The EU, SGP and the GERS Onshore deficit

There is a lot of anti-Indy talk about a “£15 billion black hole”, and the EU with its 3% of GDP so called requirement, so let’s first take a look at what the EU actually requires. What the SGP (Stability and Growth Pact) actually wants is 3% deficit, or a satisfactory member state plan to reduce to that – which is called a Medium-Term Budgetary Objective (MTO). For eurozone members there can be sanctions ultimately from the enforcement arm, but Scotland would NOT be a member of the eurozone. So the requirement is to have a satisfactory MTO to reduce that deficit.

http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm

The negative detractors of Independent Scotland “bang on” about oil revenues so let’s look at Scotland’s estimated net fiscal balance (including capital expenditure) over the last 7 years EXCLUDING oil revenues, i.e. its onshore fiscal deficit balance. The figures (from GERS executive summaries) are for deficit in billions, and percentage of GDP [1]:

2009-10 – £19.9 bn – 17.8%
2010-11 – £18.6 bn – 15.6%
2011-12 – £18.2 bn – 14.6%
2012-13 – £17.6 bn – 14.0%
2013-14 – £16.4 bn – 12.2%
2014-15 – £16.7 bn – 11.9%
2015-16 – £14.9 bn – 10.1%

(Taken from GERS as at 6th Oct 2016 – they get updated but don’t seem to keep versions)

http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/Publications

GERS 2015-16 – http://www.gov.scot/Publications/2016/08/2132

So in 6 years (end of 2010 to end of 2016), Scotland’s onshore deficit has reduced from 17.8% to 10.1% – a drop of 7.7%. It can reasonably be hoped that in another 6 years that onshore deficit can be reduced by another 7.7% to 2.4% – lower than France or the UK, and in 2 more years, to a surplus of 0.2%. Which would mean our deficit by 2022 would be well below that EU target of 3% – even if the oil price did NOT recover over the next 6 years, and Scotland got no revenue from oil at all – just like 2015-16. The EU will almost certainly regard the volatile revenues from oil as part of a cyclical deficit (or surplus), different from a structural deficit.

I somehow think the EU SGP enforcement would find that an entirely acceptable MTO – Medium-Term Budgetary Objective – for Independent Scotland within the EU. And that’s WITHOUT what the extra levers of Independence can do to help that.

http://ec.europa.eu/economy_finance/economic_governance/sgp/convergence/index_en.htm

And the UK has a convergence plan.

http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/20_scps/2016/28_uk_scp_en.pdf

And here’s a graph of the week, whatever that means!

http://ec.europa.eu/economy_finance/graphs/2014-11-10_excessive_deficit_procedure_explained_en.htm

Currently 11 out of 28 Member States are subject to an EDP (Excessive Deficit Procedure).


 [1].  (Note: figures get updated with revised deficits and GDP, there is a time series below. The basis here is to take the figures as they stand in the reports – this may result in variations to drop in deficit and deficit as percentage of GDP from up to date figures)


 Time series

Figures for GERS for previous years are updated with new figures, these can result in lower or higher deficits, or lower or higher GDP. The figures in the main article are from the executive summary for each page, the figures underneath are these figures, followed by updated figures in later years of GERS.

 Year    As published    2015-16        2014-15        2013-14        2012-13         2011-12

09-10  £19.9bn-17.8%                                             20.2-16.8%  20.0-17.2%  20.4-18.1%
10-11  £18.6bn-15.6%                        20.2-16.3%  19.6-16.0%  19.8-16.1%  19.7-16.5%
11-12  £18.2bn-14.6%  18.4-14.2%  18.9-14.7%  18.5-14.5%  18.6-14.7%
12-13  £17.6bn-14.0%  19.3-14.5%  19.5-15.0%  19.5-15.1%
13-14  £16.4bn-12.2%  17.0-12.1%  17.4-12.9%
14-15  £16.7bn-11.9%  16.1-11.1%
15-16  £14.9bn-10.1%

(the figures for 09-10 published in 2010-11 are £20.1 bn – 17.9%)

Posted in EU

EU – Democracy in action

This is an overview of the structure and main institutions of the EU, and part of its purpose is to show that far from being powerless in the EU, Independent Scotland will be able to make its presence felt as 1 member state out of 28. All information is from the official EU website – http://europa.eu – with specific links for you to check.


