Monday, September 08, 2014

Scottish independence may be a non-event

Next Thursday, the Scottish voters will be asked whether Scotland should become an independent country. Some Scots support the independence efforts. Many Englishmen such as Stephen Hawking and Paul McCartney have urged the Scots to vote to preserve the union. Peter Higgs, an Englishman in Edinburgh, was undecided quite recently. The result of the referendum seems completely uncertain now – the odds are 50-50.

Lyrics of the Czech jingle that I would hear rather often as a kid, despite socialism: The Scot has skirts, pipes, and the lake where a mysterious secret has been hiding for a long time. They say that an evil monster resembling a dragon is living there. Only Matthew and Pauline know what it looks like. In fact, there are numerous monsters there, they are not evil at all, and none of them is certainly monstrous. Who wouldn't like the Ness Family and who wouldn't like to play with them? They are wonderful friends.

The United Kingdom has been a whole for many centuries and changes of the state borders are so rare that many of us tend to instinctively think that the dissolution of the U.K. would be a big deal.

However, unlike Kiev, London is unlikely to launch an anti-terrorist operation against the separatists. In fact, one expects the split, if there will be a split, to be as velvet-like as the Velvet Divorce of Czechoslovakia. The two nations don't really hate each other at all and they're at least as sensible as the Czechs and Slovaks were in 1992.

Just to be sure, at 5.5 million, the Scottish nation is exactly as large as the Slovak nation. The Englishmen, Welshmen, and the Northern Irish are much larger than the Czechs (60 million vs 10 million) but otherwise the situations are relatively close. One of the two pieces is decidedly larger but the smaller piece is in no way negligible.

(The fact that less than 10% of the population of Britain lives in the Northern portion which is almost 1/2, Scotland, is one of millions of proofs that global warming is really, really not taking place. Canada provides us with an analogous proof.)

Of course, it's up to the Scots to decide and it is not my job to recommend them any answer, especially because I don't really care in one way or another. But there are lots of reasons to think that the union is more natural and efficient; and there are many reasons to think that the split would make sense and would make some things more efficient and relaxed.

The Scots have undoubtedly become a standard part of the Anglo-Saxon civilization. Years ago, I would think that Scotland is full of special people who primarily speak the Celtic language, Scottish Gaelic. If you are a victim of a similar vision, let me assure you that 99% of the Scots don't speak the Celtic language at all!

Nevertheless, I think that their special identity is stronger than the Canadians' identity – apologies to the Canuck readers – so the unification of Canada with the U.S. would actually be more natural than the union of the Scots and the Englishmen. Feel free to loudly disagree – again, I don't really care.

While the U.K. should be able to live without special courses from Czechoslovakia, some of their question marks about the future look so confused that they should perhaps learn something from the Czechoslovak history. Others, including my country, should be a bit more pragmatic, too.

For example, there are questions whether Scotland would become a EU member and Ireland, Latvia, and Czechia seem to oppose this idea and prefer a 10-year-long admission process. I find it silly. Both the truncated U.K. and Scotland should be successor states so I think that the default opinion whether they should remain in the EU should be the same for both countries. Well, if there will be a strong opposition, it may happen that Scotland will lose some of these things and the voters may want to take this risk into account.

An important question is the currency union. London doesn't want it because it would have to pay the Scottish bills. This explanation is irrational. Paying bills for one another is a completely independent question from the currency union. When Czechoslovakia was getting split, one of the reasons that made many Czechs happy about the idea was the end of the subsidies for Slovakia, the end of the redistribution. We were no longer supposed to be responsible for Slovakia's finances – despite the fact that the plan was to keep a monetary union.

We tried to keep the monetary union, indeed. However, everyone in the U.K. should learn a lesson from what was happening in Czechoslovakia. In early 1993, the cash began to be transferred to the Czech territory. For a simple reason: people and companies thought that there was a risk of a currency split and the expectation was that the crowns on the Slovak territory would become Slovak crowns which would quickly be devalued.

Because of these flows and asymmetries, it became necessary to split the currency union, anyway. So six weeks after the dissolution of Czechoslovakia on January 1st, 1993, a plan was ready to split the currencies overnight. Some (Czech and Slovak) stamps were glued to every banknote (the stamps were printed in Latin America, to make the transition really secret) and not such a long time afterwards, we already had separate banknotes and coins.

While some of the expectations for a Slovak crown devaluation were intense, in average, the Slovak crown stabilized at 70-80% of the Czech crown – the asymptotic difference was not qualitative in any way. Still, most people don't want to lose 20-30% of their savings, either.

Many of the federal offices and bureaus would simply be split to two identical copies, one for Czechia and one for Slovakia. Some of these plans would be designed by both sides. Many of them were really invented by Václav Klaus and his people and simply copied to Slovakia as well and it just worked.

While the United Kingdom probably doesn't have any politician of Klaus' caliber, perhaps even the politicians who are those 3 categories beneath Klaus could be capable of managing such things. One must admit that there are issues that would make the English-Scottish currency split more complicated, especially the existence of various complex financial products and derivatives which we didn't really have 3 years after the fall of communism.

