If Brexiteers Did Indy

“For now we see through a glass, darkly” – The Bible, 1 Corr 13:12

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Yesterday was the first meeting between the UK Brexit delegation and the EU delegation and, by many accounts, it has fallen far short of the UK’s expectations. David Davis spent months drumming up the “Strong and Stable” approach which would see both the divorce deal and the subsequent post-Brexit trade deal negotiated simultaneously. He was told on every front that this wouldn’t happen and simply brushed off the warnings. And then, when push came to shove…he finally accepted that he’s have to negotiate the divorce deal first. This is just the latest in a long string of failures and ineptitudes over the course of the UK’s handling of the whole farcical process and it got me thinking. If Scotland had voted Yes in 2014, what would it have looked like if the Scottish Government had handled that vote the way the UK has managed Brexit.

What if the hardcore Brexiteers did Indy?

Somewhere. In Another Scotland.

Spring 2013

The SNP have been ascendant. Under First Minister Alex Salmond, the party is now in the second year of its majority government. Salmond, who had always been known as a gradualist, had been reluctant to offer something as drastic as an independence referendum. He was far more interested in focusing on domestic policy such as his infamous Tunnocks Tax but after a couple of defections of MSPs to the fringe party Siol na h-Alba in 2010 it was inevitable that independence would have to be an option on the table.

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Salmond tried to soften the blow by concocting a plan by which he would take a package of offers to the UK Government and ask for a series of “more powers”. Only then would he present the case to Scotland to either accept his deal or to demand independence. The date of the referendum was set. 18th of September 2014.

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Winter 2013

The talks with the UK Government has not gone as well as hoped. The general impression in Westminster is, at best, one of “this again?” and whilst they eventually agreed to hand over a few concessions – Scotland would gain the ability to adjust income tax by a couple of pence in the pound and some obscure regulatory powers that no-one could really describe well would be shifted – but the overall impact was clearly going to be negligible. Salmond, of course, plays the whole thing as a glorious success. The Scottish Conservatives are no friends of independence welcome the successful deal with Westminster and pledge to endorse and support it.

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Spring 2014

The Independence Campaign is taking shape. Salmond would head up the Scottish Government’s “official” Remain campaign under the banner “Not Yet”. He’d play up the economic benefits of the close ties with the rest of the UK whilst emphasising the autonomy that Scotland had and would get in the future. In Salmond’s vision Scotland would take the path of Australia. A slow, decades long decoupling from the rest of the UK by which independence would eventually be achieved but…“not yet”.

This, of course, wasn’t going to be soon enough for some. In a shocking move, senior Scottish Government cabinet members Nicola Sturgeon and John Swinney break with the “official” position and declare themselves for Leave. They take with them a substantial enough bloc of the SNP to form a rival campaign under the banner “Scotland Now”. The majority of activists from opposition parties such as the Greens, Socialists as well as a minority of members from Labour and the Lib Dems flock to their call for an independent Scotland within Europe.

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Meanwhile, Siol na h-Alba launches their Leave campaign from their constituencies of Brigadoon and Dunroamin pledging “Scotland for the Scots” and the complete severing of all ties with the rest of the UK as soon as possible. Harking back to Scotland’s past as a trading nation and playing up sentiments of traditional “warrior spirit” they are determined to court the most fringe elements of Scottish society to their cause. Though careful to avoid any direct accusations of racism, SnA leaders busily work with their pliant media contacts to insert dog-whistle phrases into their puff pieces. Media attention on the group has never been higher despite them still only having two MSPs (neither of whom were elected under the Siol na h-Alba ticket).

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Both Leave campaigns declare themselves to be the “official” voice of independence and register their interest as such to the Electoral Commission. There is a lot at stake as the official campaign would gain an increased campaign spending limit as well as direct government funding and representation on political broadcasts. After weeks of debate, the Commission eventually rules in favour of Sturgeon and Swinney’s Scotland Now.