European Flag

The European flag symbolises both the European Union and the identity and unity of Europe. It features a circle of 12 gold stars on a blue background. They stand for the ideals of unity, solidarity and harmony among the peoples of Europe. The number of stars has nothing to do with the number of member countries.

https://europa.eu/european-union/about-eu/symbols/flag_en


European institutions

According to Article 13 of the Treaty on European Union, the institutional framework comprises 7 institutions:

  • the European Council;
  • the Council of the European Union (simply called ‘the Council’);
  • the European Parliament;
  • the European Commission;
  • the Court of Justice of the European Union;
  • the European Central Bank;
  • the Court of Auditors.

http://eur-lex.europa.eu/summary/glossary/eu_institutions.html


European Council

The European Council defines the EU’s overall political direction and priorities. It is not one of the EU’s legislating institutions, so does not negotiate or adopt EU laws. Instead it sets the EU’s policy agenda, traditionally by adopting ‘conclusions’ during European Council meetings which identify issues of concern and actions to take.

The members of the European Council are the heads of state or government of the 28 EU member states, the European Council President and the President of the European Commission. The European Council meets at least twice every 6 months.

The European Council mostly takes its decisions by consensus. However, in certain specific cases it decides by unanimity or by qualified majority (see The Council). If a vote is taken, neither the European Council President nor the Commission President take part.

http://www.consilium.europa.eu/en/european-council/


The Council

When a vote in the Council (Council of the European Union) is required, some is done by unanimous voting in which any member state can veto it, but 80% of EU legislation is voted on by a qualified majority. This uses the double majority rule which requires both a majority of at least 55% of member states (16 out of 28), and a population majority of 65% or more. So 13 member states voting against can block legislation – no matter how small they are. For non legislative votes, a simple majority of 15 out of 28 member states is enough. The Council can vote only if a majority of its members is present.

http://www.consilium.europa.eu/en/council-eu/voting-system/qualified-majority/

Abstention: Unanimity requires everyone to agree or abstain from voting. An abstention under qualified majority voting counts as a vote against. Abstention is not the same as not participating in the vote. Any member can abstain at any time.

Populations as at Jan 2016 – ascending order of size

Malta               434,400
Luxembourg          576,200
Cyprus              848,300
Estonia           1,315,900
Latvia            1,969,000
Slovenia          2,064,200
Lithuania         2,888,600
Croatia           4,190,700
Ireland           4,658,500
Slovakia          5,426,300
Finland           5,487,300
Denmark           5,707,300
Bulgaria          7,153,800

13 state total   42,720,500

Austria           8,700,500
Hungary           9,830,500
Sweden            9,851,000
Portugal         10,341,300
Czech Republic   10,553,800
Greece           10,793,500
Belgium          11,289,900
Netherlands      16,979,100
Romania          19,760,000
Poland           37,967,200
Spain            46,438,400
Italy            60,665,600
United Kingdom   65,341,200
France           66,661,600
Germany          82,162,000

EU-28 total     510,056,000

http://ec.europa.eu/eurostat/statistics-explained/index.php/Population_and_population_change_statistics

For example Malta, Luxembourg, Cyprus, Estonia, Latvia, Slovenia, Lithuania, Croatia, Ireland, Slovakia, Finland, Denmark and Bulgaria with a total population of 42,720,500 can stop EU legislation for a population of 510,056,000 – just 8.4% of the total.

Opinion: So far from being weak and insignificant and powerless in the EU, in the Council which is represented by the appropriate minister, Scotland would be just as powerful as any other member state – including Germany – even though we would be the 10th smallest member state. Of course it’s not all about blocking legislation, but it means Scotland and other small states can get changes to legislation to suit, or even trade something unimportant, with something that matters. Even the veto is very rarely used, as member states often barter with each other in a round robin way so they can all reach agreement to a total package.

Scotland with a population of 5,373,000 is 8.3% of the the UK population; Westminster controls reserved matters, Scotland’s MPs can be outvoted by just over 50% of the MPs – as they usually are. That’s powerless. So much for the equal Union.


European Parliament

A directly-elected EU body with legislative, supervisory, and budgetary responsibilities.

