06 May 2019

Scottish Centre on European Relations: The Future of Europe: Disruption, Continuity and Change

The EU still has a strong basis from which it can create a forward-looking, overarching strategy in these turbulent and disruptive times. The EU must regain its confidence that its values, interests and rights can go together rather than be in conflict, even at a time of disruption and change.

This new report draws on a range of expert voices, from Scotland and the EU, to consider the EU’s future at this time of multiple challenges and systemic change. Across seventeen chapters, the report assesses current and future EU strategies, policies, pressures and needs and the extent of solidarity or divergence within the EU.

Each author also considers Scotland’s interests, contribution and approach in their area of focus, and suggests where Scotland can best learn from the EU, and where too, in some areas, it can offer ideas, solutions and examples of a way ahead.

The report makes 40 recommendations under five headings. These recommendations aim to contribute to an ambitious, strategic future of Europe – and to Scotland making a strong, creative contribution to that future.

1. The EU’s Strategic Future

 For the EU:

• The EU must show renewed and imaginative political leadership as it navigates a divided Union and disruption and change globally. Differentiated integration and flexibility can be part of the answer, as long as it creates a strategic path for the EU; as a pragmatic partial route ahead, it will not be enough.
• The EU must build on and strengthen its best strategies in key areas, including development, human rights and climate change, and continue to be a leading voice in promoting the benefits of multilateralism. It needs to urgently tackle its own divisions, and find a route to being a stronger global actor.
• A strong new overarching and inclusive strategy for sustainable development – a green new deal and a 21st century industrial strategy – can impact strongly and guide policy, and help overcome divisions (social, political and economic) at home and internationally.
• The EU must find new ways to work with citizens and civil society in building the future Europe. A set of European citizens’ assemblies advising on policy should be held as one major contribution to revitalising the role of the EU’s citizens in shaping future EU policy.

 For Scotland:

• The Scottish government should develop a clear, overarching European strategy and vision, taking as its starting point the current major issues, priorities and strategic debates within, and facing, the EU as it enters its new five-year institutional cycle. This should build on, but go beyond, its existing policies, networks and areas of leadership and be taken forward in alliance with partners within Scotland and at all levels across the EU. As part of this, the Scottish government needs to take a fresh look at its soft power/para-diplomacy and develop a strong and consistent strategic framework for its European and wider para-diplomacy. [...]

2. EU Politics: Democracy, Rule of Law and Human Rights

For the EU:

• The EU should act to strengthen economic, social, cultural and environmental rights. It must urgently consider how to strengthen its tools to tackle rule of law issues. The EU can learn from individual countries, including Scotland, which are moving forward in specific ways on protecting economic and social rights.
• The EU should accede to the European Convention on Human Rights.
• Brexit shows that it is premature to consider EU citizenship a fundamental right. If Brexit happens, the EU and UK should revisit the idea of associate citizenship for UK citizens who wish to retain their EU identity in some form.

For Scotland:

• If Brexit goes ahead then, so far as within the competence of the Scottish parliament, Scotland should try to mirror human rights developments at the EU level. Scotland should promote, and continue to invest in, its goals of being at the forefront of economic, social and cultural rights.
• The Scottish government should institute a series of citizens’ dialogues on Europe to promote a genuine public discussion of the key European challenges and ways ahead for the EU. It should also consider launching a citizens’ assembly on the future of Europe and Scotland’s European strategy.
• The Scottish government should undertake a series of strategic audits of its EU bilateral relations, starting with its priority countries in the EU (and identifying those) – drawing on the example of Ireland’s bilateral audits. It should also look at how to integrate European opportunities and issues into its policy-making and analysis across the board. [...]

4. Sustainable Development and a Green New Deal

Eurozone

For the EU:

• Major eurozone reform, involving a very significant central fiscal, or fiscal coordination, function, is essential to address future asymmetric shocks. The ECB cannot be seen as the only bulwark against such shocks. There is also a real need to continue the process of structural reform and convergence within the eurozone to ensure less heterogeneity in the eurozone economies.

For Scotland:

• In the current status quo, Scotland should urge the UK to encourage the eurozone to reform and to develop a central fiscal function. If Scotland did choose independence, Scotland and its political institutions should engage actively with the important area of EMU reform, while recognising the limits of its influence. Scotland should consult those smaller EU countries which have retained their own currencies, to consider how they seek to respond to some of the eurozone banking and financial architecture reforms.

EU Industrial Strategy

For the EU:

• The new EU institutional cycle must be used as an opportunity to establish a bolder, stronger and coordinated industrial policy response across the member states, with far-reaching implications for areas such as trade, competition, research, investment screening and taxation. A failure to grasp this opportunity will most likely encourage (large) member states to go ahead with unilateral actions, with significant risks of single market and external economic policy fragmentation.

For Scotland:

• Scotland needs to improve significantly its capacity (and influence) to make a proactive contribution to the many strategic debates taking place at EU and global levels concerning industry and trade. This could create the foundations for stronger political leadership in setting out a bolder vision of Scotland’s industrial future. This is significant for both ‘internal’ (to Scotland) and ‘external’ (beyond Scotland) audiences.
• Scotland can and should address the persistent underperformance of Scotland’s businesses in relation to productivity, innovation, internationalisation and economic growth. A more concerted effort is required to generate the momentum and scale for a Scottish response to global, EU and UK industrial challenges, not least in light of Brexit.
• Rather than focusing on more traditional, sectoral responses, Scottish policy-makers should target Scotland’s contribution to growth by combining historical expertise with technology-driven responses, with particular focus on addressing the challenges and opportunities of a sustainable, circular economy. The proposed Scottish National Investment Bank can play a vital role here. [...]

Trade Policy

For the EU:

• In the face of challenges, not least from the US and China, to the open, rules-based global trading system, the EU must substantially step up its efforts to defend and play a leadership role in maintaining that open global system. The EU’s emphasis on greater fairness and sustainability in trade, with a new emphasis on social justice, respect for human rights, observing high labour/health and safety and environmental standards, is welcome but patchy in implementation. A more focused, committed strategic trade policy is vital.
• Europe needs to encourage, more strategically, cutting-edge innovation and the rapid adoption of digital technology, facilitating the emergence of European ‘big tech’ firms capable of competing with American and Chinese competitors.

For Scotland:

• The Scottish government should play to Scotland’s strengths, including a shared belief in values such as social justice, human rights, more even development as set out in the UN’s sustainable development goals (SDGs) and a fairer distribution of income and assets. Scotland should aim to play an influential role through working closely with others (within the limits of its para-diplomacy) to hold the EU to its promises and make a small but decisive contribution to a fairer and more peaceful world.
• The Scottish government’s trade board should take on a key – and more widely publicised – role in creating an export culture in Scotland. In particular, the trade board and the Scottish government should look to create a single portal for advising firms, particularly SMEs, on entering, or expanding in, European and international markets.

Full report

© Scottish Centre on European Relations