Summer 2014

The campaigning is now fierce but cracks are beginning to show. Much of the debate has centred around things like the economy and immigration but the arguments are beginning to sound increasingly vacuous. Few debaters are willing to lay down solid plans or proposals of their own, preferring instead to attack the opposition whenever they mention something, anything. The same soundbites are repeated on the evening pundit shows. Shows like Question Time become dominated by debates about domestic policy and rarely do any clear answers emerge.

Scotland Now comes under increased scrutiny as it emerges that they have little idea about what, precisely, they wish to do with independence. Calls for an Independence White Paper begin to gain traction and the few media interviewers with the nuance to do so begin to ask about procedural questions such as how the Scottish Government would begin negotiations to disengage from the UK. The UK’s constitution, being an “unwritten” document is particularly vague on the subject and the previous examples of disengagement – Ireland and decolonisation – are not altogether helpful in the modern age. Questions, too, about the border, currency and other issues are answered only with platitudes and soundbites.

Not that the other Leave campaign is any better. Asked on what currency Scotland would use, Siol na h-Alba’s leader Niall McFergus simply said “No the Inglis yin!” and refused further questions.

With the date of the referendum fast approaching, public opinion begins to crystalise into two camps. Folk who are leaning towards Remain tend to say that they are concerned about the economy and are either supportive of more immigration to Scotland or are, at least, not bothered either way about it. Folk who are leaning towards Leave tend to say that they are worried about the levels of immigration to Scotland but are either less concerned about the economy or are convinced that it will thrive once the “shackles of Westminster regulation” are cut. The solid majority for Remain has begun to ebb slightly in the polls but little momentum is gained in either direction.

Autumn 2014

Scotland Now finally releases its Independence White Paper. A dismally short piece containing no real information whatsoever, it is ignored entirely by the now rabidly pro-Leave media and is noticed at all only by a few bloggers on social media.

The Not Yet campaign still appears to be on track for a solid victory, albeit not quite as large as once they hoped. Salmond remains as confident as ever behind the podium but, privately, whispers have emerged of apathy within his campaign. Activists are thin on the ground even in potentially target areas. There is little enthusiasm even among political wonks for his message of “the same but a little better”.

Siol na h-Alba releases an extremely divisive political attack advert showing expies of Sturgeon and Salmond personally welcoming crowds of people coming across the border at Gretna. Police Scotland warns of increased tension in communities but McFergus denies any racial connotations in the advert saying that no particular group was represented. They withdraw the ad later that day under the intense negative pressure but the message is sent and lands home with its intended target.

September 2014 – The Week of the Referendum

Siol na h-Alba kick the referendum off with a week of political stunts by organising a “Fête of Scottish Naval Might” by inviting “all patriotic trading vessels” to journey up the Clyde. The reception is…rather less than anticipated.

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McFergus blames media bias for only running photos of “empty stretches of river between gaps in the flotilla”. No photos of more crowded sections are forthcoming officially or otherwise.

Salmond is near invisible on the political scene although his press corps still doggedly assures a solid victory for Remain. The polls have been a statistical tie for weeks and Leave is still nudging upwards…

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Sturgeon and Swinney are seemingly never off the television at this point but a disastrous interview by Swinney on the final Sunday before the polls in which he struggles to outline any solid numbers about immigration figures is widely ridiculed although he does promise that in the event of a victory for Leave, his team will be ready to start negotiations “the following Monday”.

The Results

With a 65% turnout and margin of 51.89% for Leave versus a 48.11% for Remain, Scotland votes to Leave the United Kingdom. It is a result which sends shockwaves throughout the islands. Early in the morning of the 19th of September Alex Salmond resigns with immediate effect saying “The Scottish people have voted and their will must be respected“.

