Scotland’s place in Europe, in the event of a Yes vote in the Independence Referendum,was a matter of fierce debate throughout 2014.
A number of UK and European leaders, including Manuel Barroso, President of the European Commission, and Mariano Rajoy, the Prime Minister of Spain, stated that an independent Scotland would have to apply for EU membership as a new member. As with all new members, this would involve a commitment to joining both the euro currency and the Schengen area.
This timely report found that Independence would cost Scotland nearly a billion pounds a year.
The losses would be the result of Scotland failing to renew three special arrangements that benefit the UK in its dealings with the EU: the budget rebate, the euro opt-out, and the opt-out from the Schengen border agreement. The study measured the impact on the Scottish economy of each.
The UK rebate, negotiated originally by Margaret Thatcher in 1984, is worth around £295 million (€354m) to Scotland every year. As a sovereign state, Scotland would have to contribute to the UK’s rebate alongside other member states – costing her £46 million (€55m) a year.
If Scotland joined the Euro, as all new member states are currently obliged to do – the report estimated that total losses from higher transaction costs and changes in trade patterns would cost the Scottish economy a further £468million (€562m) a year.
Estimated impacts of select EU-related costs for an independent Scotland
Ongoing annual costs (€m)
Output effect (€m)
1,063.5 – 1,097.7
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