for change.  As a British nationalist, he said, he did not want to see Scotland leave the United Kingdom, but that meant that the UK could not continue on its current path.  Its quasi-federal system – it was not a unitary state but a union of two countries – left the West Lothian question unanswered, and there would be no stable future without a satisfactory answer to that question.  A federal United Kingdom was the right way forward: there were many federations around the world that worked fairly well, and the British should do the same.

(Read articles about Scotland, Devo-Max and federation on Brian Barder’s blog here, here, here and here.)

Dr Andrew Blick, Associate Researcher at the Federal Trust (and also a Visiting Senior Research Fellow at the Institute for Contemporary History and a Senior Research Fellow at Democratic Audit) looked at the historical origins of the Anglo-Scottish union.  In 1706, the Scottish parliament had proposed that union should consist of two self-governing parliaments under a single crown and with common arrangements for agreeing common matters.  This proposal had been called “Federal Union” but had been rejected at the time by the English parliament, in favour of a united parliament for the two countries.  If Scotland was not to become independent, it was very likely that something similar might be agreed as the alternative.

In the discussion that followed, it was clear that if more devolution in Scotland was likely, that fact needed to be clear before the referendum vote was held.  There was a strong case for including the devolution option, so called “Devo-Max”, as a third option on the ballot paper.  The special nature of the Anglo-Scottish union, created by the Act of Union of 1707, clearly revealed how hollow the notion of parliamentary sovereignty really is: there are things that parliament cannot do, regardless of the writings of A V Dicey in the 19th century.

Opinions differed as to whether a stable federation could be created from the United Kingdom if England were one of the member states.  With 80 per cent of the population, there was the possibility that it would be so dominant that the other states would seek to leave.  On the other hand, the English regions were not nearly significant enough in the public mind to be an alternative: the break-up of England would be as unacceptable to the English as English dominance would be to the Scots.

There is also the European dimension.  Scotland, as a newly independent country, would be required to apply for admission to international organizations such as the United Nations and the European Union.  In the case of the EU, while there is certainly some unease at the prospect in countries such as Spain, with regional issues of their own, it was hard to see that Scotland could readily be prevented from becoming the 29th member state of the EU – it has already implemented the bulk of EU law in the acquis communautaire, making the negotiations for its accession very different from those of a completely new member such as Croatia.  But looked at from the other side, if Scotland is already in the EU, participating in the policies and implementing the laws, how much difference would there be in practice between independence and Devo-Max in any case?

These notes were written by Richard Laming but have not been checked with the speakers themselves; any errors therefore should not be attributed to the speakers.

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