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It is widely expected that the victorious Scotland Now team will take control of the Scottish Government and begin to implement their (still unpublished) plan to remove Scotland from the United Kingdom. In a shock move, however, the press conference which follows the First Minister’s shows the downcast figures of Sturgeon and Swinney apologising, equivocating and, ultimately, also both resigning their positions in the cabinet. The Scottish Government is now in turmoil with fragmented factions of Not Yet and Scotland Now both accusing each other of failing to come up with a proper plan for leaving. The SNP  hastily organise a leadership contest to replace Salmond whilst assuring that they still have the confidence of the Parliament thus can remain in government.

To cap an already historic day, Niall McFergus also resigns as leader of Siol na h-Alba saying “The job’s done. I’m away tae Nova Scotia”.

Obviously, the Scottish Government is in no condition to start talks on Monday 22nd September. The UK Government says that it will wait till everyone is ready…but that its patience is not unlimited.

October 2014

The SNP leadership contest is marked more by who rules themselves out than by who rules themselves in. All of the prominent pro-Leave faces either beat a hasty retreat for the back door out spend their time outright poisoning the attempts of their colleagues to push themselves forward. In the end, the only person left standing is former Justice minister Kenny MacAskill, who had been a prominent activist for Not Yet. Immediately, his tenure is under question both for his role in the former campaign, the fact that he was “not elected” to the position and also due to questions raised during his time as minister. Nonetheless, a government is formed and the SNP’s majority sees it pass its first vote of confidence. The new government vows to take charge of the “mandate given to the by the people” to leave the UK but says that time will be required to formulate a plan. A deal is struck with the UK Government. Once the Scottish Government is ready to begin negotiations it will notify Westminster via the Scotland Office which will then trigger a process by which Scotland will leave the Union two years later.

March 2015

There is still no plan. The Article SO trigger (as it has become known in the press) has still not been pulled. Patience is wearing thin on all sides. The economy is starting to feel the strain of the uncertainty and many are starting to wonder if independence will happen at all. PM MacAskill announces that he has put together his negotiating team but is immediately criticised for it consisting solely of SNP members from the Central Belt. Parties which supported Leave feel betrayed and locked out. Parties which voted Remain demand that the negotiations take into account the whole of the country and not just the SNP’s fiefdoms. Places like Orkney and Shetland, which voted strongly Remain, demand a distinct “place at the table” to ensure their specific interests. They even produce a detailed and extensive White Paper (at least, extensive in comparison to the still non-existent paper from the Scottish Government) detailing their concerns and offering various compromise solutions. The demand for a place at the table is denied and the White Paper is simply dismissed by MacAskill and the Scottish Government. Even a bill demanding such representation which passed jointly by the councils of the islands goes without formal response.

By the middle of the month there is, at last, some movement. MacAskill announces the publication of a Leave White Paper and announces that Article SO will be triggered by the end of the month. Scotland will leave the UK by the 29th of March 2017.

April 2015

MacAskill sends further shockwaves through an already the Scottish political world by announcing a snap election. Claiming that he had an epiphany whilst hillwalking, he claims that it would increase the Government’s mandate to carry through independence and, he hopes, would neutralise the still lingering claims about the means by which he became First Minister. The election is widely regarded as a rubber-stamp exercise given the still-vast lead the SNP enjoy in the polls. The election is set for June 8th but some warn that the Article SO timer is still ticking…

 

June 2015

The results of the general election come in and it is not to the Scottish Government’s liking. An unexpectedly blistering campaign by Labour’s Jim Murphy – who had been widely derided as “completely unelectable” even by members of his own party – utterly smashed through all that was placed before it. From the day of the announcement of the snap election to the day of the poll there was a rapid rise in support for Labour right across the country.

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From hopes of a crushing majority, the SNP fell to one seat short of being able to form a government at all. Scotland was, by now, the laughing stock of the British Isles but MacAskill vows to cling on and see independence through. He turns to Siol na h-Alba – who lost their new leader Tam McGlashan in Dunroamin but scraped a victory (by two votes) in Brigadoon – to prop up his administration. Soon, the media is full of tales of the worst of Siol na h-Alba’s misdeeds. McGlashan resigns and a new leadership contest is run but by this point, no-one particularly cares about the party which started this whole sorry story.