The European Parliament normally takes decisions by an absolute majority of votes cast in a plenary session. A quorum  exists when one third of MEPs are present (the minimum number of MEPs for a vote to be valid).

http://www.europarl.europa.eu/aboutparliament/en/20150201PVL00011/How-Plenary-works

Details of what the Parliament does can be found here:

https://europa.eu/european-union/about-eu/institutions-bodies/european-parliament_en

Number of MEPs for each member state for the 2014-2019 parliamentary term
Austria           18
Belgium           21
Bulgaria          17
Croatia           11
Cyprus             6
Czech Republic    21
Denmark           13
Estonia            6
Finland           13
France            74
Germany           96
Greece            21
Hungary           21
Ireland           11
Italy             73
Latvia             8
Lithuania         11
Luxembourg         6
Malta              6
Netherlands       26
Poland            51
Portugal          21
Romania           32
Slovakia          13
Slovenia           8
Spain             54
Sweden            20
United Kingdom    73

Total            751

http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%20110%202013%20INIT

The first subparagraph of Article 14(2) of the Treaty on European Union lays down the criteria for the composition of the European Parliament, namely that representatives of the Union’s citizens are not to exceed 750 in number, plus the President, that representation is to be degressively proportional, with a minimum of 6 members per Member State, and that no Member State is to be allocated more than 96 seats.

The European Parliament, by the way, also uses the Committee system.

http://www.europarl.europa.eu/portal/en

The full list of Seats by political group

Group of the European People’s Party (Christian Democrats)    216
Group of the Progressive Alliance of Socialists and Democrats in the EP    189
European Conservatives and Reformists Group    74
Group of the Alliance of Liberals and Democrats for Europe    69
Confederal Group of the European United Left – Nordic Green Left  52
Group of the Greens/European Free Alliance    50
Europe of Freedom and Direct Democracy Group    44
Europe of Nations and Freedom Group    39
Non-attached Members    18
Total    751

The 2 SNP MEPs are members of the Group of the Greens/European Free Alliance.

http://www.europarl.europa.eu/meps/en/hemicycle.html

Opinion: Scotland would get 13 representatives (MEPs). Since the UK would be leaving and vacating 73, this would make a total of 691 representatives, including Scotland.


European Commission

The European Commission (EC) is the executive of the EU and represents the general interest of the EU, rather than that of individual national governments or political parties. Its core responsibilities include proposing EU laws and policies and monitoring their implementation. The EC’s work is steered by a team of 28 Commissioners – one Commissioner from each EU country. This team – officially known as the College – is led by the EC President. The EC is held democratically accountable by the European Parliament, which has the right to approve and dismiss the entire political leadership of the EC.

https://ec.europa.eu/info/organisational-structure/political-leadership_en

The EC is responsible for proposing new European legislation. The European Parliament, representing citizens, and the Council, representing national governments, decide whether to adopt the EC’s proposals. The EC proposal must aim to defend the interests of the EU and its citizens.

Like the other EU institutions, the EC acts only when it can do so more effectively than local, regional or national authorities. Its actions are limited to what is necessary to achieve the objectives of the EU Treaties.

https://ec.europa.eu/info/organisational-structure/role-european-commission_en

The EC decides by consensus. But a vote, potentially secret, will take place if the President or a member so requests. For that a majority of the number of members must vote in favour of the proposal or decision for it to be adopted.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV%3Ao10004

More details about the EC’s work and duties can be found from these links:

http://ec.europa.eu/index_en.htm

https://ec.europa.eu/info/index_en

So basically, while the Commissioners make decisions on the EC’s strategies and policies, and propose laws, funding programmes and the annual budget, it is only the Parliament and the Council that can decide whether or not to accept and implement them.

Opinion: unlike the popular conception foisted on us by the anti-EU media, the EC is not all powerful and undemocratic, everything it does is under the control of the Parliament and Council. See above for how they vote!


Court of Justice of the European Union (CJEU)

Role

Ensuring EU law is interpreted and applied the same in every EU country; ensuring countries and EU institutions abide by EU law

Composition

 The Court is located in Luxembourg and divided into 2 bodies (was 3):

  • Court of Justice  (ECJ) – deals with requests for preliminary rulings from national courts, certain actions for annulment and appeals.
  • General Court  (EGC) – rules on actions for annulment brought by individuals, companies and, in some cases, EU governments. In practice, this means that this court deals mainly with competition law, State aid, trade, agriculture, trade marks. The EGC now incorpates the Civil Service Tribunal, which was for rules on disputes between the EU and its staff, but was dissolved on 1 September 2016.

