Scottish independence: could wind power Scotland back into the EU? Following Brexit, Scotland is having to choose which economic area it most wants to associate with – the UK or the EU.
Remaining in the UK means continuing Scotland’s existing economic relationship with England and Wales while facing a more complex relationship with the EU and more controversially Northern Ireland, which effectively remains in the single market. What about voting for independence and joining the EU? One major problem is the EU fiscal rules, which require a general budget deficit of no more than 3% of GDP per member (this is temporarily suspended because of COVID). In 2019-20, Scotland’s deficit amounted to 6.9% if North Sea oil revenues are included (or 7.5% without it). This was a considerable improvement on earlier years, but still well above the threshold – and that was before the pandemic. Now UK borrowing is hitting record highs and the Institute for Fiscal Studies thinks Scotland’s effective deficit will have reached close to 30% in 2020-21. This will affect the long-term debt burden of both the UK and Scotland, and raises questions about how an independent Scotland’s share of the UK debt should be calculated. Green energy would be of particular mutual interest to Scotland and the EU, especially wind power, for which Scotland has the most favourable conditions in Europe. Scotland’s accession would be valuable to help the EU meet its goal of climate neutrality by 2050. At least 25% of the EU’s long-term budget is to be dedicated to climate action, while the European Investment Bank, the EU’s lending arm, plans to invest €1 trillion in climate action and environmental sustainability between now and 2030. Scotland’s wind power capacity is comparable with Italy and below only Germany, Spain and France. But more importantly, 97% of internal energy consumption in Scotland originates from renewables. The EU member with the highest green energy consumption is Sweden, with less than 60%. The EU total is only around 20%, so Scotland would immediately raise this share.
The Conversation 26th March 2021 read more »