MacAskill remains determined to progress with Independence talks with the UK Government and sets the date of 19th June to hold the first talk. However, coalition talks with Siol na h-Alba are not going well and the first vote of confidence on the new government is delayed amid bizarre excuses such as “the ink needs time to dry on the paper“. A new date for the vote of confidence is set for June 21st – two days after the first of those discussions with Westminster. The Scottish Government seems as if it will progress without a mandate and without even having a secure and stable government.

The First Meeting

Team Scotland arrives in London to meet the UK delegation. The six man (and it is six men, the lack of other genders is noted) team consists solely of SNP members with all other parties locked out completely. It will be the test by which the rest of the negotiations are measured. MacAskill steps into the room. Full of bluster. Empty of any actual documents. Across the table, David Cameron is waiting…

Back to (our) Reality

From the outset, the UK’s handling of Brexit has been one of the most appalling adventures in modern UK politics. It cannot be ignored that for all the weaknesses of the last independence campaign and for all we can argue about where it could have done better, the old accusation that Scotland would have been walked over by Westminster in negotiations simply no longer stands. The UK really has become a joke in the world and this should not be forgotten when the time comes to plan our own negotiations. Although, at the same time, we should not assume that they won’t learn the lessons of the Brexit disaster. I’m just saying that we should learn them first and make sure that our case is absolutely the best it possibly can be.

I hope you’ve enjoyed this little bit of allegorical fiction. Maybe, if the UK continues as it has been, there’ll be another chapter someday.

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For Those Who Never Wished For It

This is a guest post by @bunniesforindy whom all of  you on Twitter should go and follow.

Independence will be won by those who never wished for it

I’ve wished for independence for a very long time.

As a kid, I waved Saltires and joined in with half-weepy, half-ironic renditions of ‘Flower of Scotland’. I drew the Lion Rampant in my notebooks. One of my most vivid memories as a teenager was staying up to watch constituency after constituency vote YES-YES for devolution in 1997. So for me, the 2014 referendum was immense fun. The flags, the foam pointy fingers, the laughter and hope and celebration.

The morning of 19th September is best passed over; if you’re like me, you know how it felt. But we recovered, and we fought on. For folk like me, Scottish independence is a lifelong dream, an uncrushable hope, and an absorbing hobby. I think I hoped what many others hoped, that we would gradually, organically win people over to our point of view. Perhaps Home Rule would be a step on the path, which might be long and winding, but in the end, would take us where we wanted to be.

That future has gone. That ship has sailed. That became abundantly clear as I watched Phantom Power Films’ latest “Journey to Yes” video.

This is the first of the ‘Sector’ series of films, and has a different tone from the others. Starting with shots panning across farming landscapes, it combines statistics about Scotland’s dependence on the sector with personal thoughts from Hilary and Carey, a farming couple from South Lanarkshire, about the impact of Brexit on farming. The effect it had on me was quite different from the other films, which are joyful and uplifting. This one was, from the very outset, grim.

Hilary and Carey voted No in 2014, primarily over fears that independence might mean leaving Europe, but also because it’s clear that self-determination isn’t a driving force for them. Carey is English. They have family from down South. They think in international, not national, terms, and despite the positive impact of devolution and the SNP government on farming, they were simply not convinced of the need to throw their eggs into the nationalist basket.

It would be lovely, for someone like me, if they moved to Yes by becoming more like me, by developing a passion for the nationhood of Scotland, a sense of joy about building a new future, and even a developing a mild allergy to the Union Jack. But that’s not what happened. As they continue, it becomes clear that their decision is hard-headed, pragmatic, and centred around the same motivation as their previous vote: Europe.

As they describe their feelings on the morning of 24th June 2016 – their paralysis, their grief (“we cried for two days”) – as they describe eloquently the history of the Common Agricultural Policy and enumerate the effects its loss will have on their business and on farming generally, this all starts to feel very serious, very real, very global, and very much bigger than just a joyful political project for enthusiasts like me.