Members

After reform was adopted by the Council on 3 December 2015, the EGC should now have an extra 12 judges, plus the 7 judges from the dissolved Civil Service Tribunal, to which 9 further judges will be attributed in September 2019 for a total of 21 extra judges to meet the increased workload.

https://europa.eu/european-union/about-eu/institutions-bodies/court-justice_en


European Central Bank

Function

The European Central Bank (ECB) is the central bank of the 19 European Union countries which have adopted the euro. Its main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.

https://www.ecb.europa.eu/ecb/html/index.en.html

Euro

The 19 euro area (eurozone) countries are: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The micro-states of Andorra, Monaco, San Marino and Vatican City also use the euro, on the basis of a formal arrangement with the European Community. Montenegro and Kosovo likewise use the euro, but without a formal arrangement.

https://www.ecb.europa.eu/euro/intro/html/index.en.html

Joining the eurozone (convergence criteria)

To join the euro area, a country’s currency must have had a stable exchange rate and be within ERM II for 2 years.There are other strict conditions as regards:

  • interest rates
  • budget deficits (3% of GDP)
  • level of government debt (60% of GDP)
  • inflation rates

https://www.ecb.europa.eu/ecb/orga/escb/html/convergence-criteria.en.html

Note that the requirements for joining the eurozone – deficit 3%, debt to GDP 60% – are often confused with the requirement to join the EU itself. They are NOT the same.


Court of Auditors

Function

As the EU’s independent external auditor, the European Court of Auditors (ECA) looks after the interests of EU taxpayers. It does not have legal powers, but works to improve the European Commission’s management of the EU budget and reports on EU finances.

https://europa.eu/european-union/about-eu/institutions-bodies/european-court-auditors_en


European Committee of the Regions (CoR)

http://cor.europa.eu/en/Pages/home.aspx

This is not one of the main institutions of the EU and is probably one most people have never even heard of. And yet it does have a role in the forming of legislation for the EU.

http://cor.europa.eu/en/about/Pages/key-facts.aspx

It holds Plenary sessions 6 times a year where opinions and reports can be adopted, but also resolutions, to be passed to the other EU institutions.

http://cor.europa.eu/en/activities/plenary/Pages/plenary-sessions.aspx

It has 350 members from the 28 EU states.

http://cor.europa.eu/en/about/Pages/members.aspx

with (from the list) the UK having 18 [1] members plus 19 alternates, of which 4 come from Scotland: 2 members – currently Councillor East Renfrewshire Council and Councillor for Stirling, and 2 alternates – East Renfrewshire Council and Leader Shetland Islands Council. An alternate can attend and vote instead of the member.

http://memberspage.cor.europa.eu/Result.aspx?f=0&s=0&o1=0&o2=0&o3=0&inst=CDR

[1] The UK actually has 24 members in its national delegation, perhaps 6 of the alternates are acting as members, who knows!

http://cor.europa.eu/en/about/nationaldelegations/Pages/national-delegations.aspx

Although the UK Delegation is formally nominated by the UK Government, it receives proposals from the following bodies: the Local Government Association of England & Wales (in consultation with English regional bodies); the Scottish Executive [2] (in consultation with the Scottish Parliament and Convention of Scottish Local Authorities); the Welsh Assembly (in consultation with the Welsh Local Government Association); and the Northern Ireland Assembly (in consultation with the Northern Ireland Local Government Association).

http://cor.europa.eu/en/about/nationaldelegations/Pages/delegation.aspx?country=United%20Kingdom

[2] “the Scottish Executive” – should be the Scottish Government!


Opinion: UK Voters “misinformed” about EU

REMAIN ran a poor campaign in the UK, trying to make people afraid of leaving the EU, rather than describing its  benefits. But more than that it failed to inform people about the EU, what its main parts do, how they work, how they relate, how voting works and its democracy. Perhaps this is because the UK Government were looking for reforms.

The anti-EU media including the BBC gave the idea the EU is undemocratic and over-bureaucratic. Well, the second is partly true though it is reforming. But it has made itself more democratic, and favours SMALLER states in a lot of ways, part of its ethos.


General Information


The EU Treaties

The Treaties main page – http://eur-lex.europa.eu/collection/eu-law/treaties.html

The full Consolidated Treaty, Protocols, Annexes, fundamental rights in HTML or PDF:

Treaty on European union (Consolidated version 2016)


The EU Budget

https://europa.eu/european-union/topics/budget_en

Current EU budget is agreed for 2014-2020.


Opinion: Scotland’s EU Nett annual contribution within the UK

Roughly speaking (2015) the UK’s rebate was about £5 billion on gross (pre-rebate) contributions of £17.8 billion, for an actual contribution of £12.8 billion. Not all the funding the UK receives goes through Whitehall, such as European funding for research in UK Universities, the total for 2014 was estimated at £5.6 billion. This mis-matches years, but means the nett contribution for 2015 was around £7.2 billion. The IFS calculates £5.7 billion for 2014, so £7.2 billion seems a sensible high estimate.

 http://www.ifs.org.uk/uploads/publications/bns/BN181.pdf

Within the UK:  Scotland’s 1/12th per capita portion of the nett contribution is therefore £600 million, but Scotland receives more than 1/12th of the UK’s funding from the EU, so our actual contribution is less. This is a draft estimate.