I believe that it is possible to negotiate some conditions that would allow the currency union in the U.K. to continue. I also believe that it could be straightforward for Scotland to switch to the euros or a new currency, too. All these things must be planned in advance, a reasonable number of government figures must be aware of all these plans, and many of the details must be kept secret from the general public.

A dissolved United Kingdom would have to think about many issues that are much less important than the currency union, e.g. the state symbols. A funny technicality that formally implies that Czechs were fraudulent was the flag. The Czech-Slovak negotiations actually led to the conclusion that no successor state would use the Czechoslovak flag. For a while, Czechs were thinking about insane possibilities, like using the old flag of Bohemia which is identical to the flag of Poland (white and red horizontal strips only). That would be pretty bad to have the same flag, wouldn't it? You may see the "Polish" flag of Czechia in the 1993 Mládek's funny song on the Czech space program.

The Czechs weren't really the original drivers of the dissolution so we didn't want this crazy hassle and kept the Czechoslovak flag regardless of the agreement. No one in Slovakia really cared after all.

Now, while no one in Scotland is likely to insist that the remainder of the U.K. starts to use a different flag so the English will be OK with the current British flag, a modification of the U.K. flag would actually be much more sensible than it was in the Czech case. The U.K. flag is really a superposition of three flags:

The red "plus" cross on the white background is the English flag, the red "X-shaped" cross on the white background is the flag of the Irish island (including Northern Ireland), and the thicker white "X-shaped" cross on the blue background is the Scottish flag. If the English respected this amalgamation theory, they should replace the blue background by the white background. The new flag would be just the two red crosses on the white background which looks pretty ugly.

I won't even discuss territorial disputes because I don't expect any. Scotland is as sharply well-defined as Slovakia was before 1993 so the borders should be adopted. However, despite this clarity, Czechia and Slovakia did negotiate about one or two villages and a few more cottages on top of that for decades. ;-)

Perhaps more seriously for the Slovaks, only one of the two successor states could have remained in the top groups of the ice-hockey tournaments and similar things. In the case of ice-hockey, Slovakia quickly ascended from the lowest level of international sports and won the world championship (in the top group) within a decade from the dissolution which I find rather impressive. The Scottish voters may want to check which sport competitions their athletes could suddenly disappear from.

I wish the Scots good luck regardless of their vote.


  1. The biggest impact would be on Parliament. Scotland is the heartland of socialist frenzy, and the rump Parliament would move to the right.

  2. OK, I would warn everyone against such considerations. Dividing a country is still a much more long-term act than some current balances in the Parliament so exactly what the dissolution would do with the Parliament in 2015 isn't sensible a major part that should drive such decisions.

    When Czechoslovakia was getting dissolved, Slovaks would also be the more left-wing ones. But this correlation would get reverted in 5 years, and again a few years later.

  3. It would be interesting if the Scots vote Yes just to see what happens :-).

  4. "However, unlike Kiev, London is unlikely to launch an anti-terrorist operation against the separatists."

    The Crimean "referendum" is a more relevant comparison to the events in Scotland, and the contrast couldn't be more stark.

    On a more Western note, it will be interesting to see if the Scottish referendum, let alone actual secession, will provide additional impetus to Catalonia to seek independence from Spain.

  5. IIRC only about 1/3 of Czechoslovakians favored desolution and there never was a referendum. I'm not sure why the Scots need a referendum. If they elect a separtist government, then that government should be free to negotiate separation. If that were the case here in Canada, then Quebec would already be its own country, which probably would be a good thing. I believe the uncertainty continues to hurts Quebec's economy.

    BTW, many Canadians look at the politics south of the border and think they're crazy. The Americans probably think the same about Canada, if they think about us at all. I can't imaging there ever being strong support to join the U.S.. Now maybe if we could convince Florida to join Canada, we probably could live with that :) Until Global Warming kicks in that is, then they could have it back.

  6. The English problem with Scots' autonomy is the kilt. English virility is overall limited to soccer hooligans. Every man a Scot carries a claymore out of scabbard. Ye cannae shoogly 'at upon th' warld.

  7. Unlike a liberal politician with the name Paul Krugman, I have no doubt Scotland would be a succesful independent country. It's not as if the union would be ripped apart by war, it would just be a 'friendly' seperation, a bit like the Velvet Divorce. Independence has many pros and cons, but in the end, it would very likely work out for Scotland, particularly because they have a fair amount of natural resources.

    I'm actually more interested in the (European) political fallout if Scotland decides to leave the United Kingdom. Scotland is generally pro-EU, whereas the rest of the UK is generally anti-EU. This poses all kinds of interesting questions.

    Is it possible for Labour to win the general election in the UK soon
    again? Currently, they rely a lot on Scottish voters. If Scotland is
    gone, they need roughly a quarter of a million extra votes to win the
    general election. It seems Scottish independence would firmly put the Tories in power.

    With the Tories in the saddle, the UK's European Union membership referendum will soon be a reality. Will Scottish independence change the referendum outcome? I'd say 'Yes', it would increase the likelihood that the UK leaves the EU, because the generally pro-EU Scotland is gone.