This is not a fun video. It’s hard to watch. The destruction of the lamb industry through loss of markets. The loss of EU funding. The “new clearances”. It all carries absolute conviction, and Hilary and Carey’s conclusion is utterly compelling. These are the kinds of decisions the foresighted are making now, and this is the kind of ground on which the next referendum will be fought. Not on the idea of branching out from the familiar to the thrilling, or terrifying, unknown, but on the prospect of escape from a trajectory that is so damaging, so ill-conceived and ill-managed, that even those who will shed a tear for the Union Jack, and those with no time for flags at all, will be forced to see independence as the only credible choice.

So what does this mean for us, the dyed-in-the-wool?

It means we need to be sensitive. We need to accept that Scotland will gain her independence through the votes of many who never wished for it. Whether because sacrificing their Britishness feels like a very real loss, or just because they were happy with the way things were and didn’t ask for this upheaval, there will be people, on the morning after the last independence referendum, who feel the way we felt on September 19th, 2014. Some of them will have voted No, of course, but others will have voted Yes. Either way, far be it from us to crow. We’ve been there and we know what it’s like. Let’s show more grace than our opponents did to us.

It means we need to be pragmatic. Many of us, behind the foam fingers, are in fact very hard-headed, very pragmatic. It’s a fine feature of the Yes movement that it can be at times wonderfully exuberant and at other times boringly down-to-earth. So let’s show our best side to those who join us reluctantly. They voted No out of prudence, and that prudence is one of our great assets as a nation. We need to recognise it and value it, whatever our own frustrations over that first result. We need these people. We need all of Scotland.

And it means we need to be realistic about how urgent our situation is. I hear people saying things like “we need to accept the timetable might slip, another referendum in 5 years would be fine.” No it wouldn’t. Not if, in those five years, we lose not just our EU membership but our membership of the single market and customs union, our EU funding, and the residency and voting rights of our EU citizens.

Continuity of full membership would be nice, but if we lose it, we can rejoin. Continuity of these other aspects is crucial – we simply cannot afford to lose them, even temporarily. Even if a transitional deal is set up, every year that goes by means thousands of migrants who give up hope of a secure life here and choose to live elsewhere. And if those who stay are disenfranchised, the referendum vote will be skewed and may be lost.

I’m confident the Scottish Government understands the urgency, but I’m not so confident it’s well understood by activists, and certainly not by the general public. It’s a message that we desperately needs to get across. Many polls have indicated that a majority of people believe independence is inevitable. We need to communicate that it can’t be put off. “It’ll happen eventually…” I’m sure it will, but if we don’t take the chance now, and hold a referendum before we lose our EU benefits, the country that becomes independent 10, 20 years down the line will be damaged and diminished by what’s happening right now.

Independence is not just a project for the enthusiast. it’s a national escape plan, and the clock is ticking.

 

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The Bridge

“Politics is a life we choose because we think we can do some good” – Kezia Dugdale, 25th April 2017

Today the Scottish Parliament debated the cuts to Child Tax Credits being imposed by Westminster. This necessarily centered much of the debate around certain exceptions to those cuts, in particular the so-called Rape Clause. This article isn’t about that Clause in particular. That must be for others. If you want, you can watch the entire debate below

Instead I want to particularly highlight Labour leader Kezia Dugdale’s speech (from 26:20 above or here). Please watch it in the context of that debate before continuing.

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Now IS The Time

PM Theresa May has called for a UK General Election to be held on June 8th. Because the UK is completely united behind her vision of Brexit and now is not the time for divisive politics..or something.

This election does have to get over the stumbling block of the Fixed Term Parliaments Act which requires a 2/3rds majority in the Commons to overrule but Labour have already announced their support for that move. It must be hard for them. If they do it, they’ll get a drubbing. If they don’t, they’ll be crucified in the press.
Whilst I don’t think the Tories will find the prospect of kicking Labour whilst they are down to be an unwelcome one, I still don’t think that this is the primary motivation for this call. There’s little the Tories can’t do with a majority of a dozen or so that they could do with a majority of 50+.

