UK Brexit is a risky opportunity for the SNP

Significance On September 2, in light of the Scottish electorate's overwhelming vote to remain in the EU, Sturgeon's ruling Scottish National Party (SNP) launched a national survey on whether to hold a second referendum on their flagship policy of independence from the United Kingdom. Impacts Sturgeon's display of post-Brexit leadership will cement her popularity in Scotland, regardless of the independence question. The apparent exhaustion of all other options of retaining EU status could see independence support increase. The failure of a second referendum could put an end to the independence cause for a generation.

Significance The move follows the annual conference of her ruling Scottish National Party (SNP) in Glasgow this month -- its last before Scotland and the rest of the United Kingdom leave the EU on March 29. Sturgeon has so far resisted pressure to call another Scottish independence referendum in response to Brexit but kept supporters’ hopes alive stressing in her keynote speech, “a better future is within our grasp”. Impacts Sturgeon’s address to the People’s Vote marchers is a clear signal to EU leaders and could stand her in good stead in future talks. Negative Brexit-related developments over the coming years will strengthen the independence movement. Scotland would be in a strong position to re-enter the EU but not to negotiate a bespoke deal.


Subject Prospects for the United Kingdom in 2020. Significance Regardless of the December 12 election outcome, Brexit will continue to dominate UK politics and further fuel economic and business uncertainty in 2020. The Scottish National Party (SNP) will press London to allow a second independence referendum, risking the integrity of the Union.


Author(s):  
Stephen Tierney

This chapter examines the independence referendum in Scotland, held on September 18, 2014, and its implications for the federal direction of the United Kingdom. The referendum saw 55 percent of Scots say “No” to the question: “Should Scotland be an Independent Country?”. Despite this result, the referendum has sparked a further process of decentralization. The chapter first describes the context that led to the Scottish independence referendum, focusing in particular on the success of the Scottish National Party (SNP) in the parliamentary elections of May 2011 and why the referendum emerged from—and was organized within—the normal contours of constitutional democracy. It then considers the period of constitutional engagement and the outcome of the referendum before concluding with an analysis of some of the lessons that can be drawn from it with regard to constitutional change and the issue of secession.


Subject Prospects for Europe in the third quarter. Significance For the rest of June and the third quarter, the EU will grapple with the future positions within the bloc of two member states, the United Kingdom and Greece. The period will see the resolution, one way or another, of the immediate crisis in Greece's relations with its international creditors. The way in which this takes place will have profound implications for the future of the single currency.


Subject The package of reforms on a new EU-UK relationship. Significance The agreement between the United Kingdom and its EU partners sets the stage for the UK referendum on EU membership, which Prime Minister David Cameron has set for June 23. Cameron said he had negotiated new terms that would allow the United Kingdom to remain in the EU. Impacts The deal bolsters the campaign to remain in the EU, but the referendum outcome is still highly uncertain. The deal will only come into effect if the outcome is for remaining, forestalling a second referendum for better terms. If the outcome is for leaving, a new relationship with the EU would have to be negotiated during a two-year transition period. It would also probably lead to a second Scottish independence referendum and UK break-up.


Subject The United Kingdom's WTO status after Brexit. Significance The terms of the United Kingdom's WTO membership are linked to those of the EU. In order to continue benefiting from other members' concessions after Brexit, the United Kingdom will need to arrange its own membership and terms in a potentially lengthy and complicated negotiation process with all other WTO members. Impacts Upon Brexit, the United Kingdom will regain its full competence for concluding bilateral and regional trade agreements. The government's slow progress in recruiting experienced UK trade negotiators may put it at a disadvantage. Poor understanding of the complexity of WTO negotiations may mean that economic losses have been underestimated.


Significance This followed a landmark speech on January 17 in which she added more clarity and detail to her previous stance on the United Kingdom’s departure from the EU. May indicated a willingness to leave the single market, strongly implied that the United Kingdom would not be part of the customs union in its current form and asserted that she would rather quit the EU with no permanent or transitional deal agreed than accept an arrangement which limited the United Kingdom’s future freedom of action. Impacts The government is likely to meet its preferred timetable for triggering Article 50 even if it has to obtain approval from parliament. The United Kingdom will probably lose its passporting rights, which allow UK-based banks to sell their products across the EEA. Paris and Frankfurt will probably benefit as banks may seek to move some of their staff out of London.


Significance This comes after the Telegraph reported last week that Soros had donated 400,000 pounds to the group. There is an ongoing debate as to whether the United Kingdom will in fact leave the EU. Central to it is the question of whether the UK government can unilaterally revoke its decision to trigger Article 50 in March 2017. Impacts Voters would be less likely to support the revocation of Article 50 if the Council imposed conditions that made membership less attractive. Revoking Article 50 and remaining in the EU would reduce damage to the UK economy. If Article 50 is revocable, Eurosceptic governments could be tempted to use the prospect of triggering it as leverage in EU negotiations.


Subject MiFID II implementation and compliance Significance The EU’s flagship investor protection reform -- the Markets in Financial Instruments Directive II (MiFID II) -- will come into force on January 3, 2018, Valdis Dombrovskis, the EU Commissioner responsible for financial stability, confirmed on October 17, saying that there would not be a further delay. Despite already having been given an extra year's extension, banks are struggling to comply in time because of the directive's complexity. Regulators, too, are behind in expanding their capacity to enforce it. Impacts Firms across the world that do any of their business within the EU will have to comply, not just those registered in the EU. All firms trading in financial instruments must comply but those where this is a small part of their business may be caught unawares. MiFID II will come into effect before the United Kingdom leaves the EU and is likely to be written into UK law post-Brexit. The United States is keen to deregulate, but US firms whose EU activity is not compliant will be punished, possibly harming US-EU relations.


Significance However, member states have the dominant foreign policy role in the EU. After Brexit, that will be France and Germany despite the United Kingdom insisting that it wants to maintain as close a relationship with the EU as possible. Impacts EU reformers will light on foreign policy as an area to drive forwarded integration. However, the EEAS lacks the competencies and institutional horsepower to be a force for integration. The strategic needs of the 27 post-Brexit EU members will be various, thus acting as a drag on integration. Smaller EU member states will see more advantage than larger ones in collectively pursuing foreign policy goals through Brussels. Larger member states will be unwilling to submit their national defence policies to greater EU authority.


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