    Will an independent Scotland weaken the United Kingdom's position in any
    European Union exit negotiations? I'd say the answer is 'Yes',
    because it lost 5 million people, a huge amount of land, territorial
    (fishing) waters and a fair share of its GDP. They are still relevant, but not as much.

    Will an independent Scotland weaken the United Kingdom's position within the European Union? I'd say the answer is again 'Yes', because the UK's voting weight decreases and it loses MEPs, too. Moreover, Scotland could demonstrate its independence and vote against UK proposals.

    If the United Kingdom refuses Scotland as a member of its monetary union, would this drive Scotland towards Eurozone membership? I don't know what to think of this. I guess not, because the people in Scotland don't want to join. But then again, maybe the euro is preferable to a Scottish currency.

    Another interesting question is if Scotland could actually join the European Union. Some people expect countries like Spain to block membership, to send a message to their own independence movements (e.g. Catalonia). Seems unlikely to me. Would lead to backlash from other EU members.

    My overall assessment is that Scottish independence would weaken the
    United Kingdom's position in the European political landscape. This
    would strengthen the europhiles, since the UK is the preeminent
    eurosceptic country. The europhiles even gain an ally: pro-EU Scotland.

  8. 4. No honest, factual debate in the media and amongst citizens, about the pros and cons of annexation of Crimea by the Russian Federation.

    Given the difficult circumstances, perhaps understandable, but certainly not ideal. Isn't Crimea hugely dependent on Ukraine? Food, water, energy. What about the Crimean economy? Jobs, businesses, (public) transportation. State-funded pensions - if any - will Russia fufill these obligations now? Will the citizenship of non-Russians change? Is it possible to remain Ukrainian instead? The ruble will be Crimea's (sole) currency now? Will Russia subsidize the region, or they have to fend for themselves?

    Just a few questions one can ask. Many of these questions could be addressed in a regionwide independence and/or annexation debate. But there wasn't one in Crimea. The annexation happened in a rush. This in stark contrast to what we're seeing in the United Kingdom, where there's a lively debate in the media and amongst citizens. And the debate is just the start, because after a 'Yes' vote, many open questions would be addressed during the negotiations.

    I think the lack of debate in Crimea about the pros and cons also skews the referendum result. I have little doubt that a majority of Crimeans want to join Russia. Even after a lengthy regionwide debate that would likely not change. But I do think the percentage of pro-Russia voters would go down if many of the open questions would have not so positive answers.

  9. I am a Canadian and am pretty sure our current Tea Party PM is doing everything he can to dissolve the differences between Canada and the US. We will have a referendum in 2015 and Harper will assume his place in the dustbin of history.

    For Canadians its a fascinating story. The Queen of England is still our head of state, but dissolution may prompt Canada to become a republic. We have our own Separation anxiety with Quebec.

    If culture and arts are the power, Scotland will be have led to freedom by Liam Neeson (Rob Roy) Mel Gibson ( Braveheart) and Battlestar Galactica (Outlander)

  10. You must have been sleeping. As soon as the separation efforts began (or, in some cases, when the referendum results were announced), all your questions were settled.

    Ukraine stopped almost all export and transfers to Crimea so indeed, Crimea is much less independent of Ukraine than Scotland is independent of England today.

    The rouble has been the only currency on Crimea since the days after the referendum, too, and Ukrainians by citizenship are aliens over there just like there are anywhere else in Russia - or any other country in the world, for that matter. Do you really need to ask these questions?

    The annexation happened quickly because it had to. The coup in Kiev occurred quickly as well and if the annexation did not proceed quickly, the junta could have very well conquered Crimea as well.

  11. It seems there's a misunderstanding. I'm not pro-Kiev or pro-Moscow.

    We were talking about the differences between the Crimea annexation and Scotland's possible independence. The lack of regionwide debate in Crimea right before the annexation, stands in stark contrast to the lively debate we're seeing in the United Kingdom. Don't you agree with this observation?

    I'm not very judgmental about what happened in Crimea. I mean, ideally I would say a debate about the positives and negatives is preferable, since it takes away uncertainty and it makes any possible transition smoother. But given the difficult circumstances in Crimea, I also understand why it wasn't possible. They had to do it quickly.

    Moreover, like I said previously, I also think it wouldn't have changed the ultimate outcome. The vast majority of the Crimean population supports the annexation of Crimea by the Russian Federation. A lengthy debate about the pros and cons would probably only change the percentages of pro-Russia and pro-Ukraine voters a bit, but not the secession of Crimea from Ukraine.

    I now wonder what's going to happen in Eastern Ukraine. Crimea quite clearly wants to join Russia, only hardcore Russophobes still deny that. But in Eastern Ukraine the situation is not so clear. Some polls suggest a sizeable majority is against annexation by Russa:

    It's noteworthy that even the majority of Russian speakers is against. It look likes the people want some degree of autonomy, but not annexation.

    Western propaganda? Unreliable poll? Some will dismiss it as such. What do you think of it?