I don’t think this is about Labour. This is a Brexit call. May will be wanting to legitimise the hardest-of-Brexits she’s angling for but which wasn’t in the last manifesto. She’ll also be wanting to harden the party behind that vision. I’d be watching the selection process very carefully to see how many of those back-bencher Remainer Tories get quietly (or not so quietly) purged from the ranks or at least get made to submit to the party will.

With regard to Scotland, this is a gamble which only makes sense if May isn’t considering Scotland at all. All it is going to take is the pro-independence parties (especially the one which holds all of the pro-indy seats at the moment) to put up their 2015 manifesto as read and state that this General Election is about the choice between the hardest of Tory Brexits and Independence. Once they return a majority (I wonder how David Mundell is feeling right now) then no-one can deny that mandate for a referendum without ridicule.

SNP support probably isn’t as strong as it was in the wake of the Surge inflated 2015 election but FPTP will still work in its favour. The chances of returning a majority of seats by themselves is still substantial.

And then there’s Northern Ireland which is still without an Assembly. Yes, in normal times the General Election dynamics are somewhat different but between the prospect of Brexit and Direct Rule these are far from normal times. I won’t even pretend to try to predict what will happen there.

So what’s the “best case” scenario for May? A quelled party, a silenced opposition and “the regions” don’t make too much of a racket as they follow the UK into the hardest of Tory Brexits and all the cuts, Austerity and pain that will bring. Tory rule will dominate for a decade or more.

Her “worst” case? She loses her majority and the mandate for Brexit. Government crumbles, resignations happen and all the while Article 50 – which was triggered by a “united” Britain less than a month ago keeps on ticking down towards May 2019…

Interesting times.

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The Drake Equation

When was the moment you became afraid, genuinely afraid, for the outcome of Brexit?

Maybe it happened a while ago. Maybe it hasn’t happened yet. I hit that point today.

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We’re less than a week into the Brexit process and the UK has already told the EU that there may be security concerns…nudge nudge…if it doesn’t get what it wants (although that was just a misunderstanding, don’t you know?).

Then the Government was utterly blindsided by Spain gaining a veto over any deal which involves Gibraltar – despite those in the actual know talking about it for literally months prior to the vote.

In response, senior politicians in the UK – a NATO member – are threatening another NATO member with the prospect of actual war.

And the negotiations haven’t even started yet.

As part of my EU Referendum series, back right before the Brexit vote I stated that I didn’t believe the hype that a Leave vote would be the utter ruination of everything.

I even felt that J. J. Patrick’s three part series on the road to a Dystopian Brexit was, if plausible, at least well out on the edge of the probable. At best a warning rather than a prediction.

What I hadn’t, obviously, fully appreciated was the utter incompetence of the UK Government’s Brexit team. I’m not just talking about the bumbling excuse for a clown that is Boris Johnson – such a Titanic Success he’s been – but also David Davis, who nine months after the vote and just days before the triggering of Article 50 couldn’t answer even basic questions about the “plan”.

But even all that is just incompetence. Even that would just lead to the UK being out-negotiated on every major issue by the EU until it either accepts the deal offered or stomps off into the sunset without one.

And this latter option is what looks increasingly likely. It really does look like the “plan” is to walk out of talks and to find some way of blaming the EU for it happening.

But back to that headline. The sight of the UK threatening another European nation with war as a negotiating tactic – for that is what it is, make no mistake there – is deeply disturbing. At heart, I’m a pacifist. War should never be considered an “option” in the diplomatic process, not even the final option. It should be considered to be the consequence of the failure of the last option. Even the threat of a war is one which can rapidly spiral out of control, if one ever presumed for a moment that it could have been controlled.

