Desires for national independence in Europe bound by economic realities

Viviane Reding, Vice-President of the European Commission in charge of Justice, Fundamental Rights and Citizenship, went to Barcelona where she participated in a debate about the future of Europe with 250 citizens. (EC Audiovisual services, 23/02/2014).

Viviane Reding, Vice-President of the European Commission in charge of Justice, Fundamental Rights and Citizenship, went to Barcelona where she participated in a debate about the future of Europe with 250 citizens. (EC Audiovisual services, 23/02/2014).

After the fall of communism in Europe, secession became the name of the game all over the Old Continent. It started with the ‘velvet divorce’ of Czechoslovakia on 1 January 1993, which produced the Czech Republic and Slovakia. Then followed the bloody dismembering of Yugoslavia, where a handful of new nations appeared. Now Scotland and Catalonia have taken the lead for independence, with strong internal momentum to secede from the UK and Spain. Under completely different circumstances, Ukraine during this past week became the next candidate for dissolution, when the Kiev Parliament ousted President Victor Yanukovych and appointed as interim President Oleksander Turchinov.

Unlike Czechoslovakia, national secessionist movements in the Balkans led to bloody conflicts and destruction. In Bosnia-Herzegovina, after the jingoist fire receded, the real problems started haunting peoples’ everyday lives. Today the new state proves to be a completely worthless construction, capable only to serve the chauvinist forces which waged the initial conflict. The political classes in power and the new makeshift administration soon degraded into criminal gangs exploiting the last available economic resources of the region.

Bloody confrontations

On the other hand though the dissolution of Yugoslavia produced three well-governed states, Slovenia, Croatia and Serbia. Invariably the qualities of a new state-nation produced after secession is determined by the ability of the society to organize itself. Also, of paramount importance is the existence or emergence of a well-structured political class. If it has direct references to the people and works honestly for the common good without personal strategies, it can avoid the road to corruption and economic destruction. The existence of natural resources is not a prerequisite for the success of a nation, and sometimes it may become a catastrophic factor. Compare the impact that the discovery of large hydrocarbon deposits had on different nations. Norway and Nigeria are the two ends of the spectrum in this discussion.

Coming back to the latest secessionist movements within the European Union, the cases of Scotland and Catalonia appear in the horizon. In both cases the EU membership and the currency of the aspirant new countries appear as the major points of discussion. Brussels is adamant that if the referendum turns out a positive result, then, immediately, the new countries will be automatically out of the Union. In the case of Catalonia the euro will no longer be the legal tender for internal transactions, while London has clarified that the same will be true for the GBP in Scotland.

In both cases, the new states may use the euro and the GBP in their internal transactions, but it will be under the same conditions as if they had chosen to use the US dollar. London and Brussels can do nothing to block the use of the GBP and the euro exactly in the same way as Washington can’t forbid the use of the dollar. However, Scotland and Catalonia must possess enough British pounds or euros in order to use them as means of internal transactions and as a store of wealth, because in both cases they won’t be able to print money. The printing machines will remain under the authority of London and Brussels. At this point it must be mentioned that in the case of the euro, no Eurozone member state has a free hand to print as many as it sees fit.

Money matters

The printing rights remain with the European Central Bank, which operates under a different mandate than the Bank of England or any other major central bank. All central banks in the developed world come under the authority of the government, while the Treaty of Maastricht, which institutionalized the euro, provides for a special independence regime for the ECB. No euro area government has direct authority over the ECB. Actually, the ECB’s right to buy government bonds issued by Eurozone member states is currently challenged in the Federal Constitutional Court of Germany, but the Germans handed this case over to the European Court of Luxembourg.

In any case, neither Scotland or Catalonia will be able to retain their moneys under the present status. They will be obliged to either issue their own monetary unit or use the GBP, the euro or even the dollar in the same way, as any other country in world which choses to do the same. The problem is that they must hold enough of those currencies because they won’t be able to print them. As a result they won’t be able to run fiscal or foreign account deficits, unless they find available credit from lenders.

