Scotland referendum: 'Yes' side banks on quick EU deal

Scotland’s Yes side is counting on a quick re-entry to the European Union if voters opt for independence in the referendum Thursday.

Ties with EU are particularly important to Scotland, as 46 per cent of its trade is with Europe.

The Yes side is banking on a continued trading relationship, just as it assumes that most of the economic activity now centred in Scotland would remain there.

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With the referendum vote too close to call, Britain is warning of a huge economic hit if Scotland votes Yes. Capital will flee, there will be uncertainty over the currency and standards of living could fall in an independent Scotland, the argument goes.

Smooth admission to the EU is also far from a sure thing. All of the EU’s current members would have to vote in favour of Scotland’s admission to achieve a quick re-entry.

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That may not be a palatable option for any country with its own regions hoping for independence – Spain with the Catalans or France with the Basques, for example. Spain blocked Kosovo’s entry to the EU, after its independence fight.

European Commission president Jose Manuel Barroso said earlier this year it would be "extremely difficult, if not impossible" for an independent Scotland to join the European Union.

Scotland is already grooming old friends in the EU in the hopes of moving the process along.

Scots like the EU

France and Scotland were allies for centuries over their shared hostility toward England.

In the past year, Edinburgh and Paris have signed co-operation pacts in energy, education, culture and the arts.

There is little of the anti-EU sentiment so pervasive in Britain in Scotland.

In fact, the Yes side is eager to get a seat at the table on EU bodies that set trade and standards policies.

There also is an underlying resentment that so many of the best and brightest from Scotland have to go elsewhere (usually London) to get ahead.

The Better Together campaign argues that the U.K. market of 60 million people is very important to Scottish business. It points to benefits of sharing the costs of pensions, welfare, the military and administration. And it cites the bailout of Scotland's banks by U.K. taxpayers in 2008. 

Consumer prices and mortgage rates are both lower because Scotland is in the union, the No side says.

The Yes side is asserting that an independent Scotland would be richer than rest of U.K. In fact, it estimates Scots send more to Westminster in taxes than they see in services, more than £1,300 ($2,300 Canadian) per year.

Scotland already pays its share of the cost of services like the welfare and pension systems, it says.

Part of what the Yes side says is an overpayment is the £2 billion ($3.6 billion) a day it contributes to U.K. coffers in revenues on North Sea oil.

It estimates Scotland still has $2.7 trillion in reserves, as well as huge potential for tidal and wind energy.

It touts up the strength of Scottish economy: $30 billion in construction, $18 billion in tourism, $16 billion in petrochemicals, $12 billion in financial services, $7.7 billion in whisky exports — in its website.

Yes side promises to cut corporate tax

It’s even holding out a carrot for businesses based in Scotland, wary of statements by its financial institutions, including the Royal Bank of Scotland, that they would shift headquarters to London.

In a background document on the potential for jobs and business expansion after independence, the Yes side promises a tax cut.

“With independence our economic policy would be tailored precisely to our own needs — for example in order to resist the gravitational pull of London, we would be able to cut the headline corporation tax rate by up to three per cent which could boost employment by up to 27,000 jobs,” the brief says.

British prime minister David Cameron has promised Scotland a “painful divorce” depriving Scots of benefits and pensions and a rising standard of living.

He has pledged that that Scotland will not be permitted to keep the pound as its currency, holding out the spectre of damaging uncertainty over its currency.

But that may just play into the Yes side’s game in Europe – because Britain is the anomaly in not sticking with the euro. In pledging to join the eurozone, an independent Scotland may well secure its place in the trading bloc, despite the naysayers.