What’s the strategy here anyway? By launching an attack on another NATO member, the UK would pull in other NATO members, most of them also European. Does the UK want to pull the USA into this to pick an ally? Or hang one side (or both) out to dry?

Is the UK relying on Donald Trump being a rational and impartial mediator in all of this?

As has been noted elsewhere, this shouldn’t even have been any kind of issue at all. Most of the deals of any competence within the EU divorce settlement, including the Gibraltar/Spain border issue, need to be ratified by the entire EU27, including Spain, anyway. At this point it looks as though the inclusion of the explicit Spanish veto was added to the EU’s strategy document for one (or both) of two purposes. a) As a sweetener to keep Spain “on-side” and acting within the whole of the EU27 “as one” and/or b) to test the UK’s plan to see what they’d do and to test the robustness of its strategy ahead of the negotiations.

The UK didn’t just blink in the face of this test. It has shut its eyes, screamed loudly and ran right off the cliff. The EU now knows that the UK has buttons which can be pressed. Westminster needs to ramp down the rhetoric immediately and get a serious grip of itself before it reaches the negotiation table proper if it wants to be taken seriously. From the lack of planning, through the deliberate exclusion of the devolved nations (and Gibraltar) from any kind of involvement in negotiations out to frankly stupid statements like this the UK has done a great deal of harm to its own reputation and the chances of making Brexit bearable, never mind making it a “success”.

And we’re less than a week into the Brexit process. Two years to go.

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Discussing Danish Debt

There’s an interesting wee story doing the rounds that moment regarding Denmark and their foreign debt.

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I’ve seen a few folk get a bit over excited about the story and have misinterpreted it as saying that Denmark is now debt free. First up, it’s not. Their national debt is at about 38% of GDP (compared to the UK’s 85.4%). This isn’t about the Danes paying off all of their national debt, it’s just saying that they no longer have any debt which is denominated in foreign currencies. All of the Danish national debt is, for the moment, denominated in Danish krone.

There’s a more interesting story under here about why it has happened though. It’s the story of managing one’s currency and maintaining a currency peg with regard to another. This is something that folk in Scotland should be watching closely as our own debate about currencies heats up again.

Not long ago I wrote an article on defending one’s currency against speculative attacks but many of the lessons also apply to more gradual changes in currency value and the effects are being borne out in Denmark as we speak.

Recently the instability in the Eurozone and reduction in confidence in the euro has seen investors selling euros and buying krone, seeing it as a safer investment. This is pushing up the value of krone which, if it was freely floating, would affect the exchange rate between it and the euro. But Denmark seeks to maintain a stable exchange rate between the krone and the euro (At a rate of 7.46038 DKK/EUR ± 2.25%) so its central bank must intervene to prevent the rise in value. It does this by cutting interest rates (to make further purchases less attractive) and selling DKK and buying foreign currencies. This influx of foreign currency has allowed it to pay off foreign denominated debt but has also caused its foreign reserve holdings to boom from 200,000 million krone in 2008 to over 400,000 million krone today.

If the opposite case had been true, if the DKK was weakening with respect to the EUR, we might expect the levers to be pulled in the opposite direction. Interests rates would increase to attract investment and foreign reserves would be drawn down as foreign currencies were sold to buy up krone holdings and support the value of the currencies and we might see the central bank issue bonds marked in foreign currencies rather than paying them off.

It may well be that Denmark can continue do defend its currency peg for some time, although some have eyed the possibility of a break similar to the one Switzerland went through in January 2015. A couple of years on from the Swiss break the risk of Denmark following suit appears to have receded for the moment.

All in Denmark – currently the 2nd happiest county on Earth – is showing what happens when a small country of 5-and-a-bit million people, its own currency and the will to manage it can do and whether or not Scotland specifically chooses a path similar to this (by pegging a £Scot to the GBP or, indeed, the EUR), Denmark should be taken as an example of what can be done. A small island of light and clarity in a world where the people of Scotland are about to be told repeatedly and in detail what some folk think we can’t do.

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