In the case of Scotland, those issues plus the ownership of North Sea oil seem to play a crucial role for the outcome of the September referendum. In Catalonia though there is no referendum in sight. All in all, the drives for national autonomy within the EU seem to be powered by economic carburants rather than chauvinism.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Parliament commemorates the victims of the Holocaust

A Young entrepreneur cries out: “start in Europe, stay in Europe”

Half the world’s refugee children not in school, UN agency finds

The Eurogroup offered a cold reception to IMF’s director for Europe

Business should be joyful – just ask the sports world

Artificial Intelligence: These 3 charts show what people really think

A Sting Exclusive: “China is Making Good Stories not Bad Ones”, Ambassador Yang highlights from Brussels

Forget GDP – for the 21st century we need a modern growth measure

Impact of high debt levels on least developed countries ‘cannot be overstated’, says UN

Fashion’s hot new trend: clothes you don’t need to wash (very often)

What happens when you toss your water bottle in the trash?

This New York store is selling Christmas presents for refugees

These are the world’s 20 most dynamic cities

Gaza investigators call on Israel to review ‘rules of engagement’ as Gaza protest anniversary looms

Monday’s Daily Brief: WFP mulls ‘last resort’ Yemen aid suspension, top peacekeeping awardee announced, abuzz over Bee Day, Ebola threat ‘very high’

EU fight against tax-evasion and money laundering blocked by Britain

It’s time to strengthen global digital cooperation

Satellites and data are going to help us phase out fossil fuels. Here’s how

Why David Cameron’s large victory in UK elections will not pursue a ‘Brexit’

Further reforms in Sweden can drive growth, competitiveness and social cohesion

EU out to conquer African Union summit

UN postal agency ‘regrets’ US withdrawal

Technological innovation can bolster trust and security at international borders. Here’s how

10 million Yemenis ‘one step away from famine’, UN food relief agency calls for ‘unhindered access’ to frontline regions

Judicial independence under threat in Nigeria, warns UN rights expert

Eurozone: Inflation plunge to 0.4% in July may trigger cataclysmic developments

Here are what UNESCO considers to be remarkable new World Heritage Sites

Blockchain will make sure green pledges aren’t just greenwash: a new initiative by young leaders at the World Economic Forum

If innovators can solve India’s problems, they can save the world. Here’s why

Towards a seamless internal EU market for industrial goods

3 of Jack Ma’s best pieces of advice

State aid: Commission approves support for six offshore wind farms in France

European Business Summit 15th year: Controversy and Constructive Ideas

Estonia is making public transport free

Stateless Rohingya refugee children living in ‘untenable situation’, UNICEF chief

One migrant child reported dead or missing every day, UN calls for more protection

Primary Healthcare vs Specialization Careers, how to promote PHC to the Young Health Workforce?

Here are 5 security challenges Nigeria’s leader must tackle

Here are three ways organizations can prepare for tomorrow’s world

Sustainable Development Summit: ‘We must step up our efforts – now’, Guterres declares

1st Exclusive High Level Dialogue: China-EU Cybersecurity and 5G Cooperation

JADE Romania Celebrates the 4th Anniversary

Drowning in the Mediterranean this summer? Many happy returns

Telemedicine and the Brazilian reality

EU invests in green projects and bans single-use plastics while climate change requires more to be done

A Sting Exclusive, the European Commissioner for Energy Günther Oettinger writes for the Sting on “EU Industry: a major energizer”

Q and A on the draft digital copyright directive

In Sweden you can roam anywhere you like, without the landowner’s permission

Here’s how we can use agriculture to fight climate change

We need to measure innovation better. Here’s how

The UK to split if May’s hard or no-deal Brexit is pursued

5 droughts that changed human history

UN chief praises Malaysia’s death penalty repeal as ‘major step forward’

Human Rights Council election: 5 things you need to know about it

We’ve lost 60% of wildlife in less than 50 years

Talent, not technology, is the key to success in a digital future

Is the world living up to its climate commitments?

Inflation not a problem for Europe

EU finally agreed to cut roaming charges in 2017 but criticism is always there

How to end overfishing in the global South

More Stings?

Comments

  1. Heya i’m for the first time here. I came across this board
    and I find It really useful & it helped me out a lot.
    I hope to give something back and help others like you helped me.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s