Opinion: Independent Scotland’s EU Nett annual contribution

For the starting point for Independent Scotland, you would take the UK’s gross unrebated £17.8 billion, for which 1/12th is £1,483 million. From that subtract 1/12th of the UK’s funding of £5.6 billion – £467 million for £1,016 million.But with Brexit the UK’s nett contribution of £7.2 billion minus Scotland’s share of £600 million = £6.6 billion would be shared by the EU27 plus Scotland, with our share being roughly 1/100th by population, a little more by GNI (Gross National Income). So add another £66 million, for a total of £1,082 million. However, Scotland receives more than 1/12th of the UK’s EU funding already, and this is worth at least an extra £100 million, but on the side of caution make it less for a nice round £1,000 million.

But in exchange for giving up that UK rebate, Scotland’s CAP Pillar 1 and Pillar 2 convergence funding with negotiation would rise in total by about £320 million per year.

http://www.gov.scot/Topics/farmingrural/Agriculture/CAP/CAPEurope10112012/budget-facts31102012

Independent Scotland: this initial high end estimate of Scotland’s nett contribution is around £680 million per year, it would likely be lower. This is a draft estimate. Some other estimates have it as low as £300 million..


Some EU Links

Euromyths – https://blogs.ec.europa.eu/ECintheUK/

There’s a whole load of information about the EU and the relative populations, GDP, many other statistics  here. Sometime we may pick out some goodies.

Eurostats – http://ec.europa.eu/eurostat

EU 2014-20 financial (budget) framework:

http://ec.europa.eu/budget/biblio/documents/fin_fwk1420/fin_fwk1420_en.cfm

There’ll be more links. This is a static page, doesn’t mean it can’t be added to.


Trade Agreements

The EU has trade agreements, which the UK would have to try to duplicate, check out some of the countries on the EU website trade page:

http://ec.europa.eu/trade/policy/countries-and-regions/

The UK will have to create trade agreements with all these countries, and renegotiate its terms of membership with WTO itself, and its 163 plus members.

Opinion: some – many – countries might not want to upset the EU with whatever trade agreement it put in place with the UK. For a discussion about this from the UK point of view, but also that would have significance for iScotland outside the EU, there’s this non-official source:

http://www.politico.eu/article/forget-brussels-brexits-toughest-battleground-is-the-wto-uk-theresa-may/


And lastly …

You want that population chart with Scotland in and the UK out? Thought you might.

Populations as at Jan 2016 – ascending order of size

Malta               434,400
Luxembourg          576,200
Cyprus              848,300
Estonia           1,315,900
Latvia            1,969,000
Slovenia          2,064,200
Lithuania         2,888,600
Croatia           4,190,700
Ireland           4,658,500
Scotland          5,373,000
Slovakia          5,426,300
Finland           5,487,300
Denmark           5,707,300

13 state total   40,939,700

Bulgaria          7,153,800
Austria           8,700,500
Hungary           9,830,500
Sweden            9,851,000
Portugal         10,341,300
Czech Republic   10,553,800
Greece           10,793,500
Belgium          11,289,900
Netherlands      16,979,100
Romania          19,760,000
Poland           37,967,200
Spain            46,438,400
Italy            60,665,600
France           66,661,600
Germany          82,162,000

EU-28 total     450,087,800

So in the new EU, Malta, Luxembourg, Cyprus, Estonia, Latvia, Slovenia, Lithuania, Croatia, Ireland, Scotland, Slovakia, Finland and Denmark with a total population of 40,939,700 can stop or force changes to EU legislation for a population of 450,087,800 – 9.1% of the total.

Guy Verhofstadt on Scotland in the EU as on the BBC:

https://www.youtube.com/watch?v=6yARY-SR8qs&feature=youtu.be


Survey for Leave voters in Scotland

Alyn Smith MEP (SNP) has an ongoing survey as at Oct 2016, to find out why Leave voters in Scotland, representing 38% of the voting public, voted Leave. The great thing about this survey is it has actual text boxes to allow you to give your own reason which will then have to be read by humans, rather than stupid computers! Don’t forget to uncheck the “further contact” box if you don’t want to be followed up. Default should always be opt-out, not opt-in, my only criticism. Baaaaad Alyn!

http://www.alynsmith.eu/consultation


Posted in EU